SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2007

Shaw Communications Inc.

(Translation of registrant’s name into English)

Suite 900, 630 3rd Avenue S.W., Calgary, Alberta T2P 4L4 (403) 750-4500

(Address of principal executive offices)

     Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

     Form 20-F o Form 40-F þ

     Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

     Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

     Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

     Yes o No þ

     If “ Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-          

 

 

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant, Shaw Communications Inc., has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 29, 2007

 

 

TABLE OF CONTENTS

 

 

SHAW COMMUNICATIONS INC.

 

NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS

 

The annual general meeting of shareholders of Shaw Communications Inc. (the “Corporation”) will be held as follows:

 

 

for the following purposes:

 

 

By Order of the Board of Directors,

 

(signed) Douglas J. Black, Q.C.

Corporate Secretary

 

Calgary, Alberta

November 22, 2007

 

 

Holders of Class A Shares of record at the close of business on November 23, 2007 are the only shareholders entitled to vote at the meeting. Holders of Class B Non-Voting Shares are entitled to attend and speak at the meeting, but are not entitled to vote on any matter proposed for consideration.

 

If you cannot attend the meeting in person, you are encouraged to complete the accompanying proxy and to return it in the enclosed envelope to CIBC Mellon Trust Company, 600 The Dome Tower, 333 – 7th Avenue S.W., Calgary, Alberta, T2P 2Z1 (mailing address: Proxy Dept., CIBC Mellon Trust Company, P.O. Box 721, Agincourt, Ontario, M1S 0A1), to be received not later than 48 hours (excluding Saturdays, Sundays and holidays) before the time fixed for the meeting or an adjournment thereof.

 

SHAW COMMUNICATIONS INC.

 

PROXY CIRCULAR

 

The information contained in this proxy circular is provided in connection with the solicitation of proxies by and on behalf of management of Shaw Communications Inc. (the “Corporation”) for use at the annual general meeting (the “Meeting”) of shareholders of the Corporation to be held on January 10, 2008, and any adjournments thereof, as set forth in the attached Notice of Meeting.

 

Unless otherwise noted, the information contained in this proxy circular is given as of November 22, 2007. All sums are expressed in Canadian dollars, unless otherwise noted. In addition, all applicable figures have been adjusted retroactively to reflect the two-for-one stock split that was effective as of the close of business on July 30, 2007.

 

BUSINESS OF THE MEETING

 

 

Information concerning the nominees for election to the Board of Directors (the “Board”) of the Corporation is set forth below, along with certain other information relating to meetings of the Board and its committees and fees paid to individual directors.

 

The number of directors to be elected is 16. Directors will hold office until the next annual meeting of shareholders of the Corporation or until their successors are elected or appointed. Management of the Corporation recommends voting in favour of each nominee listed below.

 

Nominees for Election to the Board of Directors

 

The following table sets out the name of each director, together with his or her municipality of residence, age, year first elected or appointed a director, biography and comparative ownership of securities of the Corporation for the years 2007 and 2006.

 

 

 

Notes:

 

 

 

Meetings Held and Attendance of Directors

 

The following table summarizes the meetings of the Board and its committees (Executive, Audit, Corporate Governance and Nominating, and Human Resources and Compensation) held during the fiscal year ended August 31, 2007, and the attendance of individual directors of the Corporation at such meetings.

 

 

 

Notes:

 

 

Following each regular meeting, the Board and its committees conduct “in camera” sessions at which no management directors or members of management are present. The in camera portion of each regular Board meeting generally consists of one session without the presence of any member of management or any management director (other than the Executive Chair) and one session without the presence of any member of management, any management director or the Executive Chair. The in camera sessions are intended not only to encourage the Board and its committees to fully and independently fulfil their mandates, but also to facilitate the performance of the fiduciary duties and responsibilities of the Board and its committees on behalf of shareholders of the Corporation.

Fees Paid to Individual Directors

 

The following table summarizes the cash compensation that was paid or would have been paid to each director of the Corporation for meetings held during the fiscal year ended August 31, 2007 if such director had not chosen to participate in the Corporation’s DDSU Plan. See also “Statement of Executive Compensation — Compensation of Directors”.

 

 

 

Notes:

 

 

 

The firm of Ernst & Young LLP, Chartered Accountants, the present auditors of the Corporation, has been nominated to serve as auditors of the Corporation to hold office until the next annual general meeting of shareholders of the Corporation. The Audit Committee has recommended to the Board and to shareholders the nomination of Ernst & Young LLP as the Corporation’s auditors.

 

Audit Fees

 

The aggregate amounts paid or accrued by the Corporation with respect to fees payable to Ernst & Young LLP for audit (including separate audits of subsidiary entities, financings, regulatory reporting requirements, and Sarbanes-Oxley Act related services), audit-related, tax and other services in the fiscal years ended August 31, 2007 and 2006 were as follows:

 

 

Fees paid for audit-related services in fiscal 2007 and 2006 were in respect of the separate audits of subsidiaries that were not required by law. The tax fees paid in fiscal 2007 and 2006 were related to linear property tax compliance; fees paid in fiscal 2006 also included tax compliance on scientific research, exploration and development tax credits, and transfer pricing.

The Audit Committee of the Corporation considered and agreed that the above fees are compatible with maintaining the independence of the Corporation’s auditors. Further, the Audit Committee determined that, in order to ensure the continued independence of the auditors, only limited non-audit services will be provided to the Corporation by Ernst & Young LLP and in such case, only with the prior approval of the Audit Committee. The Chair of the Audit Committee has been delegated authority to approve the retainer of Ernst & Young LLP to provide non-audit services in extraordinary circumstances where it is not feasible or practical to convene a meeting of the Audit Committee, subject to an aggregate limit of $100,000 in fees payable to Ernst & Young LLP for such services per fiscal year of the Corporation. The Chair of the Audit Committee is required to report any such services approved by him to the Audit Committee.

 

 

The U.S. Securities and Exchange Commission has mandated that all securities listed on the New York Stock Exchange (“NYSE”) be eligible for participation in the U.S. Direct Registration System (“DRS”) as of January 1, 2008. The DRS allows shareholders to register and transfer ownership of shares electronically, without the need for paper share certificates. In order for the Corporation to be eligible to participate in the DRS, the Board has amended the Corporation’s By-Law 1A, effective October 25, 2007. This amendment to the Corporation’s By-Law 1A needs to be confirmed by the Corporation’s shareholders by ordinary resolution, being a resolution passed by a simple majority of votes cast at the Meeting.

 

The text of the ordinary resolution to confirm the amendment to By-Law 1A is as follows:

 

“RESOLVED, as an ordinary resolution, that:

 

1. the amendment to By-Law 1A of the Corporation by deleting Section 7.03 thereof in its entirety and replacing it with the following, be and is hereby confirmed and approved:

 

“7.03 Registration of Transfer.  Unless expressly waived by the board, no transfer of a share shall be registered in a securities register except: (i) upon presentation of the certificate representing such shares with an endorsement which complies with the Act made thereon or delivered therewith duly executed by an appropriate person as provided by the Act, together with such reasonable assurance that the endorsement is genuine and effective as the board may from time to time prescribe, or (ii) if the share is held through a direct registration system (DRS) that enables investors to hold and transfer shares electronically directly on the books of the issuer or its registrar and transfer agent, without the need for share certificates representing such shares, upon satisfaction of such conditions applicable to the transfer of shares on such direct registration system and such other conditions as may be approved by the board from time to time; and, in each case, upon payment of all applicable taxes and any reasonable fees prescribed by the board, upon compliance with such restrictions on transfer as are authorized by the Articles and upon satisfaction of any lien referred to in paragraph 7.04. No share of the Corporation shall be held under a DRS until such time as the Corporation decides that it shall participate in such a system.”; and

 

2. any director or officer of the Corporation or any other person designated by any one of them be, and each of them is, hereby authorized to take such action and to execute and deliver such documents, whether on behalf or in the name of the Corporation or otherwise, as such person may, in his or her discretion, consider to be necessary or desirable to carry out the intent and purpose of this resolution and the matters/transactions contemplated herein.”.

 

PROXY INFORMATION

 

SOLICITATION OF PROXIES

 

This is a management proxy circular and proxies are hereby solicited by or on behalf of the management of the Corporation for use at the Meeting or any adjournments thereof. It is expected that the solicitation will primarily be by mail, but may also be made by telephone or other means of telecommunication by directors, officers or employees of the Corporation. The cost of the solicitation will be borne by the Corporation.

 

APPOINTMENT OF PROXYHOLDERS AND REVOCATION OF PROXIES

 

Each person named in the enclosed form of proxy is a director and officer of the Corporation. A shareholder who wishes to appoint some other person to represent him or her at the Meeting may do so either by inserting the name of that person, who need not be a shareholder, in the space provided in the form of proxy and striking out the names of the specified persons, or by completing another form of proxy. In either case, the shareholder must deliver or send the completed form of proxy to CIBC Mellon Trust Company, 600 The Dome Tower, 333 – 7th Avenue S.W., Calgary, Alberta, T2P 2Z1 (mailing address: Proxy Dept., CIBC Mellon Trust Company, P.O. Box 721, Agincourt, Ontario, M1S 0A1), so that it will be received not later than 48 hours (excluding Saturdays, Sundays and holidays) before the time fixed for the Meeting or an adjournment thereof.

 

A shareholder who has given a proxy may revoke it, in any manner permitted by law, including by signing a proxy bearing a later date or a notice of revocation and, in either case, delivering it to the Corporation’s registered office up to the day before the Meeting or to the Chair of the Meeting on the day of the Meeting.

 

EXERCISE OF DISCRETION BY PROXYHOLDERS

 

Where a choice is specified, the persons named in the enclosed form of proxy will vote the shares in respect of which they are appointed in accordance with the directions contained therein. In the absence of such directions, it is intended that such shares will be voted for the adoption of all resolutions referred to in the Notice of Meeting.

 

The enclosed form of proxy confers discretionary authority upon the persons named therein with respect to amendments or variations to matters identified in the Notice of Meeting and with respect to other matters which may properly come before the Meeting. At the date of this proxy circular, management of the Corporation knows of no such amendments, variations or other matters to come before the Meeting other than the matters referred to in the Notice of Meeting. If any such amendment, variation or other matter which is not now known should properly come before the Meeting, then the persons named in the form of proxy will vote on such matters in accordance with their best judgement with respect to the shares represented by such proxy.

 

VOTING OF CLASS A SHARES — ADVICE TO BENEFICIAL HOLDERS

 

The information set forth in this section is of significant importance to shareholders who hold class A participating shares (“Class A Shares”) in the capital of the Corporation through brokers and their nominees and not in their own name. Shareholders who do not hold their Class A Shares in their own name (referred to in this proxy circular as “Beneficial Shareholders”) should note that only proxies deposited by shareholders whose names appear on the records of the Corporation as the registered holders of the Class A Shares can be recognized and acted upon at the Meeting. If Class A Shares are listed in an account statement provided to a shareholder by a broker, then in almost all cases those shares will not be registered under the name of the shareholder on the records of the Corporation. Such shares will more likely be registered under the name of the shareholder’s broker or an agent of that broker. Shares held by brokers or their nominees can only be voted for, or withheld from voting, or voted against any resolution upon the instructions of the Beneficial Shareholder. Without specific instructions, brokers and nominees are prohibited from voting shares for their clients.

 

Applicable regulatory policy requires intermediaries and brokers to seek voting instructions from Beneficial Shareholders in advance of shareholders’ meetings. Every intermediary and broker has its own mailing procedures and provides its own return instructions, which should be carefully followed by Beneficial Shareholders in order to ensure that their Class A Shares are voted at the Meeting. Often, the form of proxy supplied to a Beneficial Shareholder by its broker is identical to the form of the proxy provided to registered shareholders; however, its purpose is limited to instructing the registered shareholder how to vote on behalf of the Beneficial Shareholder. A Beneficial Shareholder receiving a proxy from an intermediary cannot use that proxy to vote shares directly at the Meeting; rather the proxy must be returned to the intermediary well in advance of the Meeting in order to have the shares voted.

 

VOTING SHARES AND PRINCIPAL HOLDERS THEREOF

 

Only the holders of Class A Shares of record at the close of business on November 23, 2007, the record date fixed by the directors of the Corporation, will be entitled to vote on all matters at the Meeting. Each holder of Class A Shares is entitled to one vote for each such share held. As at November 22, 2007, there were 22,563,064 Class A Shares and 409,606,905 class B non-voting participating shares (“Class B Non-Voting Shares”) in the capital of the Corporation outstanding.

 

The only person who, to the knowledge of the directors and executive officers of the Corporation, beneficially owns, directly or indirectly, or exercises control or direction over, more than 10% of the Class A Shares is JR Shaw who beneficially owns, controls or directs 17,784,208 Class A Shares, representing approximately 78.8% of the issued and outstanding Class A Shares. JR Shaw, members of his family and corporations owned or controlled by them have entered into a Voting Trust Agreement relating to all Class A Shares they own, control or direct. The voting rights with respect to such shares are exercised by the representative of a committee of five trustees. The Corporation has been advised that the representative of the trustees will vote for the adoption of all the resolutions referred to in the Notice of the Meeting.

 

RESTRICTED SHARES

 

Holders of Class B Non-Voting Shares are not entitled to vote at meetings of shareholders of the Corporation, except as provided by law, and will not be entitled to vote on any matter at the Meeting. In the event of a take-over bid, in certain circumstances which are fully described in the Corporation’s Annual Information Form dated November 29, 2007, a holder of Class B Non-Voting Shares may be entitled to convert such shares into Class A Shares for purposes of tendering to the take-over bid.

 

STATEMENT OF EXECUTIVE COMPENSATION

 

SUMMARY COMPENSATION TABLE

 

The following table sets forth compensation earned during the last three financial years of the Corporation by the Corporation’s Chief Executive Officer, Chief Financial Officer and the three most highly compensated executive officers (collectively, “Named Executive Officers”) who served as executive officers of the Corporation for the financial year ended August 31, 2007.

 

 

 

Notes:

 

 

STOCK OPTIONS

 

Options to acquire Class B Non-Voting Shares are granted pursuant to the Corporation’s stock option plan. For a description of the Corporation’s stock option plan, see the information under the heading “Statement of Executive Compensation — Report on Executive Compensation — Compensation Philosophy — Long Term Incentives”.

 

Option/SAR Grants During the Most Recently Completed Financial Year

 

No options to acquire Class B Non-Voting Shares of the Corporation were granted to Named Executive Officers in the Corporation’s fiscal year ended August 31, 2007.

Aggregated Option Exercises During the Most Recently Completed Financial Year and Financial Year-End Option Values

 

The following table sets forth details of stock options held or exercised by each Named Executive Officer during the most recently completed financial year and the value of such options based on the difference between the market value of $24.52 per Class B Non-Voting Share as at August 31, 2007 and the exercise price of the options.

 

 

 

 

 

 

PENSION PLANS

 

The Corporation maintains both a defined contribution pension plan and a defined benefit plan, as described below.

 

Defined Contribution Plan

 

The Corporation provides all eligible employees with a defined contribution pension plan (also known as a money purchase plan). Under this plan, the Corporation makes annual contributions up to a maximum of 5% of each employee’s annual salary to a maximum contribution allowable under the Income Tax Act (Canada). Funds are accumulated under the employee’s name and used on retirement to purchase one of several types of annuity at the option of the employee. Contributions on behalf of the Named Executive Officers are included in “All Other Compensation” in the Summary Compensation Table under the heading “Statement of Executive Compensation”. As a defined contribution plan, this pension plan of the Corporation is fully funded and is not subject to surpluses or deficiencies.

 

Defined Benefit Plan (SERP)

 

Effective September 1, 2002, the Corporation established a Supplemental Executive Retirement Plan (“SERP”) for its most senior executive officers. The SERP is a non-contributory defined benefit pension plan which is unfunded.

 

Pension payments under the SERP are set forth in the following table. Benefits under the SERP are based on the officer’s length of service and his or her highest three year average rate of SERP eligible earnings (base salary plus annual cash bonus) during his or her years of service with the Corporation. The SERP provides for payments equal to 5% of SERP eligible earnings for each of the first ten years that an executive officer is in a SERP eligible position and 1.5% for each SERP eligible year thereafter. The maximum annual pension that an officer may earn under the SERP is 70% of average SERP pensionable earnings.

 

An executive officer of the Corporation must be in a SERP-eligible position for 5 years to qualify to receive a pension. Officers who retire at age 60 or later will receive a full pension as will those officers who retire after age 55 with 10 years of SERP-eligible service. Officers between the ages 55 and 60 with less than 10 years of SERP-eligible service and officers between the ages 50 and 55 with 15 years of SERP-eligible service are eligible to retire with a discounted pension.

SERP Payment Table

 

 

 

Notes:

 

 

 

 

Notes:

 

 

The Corporation’s obligations and related costs of the SERP benefits earned by executive officers are actuarially determined using the projected benefit method, pro-rated on service, and management’s best estimate of salary escalation and retirement ages of officers. The pension expense with respect to the SERP for the fiscal year ended August 31, 2007 was $20.8 million. The expected aggregate benefit payments for the fiscal year ended August 31, 2008, as actuarially determined, are approximately $1.4 million. The accrued benefit obligation of the SERP at August 31, 2007 was $158.5 million, of which $58.3 million has been recognized by the Corporation as a liability in its accounts in accordance with Canadian generally accepted accounting principles. In the event of a change of control of, or merger involving, the Corporation, the SERP becomes fully vested and fully funded immediately.

 

Further information with respect to the SERP, and the Corporation’s accounting policy with respect thereto, is set forth in Notes 1 and 17 to the audited annual consolidated financial statements of the Corporation for the year ended August 31, 2007. See “Other Information — Additional Information”.

 

EMPLOYEE SHARE PURCHASE PLAN

 

An employee share purchase plan (the “ESPP”) was introduced in 1998 to provide employees of the Corporation with an incentive to increase the profitability of the Corporation and a means to participate in that increased profitability.

 

Generally, all non-unionized full time or part time employees of the Corporation and certain of its subsidiaries are eligible to enrol in the ESPP. Executive officers of the Corporation, including the Named Executive Officers, are entitled to participate in the ESPP on the same basis as all other employees of the Corporation.

 

Under the ESPP, each employee contributes, through payroll deductions, a minimum of $25.00 per semi-monthly pay period or $50.00 per monthly pay period to a maximum of 5% of the participant’s monthly basic compensation. The Corporation contributes an amount equal to 25% of the participant’s contributions for that month. CIBC Mellon Trust Company, as trustee under the ESPP, or its nominee acquires Class B Non-Voting Shares for the benefit of participants through the facilities of the Toronto Stock Exchange (the “TSX”) using monies contributed to the ESPP. A participant may withdraw up to 100% of the shares vested in his or her account up to twice in any 12 month period.

 

As at August 31, 2007, approximately 39% of eligible employees of the Corporation purchased Class B Non-Voting Shares under the ESPP. As at such date, an aggregate of approximately 1,051,867 Class B Non-Voting Shares were held under the ESPP.

 

EMPLOYMENT CONTRACTS

 

In 1997, the Corporation entered into an agreement with its Executive Chair, JR Shaw, which provides for, amongst other things, an annual incentive bonus. The agreement recognizes JR Shaw’s central role in founding and building the Corporation and ensures that the Corporation retains and utilizes the full benefits of his 40 years of industry experience. As Executive Chair, JR Shaw continues to provide broad stewardship and strategic vision for the Corporation. In addition, his stature as a national corporate leader and his positive long-standing reputation with government, regulatory, investor and banking communities enhances the Corporation’s capacity to achieve its strategic and financial goals.

 

The agreement with JR Shaw provides for an incentive bonus that is paid to him annually, provided the Corporation reaches its financial targets. The agreement also specifies that the amount is to be between 0.5% and 1.0% of the Corporation’s service operating income before amortization (as reported in the Corporation’s annual consolidated financial statements) calculated excluding the results of Star Choice Communications Inc. (the “Income Base”) for the year in which it is to be paid. The Corporation met its financial targets and JR Shaw voluntarily elected to cap the bonus paid to him by the Corporation at $6,326,730, equal to the amount paid under the agreement since fiscal 2002. This represents approximately 0.61% of the Income Base for fiscal 2007, as compared to 0.70%, 0.75% , 0.78%, 0.83% and 0.98% of the Income Base for fiscal 2006, 2005, 2004, 2003 and 2002, respectively.

 

No other Named Executive Officer has an employment contract with the Corporation.

 

COMPOSITION OF THE COMPENSATION COMMITTEE

 

The Human Resources and Compensation Committee is comprised of four independent directors, Willard H. Yuill (Chair), Harold Roozen, Jeffrey C. Royer and JC Sparkman. The Human Resources and Compensation Committee has the responsibility of annually reviewing and recommending to the Board the compensation package for the Executive Chair, Chief Executive Officer (“CEO”), Chief Financial Officer and the other two most highly compensated officers of the Corporation. It also has responsibility for annually reviewing and approving the compensation packages for the other senior officers of the Corporation. In addition, the Human Resources and Compensation Committee reviews and approves changes to the Corporation’s compensation policies in respect of matters such as incentive-compensation (bonus) plans, pension plans and employee benefit plans and the structure and granting of stock options or other equity-based plans. Further, the Human Resources and Compensation Committee approves the appointment of senior management recruited from outside the Corporation as well as the promotion of senior management within the Corporation.

 

REPORT ON EXECUTIVE COMPENSATION

 

The Human Resources and Compensation Committee of the Corporation has been delegated responsibility of annually setting and approving the overall compensation policy intended to reward executive officers of the Corporation. In doing so, the Human Resources and Compensation Committee reviews and approves, in consultation with outside experts, various components of the Corporation’s compensation policies such as pension plans, employee benefit plans and stock options. The Human Resources and Compensation Committee also approves the compensation of executive officers recruited from outside the Corporation, as well compensation of senior management within the Corporation.

Compensation Philosophy

 

The total compensation of executive officers of the Corporation, including the Named Executive Officers, consists of the following components: base salary, short-term incentive awards and long-term incentive awards. Each executive officer’s compensation is balanced between these three components.

 

 

Base salary levels for all executive officers of the Corporation (including the Named Executive Officers) are based upon performance and are commensurate with those of comparable compensation programs in the industry in North America. The base salaries are designed to achieve the following objectives:

 

 

 

Short term incentive awards are paid as cash bonuses. For the 2007 fiscal year, bonuses were awarded to approximately 440 key management personnel, as determined by and at the discretion of the Human Resources and Compensation Committee. In addition, success-sharing bonuses were awarded to approximately 8,000 other employees. The bonuses were based upon the Corporation’s overall performance for the fiscal year ending August 31, 2007.

 

The fiscal 2007 bonuses rewarded employees for the success of the Corporation in attaining performance targets. During fiscal 2007, the Corporation achieved its performance targets, including the continued expansion of Shaw Digital Phone to new markets, subscriber growth, and achievement of financial objectives including service operating income before amortization and free cash flow targets.

 

 

Long term incentive awards consist principally of stock options granted under the Corporation’s current stock option plan, which has been in place since October 1999. The stock option plan of the Corporation provides that options may be granted to such directors, officers, employees and consultants of the Corporation and for such number of Class B Non-Voting Shares as the Board, or a committee thereof, determines in its discretion, at an exercise price not less than the closing price of the Class B Non-Voting Shares on the TSX on the trading day immediately preceding the date on which the option is granted. Unless otherwise determined by the Board, options are not immediately exercisable, but, rather, 25% of the original grant is exercisable on each of the first, second, third and fourth anniversary dates of the date of grant. Options granted under the stock option plan expire 10 years from the date of grant and, subject to limited exceptions, must be exercised while the optionee remains as a director, officer, employee or consultant of the Corporation. Provision is made for early termination of options in the event of death, disability or cessation of employment or service arrangements, as the case may be. Options are not transferable or assignable.

 

The maximum number of Class B Non-Voting Shares issuable under the Corporation’s stock option plan may not exceed 32,000,000 Class B Non-Voting Shares, representing approximately 7.8% of the Class B Non-Voting Shares issued and outstanding as of August 31, 2007. The maximum number of Class B Non-Voting Shares which may be reserved for issuance to insiders of the Corporation and their associates under such plan is limited to 10% of the number of Class B Non-Voting Shares outstanding at the date of grant on a non-diluted basis. The maximum number of Class B Non-Voting Shares which may be issued to insiders of the Corporation and their associates under such plan within a one year period is limited to 10% of the number of Class B Non-Voting Shares outstanding at the time of the issuance on a non-diluted basis. The maximum number of Class B Non-Voting Shares which may be issued to any one insider of the Corporation under the stock option plan within a one year period is limited to 5% of the Class B Non-Voting Shares outstanding at the time of the issuance on a non-diluted basis. Subject to applicable law and approval of the Board, the Corporation may provide financial assistance in connection with the exercise of an option, with recourse to the Class B Non-Voting shares purchased upon such exercise.

 

During the last fiscal year and prior to June 30, 2007, in accordance with the TSX rules and with the consent of the TSX, the Corporation amended its stock option plan in order to (i) add a “surrender for cash” feature which can be activated at the Board’s discretion, with no shares reverting back to the plan reserve if so surrendered; and (ii) make certain other amendments of a housekeeping nature. The foregoing amendments did not require shareholder approval as they

were made pursuant to the amendment provisions of the stock option plan and were not deemed to be material by the TSX. Subject to the rules of the TSX, all future amendments to the Corporation’s stock option plan dating from June 30, 2007 will require the approval of the TSX and the holders of Class A Shares of the Corporation.

 

As at August 31, 2007, an aggregate of 17,574,801 Class B Non-Voting Shares were reserved for issuance on exercise of options granted under the Corporation’s stock option plan, representing approximately 4.3% of the Class B Non-Voting Shares issued and outstanding as at such date. See “Other Information — Securities Authorized for Issuance under Equity Compensation Plans”. Effective September 1, 2007, certain option grants were made to each of the Named Executive Officers. See “Statement of Executive Compensation — Stock Options”.

 

Compensation of CEO and Executive Chair

 

The total compensation package of the CEO of the Corporation is determined in the same manner as that of all other executive officers. The bonus paid to the CEO during the last fiscal year was intended to recognize the CEO in the same fashion through the same bonus plan in which all other executive officers and senior management of the Corporation participated.

 

With respect to the Executive Chair of the Corporation, the Corporation, upon recommendation of the Human Resources and Compensation Committee, entered into an agreement with the Executive Chair in 1997 to recognize his central role as founder and builder of the Corporation since its inception over 40 years ago and to retain and utilize the ongoing stewardship benefits of his industry stature and experience, national reputation and strategic vision to achieve the Corporation’s strategic and financial objectives. The Executive Chair’s bonus remains governed by the terms and conditions of such agreement. For fiscal 2007, in accordance with the ongoing request of the Executive Chair, the Human Resources and Compensation Committee determined that the Executive Chair’s bonus should be fixed at the amount paid to him since fiscal 2002. The Human Resources and Compensation Committee is to review the bonus granted to the Executive Chair annually. See “Statement of Executive Compensation — Employment Contracts”.

 

Report on Executive Compensation Submitted on Behalf of the Human Resources and Compensation Committee:

 

Willard H. Yuill (Chair)

Harold Roozen

Jeffrey C. Royer

JC Sparkman

 

PERFORMANCE GRAPH

 

The following graph compares the cumulative return of the Class B Non-Voting Shares with the Standard & Poor’s/TSX Composite Index for the period commencing on August 31, 2002 and ending on August 31, 2007.

 

Relative Total Return Performance
Shaw Communications Inc. vs. S&P/TSX Composite
August 31, 2002 to August 31, 2007⁽¹⁾

 

 

 

Notes:

 

 

COMPENSATION OF DIRECTORS

 

Cash Compensation

 

Directors of the Corporation are currently remunerated for their services as directors according to the fee schedule set forth in the table below.

 

 

 

Notes:

 

 

The fees paid to directors of the Corporation are payable in Canadian dollars for directors resident in Canada and in U.S. dollars for all other directors. The Corporation also reimburses directors for out-of-pocket expenses incurred in attending Board and Committee meetings.

 

For information with respect to fees paid to each director of the Corporation for the fiscal year ended August 31, 2007, see the table under the heading “Business of the Meeting — Election of Directors — Fees Paid to Individual Directors”.

 

Stock Options

 

Each director (other than management directors) has been granted options to acquire 70,000 Class B Non-Voting Shares at exercise prices ranging from $8.68 to $26.20 pursuant to the terms and conditions of the stock option plan of the Corporation. In accordance with the terms of such stock option plan, 25% of the original option grant is exercisable on each of the first, second, third and fourth anniversary dates of the date of grant. The options expire 10 years from the date of grant. Subject to limited exceptions, options must be exercised while the individual remains as a director of the Corporation. The options are not transferable or assignable. For further information concerning the Corporation’s stock option plan, see “Statement of Execution Compensation — Report on Executive Compensation”.

 

During fiscal 2007, 20,000 options were granted to Gregg Keating on his appointment to the Board on May 24, 2007. Subsequent to fiscal 2007 year-end, Dr. Lynda Haverstock was appointed to the Board on October 26, 2007 and was granted 20,000 options on October 30, 2007. Also, a further 50,000 options were granted to each director (other than management directors) on October 30, 2007. These latter options were granted in connection with a review of the Board of Directors’ compensation practices which was undertaken by the Human Resources and Compensation Committee with the assistance of an outside consultant.

 

For information concerning the options held by management directors, see “Statement of Executive Compensation — Stock Options”.

 

DDSU Plan

 

The Corporation has adopted a Directors’ Deferred Share Unit Plan (“DDSU Plan”) for directors. Effective January 1, 2004, directors may elect under the DDSU Plan to receive 25%, 50%, 75% or 100% of their annual cash compensation in the form of deferred share units (“DSUs”), provided that any director who has not met the applicable share ownership guideline is required to elect to receive at least 25% of his or her annual compensation in DSUs. The number of DSUs to be credited to a director’s account on each payment date is equal to the number of Class B Non-Voting Shares that could have been purchased on the payment date with the amount of compensation allocated to the DDSU Plan. On each dividend payment date for the Class B Non-Voting Shares, an additional number of DSUs is credited to a director’s DSU account, equivalent to the number of Class B Non-Voting Shares that could have been acquired on that date by notional dividend reinvestment. DSUs will be paid out in cash when the director ceases to hold office as a director or on a date elected by the director during the year following cessation of directorship. The payout will be calculated by multiplying the number of DSUs by the then current market value of a Class B Non-Voting Share.

 

Share Ownership Guideline

 

During the fiscal year ended August 31, 2003, the Corporation established share ownership guidelines for non-management directors. The guideline level of share ownership (including DSUs) is Class A Shares and Class B Non-Voting Shares with an aggregate market value of at least $250,000, to be held by each non-management director within five years of the later of the effective date of the DDSU Plan and the date on which the director was first elected or appointed to the Board.

 

For information concerning the shares, DSUs and options held by each director nominated for election at the Meeting, see the table under the heading “Business of the Meeting — Election of Directors.”

 

OTHER INFORMATION

 

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

 

As of August 31, 2007, the Corporation had two compensation plans under which equity securities of the Corporation are authorized for issuance, as summarized in the table below. Under such plans, options to acquire an aggregate of 17,608,403 Class B Non-Voting Shares were outstanding as of August 31, 2007, representing approximately 4.3% of the Class B Non-Voting Shares issued and outstanding as of such date.

 

Equity Compensation Plan Information

 

 

 

Notes:

 

 

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

 

Certain executive officers and employees of the Corporation are currently indebted to the Corporation, as set forth in the following tables. Except for routine indebtedness, no other director or executive officer of the Corporation is or has been indebted to the Corporation. In compliance with the Sarbanes-Oxley Act of 2002, the Corporation has not granted loans to any director or officer of the Corporation since July 29, 2002.

 

 

The following table sets forth the aggregate indebtedness outstanding as of October 31, 2007 in connection with a purchase of securities of the Corporation, as well as all other indebtedness of all directors, executive officers and employees, current or former, of the Corporation or any of its subsidiaries.

 

 

 

 

Notes:

 

 

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

 

Other than as disclosed herein, management of the Corporation is unaware of any material interest of any director or executive officer of the Corporation, of any management nominee for election as a director of the Corporation or of any person who beneficially owns (directly or indirectly) or exercises control or direction over shares carrying more than 10% of the voting rights attached to all voting shares of the Corporation, or any associate or affiliate of any such person, in any transaction since the beginning of the last completed financial year of the Corporation or in any proposed transaction that has materially affected or would materially affect the Corporation or any of its subsidiaries.

 

NORMAL COURSE ISSUER BID

 

On November 15, 2007, the Corporation announced that it received the approval of the TSX to renew its normal course issuer bid. Pursuant to such normal course issuer bid, the Corporation is authorized to acquire up to an additional 35,600,000 Class B Non-Voting Shares, being approximately 10% of the public float of Class B Non-Voting Shares, until the expiry of the bid on November 18, 2008.

 

Under its last normal course issuer bid which commenced November 17, 2006 and expired November 16, 2007, the Corporation was authorized to purchase 30,600,000 Class B Non-Voting Shares. The Corporation purchased an aggregate of 848,400 Class B Non-Voting Shares at a weighted average price of $23.59, as summarized in the following table. All such shares have been cancelled.

 

 

 

The Corporation believes that purchases of outstanding Class B Non-Voting Shares are in the best interests of the Corporation and its shareholders, and that such purchases constitute a desirable use of the Corporation’s free cash flow that is expected to enhance the value of the remaining Class B Non-Voting Shares. During the period from November 17,

2007 to the date hereof, the Corporation has not purchased and cancelled any Class B Non-Voting Shares pursuant to its renewed normal course issuer bid.

 

Purchases under the renewed normal course issuer bid will be effected through the facilities of the TSX, in accordance with its by-laws and rules. The renewed normal course issuer bid does not apply to Class A Shares of the Corporation.

 

Copies of the Notice of Intention to Make a Normal Course Issuer Bid filed by the Corporation with the TSX may be obtained, without charge, by contacting the Corporate Secretary of the Corporation at: Suite 900, 630 — 3rd Avenue S.W., Calgary, Alberta, Canada, T2P 4L4, Telephone (403) 750-4500.

 

On July 24, 2007, the Corporation also purchased for cancellation a block of 3,560,000 Class B Non-Voting Participating Shares, then representing less than 1% of its outstanding Class B Non-Voting Participating Shares, for a purchase price of $23.81 per share. The purchase was made from an arm’s length third party shareholder in the Province of Ontario pursuant to a private agreement and under an issuer bid exemption order from the Ontario Securities Commission.

 

ADDITIONAL INFORMATION

 

Additional information concerning the Corporation, including the Corporation’s Business Conduct Standards, Annual Information Form dated November 29, 2007, consolidated interim and annual financial statements and management’s discussion and analysis thereon, is available through the Internet on the Canadian System for Electronic Document Analysis and Retrieval (SEDAR) which may be accessed at www.sedar.com. Copies of such information may also be obtained on request without charge from the Corporate Secretary of the Corporation, Suite 900, 630 — 3rd Avenue S.W., Calgary, Alberta, Canada, T2P 4L4, Telephone (403) 750-4500.

 

Financial information of the Corporation is provided in the Corporation’s consolidated corporate financial statements, and management’s discussion and analysis thereon, for the Corporation’s fiscal year ended August 31, 2007. Copies of such financial statements may be obtained in the manner set forth above.

 

Copies of any documents referred to in the proxy circular as being available on the Corporation’s website, www.shaw.ca, may also be obtained in the manner set forth above.

 

STATEMENT OF CORPORATE GOVERNANCE

 

The Board and management of the Corporation recognize that effective corporate governance is central to the prudent direction and operation of the Corporation in a manner that ultimately enhances shareholder value. The following discussion outlines the Corporation’s system of corporate governance, including with respect to various matters addressed by National Instrument 58-101 — Disclosure of Corporate Governance Practices and National Policy 58-201 — Corporate Governance Guidelines.

 

The corporate governance practices and policies of the Corporation have been developed under the general stewardship of the Corporate Governance and Nominating Committee of the Board. The Corporate Governance and Nominating Committee believes that the corporate governance practices of the Corporation are appropriate for a company such as the Corporation. As a result of evolving laws, policies and practices, including the Sarbanes-Oxley Act of 2002 and the corporate governance rules adopted by the NYSE, the Corporate Governance and Nominating Committee continuously reviews the practices and policies of the Corporation to ensure that the Corporation complies with all applicable requirements. In this regard, the Corporate Governance and Nominating Committee has developed and implemented, and continues to develop, implement and refine, formal policies and procedures that reflect the Corporation’s commitment to exemplary corporate governance.

 

BOARD MANDATE AND COMPOSITION

 

The Board has responsibility for supervising and overseeing the management of the business of the Corporation. As part of its stewardship of the Corporation, and in addition to the obligations of the Board mandated by law, the Board has specific responsibility for strategic planning; the selection and monitoring of management, including the CEO; management succession planning; the identification and management of the principal risks associated with the Corporation’s business; and the implementation and assessment of internal controls, disclosure controls and other systems and procedures consistent with applicable laws and good corporate practice. These duties and obligations, among others, are set forth in a written Board mandate that has been adopted and is reviewed on an on-going basis by the Board. A copy of the Board mandate is appended to this proxy circular as Exhibit A hereto.

 

Certain of the powers, duties and responsibilities of the Board have been delegated to committees of the Board, as described under the heading “Statement of Corporate Governance — Committees of the Board”.

 

With respect to strategic planning, the Board establishes the overall strategic objectives for the Corporation, annually reviews and approves management’s strategic plans and, on an on-going basis, reviews emerging trends, opportunities, risks and issues with management. The Board receives updates from management on strategic developments at least eight times per year (at the end of each fiscal quarter and at mid-quarter) and reviews and adjusts consolidated and divisional budgets, plans and objectives of the Corporation as may be required. The Board also reviews and approves strategic transactions that are not considered to be in the ordinary course of business as well as other items of significance, including significant acquisitions, dispositions and financings.

 

The Board is currently composed of 16 directors, 13 of whom have been determined by the Board to be independent directors. For further information in this regard, see the table under the heading “Statement of Corporate Governance — Corporate Governance Disclosure and Compliance with Corporate Governance Guidelines”.

 

COMMITTEES OF THE BOARD

 

Subject to applicable law, the Board may delegate its powers, duties and responsibilities to committees of the Board. In this regard, the Board has established four standing committees: Executive, Audit, Corporate Governance and Nominating, and Human Resources and Compensation. The membership of each committee is set forth below. For information about the attendance of members at meetings of the committees, see “Business of the Meeting — Election of Directors — Meetings Held and Attendance of Directors”.

 

The mandate of each of the committees of the Board is summarized below. A copy of the full written charter of each committee is available on the Corporation’s website.

 

 

The Executive Committee carries out all matters that may be specifically and lawfully delegated to it by the Board. In particular, the Executive Committee exercises the powers of the Board in circumstances where, following initial approval of a matter by the full Board, the Board delegates approval of certain aspects to the Executive Committee. Matters reviewed and approved by the Executive Committee are in most circumstances referred back to the full Board for ratification, confirmation and approval at the next meeting of the Board.

 

Other than JR Shaw, each and every member of the Executive Committee is an independent director.

 

 

The Audit Committee of the Board is responsible for overseeing the integrity of the Corporation’s financial reporting process. In this regard, the primary duties of the Audit Committee involve reviewing the Corporation’s annual and interim financial statements; monitoring the effectiveness and integrity of the Corporation’s financial reporting, internal control and related management information systems; and overseeing the audits conducted by the Corporation’s external auditors.

 

The Audit Committee is responsible for overseeing the effectiveness and integrity of the Corporation’s internal controls, including information systems related thereto, and disclosure processes and controls; evaluating the qualifications and performance of the Corporation’s external auditors and implementing practices to preserve their independence; reviewing the engagements to be provided by the external auditors; and reviewing all significant auditing and accounting practices and policies and any proposed changes with respect thereto.

 

Further, the Audit Committee, in respect of those risk areas that the Board has assigned to it oversight responsibility, identifies and reviews with management the principal risks facing the Corporation in those areas and ensures that management has in place policies and systems to assess and manage these risks. As part of this process, the Audit Committee regularly reviews reports and discusses significant risk areas with the Corporation’s external auditors.

 

With respect to internal controls over financial reporting, the Corporation has conducted an evaluation of the effectiveness of its system of internal controls and concluded that the Corporation’s system of internal controls over financial reporting was effective as at August 31, 2007 and that the Corporation is in compliance with the requirements of Section 302 of the Sarbanes-Oxley Act of 2002. As part of its oversight of the integrity of the Corporation’s internal controls, the Audit Committee specifically reviews and addresses fraud prevention and other procedures. Under the Corporation’s Business Conduct Standards, the Corporation has also implemented procedures to ensure that concerns and complaints with respect to accounting, auditing, internal control and public disclosure matters, among others, are brought to the attention of the Audit Committee.

 

Each and every member of the Audit Committee is an independent director and is financially literate. Michael W. O’Brien, who serves as the Chair of the Audit Committee, qualifies as a “financial expert” under the Sarbanes-Oxley Act of 2002 and other applicable regulatory requirements. Carl E. Vogel also qualifies as a “financial expert” under the Sarbanes-Oxley Act of 2002 and other applicable regulatory requirements.

 

A further description of matters relating to the Audit Committee, along with a copy of the written charter of the Audit Committee, is set forth under the heading “Audit Committee” in the Corporation’s Annual Information Form dated November 29, 2007.

 

 

The Corporate Governance and Nominating Committee of the Board is responsible for developing and monitoring the Corporation’s approach to corporate governance in accordance with good corporate practice and applicable laws and policies. In particular, the Corporate Governance and Nominating Committee is responsible for overseeing the role, composition, structure and effectiveness of the Board and its committees.

 

In this regard, the Corporate Governance and Nominating Committee is responsible for such matters as establishing and reviewing the mandates of the Board and its committees; identifying and evaluating candidates for nomination to the Board; overseeing the orientation and education programs for directors; assessing the effectiveness of the Board, its committees and individual directors; and establishing and reviewing general corporate policies and practices, such as related party transaction policies and securities trading guidelines.

Each and every member of the Corporate Governance and Nominating Committee is an independent director.

 

 

The Human Resources and Compensation Committee of the Board is responsible for ensuring that appropriate and effective human resource recruitment, development, compensation, retention, succession planning (including appointing, training and monitoring senior management) and performance evaluations programs are developed and implemented in conformity with the Corporation’s strategic objectives and with a view to attracting and retaining the best qualified management and employees. For further information, see “Statement of Executive Compensation — Composition of Compensation Committee”.

 

Each and every member of the Human Resources and Compensation Committee is an independent director.

 

LEAD DIRECTOR

 

During fiscal 2004, the Corporation created the position of lead director and adopted a formal position description, a copy of which is available on the Corporation’s website. The lead director provides independent leadership to the Board, facilitates the functioning of the Board independently of management of the Corporation, and maintains and enhances the quality of the Corporation’s corporate governance practices. In this regard, the lead director acts as Chair of meetings of the Board in the absence of the Executive Chair; consults with the Corporation’s independent directors and represents them in discussions with management of the Corporation; serves as Board ombudsman; mentors and counsels new members of the Board; and facilitates the process of conducting director evaluations.

 

Donald F. Mazankowski, an independent director, has served as lead director of the Corporation since the position was created in 2004. Mr. Mazankowski, a director of the Corporation since 1993, was a Member of the Parliament of Canada from 1968 to 1993 and held a number of Cabinet positions, including Deputy Prime Minster, Minister of Finance and President of the Privy Council. Mr. Mazankowski also serves as a director of several national and international corporations.

 

OTHER CORPORATE GOVERNANCE MATTERS

 

 

The Corporation has adopted a set of Business Conduct Standards, which apply to all directors, officers (including the principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions) and employees of the Corporation. The Corporate Governance and Nominating Committee, with the assistance of the Corporation’s Business Conduct Standards Committee (a committee of management representatives from each of the Operations, Human Resources, Legal and Finance departments which meets throughout the year), is responsible for monitoring compliance with the Business Conduct Standards and for approving waivers of such standards. No such waivers for directors or officers of the Corporation have been granted as of the date hereof.

 

The Corporation’s Business Conduct Standards address such matters as conflicts of interest, confidential information, and the protection and proper use of the Corporation’s assets. The Business Conduct Standards also include procedures for the submissions of complaints or concerns that employees may have regarding compliance with corporate policies or applicable laws or with respect to accounting, internal control and auditing matters.

 

Communications Policy

 

The Corporation has adopted corporate disclosure guidelines with respect to the dissemination of material information in a timely manner to all shareholders in accordance with applicable securities laws. Under such guidelines, the Board, upon recommendation of the Audit Committee, approves annual and quarterly reports to shareholders as well as other material public communications.

 

All quarterly and annual financial statements, material press releases, investor presentations and other corporate governance-related materials are posted immediately on the Corporation’s website. With respect to the release of its quarterly financial results, the Corporation provides Internet and telephone conference call access to interested parties.

 

Investor enquiries receive a response through the finance department of the Corporation or through an appropriate officer of the Corporation.

 

CORPORATE GOVERNANCE DISCLOSURE AND COMPLIANCE WITH CORPORATE GOVERNANCE GUIDELINES

 

The Canadian Securities Administrators have adopted National Instrument 58-101 — Disclosure of Corporate Governance Practices (the “Disclosure Instrument”) and National Policy 58-201 — Corporate Governance Guidelines (the “Guidelines’). The Disclosure Instrument requires issuers such as the Corporation to disclose the corporate governance practices that they have adopted, while the Guidelines provide guidance on corporate governance practices. In this regard, a brief description of the Corporation’s system of corporate governance, with reference to each of the items set out in the Disclosure Instrument, is set forth in the table below.