UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No.          )

 

 

 

 

 

You are cordially invited to attend the 2019 Annual Meeting of Stockholders of Maxar Technologies Inc., to be held at Maxar’s corporate headquarters located at 1300 West 120th Avenue, Westminster, Colorado  80234, on May 8, 2019, at 2:00 p.m., Mountain Time. The attached Notice of Annual Meeting and Proxy Statement describe the matters that we expect to act upon at the Annual Meeting.

Your vote is important. We hope that you will attend the meeting, but whether or not you attend, please submit your proxy or voting instructions as soon as possible to ensure your shares are voted at the Annual Meeting.  The accompanying Notice of Annual Meeting and Proxy Statement provide information about the matters on which you may vote. If you wish to attend the meeting in person, please follow the advance registration instructions in the Proxy Statement.

On behalf of the Board of Directors, thank you for your continued support of Maxar.

Sincerely,

Daniel L. Jablonsky

Director, President and Chief Executive Officer

Maxar Technologies Inc.

1300 West 120th Avenue

Westminster, Colorado 80234

(303) 684‑4000

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 8, 2019

 

We are providing this Proxy Statement to you in connection with the solicitation of proxies to be used at the 2019 Annual Meeting of Stockholders of Maxar Technologies Inc. This Proxy Statement contains important information regarding our Annual Meeting, the proposals on which you are being asked to vote, information you may find useful in determining how to vote and information about voting procedures.

On or about March 28, 2019, we will send our Stockholders entitled to notice of, and to vote at, the Annual Meeting either a (1) Notice of Internet Availability of Proxy Materials containing instructions on how to access our Proxy Statement and 2018 Annual Report and how to vote shares at the Annual Meeting, or (2) a complete copy of the proxy materials by mail (or by email for those Stockholders who requested electronic delivery) for those Stockholders who requested hard copy delivery.

Your vote is very important. Whether or not you expect to attend the Annual Meeting, please submit your proxy or voting instructions as promptly as possible by following the instructions in the proxy materials you received in order to ensure your shares are represented at the Annual Meeting. Even if you have voted by proxy, you may still vote in person if you attend the Annual Meeting. Please note, however, that if your shares are held by a broker, bank or other nominee and you wish to vote at the Annual Meeting, you must obtain a proxy issued in your name from your broker, bank or nominee authorizing you to vote your shares at the Annual Meeting.

 

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be Held on May 8, 2019: The 2019 Proxy Statement and 2018 Annual Report are available at www.envisionreports.com/MAXR.

 

 

TABLE OF CONTENTS

 

 

 

Chair’s Letter:

Given the difficult year Maxar Technologies Inc. faced in 2018, as the new Chair of the Board I want to directly address all of you as Stockholders and assure you we are doing everything possible to right the ship in 2019.

In 2017 with the approval of many of you we joined together DigitalGlobe and McDonald, Dettwiler and Associates (MDA) to form Maxar. At the time, it was widely expected the new company would be highly successful because of its unique end-to-end capabilities and, therefore, would be profitable for our Stockholders. In 2018, tough headwinds in the GEO Satcom business, the loss of an important on orbit asset called Worldview 4, and our inability to deal with financial shortfalls in a timely way weighed heavily on our Company.

In early 2019 with the change in our domestication from Canada to the U.S. and with the change in governance of the Board, it was a natural question for directors to ask…”Do we have the right CEO?“ Given the company’s performance in 2018 and the loss of over 90% of our value in the marketplace, the directors decided it was time to put new leadership at the head of the company and unanimously selected Dan Jablonsky as our new CEO.  This was not a knee jerk reaction but rather a well thought out decision which the directors felt was essential to rebuild lost confidence in our company, its leadership and its Board.

I have personally worked with Dan since he joined DigitalGlobe in 2012. Earlier in his career, Dan served as an officer and nuclear engineer in the U.S. Navy, and later became an attorney. He practiced corporate and securities law, and worked in the enforcement division of the U.S. Securities and Exchange Commission. That is to say, we share a commitment to integrity, to putting mission first, and to principled leadership.  His time as General Counsel and General Manager of the U.S. and International Defense and Intelligence business at DigitalGlobe and his leadership of DigitalGlobe at Maxar has given us a good opportunity to watch Dan in action and gave us high confidence in his ability to lead Maxar.

The Board is your representative, and we take this obligation very seriously. Our primary responsibility to you is to be sure the company has the best CEO possible. A close second is to assure the company has the right strategy going forward. To that end, the Board is working very closely with Dan and his team as we consider all options to turn the corner and head our company in the right direction. This will take time, but we are convinced we understand what needs to be done. The Board will provide the proper oversight and advice to Dan and his team as they execute the company’s strategy in 2019.

 

 

Howell M. Estes, III

Chair of the Board of Directors

Maxar Technologies Inc.

 

 

PROXY SUMMARY

2018 Business Highlights

 

On January 1, 2019, we completed the change of our jurisdiction of organization from the Province of British Columbia in Canada to the State of Delaware in the United States. Additionally, we completed a reorganization of our corporate structure of the group of companies controlled by our predecessor issuer, Maxar Technologies Ltd. (“Maxar Canada”), as the holding company of the Maxar group, pursuant to which Maxar Technologies Inc. (“Maxar” or the “Company”) directly acquired all of the issued and outstanding shares of Maxar Canada, and Maxar U.S. replaced Maxar Canada as the publicly held parent company of the Maxar group. We refer to this transaction as the “U.S. Domestication”. The U.S. Domestication marked a major milestone in Maxar Canada’s long-term objective to gain a stronger presence in the U.S. market.  Information for the fiscal year ended 2018, including our Compensation, Discussion and Analysis will reflect information for Maxar Canada.

Our Board of Directors

 

Our Board of Directors is comprised of highly skilled and experienced members from diverse commercial and government backgrounds, who collectively provide the depth, expertise and leadership to assist management and represent the interests of our Stockholders.  Our Board of Directors’ top priorities are to represent the Company’s  Stockholders and create long-term value, and to oversee the development and execution of the Company’s strategy.  In realizing our purpose, our Board of Directors and our Company maintain the highest standards of ethical conduct and sound corporate governance, which are described in more detail below in the Corporate Governance section of this Proxy Statement, beginning on page 17.

 

Executive Compensation Summary Results

 

We encourage Stockholders to review the Compensation Discussion & Analysis beginning on page 33 of this Proxy Statement, which describes our executive compensation philosophy and the design of our executive compensation program in greater detail.

Meeting Agenda and Board Voting Recommendations

 

The following table summarizes the proposals to be considered at our Annual Meeting and the Board of Directors’ voting recommendation with respect to each proposal:

 

You Can Vote in the Following Ways:

 

 

 

THE PROPOSALS

Proposal 1 - Election of Directors

At this year’s Annual Meeting, we will be presenting ten director nominees for election, each to serve a term of one year expiring at our 2020 Annual Meeting of Stockholders and until their respective successors are duly elected and qualify.  The nominees are Howell M. Estes, III,  Nick S. Cyprus, Roxanne J. Decyk, Lori B. Garver, Joanne O. Isham, Daniel L. Jablonsky,  C. Robert Kehler, L. Roger Mason, Jr., Robert L. Phillips and Eric J. Zahler.  Mr. Brian G. Kenning and Mr. Dennis Chookaszian,  each a current director, are not standing for re-election and will retire from the Board of Directors effective at the conclusion of the Annual Meeting.

Each of the nominees standing for election is presently a member of the Board of Directors with the exception of Ms. Decyk.  Each of the nominees standing for election is considered independent, with the exception of Mr. Jablonsky.

The Board of Directors, acting upon the recommendation of the Nominating and Corporate Governance Committee, recommends that the Stockholders vote in favor of the election of the nominees named in this Proxy Statement to serve as members of the Board of Directors.  Each of the nominees has consented to be named in this Proxy Statement and to serve if elected.

As of March 20, 2019, the authorized number of Board of Directors consists of eleven directors and the Board of Directors currently consists of 11 members.  Neither Brian G. Kenning nor Dennis Chookaszian will stand for re-election at the Annual Meeting. Roxanne J. Decyk is being nominated as a new director, and the Board of Directors has approved reducing the authorized number of directors to 10 effective as of the conclusion of the Annual Meeting.  If, at the time of the Annual Meeting, any of the nominees should be unable or unwilling for good cause to serve, the persons named as proxy on the proxy card will vote for such substitute nominee or nominees as the Board of Directors recommends, or vote to allow the resulting vacancy to remain open until filled by the Board of Directors, as the Board of Directors recommends.

The following table provides certain summary information about each of our director nominees as of March 20, 2019:

 

Biographical information as of March 20, 2019  about each nominee for director is set forth beginning on page 18 and summarizes the specific experiences, qualifications and skills that led to the conclusion that each of our nominees should serve on the Board of Directors.

Approval of each of the director nominees named in this Proposal 1 requires the affirmative vote of a majority of the votes cast with respect to the nominee’s election at the 2019 Annual Meeting (i.e. the number of shares cast “FOR” a nominee’s election must exceed the number of votes cast “AGAINST” that nominee’s election). Abstentions and Broker Non-Votes will have no effect on the outcome of the vote on this proposal.

 

 

Proposal 2 - Advisory Vote on Executive Compensation

In accordance with Section 14A of the Securities Exchange Act of 1934, as amended (“Exchange Act”), we are providing our stockholders with the opportunity to approve, on a non-binding advisory basis, the Company’s executive compensation as disclosed in this Proxy Statement in accordance with rules promulgated by the U.S. Securities and Exchange Commission (“SEC”).

Compensation Philosophy and Objectives.

Our executive compensation philosophy is built on a commitment to link pay to performance and to enhance alignment with stockholder interests.  We reward executives for pursuing and achieving our key strategic business goals, and likewise, we believe underachievement should be reflected in pay as well.  Our executive compensation program is also designed to attract and retain executive talent in a competitive marketplace and to compensate executives at competitive but responsible levels.

The Compensation Committee has designed CEO and other Named Executive Officer (“NEO”) compensation programs to drive actions that align with both the short-term and long-term interests of our stockholders.  We address these objectives by applying the following principles:

Pay at Risk Tied to Company Performance: support the overall business objectives by aligning a substantial portion of executive total compensation to our financial and operating performance, with 87% of CEO targeted total direct compensation (consisting of base salary, target cash incentive opportunity and the fair value of equity awards) and 76% of targeted total direct compensation for our other NEOs, on average, tied to performance or the value of our common stock.

Stockholder Alignment: enhance the linkage between our executives’ and our stockholders’ interests by issuing awards with payouts tied directly to the Company’s financial performance and the value of our common stock.

Peer Group Assessments: review and consider market practices of a selected peer group and the Radford High Technology Survey, to assess market competitive compensation levels.

Absolute and Relative Pay-for-Performance: structure components of pay to align with key performance metrics, using absolute financial measures and relative share price measures while also holding officers accountable to individual performance.

Compensation Governance Best Practices.

We do this by adopting the following measures, which we believe reflect governance best practices:

 

We encourage stockholders to review the Compensation Discussion & Analysis beginning on page 33 of this Proxy Statement, which describes our executive compensation philosophy and the design of our executive compensation program in greater detail.  Our Board of Directors believes our executive compensation program aligns compensation for our executives with performance and long-term stockholder interests.

We request stockholder approval of the compensation paid to our NEOs as described in this Proxy Statement and we are asking stockholders to vote “FOR” the following resolution:

RESOLVED, that the compensation paid to Maxar’s  NEOs, as disclosed in this Proxy Statement pursuant to the Securities and Exchange Commission’s executive compensation disclosure rules (which disclosure includes the Compensation Discussion & Analysis, executive compensation tables and narrative discussion that accompanies the executive compensation tables), is hereby APPROVED.

The vote to approve the executive compensation of our NEOs is advisory and, accordingly, the results are not binding on Maxar, our Board of Directors or the Compensation Committee, and will not be construed as overruling a decision by, or creating or implying any

additional fiduciary duty for Maxar, our Board of Directors or the Compensation Committee. Our Compensation Committee, however, values the input of our stockholders and will consider the results of the vote when making future compensation decisions for our NEOs. The Board of Directors is recommending a Say-on-Pay vote frequency every “1 year”, as further described in Proposal 3. Unless this policy changes, the next non-binding advisory vote on the executive compensation of our NEOs will be at the 2020 Annual Meeting of Stockholders.

Approval of this Proposal 2 requires the affirmative vote of stockholders holding a majority of the shares present in person or by proxy at the Annual Meeting and entitled to vote on the proposal. Abstentions will have the same effect as a vote “against” this proposal.  Broker Non-Votes will have no effect on the outcome of this proposal.

 

 

Proposal 3 - Advisory Vote on Frequency of Advisory Vote to Approve Executive Compensation

In accordance with Section 14A of the Exchange Act, we are providing our Stockholders with the opportunity to recommend, on a non-binding advisory basis, the frequency of the advisory vote of the Company’s Stockholders to approve the executive compensation paid to our NEOs in accordance with rules promulgated by the SEC.  Pursuant to the Dodd-Frank Act, this Proposal 3 gives the stockholders the ability to vote to have a “say-on-pay” vote every year, every two years or every three years.

The Company believes that regular communication with stockholders on the issue of executive compensation is important and helps ensure that compensation practices are aligned with stockholders’ interests. Accordingly, the Company believes that it is appropriate to solicit stockholders’ input on executive compensation on an annual basis.

The vote on the frequency of the “say-on-pay” vote is advisory and, accordingly, the results are not binding on the Company. Our Compensation Committee, however, values the input of our stockholders and will consider the results of the vote when making future decisions on how often the Company should include a say-on-pay vote at its annual meeting.

The option of every year, every two years or every three years that receives the highest number of votes cast will be determined to be the preferred frequency recommended by the Company’s stockholders with which the Company is to hold say-on-pay votes.  Abstentions and Broker Non-Votes will have no effect on the outcome of the vote on this proposal.

 

 

 

Proposal 4 - Ratification of the Appointment of the Company’s  Independent Auditors

The Audit Committee of the Board of Directors has appointed the accounting firm of KPMG LLP, Certified Public Accountants (“KPMG U.S.”) as the independent registered public accounting firm to conduct the audit of our consolidated financial statements for the year ending December 31, 2019.  This matter is nevertheless being submitted to the stockholders to afford them the opportunity to express their views.  If this proposal is not approved by stockholders at the Annual Meeting, the Audit Committee intends to reconsider its appointment of KPMG U.S. as our independent registered public accounting firm. KPMG U.S. has served as the Company’s independent registered public accounting firm since 2018.  The Company’s consolidated financial statements for the fiscal year ended December 31, 2017 were audited by KPMG LLP, Chartered Professional Accountants, of Vancouver, British Columbia (“KPMG Canada”).  Effective July 29, 2018, KPMG Canada resigned as the Company’s auditor and KPMG U.S. was appointed as the Company’s auditor to fill the vacancy.  KPMG Canada served as the independent registered public accounting firm of the predecessor issuer, Maxar Technologies Ltd. (f/k/a MacDonald, Dettwiler and Associates Ltd.) between 2001 and 2017.

We expect that a representative of KPMG U.S. will be present at the Annual Meeting to answer any questions concerning the independent registered public accounting firm’s areas of responsibility, and will have an opportunity to make a statement if he or she desires to do so.

Rationale for Selection of Independent Registered Public Accounting Firm

In making the decision to reappoint KPMG U.S. as the Company’s independent auditor for 2019, the Audit Committee took into consideration a number of factors, including:

KPMG U.S.’s  historical and recent performance on the Company’s audit and its interim reviews;

the quality and candor of KPMG U.S.’s communications with the Audit Committee and management;

the appropriateness of KPMG U.S.’s  fees;

KPMG U.S.’s  history as our independent auditor, its familiarity with our industry and the complexities of global operations, and its expertise in accounting policies and practices, and internal control over financial reporting; and

KPMG U.S.’s  continued independence.

Based on this evaluation, the Audit Committee believes that the selection of KPMG U.S. as our independent registered public accounting firm for fiscal year 2019 is in the best interests of the Company and its stockholders, and should be ratified.

Approval of this Proposal 4 requires the affirmative vote of stockholders holding a majority of the shares present in person or by proxy at the Annual Meeting and entitled to vote on the proposal. Abstentions will have the same effect as a vote “against” this proposal.

 

 

 

Proposal 5 – Approval of Maxar Technologies Inc. 2019 Incentive Award Plan

We are asking our stockholders to approve the Maxar Technologies Inc. 2019 Incentive Award Plan (the "2019 Plan").

On March 27, 2019, our Board of Directors (the “Board”) adopted, subject to stockholder approval, the 2019 Plan. The 2019 Plan is intended to replace the Maxar Technologies Ltd. Omnibus Equity Incentive Plan (the “Omnibus Plan”). Upon stockholder approval of the 2019 Plan, the 2019 Plan will become effective and will supersede and replace in its entirety the Omnibus Plan, and no further awards will be granted under the Omnibus Plan; however, the terms and conditions of the Omnibus Plan will continue to govern any outstanding awards granted thereunder. If the 2019 Plan is not approved by our stockholders, it will not become effective, the Omnibus Plan will continue in effect, and we may continue to grant awards under the Omnibus Plan, subject to its terms, conditions and limitations, using the shares available for issuance thereunder.

Employees and consultants of the Company, its subsidiaries and affiliates, as well as members of our Board, are eligible to receive awards under the 2019 Plan. The 2019 Plan provides for the grant of stock options, including incentive stock options (“ISOs”) and nonqualified stock options (“NQSOs”), stock appreciation rights (“SARs”), restricted stock, restricted stock units (“RSUs”), deferred stock, deferred stock units (“DSUs”), cash-based awards and dividend equivalents to eligible individuals.

The number of shares of our common stock available for issuance under the 2019 Plan is equal to the sum of (i) 2,525,000 shares, which represents 4.2% of the shares of common stock outstanding as of March 20, 2019, and (ii) any shares subject to issued and outstanding awards under the Omnibus Plan, the Maxar Technologies Ltd. Employee Stock Option Plan or the MacDonald, Dettwiler and Associates Ltd. Long Term Incentive Plans for the years 2014, 2015, 2016 and 2017 (collectively, the “Prior Plans”) that expire, are cancelled or otherwise terminate following the effective date of the 2019 Plan.

Approval of the 2019 Plan will constitute approval pursuant to the stockholder approval requirements of Section 422 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), relating to ISOs.

We expect that the share reserve under the 2019 Plan will allow us to continue to grant equity-based compensation at levels we deem necessary and appropriate for approximately one year at the current stock price. We base this belief upon our historical annual equity award grant rate (otherwise known as burn rate), our historical forfeiture rate and our estimates of the number of shares that we estimate will be needed to attract new senior and executive hires and in connection with potential merger and acquisition transactions. This belief could change, however, based upon a number of factors, including the need to increase our burn rate over historical averages in order to attract and retain key talent and the price of our common stock (because we determine the size of equity awards to be granted in part based on the price of our common stock at the time of grant, and if our stock price on the date the award is granted is significantly lower than the stock price assumed in our forecast, we would need to grant a larger number of shares than anticipated to deliver the same value to participants).

Reasonable Equity Dilution and Key Historical Equity Metrics

In its determination to approve the 2019 Plan, our Board reviewed an analysis prepared by Meridian Compensation Partners (“Meridian”), its compensation consultant, which included an analysis of certain burn rate, dilution and overhang metrics, and the costs of the 2019 Plan.  Specifically, our Board considered that:

In 2018, 2017 and 2016, we granted equity awards representing a total of approximately 171,932, 1,108,079, and 1,498,500 shares respectively.  This level of equity awards represents a three-year adjusted average burn rate of 2.4% of weighted average ordinary shares outstanding. Equity burn rate is calculated by dividing the number of shares subject to equity awards granted during the fiscal year (without adjusting for forfeitures) by the weighted average ordinary shares outstanding during the fiscal year.

In 2018, 2017 and 2016, our end-of-year overhang rate, calculated by dividing (i) the number of shares subject to equity awards outstanding at the end of the fiscal year plus the number of shares remaining available for issuance under our Prior Plans by (ii) the number of our shares outstanding at the end of the fiscal year, was 0.58%, 7.00%, and 4.1%, respectively.  If approved, the issuance of the additional shares to be reserved under the 2019 Plan would dilute the holdings of stockholders by an additional 2.7% on a fully diluted basis, based on the number of shares of our common stock outstanding as of December 31, 2018.  Based on our three-year adjusted average burn rate, if the 2019 Plan is approved, we expect our overhang at the end of 2019 will be approximately 4.3% (including the shares that will be reserved for issuance under the 2019 Plan). The table below outlines the number of equity-settled grants issued in 2018, 2017, and 2016, along with the corresponding weighted average shares outstanding:

 

Meridian’s analysis, which is based on generally accepted evaluation methodologies, concluded that the number of shares under the 2019 Plan is within generally accepted standards.

During our stockholder outreach in 2018 we heard that stock ownership by executives and the board was an important component of stockholder alignment and the total compensation package.

In light of the factors described above, our Board believes the additional authorized shares being requested under the 2019 Plan represents reasonable potential equity dilution and provides a significant incentive for officers, employees, non-employee directors and consultants to increase the value of the Company for all stockholders.

Key Features of the 2019 Plan

The 2019 Plan reflects a broad range of compensation and governance best practices, including the following:

A summary of the principal provisions of the 2019 Plan is set forth below. The summary is qualified by reference to the full text of the 2019 Plan, which is attached as Appendix A to this Proxy Statement.

Administration

The 2019 Plan is administered by the Compensation Committee or other committee designated by the Board. To the extent required to comply with Rule 16b‑3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), it is intended that each member of the committee will be a “non-employee director” within the meaning of Rule 16b‑3. Non-employee director awards are administered by the Board. The committee or our Board may delegate its powers under the 2019 Plan to one or more members of the Board or one or more directors, officers or managers of the Company or any subsidiary, provided that no officer may be delegated the authority to grant awards to or amend awards held by executives of the Company who are subject to Section 16 of the Exchange Act or any officer or director to whom authority to grant or amend awards has been delegated. The Board, committee or delegate thereof, as applicable, are referred to herein as the “plan administrator.”

The plan administrator has the authority to administer the 2019 Plan, including, notwithstanding any other provision of the 2019 Plan, the power to determine eligibility, the types and sizes of awards, the price and vesting schedule of awards, the methods for settling awards, the method of payment for any exercise or purchase price, any rules and regulations the plan administrator deems necessary to administer the 2019 Plan, and the acceleration or waiver of any vesting restriction.

Eligibility

Persons eligible to participate in the 2019 Plan include all employees (approximately 5,800, including 6 executive officers as of March 20, 2019), approximately 531 consultants of the Company and its subsidiaries as of March 20, 2019, and our 9 non-employee directors as of the conclusion of the Annual Meeting, in each case, as determined by the plan administrator. However, with respect to employees and consultants, under the Company’s current policies and practices, only employees at a Director-level and above (consisting of approximately 390 employees) are regularly eligible for equity grants, and no consultants are currently eligible for grants.

Limitation on Awards and Stock Available

If our stockholders approve the 2019 Plan, the number of shares of our common stock authorized for issuance under the 2019 Plan is equal to the sum of (i) 2,525,000 shares, representing 4.2 % of the issued and outstanding shares as at the date of this Proxy Statement, and (ii) any shares subject to issued and outstanding awards under the Prior Plans that expire, are cancelled or otherwise terminate following the effective date of the 2019 Plan; provided, that no more than 2,525,000 shares may be issued pursuant to the exercise of ISOs. The shares distributed pursuant to an award under the 2019 Plan may be authorized but unissued shares, shares purchased by the Company on the open mark or treasury shares.

If any shares of our common stock subject to an award under the 2019 Plan or any award under the Prior Plans are forfeited, expire, converted to shares of another entity in connection with a corporate transaction or are settled for cash, any shares deemed subject to such award may, to the extent of such forfeiture, expiration, conversion or cash settlement, be used again for new grants under the 2019 Plan. However, the following shares of our common stock may not be used again for grant under the 2019 Plan: (1) shares tendered or withheld to satisfy the exercise price of an option or a SAR; (2) shares tendered or withheld to satisfy the tax withholding obligations with respect to an award; (3) shares subject to a SAR that are not issued in connection with the stock settlement of the SAR on its exercise; and (4) shares purchased on the open market with the cash proceeds from the exercise of options. Awards granted under the 2019 Plan in connection with the assumption or substitution of outstanding equity awards previously granted by a company or other entity in the context of a corporate acquisition or merger will not reduce the shares of our common stock authorized for grant under the 2019 Plan, except as may be required by reason of Section 422 of the Code.

In addition, for so long as our common stock is listed and traded on the Toronto Stock Exchange, the number of shares of common stock issuable to “reporting insiders” of the Company (as defined in National Instrument 55‑104‑Insider Reporting Requirements and Exemptions) at any time, and within any one-year period, under the 2019 Plan, or when combined with all of the Company’s other equity‑based compensation plans, may not exceed 10% of the Company’s issued and outstanding shares of common stock as of any date of determination. Additionally, notwithstanding any provision to the contrary in the 2019 Plan, the sum of the grant date fair value of equity-based awards and the amount of any cash-based awards granted to a non-employee director in respect of such director’s service as a member of our Board of Directors or any Board committee during any calendar year shall not exceed $500,000 (the “Director Limit”).

The closing price of our common stock on March 20, 2019 was $4.75 per share.

The award agreement governing an award granted under the 2019 Plan will provide that such award (or any portion thereof) shall vest no earlier than one year measured from the date of grant. In addition, up to an aggregate of five percent of the number of shares of our common stock available for issuance under the 2019 Plan as of its effective date may be granted without regard to the foregoing minimum vesting requirement. Awards to non-employee directors may vest on the earlier of the one year anniversary of the date of grant or the next annual meeting of the Company’s stockholders, so long as the period between such meetings is not less than 50 weeks.

Awards

The 2019 Plan provides for the grant of ISOs, NQSOs, SARs, restricted stock, RSUs, deferred stock, DSUs, cash-based awards and dividend equivalents. All awards under the 2019 Plan will be set forth in award agreements, which will detail all terms and conditions of the awards, including any applicable vesting and payment terms and post-termination exercise limitations. No fractional shares of our common stock shall be issued or delivered pursuant to the 2019 Plan or any award thereunder.

Options. Options provide for the purchase of shares of our common stock in the future at an exercise price set on the grant date. ISOs, by contrast to NQSOs, may provide tax deferral beyond exercise and favorable capital gains tax treatment to their holders if certain holding period and other requirements of the Code are satisfied. The exercise price of an option may not be less than 100% of the fair market value (which for purposes of the 2019 Plan shall generally be the closing price on the NYSE as of such date) of the underlying share on the date of grant (or 110% in the case of ISOs granted to certain significant stockholders), except with respect to certain substitute options granted in connection with a corporate transaction. The term of an option may not be longer than ten years (or five years in the case of ISOs granted to certain significant stockholders). Vesting conditions determined by the plan administrator may apply to options and may include continued service, performance and/or other conditions.

Stock Appreciation Rights. SARs entitle their holder, upon exercise, to receive an amount equal to the appreciation of the stock subject to the award between the grant date and the exercise date. The exercise price of a SAR may not be less than 100% of the fair market value of the underlying share on the date of grant (except with respect to certain substitute SARs granted in connection with a corporate transaction) and the term of a SAR may not be longer than ten years. Vesting conditions determined by the plan administrator may apply to SARs and may include continued service, performance and/or other conditions. SARs under the 2019 Plan will be settled in cash or common stock, or in a combination of both, as determined by the plan administrator.

Restricted Stock. A restricted stock award is an award of nontransferable shares of our common stock that remain forfeitable unless and until specified vesting conditions are met. Vesting conditions applicable to restricted stock may be based on continuing service, the attainment of performance goals and/or such other conditions as the plan administrator may determine. In general, restricted stock may not be sold or otherwise transferred until restrictions are removed or expire. Holders of restricted stock will have voting rights and will have the right to receive dividends; however, dividends may not be paid until the applicable restricted stock vests.

Restricted Stock Units. RSUs are contractual promises to deliver shares of our common stock (or the fair market value of such shares in cash) in the future, which may also remain forfeitable unless and until specified vesting conditions are met. RSUs generally may not be sold or transferred until vesting conditions are removed or expire. The shares underlying RSUs will not be issued until the RSUs have vested, and recipients of RSUs generally will have no voting or dividend rights prior to the time the RSUs are settled in shares, unless the

RSU includes a dividend equivalent right (in which case the holder may be entitled to dividend equivalent payments under certain circumstances). Delivery of the shares underlying RSUs may be deferred under the terms of the award or at the election of the participant, if the plan administrator permits such a deferral. On the settlement date or dates, we will issue to the participant one unrestricted, fully transferable share of our common stock (or the fair market value of one such share of common stock in cash) for each vested and nonforfeited RSU.

Cash-Based Awards.  Cash-based awards are cash payments, cash bonus awards, or performance awards or incentive awards that are paid in cash. Cash-based awards may be granted to participants and may also be available as a payment form in the settlement of other awards, as standalone payments and as payment in lieu of base salary, bonus, fees or other cash compensation otherwise payable to any individual who is eligible to receive awards. The plan administrator will determine the terms and conditions of cash-based awards, which may include vesting conditions based on continued service, performance and/or other conditions.

Deferred Stock.  A deferred stock award is the right to receive shares of our common stock in the future that remains forfeitable unless and until specified vesting conditions and other specified criteria are met. Holders of deferred stock will have no rights as a company stockholder until the award vests and the shares are delivered.

Deferred Stock Units.  DSUs are contractual promises to deliver shares of our common stock in the future, which may also remain forfeitable unless and until specified vesting conditions and other specified criteria are met. Recipients of DSUs generally will have no voting or dividend rights prior to the time the DSUs vest and are settled in shares. On the settlement date or dates, we will issue to the participant one unrestricted, fully transferable share of our common stock (or the fair market value of one such share of common stock in cash) for each vested and nonforfeited DSU.

Dividend Equivalents. Dividend equivalents represent the right to receive the equivalent value of dividends paid on our common stock and may be granted alone or in tandem with awards other than stock options or SARs. Dividend equivalents may accrue on awards, but shall not be payable unless and until the applicable award vests.

Forfeiture of Unvested Awards and Claw-Back Provisions

Except as otherwise determined by the plan administrator and as otherwise described below under “Corporate Transactions,” if the employment or services of the holder of an award is terminated, the unvested portion of the award will generally be forfeited and will cease to vest or become exercisable after the termination. However, the plan administrator may provide that an award will vest in whole or in part in the event of certain terminations.

All awards will be subject to the provisions of any clawback policy implemented by the Company, including any clawback policy adopted to comply with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act, to the extent set forth in such policy and/or in an applicable award agreement.

Transferability

Generally, awards under the 2019 Plan may only be transferred, sold, pledged or assigned by will or the laws of descent and distribution or, subject to the consent of the plan administrator, pursuant to a domestic relations order, unless and until such award has been exercised or the shares of common stock underlying such award have been issued and all restrictions applicable to such shares have lapsed. However, subject to certain terms and conditions, the plan administrator may permit an award holder to transfer an award, other than an ISO (unless it is intended to become a NQSO), to any “permitted transferee” under applicable securities laws or any other transferee specifically approved by the plan administrator.

Amendment and Termination

Our Board may wholly or partially amend or otherwise modify, suspend or terminate the 2019 Plan or any award at any time or from time to time; however, stockholder approval given within twelve months before or after such action will be required for any amendment that increases the aggregate number of shares available under the 2019 Plan or the Director Limit, reduces the price per share of any stock option or SAR, cancels any stock option or SAR in exchange for cash or another award when the option or SAR price per share exceeds the fair market value of the underlying shares, or amends the provisions of the 2019 Plan that provide for when the 2019 Plan may be amended, modified, suspended or terminated. In addition, no amendment, suspension or termination of the 2019 Plan may, without the consent of the affected participant, materially and adversely affect the participant’s rights. No Awards may be granted or awarded during any period of suspension or after termination of the 2019 Plan. In addition, no ISOs may be granted pursuant to the 2019 Plan after the tenth anniversary of the earlier of the date the 2019 Plan was adopted by our Board and the date the 2019 Plan was approved by the Company’s stockholders, and no additional shares may be added to the 2019 Plan reserve due to award forfeitures or expirations from and after such tenth anniversary.

Corporate Transactions

The plan administrator has broad discretion to take action under the 2019 Plan, as well as make adjustments to the terms and conditions of existing and future awards, to prevent the dilution or enlargement of intended benefits and facilitate necessary or desirable changes in the event of certain transactions and events affecting our stock, such as stock dividends, stock splits, mergers, acquisitions, consolidations and other corporate transactions. In addition, in the event of certain non-reciprocal transactions with our stockholders known as “equity restructurings,” the plan administrator will make equitable adjustments to the 2019 Plan and outstanding awards.

If a Change in Control of the Company occurs (as defined in the 2019 Plan), all outstanding options and SARs that are not exercised shall be assumed or substituted by the surviving corporation and other outstanding awards shall be converted into similar awards of the surviving corporation. If the surviving corporation refuses to assume or substitute for an award, the award shall accelerate and become fully vested and exercisable upon the Change in Control and all restrictions on the award shall lapse, provided that any awards subject to performance-based vesting will vest based on the greater of (a) actual performance as of the Change in Control or (b) target performance, prorated based on a shortened performance period ending as of the Change in Control. Additionally, if a participant’s service to the Company terminates without “cause” or for “good reason” within the one-year period following a Change in Control of the Company, then the foregoing equity award acceleration will apply effective as of the participant’s termination date, and any options or SARs held by the participant may be exercised until the earlier of their expiration date and the first anniversary of the participant’s termination date.

U.S. Federal Income Tax Consequences

With respect to NQSOs, the Company is generally entitled to deduct and the optionee recognizes ordinary income in an amount equal to the difference between the option exercise price and the fair market value of the shares at the time of exercise. The gain or loss (generally in an amount equal to the difference between the fair market value on the date of sale and the fair market value on the date of exercise) upon disposition of such stock will be treated as a capital gain or loss (long-term or short-term, depending on whether the shares were held for more than one year), and the Company will not be entitled to any corresponding deduction.

With respect to ISOs, if applicable holding period requirements are met (i.e., the stock acquired upon exercise of an ISO is held for a minimum of two years from the date of grant and one year from the date of exercise), the participant will not recognize taxable income at the time of exercise of the ISO. However, the excess of the fair market value of the shares of our common stock received over the exercise price is an item of tax preference income potentially subject to the alternative minimum tax. The gain or loss (in an amount equal to the difference between the fair market value on the date of sale and the exercise price) upon disposition of such stock will be treated as a long-term capital gain or loss, and the Company will not be entitled to any corresponding deduction. If the holding period requirements described above are not met, the ISO will fail to meet the requirements for beneficial tax treatment of ISOs under the Code, and the tax consequences described for NQSOs will apply, although the amount of income recognized by the participant will be the lesser of (a) the excess of the fair market value of the stock at the time of exercise over the exercise price, or (b) the excess of the amount realized on the disposition over the exercise price.

The current federal income tax consequences of other awards authorized under the 2019 Plan generally follow certain basic patterns: SARs are taxed and deductible in substantially the same manner as NQSOs; nontransferable restricted stock subject to a substantial risk of forfeiture and RSUs will result in income recognition equal to the excess of the fair market value over the price paid, if any, only at the time the restrictions applicable to such awards lapse (unless, with respect to an award of restricted stock, the recipient elects to accelerate recognition as of the date of grant); stock-based performance awards, dividend equivalents and other types of awards are generally subject to tax at ordinary income rates at the time of payment.

New Plan Benefits

Other than with respect to annual grants of restricted stock units to our non-employee directors that will be made immediately following the Annual Meeting, all future awards under the 2019 Plan (assuming it is approved by stockholders) are subject to the discretion of the plan administrator, and therefore it is not possible to determine the benefits that will be received in the future by other participants in the 2019 Plan (although the Grants of Plan-Based Awards - Fiscal Year 2018 table in this Proxy Statement describes all equity awards granted to our NEOs during our fiscal year ended December 31, 2018 under the Prior Plans). Therefore, the table below provides

information only for our non-employee directors.  Employees of the Company that serve on the Board do not receive pay for their Board service.

Approval of this Proposal 5 requires the affirmative vote of stockholders holding a majority of the shares present in person or by proxy at the Annual Meeting and entitled to vote on the proposal. Abstentions will have the same effect as a vote “against” this proposal.  Broker Non-Votes will have no effect on the outcome of this proposal.

 

 

 

 

Proposal 6 – Approval of Maxar Technologies Inc. Employee Stock Purchase Plan

We are asking our stockholders to approve the Maxar Technologies Inc. Employee Stock Purchase Plan (“ESPP”).

On March 27, 2019, based on the recommendation of the Compensation Committee, our Board approved and adopted the ESPP subject to approval by our stockholders.

The ESPP is designed to provide employees of the designated entities with the opportunity to purchase our common stock at a discount through accumulated payroll deductions during successive offering periods. We believe that the ESPP enhances such employees’ sense of participation in our performance, aligning their interests with those of our stockholders, and is a necessary and powerful incentive and retention tool that benefits our stockholders.

The MDA Employee Share Purchase Plan terminated as to any new offering periods on March 1, 2019.

Key Features of the ESPP

The principal features of the ESPP are summarized below, but the summary is qualified in its entirety by the ESPP, which is included as Appendix B to this Proxy Statement. We encourage you to read the ESPP carefully.

The ESPP has two components: the Section 423 Component and the Non-Section 423 Component (each defined below). The ESPP authorizes the grant of options that are intended to qualify for favorable U.S. federal tax treatment under Section 423 of the U.S. Internal Revenue Code (the “Code”) (the “Section 423 Component”), as well as options that are not intended to be tax-qualified under Section 423 of the Code (the “Non-Section 423 Component”), which will generally be granted to non-U.S. employees.

Plan Administration

The ESPP shall be administered by the Board unless and until the Board delegates administration to a committee. Subject to the provisions of the ESPP, the plan administrator determines the terms and conditions of the offerings under the ESPP; provided, however, that all participants granted purchase rights in an offering that are intended to comply with Section 423 of the Code will have the same rights and privileges within the meaning of Section 423 of the Code. Additionally, the plan administrator may provide that participants shall not sell, pledge, assign, hypothecate, transfer, or otherwise dispose of any common stock purchased under the ESPP for a specified period following the purchase date.

Shares Available Under the ESPP

The maximum number of shares of our common stock that will initially be available for sale under the ESPP, is 5,000,000 shares, representing 8.3% of the issued and outstanding shares as at March 20, 2019.

Eligible Employees

Employees eligible to participate in the ESPP generally include our employees, and employees of our subsidiaries that have been designated from time to time by the plan administrator as eligible subsidiaries in the ESPP, (1) who do not own 5% or more of the total combined voting power or value of all classes of our stock or the stock of a parent entity or one of our subsidiaries, (2) whose customary employment is for more than 10 hours per week, and (3) whose customary employment is for more than five months in any calendar year. The plan administrator may also exclude from participating in the Section 423 Component any employee who is a citizen or resident of a non-U.S. jurisdiction, where granting an option would either be prohibited under the laws of that jurisdiction or cause the ESPP to violate the requirements of Section 423 of the Code. Any such exclusion of non-U.S. employees is applied in an identical manner to all similar situated employees. In addition, with respect to the Non-Section 423 Component, eligibility may be further limited by applicable local law and the plan administrator may only designate some employees of a designated subsidiary as eligible employees. As of March 20, 2019, we had approximately 5,800 employees who will be eligible to participate in the ESPP.

Non-employee directors are not eligible to participate in the ESPP.

Offering Periods

The duration and timing of offering periods may be established or changed by the Board or Committee at any time, in its sole discretion, but may not exceed 27 months.

Purchase Price

At the end of each offering period, participants purchase the number of shares of common stock that the participant’s accumulated payroll deductions during that offering period will buy at a purchase price designated by the plan administrator which shall not be less than the lesser of 85% of the fair market value of our common stock on the first day of the offering period or on the purchase date. If no purchase price is designated by the plan administrator for an offering period, the purchase price of the offering shall be the lesser of 85% of the fair market value of our common stock on the first day of the offering period or on the purchase date.  The closing price of our common stock on March 20, 2019 was $4.75 per share.

Participation

Eligible employees must authorize the payroll deduction of at least 1%, but not more than 10%, of their ESPP-eligible compensation, which will be deducted on each payday during an offering period. A participant may decrease (but not increase) the rate of their payroll deductions only once during an offering period.

Employees may not purchase more than $25,000 in shares of our common stock in any calendar year, in accordance with Section 423 of the Code. In addition, the maximum number of shares any participant can acquire in a single offering period is currently 12,500 shares.

Additionally, for so long as our common stock is listed and traded on the Toronto Stock Exchange, the number of shares of our common stock issuable to “reporting insiders” of the Company (as defined in National Instrument 55 104 Insider Reporting Requirements and Exemptions) at any time, and within any one-year period, under the ESPP, or when combined with all of the Company’s other equity based compensation plans, may not exceed 10% of the Company’s issued and outstanding shares of common stock as of any date of determination.

Except as otherwise provided by the plan administrator, a participant may cancel his or her payroll deduction authorization by providing written notice at least five business days prior to a purchase date, subject to the Plan’s notice requirements. A participant will automatically cease to participate in the ESPP and the participant’s options granted thereunder will terminate if the participant ceases employment with the Company or otherwise ceases to be an eligible employee.

Transferability

Other than upon a participant’s death, options granted under the ESPP are not transferable by a participant and are exercisable only by the participant.

Effect of Changes in Capitalization

In the event of any dividend or other distribution, reorganization, merger, consolidation, combination, repurchase, or exchange of shares of our common stock or other securities, or other change in our corporate structure affecting our common stock, the plan administrator may adjust the number and class of common stock subject to outstanding options or with respect to which options may be granted, as well as the option prices.

In the event of non-reciprocal transaction between us and our stockholders (such as a stock split, spin-off, rights offering, or nonrecurring stock dividend that affects our common stock and causes a change in the per share value of our common stock underlying outstanding options), the plan administrator will equitably adjust the number and type of securities subject to outstanding options, as well as the option prices.

Corporate Transactions

In the event of a dissolution or liquidation, the offering period then in progress will be shortened by setting a new purchase date, and will terminate immediately before the proposed dissolution or liquidation, unless the plan administrator determines otherwise.

In the event of a sale of all or substantially all of our assets, or our merger with or into another corporation, each outstanding option will be assumed, or an equivalent option substituted by the successor corporation or its affiliate. If the successor corporation does not assume or substitute the option, any offering period then in progress will be shortened by setting a new purchase date, and will end on the new purchase date.

Amendment and Termination

Unless otherwise required by applicable law, regulation or stock exchange rule, the plan administrator may at any time terminate or amend the ESPP without obtaining stockholder approval, however, except in connection with certain changes in our capital structure, no such termination can affect options previously granted, provided that an offering period may be terminated by the Board if the Board determines that the termination of the offering period or the Plan is in the best interests of the Company and our stockholders.  An amendment will require stockholder approval if it increases the number of shares available for purchase under the plan, reduces the purchase price below 85% of the fair market value of one share on the enrollment date or on the exercise date, whichever is lower, enables non-employees to participate, or is necessary to comply with Section 423 of the Code.  Without stockholder consent and without regard to whether any participant rights have been adversely affected, the plan administrator may, in its sole discretion, change the offering periods, limit the frequency and number of changes in the amount withheld during an offering period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a participant to adjust for delays or mistakes in our processing of properly completed withholding elections, establish reasonable waiting and adjustment periods and accounting and crediting procedures to ensure that amounts applied toward the purchase shares properly correspond with amounts withheld from the participant’s compensation, and establish other limitations or procedures it deems advisable that are consistent with the ESPP. In addition, except in connection with certain changes in our capital structure, no amendment, of the ESPP may, without the consent of the affected participant, make any change in an option previously granted that materially and adversely affects the participant’s rights. If the plan administrator determines that the ongoing operation of the ESPP may result in unfavorable financial accounting consequences it may, in its sole discretion, without stockholder approval, modify or amend the ESPP to reduce or eliminate such accounting consequence including, but not limited to, altering the purchase price for any offering period, including those underway at the time of the change in purchase price, shortening any offering period, including those underway at the time of the plan administrator action, and allocating shares.

Certain U.S. Federal Income Tax Consequences of the ESPP

The following is a general summary under current law of the material U.S. federal income tax consequences to an employee who participates in the ESPP. This summary deals with the general U.S. federal income tax principles that apply and is provided only for general information. Some kinds of taxes, such as state, local and foreign income taxes and federal employment taxes, are not discussed. Tax laws are complex and subject to change and may vary depending on individual circumstances and from locality to locality. This summary also assumes that the Section 423 Component complies with Section 423 of the Code and is based on the tax laws in effect as of the date of this proxy statement. Changes to these laws could alter the tax consequences described below. The summary does not discuss all aspects of federal income taxation that may be relevant in light of a participant’s personal circumstances. This summarized tax information is not tax advice and a recipient of an award should rely on the advice of his or her legal and tax advisors.

As described above, the ESPP has a Section 423 Component and a Non-Section 423 Component. The tax consequences for a U.S. taxpayer will depend on whether he or she participates in the Section 423 Component or the Non-Section 423 Component.

Tax consequences to U.S. participants in the Section 423 Component. The right of participants to make purchases under the Section 423 Component are intended to qualify under the provisions of Section 423 of the Code. Under the applicable Code provisions, no income will be taxable to a participant until the sale or other disposition of the shares purchased under the ESPP. Upon such sale or disposition, the participant will generally be subject to tax in an amount that depends upon the length of time such shares are held by the participant prior to disposing of them. If the shares are sold or disposed of more than two years from the first day of the offering period in which the shares were purchased and one year from the date of purchase, or if the participant dies while holding the shares, the participant (or his or her estate) will recognize ordinary income measured as the lesser of (1) the excess of the fair market value of the shares at the time of such sale or disposition over the purchase price and (2) the excess of the fair market value of the shares at the beginning of the offering period over the purchase price. Any additional gain will be treated as long-term capital gain. If the shares are held for the holding periods described above but are sold for a price that is less than the purchase price, there is no ordinary income and the participating employee has a long-term capital loss for the difference between the sale price and the purchase price.

If the shares are sold or otherwise disposed of before the expiration of the holding periods described above, the participant will recognize ordinary income generally measured as the excess of the fair market value of the shares on the date the shares are purchased over the purchase price. Any additional gain or loss on such sale or disposition will be long-term or short-term capital gain or loss, depending on how long the shares were held by the participant.

We are not entitled to a deduction for amounts taxed as ordinary income or capital gain to a participant except to the extent of ordinary income recognized upon a sale or disposition of shares prior to the expiration of the holding periods described above.

Tax consequences to U.S. participants in the Non-Section 423 Component. A U.S. participant in the Non-Section 423 Component will have compensation income equal to the value of the common stock on the day he or she purchased the common stock less the purchase price.

When a participant sells the common stock he or she purchased under the Non-Section 423 Component of the ESPP, he or she also will have a capital gain or loss equal to the difference between the sales proceeds and the value of the common stock on the day he or she purchased it. This capital gain or loss will be long-term if the participant held the common stock for more than one year and otherwise will be short-term.

Any compensation income that a participant receives upon the purchase of shares of common stock under the Non-Section 423 Component of the ESPP is subject to withholding for income, Medicare and social security taxes, as applicable. In addition, the compensation income is required to be reported as ordinary income to the participant on his or her annual Form W‑2, and the participant is responsible for ensuring that this income is reported on his or her individual income tax return.

We are entitled to a deduction for amounts taxed as ordinary income to a participant to the extent of ordinary income recognized upon a purchase made under the Non-Section 423 Component.

New Plan Benefits

The actual number of shares of our common stock that may be purchased by any individual cannot be determined in advance because the number of shares purchased depends on each employee’s voluntary election to participate and on the fair market value of our common stock at various future dates.

Approval of this Proposal 6 requires the affirmative vote of stockholders holding a majority of the shares present in person or by proxy at the Annual Meeting and entitled to vote on the proposal. Abstentions will have the same effect as a vote “against” this proposal.  Broker Non-Votes will have no effect on the outcome of this proposal.

 

 

 

 

CORPORATE GOVERNANCE

Maxar is committed to maintaining a program of corporate governance that promotes responsible corporate activity, the long‑term interests of stockholders, and accountability of our Board of Directors and management.

Our Board Members

 

The following biographical information about each nominee to our Board of Directors summarizes the specific experiences, skills and qualifications that led to the conclusion that each of our director nominee should serve on the Board of Directors. Our Nominating and Corporate Governance Committee, composed entirely of independent directors, is responsible for making recommendations to the Board of Directors regarding candidates for directorships. The Nominating and Corporate Governance Committee evaluates and reviews with the Board of Directors, no less than annually, the appropriate qualifications, expertise and characteristics required of our Non-Employee Directors to ensure that the Board of Directors, as a whole, contains the diverse mix of expertise, experience, skills and backgrounds necessary to oversee the development and implementation of the Company’s long-term strategy and to represent the interests of our stockholders.  The Nominating and Corporate Governance Committee promotes Maxar’s Board Diversity Policy and considers diversity in the context of our Board of Directors as a whole to ensure that a broad range of perspectives are represented on our Board of Directors.  For the purpose of Board of Directors composition, diversity includes, but is not limited to, business experience, geography, age, ethnicity and gender.  The Board of Directors aspires to attain by our 2021 annual meeting, a board composition in which at least 30% of the independent directors are women.  The Board of Directors is currently comprised of 18% women and with the election of the ten nominees at the 2019 Annual Meeting, 30% of the Board of Directors will be comprised of women.  Listed below are some of the skills, characteristics and experiences we look for in the members of our Board of Directors:

Senior Leadership Experience – The Board of Directors looks for individuals with experience serving in a senior executive position, including as chief executive officer. The Board of Directors believes that extensive senior executive-level experience provides a practical understanding of how organizations operate, and enables leadership in core management areas, including operations, human resources, financial planning, compliance, marketing and communications. The Board of Directors believes individuals with this experience are valuable to the Company’s ability to execute on its strategic vision.

Global Business and Human Resources Experience – The Board of Directors looks for individuals with international business experience, who are highly respected in business and financial communities and have extensive experience working with and for international companies and dealing with global issues. The Board of Directors also looks for individuals with extensive knowledge and experience in the field of human resources, executive compensation and global rewards. The Board of Directors believes that individuals with this experience provide the Board of Directors and management with a diverse understanding of the international issues facing the Company and create value for stockholders by better serving our international customers and employees.

Accounting/Financial Expertise – The Board of Directors looks for individuals with extensive financial-reporting and internal-controls experience, including experience serving as the chief financial officer or chief accounting officer of a large corporation. The Board of Directors believes that the financial and accounting skills and experience these individuals bring, particularly with regard to Audit Committee functions and risk management and financial oversight responsibilities, are valuable resources to the Board of Directors.

Government/Department of Defense/Intelligence/Industry Experience – The Board of Directors looks for individuals with extensive knowledge of the defense and intelligence community, operations and systems integration as well as expertise in the geospatial intelligence and the satellite and space industry. The Board of Directors also seeks individuals with national security clearances necessary to allow briefing on the Company’s classified business. The Board of Directors believe that specialized experience with the U.S. government, and in particular the Department of Defense, Satellite and Space industry and the Intelligence Community, are valuable to the Board of Directors and to the Company in serving our customers’ needs and helping them fulfill their mission requirements.

Corporate Strategy and Financial Markets Expertise – The Board of Directors seeks skilled individuals, notably from the investment banking and private equity world, with a deep understanding of capital markets and mergers and acquisitions (“M&A”). The Board of Directors believes that individuals with these backgrounds provide valuable perspectives for M&A initiatives, financing matters, and investor relations perspectives.

The nominees standing for election at the Annual Meeting demonstrate these attributes, key experiences, and qualifications which are valuable resources to the Board of Directors in carrying out our business strategy, the needs of the Company and our stockholders, and our Purpose, Vision, and Values.  Below is a more detailed list of specific attributes the Board of Directors considers in assessing the qualifications and skills of our Non-Employee Directors.

Information Regarding Nominees Standing for Election to the Board of Directors at the Annual Meeting (as of March 20, 2019)

Below is biological and other information of each of the director nominees standing for election to the Board of Directors at the Annual Meeting.

 

 

 

 

 

 

 

 

 

Role of the Board of Directors

 

The Board of Directors plays an active role in overseeing management and representing the interests of stockholders. The Board of Directors regularly interacts with management and is available to provide advice and counsel. The Board of Directors and its committees regularly schedule and hold executive sessions without any members of management present. Gen. Estes, our independent Chair of the Board of Directors, presides at all executive sessions of the non‑management directors.  The Board of Directors also carefully considers feedback received from stockholders.

Directors are expected to attend Board of Directors meetings and the meetings of the committees on which they serve. In 2018, the Board of Directors of Maxar Canada met a total of 16 times. All directors attended at least 75 percent of the total meetings of the Board of Directors and the committees on which he or she served during his or her tenure during 2018. Directors are encouraged to attend the Company’s  Annual Meeting of stockholders, although such attendance is not mandatory. Gens. Estes and Kehler, Messrs. Phillips, Cyprus, Mason and Zahler and Mmes. Garver and Isham attended Maxar Canada’s 2018  Annual Meeting of stockholders.

Corporate Governance Guidelines

 

Our Board of Directors has adopted Corporate Governance Guidelines that provide for responsible oversight and governance of the Company and management, and which are reviewed at least annually. Our Corporate Governance Guidelines cover a wide range of subjects, including: the role of the Board of Directors; composition of the Board of Directors, director responsibilities, director nomination procedures and qualification standards; director independence standards; director orientation and continuing education; procedures for annual performance evaluations of the Board of Directors and the committees; formal evaluation of our Chief Executive Officer; and succession planning and management development. The Nominating and Corporate Governance Committee regularly assesses our governance practices in light of market benchmarks and best practices. The Corporate Governance Guidelines are reviewed annually by the Board of Directors.

A copy of our Corporate Governance Guidelines can be found on the Governance Documents page of our website under Investors, Corporate Governance, Governance Documents at http://investor.maxar.com.

Director Independence

 

As required by our Corporate Governance Guidelines and Nominating and Corporate Governance Committee charter, the Board of Directors has determined that each of Howell M. Estes, III, Nick S. Cyprus, Roxanne J. Decyk, Lori B. Garver, Joanne O. Isham, C. Robert Kehler, L. Roger Mason, Jr.,  Robert Phillips, and Eric J. Zahler is an “independent director” as defined under the applicable rules and regulations of the SEC, the New York Stock Exchange (“NYSE”) and the Toronto Stock Exchange (“TSX”). This represents 90% of the nominees to our Board of Directors. In determining the independence of our directors, the Board of Directors considered all transactions in which we and any director had any interest. In making these determinations, the Board of Directors considered the relationships and transactions described under the caption “Certain Relationships and Related-Party Transactions” beginning on page 26. Messrs. Chookaszian and Kenning are not standing for re-election but were determined to be independent during their tenure with the Company.

Board of Directors Leadership Structure

 

Our Corporate Governance Guidelines do not require the separation of the offices of the Chair of the Board of Directors and the Chief Executive Officer. Instead, the Board of Directors has the latitude to choose its Chair in any way that it deems best for the Company at any given point in time. After careful consideration, the Board of Directors determined that it is in the best interest of the Company and its stockholders to separate the positions of Chair and Chief Executive Officer. Gen. Estes, one of our independent directors, was duly elected to serve as our Chair effective January 1, 2019.

The Board of Directors believes that having an independent director serve as our Chair is best for the Company at this time.  Our independent Chair is responsible for overall board effectiveness and operation, as well as individual director effectiveness by ensuring that the Board of Directors and its committees are operated pursuant to the Company’s Bylaws, Corporate Governance Guidelines and the committee’s respective charters, as well as to preside over meetings of the Board of Directors, foster the understanding of the Board of Directors of their roles and responsibilities and communicate regularly with the Company’s Chief Executive Officer.  Our independent Chair is also responsible for presiding over our stockholder meetings and maintaining relationships with key stockholders as appropriate and in coordination with our Chief Executive Officer.  Our Chief Executive Officer has primary responsibility for the operational leadership and strategic direction of the Company.

Board of Directors Oversight of Risk

 

The Board of Directors actively monitors the Company’s risk profile, including through review of quarterly reports by its Risk Committee and, at least annually, review of the Company’s overall enterprise risk management program and mitigation strategies.  The Company has established a standing Risk Committee of the Board of Directors. The Risk Committee is charged with oversight of enterprise risks, information technology and security risks, regulatory compliance risks, and oversight of the Company’s development and execution of its

Enterprise Risk Management Program. The Audit Committee has shared responsibility for risk with specific responsibility for overseeing financial risk, including risks associated with preparation of financial statements. Members of management report to the Audit Committee and the Risk Committee on a quarterly basis concerning management of specific risks that may impact the Company. Both committees report to the full Board of Directors on all material risk considerations affecting the Company.  It is a requirement that at least one member of the Risk Committee also serve on the Company’s Audit Committee.

The day‑to‑day enterprise risk management responsibilities for the Company are overseen by a management risk committee of the Company comprised of the Chief Risk Officer, the Chief Financial Officer, the Chief Accounting Officer, the Chief Human Resources Officer, and other key executives and management of the Company, in accordance with the Company’s Enterprise Risk Management Policy. The Chief Risk Officer has primary responsibility for reporting to the Risk Committee and the Audit Committee on enterprise risk matters, though other members of management may participate, as warranted by the matters to be discussed.

Our Board of Directors believes that the processes it has established for overseeing risk would be effective under a variety of leadership frameworks and therefore do not require the separation of the offices of the Chair of the Board of Directors and the Chief Executive Officer, as described under “Board of Directors Leadership Structure” above.

Code of Ethics and Conduct

 

Effective January 1, 2019, we adopted a Code of Ethics and Conduct that governs our Board of Directors, senior officers (including our Chief Executive Officer and Chief Financial Officer), and employees. Copies of our Code of Ethics and Conduct can be found on the Company Information page of our website under Investors, Corporate Governance, Governance Documents at http://investor.maxar.com and may also be obtained upon request without charge by writing to the Corporate Secretary of the Company, Maxar Technologies Inc., 1300 120th Avenue, Westminster, Colorado 80234. We will post to our website any amendments to the Code of Ethics and Conduct, and any waivers that are required to be disclosed by the rules of either the SEC, the NYSE, or the TSX.  Since prior fiscal year disclosure for us with respect to amendments or waivers of the Code of Conduct is not applicable, we disclose the following information with respect to Maxar Canada. For the year ended December 31, 2018, there were no waivers of any provisions of Maxar Canada’s Code of Conduct.

Succession Planning

 

The Board of Directors is responsible for the development, implementation and regular review of a succession plan for the Chief Executive Officer, and oversees and provides input to the Chief Executive Officer on succession planning for our other executive officers. Board members are expected to have a thorough understanding of the characteristics necessary for a Chief Executive Officer to execute on a long-term strategy that optimizes operating performance, profitability, and stockholder value creation. As part of its responsibilities under its charter, the Nominating and Corporate Governance Committee of the Board of Directors oversees the succession planning process for the Chief Executive Officer and other key employees. The ongoing succession process is designed to reduce vacancy, readiness and transition risks and develop strong leadership quality and executive bench strength. The succession plan for the Chief Executive Officer and other key employees is reviewed not less than annually with the Board of Directors in executive session.

Director Evaluation Process

 

The Board of Directors, through the Nominating and Corporate Governance Committee, establishes criteria and processes for the annual self‑evaluation of the Board of Directors and each committee. The performance self‑evaluations focus on the contribution to the Company by the Board of Directors and each committee, and specifically focus on areas in which a better contribution could be made. The Board of Directors has determined that every three years,  it will engage an independent consultant to assist with its self‑evaluations. The Board of Directors believes that through its annual self‑evaluation and triennial third-party evaluation, the Board of Directors will continue to evolve to meet the Company’s long-term strategic needs and the interests of our stockholders.

Related-Person Transactions Policies and Procedures

 

Our Board of Directors adopted a formal Related-Person Transaction Policy, which sets out our policies and procedures for the review, approval, or ratification of any Related-Person Transaction.  Under the Related-Person Transaction Policy, the Audit Committee will review the relevant facts and circumstances of each Related-Person Transaction and either approve or disapprove the Related-Person Transaction.  Such review shall include, but not be limited to:

Management shall present to the Audit Committee each proposed Related Person Transaction, including all relevant facts and circumstances and shall update the Audit Committee as to any material changes to any approved or ratified Related-Person Transaction.  

No member of the Board of Directors may participate in approval of a Related Person transaction for which he or she is a Related Person.

For the purposes of Maxar’s Related-Person Transaction policy, a “Related-Person Transaction” is a material transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which the Company (including any of its subsidiaries) was, is or will be a participant and in which any Related Person (as defined below) had, has or will have a direct or indirect material interest.  A transaction involving an amount exceeding $120,000 is presumed to be a “material transaction,” though transactions involving lower amounts may be material based on the facts and circumstances.  A “direct or indirect material interest” of a Related Person may arise by virtue of Control (as defined in the policy) or significant influence of the Related Person to the transaction or by direct or indirect pecuniary interest of the Related Person in the transaction.  A  “Related Person” is defined as:

The Company’s Related-Person Transaction Policy was adopted effective January 1, 2019.

Certain Relationships and Related-Party Transactions

 

The Company’s Related-Person Transaction Policy was adopted effective January 1, 2019.  Accordingly prior fiscal year disclosure for us with respect to certain relationships and related-party transactions is not applicable.  Since the beginning of Maxar Canada’s last fiscal year, there were no transactions, and there are currently no proposed transactions, in which: (i) the amounts involved exceeded or will exceed $120,000, and (ii) a director, executive officer, holder of more than 5% of our voting securities or any member of their immediate family had or will have a direct or indirect material interest.

Communication with the Board of Directors

 

The Board of Directors encourages our stockholders and other interested parties who are interested in communicating with our Board of Directors, the Chair of the Board of Directors, or the independent directors as a group to communicate by mail as follows:

Board of Directors of Maxar Technologies Inc.

c/o Corporate Secretary

Maxar Technologies Inc.

1300 West 120th Avenue

Westminster, Colorado 80234

Additionally, stockholders and other interested parties who are interested in communicating with the Chair of the Board of Directors or the independent directors as a group may do so electronically by emailing to independentdirector@maxar.com.

Correspondence received will be reviewed by our General Counsel or another designee, who will regularly forward to the appropriate directors all correspondence that, in the opinion of such person, deals with the functions of the Board of Directors or committees thereof or that the General Counsel otherwise determines requires their attention. Directors may at any time review a log of all correspondence received by the Company that is addressed to any director and request copies of any such correspondence. Concerns relating to accounting, internal controls or auditing matters are immediately brought to the attention of the Audit Committee and handled in accordance with procedures established by the Audit Committee with respect to such matters.

Board Committees

 

The Board of Directors has four standing committees. The following table lists the committee membership of each of the independent director nominees to the Company’s Board of Directors.  While Messrs. Chookaszian and Kenning are not standing for re-election, they will continue to serve as members of their respective committees until the conclusion of Annual Meeting. Mr. Chookaszian chairs the Risk Committee and is a member of the Audit Committee. Mr. Kenning is a member of the Risk and Audit Committees. Ms. Decyk will be appointed to Audit and Risk Committees upon her election to the Board of Directors at the Annual Meeting.

 

*      pending election to the Board of Directors.

**    assuming Chair at the conclusion of the Annual Meeting.

For the fiscal year ended December 31, 2018, the four standing committees of Maxar Canada held the following number of meetings: Audit (12); Human Resources and Executive Compensation (5); Governance and Nominating (4); and Risk (3).

The Board of Directors annually reviews and approves the charter of each of its committees. All committee charters are available on the Company Information page of our website under Investors,  Corporate Governance, Governance Documents at http://investor.maxar.com.

Audit Committee

Our Audit Committee assists the Board of Directors in its oversight of the quality and integrity of our accounting, auditing, and reporting practices. Among its functions, the Audit Committee: (i) reviews our quarterly and annual financial statements, including any significant financial items and changes in accounting policies; (ii) reviews the audit plans and findings of our independent registered public accounting firm and our internal audit activities; (iii) reviews our financial risk and internal control procedures, including legal and compliance matters; and (iv) has the sole discretion to appoint annually our independent registered public accounting firm, and evaluate its independence and performance. The Audit Committee reviews and evaluates, at least annually, the adequacy of its charter.

The Board of Directors has determined that each of Mr. Cyprus and Mr. Chookaszian (who is not standing for re-election) qualifies as an audit committee financial expert as defined by applicable SEC rules. Each member of the Audit Committee qualifies as an independent director, as defined under the NYSE and TSX rules and Rule 10A‑3 of the Exchange Act applicable to the Audit Committee members.

Compensation Committee

Our Compensation Committee reviews and recommends policies relating to compensation and benefits of our directors, officers and employees. The Compensation Committee reviews and approves corporate goals and objectives relevant to the compensation of our Chief Executive Officer and other executive officers, evaluates the performance of these officers in light of those goals and objectives, and recommends for approval by the Board of Directors the compensation of these officers based on such evaluations. In making compensation decisions, the Compensation Committee may consider the recommendations of the Chief Executive Officer concerning the Company’s compensation and employment benefit plans and practices, including its executive compensation plans, incentive compensation and equity‑based plans with respect to executive officers (other than the Chief Executive Officer) and director compensation arrangements. The Compensation Committee engaged Meridian Compensation Partners (“Meridian”) as independent compensation consultants in 2018 to assist in fulfilling the Compensation Committee’s duties.  Previously the Compensation Committee engaged Radford Consulting, an Aon company (“Radford”).  Additional information regarding the Compensation Committee’s engagement of its independent compensation consultant is contained in the Compensation, Discussion and Analysis section of this Proxy Statement.  Effective January 1, 2019, the Board established a subcommittee with certain authority to grant equity awards under

the Maxar Technologies Ltd. Omnibus Equity Incentive Plan.  Maxar’s President and CEO and the Chair of the Compensation Committee are the sole members of this subcommittee with the authority to grant equity awards under the Omnibus Plan to employees of the Company who are not (i) executive officers, or (ii) persons subject to the reporting requirements of Section 16(a) of the Exchange Act.  As of the date of this Proxy Statement, no awards have been made by this subcommittee. The Compensation Committee also administers the issuance of awards under our equity award plans. The Compensation Committee reviews and evaluates, at least annually, the adequacy of its charter and the performance of the Compensation Committee and its members, including compliance of the Compensation Committee with its charter. Each member of the Compensation Committee qualifies as an independent director, as defined under the applicable rules and regulations of the NYSE and TSX. In making its independence determination for each member of the Compensation Committee, the Board of Directors considered whether the director has a relationship with the Company that is material to the Director’s ability to be independent from management in connection with the duties of a Compensation Committee member.

Nominating and Corporate Governance Committee

In addition to reviewing Director nominees, the Nominating and Corporate Governance Committee is responsible for overseeing our Corporate Governance Guidelines, reporting and making recommendations to the Board of Directors concerning governance matters, and succession planning for our Chief Executive Officer and other key employees. The Nominating and Corporate Governance Committee reviews and evaluates, at least annually, the adequacy of its charter. Each member of the Nominating and Corporate Governance Committee qualifies as an independent director, as defined under the applicable rules and regulations of the NYSE and TSX.

The Nominating and Corporate Governance Committee reviews all candidates for nomination to the Board of Directors, including those recommended by stockholders. To have a candidate considered by the Nominating and Corporate Governance Committee for selection or appointment to the Board of Directors, a stockholder must submit the recommendation in writing to our Corporate Secretary. Recommendation letters must include the following information: (i) the name of the stockholder submitting the recommendation and evidence of the stockholder’s ownership of Company stock, including the number of shares owned and the length of time of ownership; (ii) the reasons for the recommendation; and (iii) the full name and address of each recommended director candidate as well as brief biographical information setting forth past and present directorships, employments, occupations and civic activities. Any such recommendation should also be accompanied by a written statement from the proposed nominee consenting to be named as a candidate and, if nominated and elected, consenting to serve as a director. The Nominating and Corporate Governance Committee may request additional information concerning the director candidate as it deems reasonably necessary to determine the eligibility and qualification of the director candidate to serve as a member of our Board of Directors. For a candidate to be considered by the Nominating and Corporate Governance Committee for nomination to the Board of Directors at an upcoming annual meeting, a stockholder recommendation must be received by our Corporate Secretary not less than 120 days prior to the anniversary date of the Company’s most recent annual meeting of stockholders. Our Bylaws include additional requirements regarding nominations of persons at a stockholders’ meeting other than by the Board of Directors. The Board of Directors will evaluate director candidates recommended by stockholders in the same manner as director nominees recommended by any other source, including management or members of the Board of Directors.

Risk Committee

Our Risk Committee is responsible for overseeing enterprise risk management for the Company. Its responsibilities include reviewing the Company’s identification of risks and their mitigation in light of the Company’s risk tolerance profile and business strategy, periodically reviewing the adequacy of the Company’s resources to perform its risk management responsibilities and achieve its objectives, meeting with the Company’s executive risk oversight committee, reviewing the Company’s information technology and industrial security programs and reviewing the Company’s compliance with legal and regulatory requirements relating to business operations. The Risk Committee reviews and evaluates, at least annually, the adequacy of its charter. The Risk Committee charter requires that each member of the Risk Committee qualify as an independent director, that at least one member shall hold specified security clearances and one member also serve on the Company’s Audit Committee. Each member of the Risk Committee qualifies as an independent director, as defined under the applicable rules of the NYSE and TSX. Mr. Chookaszian, the Chair of the Risk Committee, is not standing for re-election to the Board of Directors, and his term will expire at the conclusion of the Annual Meeting.  Gen. C. Robert Kehler will succeed Mr. Chookaszian as Chair of the Risk Committee effective upon the conclusion of the Annual Meeting.

Executive Leadership Team

 

The following table lists the members of our executive leadership team as of March 27, 2019:

 

Please see Corporate Governance – Our Board Members, for Mr. Jablonsky’s biography.

The role of our executive leadership team is to define our strategy and formalize clear objectives, including businesses and market segments. Our Company’s success is dependent upon the right people, culture and organizational structure. The Board of Directors also recognizes the importance of effective executive leadership to our success. Each member of our executive leadership team serves at the pleasure of the Board of Directors:

Biggs C. Porter joined Maxar in August 2018 as our Executive Vice President and Chief Financial Officer.  Prior to joining Maxar, Mr. Porter served as Executive Vice President and Chief Financial Officer of Fluor Corporation from 2012 until 2017. Prior to Fluor, Mr. Porter served as Chief Financial Officer of Tenet Healthcare Corp and held other leadership positions at Raytheon, Northrop Grumman and TXU. Mr. Porter also serves as a director of Bristow Group and is a member of their audit committee and served as a member of the board of directors of Perspecta Inc. from May 2018 until October 2018. Mr. Porter has a bachelor’s degree in accounting from Duke University and a Master in Professional Accounting (MPA) from the University of Texas at Austin and is a certified public accountant.    As announced by the Company on March 20, 2019, Mr. Porter will serve as interim principal accounting officer upon the effectiveness of the resignation of Mr. Torres.

Dr. Walter S. Scott joined Maxar in 2017 after its acquisition of DigitalGlobe and is DigitalGlobe’s founder.   Dr. Scott currently serves as our Executive Vice President, Chief Technical Officer (“CTO”). From 1986 through 1992, Dr. Scott held a number of technical, program and department management positions at the Lawrence Livermore National Laboratory, including serving as the Assistant Associate Director of the Physics Department. Prior to this, Dr. Scott served as President of Scott Consulting, a Unix systems and applications consulting firm. Dr. Scott served on the Board of Directors of The Open Geospatial Consortium (OGC), an international industry consensus standards organization from 2013 through 2018 and also served on numerous advisory panels to various U.S. Government agencies.  Dr. Scott holds a B.A. in Applied Mathematics, magna cum laude, from Harvard College and a Doctorate and Master of Science in Computer Science from the University of California, Berkeley.

Leon Anthony Frazier joined Maxar in 2017 after its acquisition of DigitalGlobe and serves as our Executive Vice President of Global Field Operations.  In this role he leads all sales, business development, and services delivery activities for the Company outside the Canadian market.  Prior to this role Mr. Frazier served as President of Radiant Solutions. Mr. Frazier served as Senior Vice President, General Manager of DigitalGlobe’s Services business from 2013 and led GeoEye’s Marketing and Communications team since 2010, prior to its acquisition by DigitalGlobe in 2013. Prior to GeoEye, Mr. Frazier served as Senior Director of Product Management at Cisco Systems, where he brought to market emerging technologies core to Cisco’s video and collaboration strategy. Prior to Cisco, Mr. Frazier held senior marketing roles at Infor, iPhrase Technologies an MIT start-up acquired by IBM, and  pcOrder.com. Mr. Frazier began his career in strategic consulting at Bain & Company. Mr. Frazier holds a Bachelors of Systems Engineering from the University of Pennsylvania and an MBA with distinction from Harvard University.

Jose A. Torres, Jr. joined Maxar in 2017 after its acquisition of DigitalGlobe and currently serves as our Senior Vice President, Chief Accounting Officer. Mr. Torres was the Senior Vice President, Chief Accounting officer of DigitalGlobe from January 2016 until October 2017.  Prior to joining DigitalGlobe, from 2012 through 2015, Mr. Torres was the Vice President of Accounting, Financial Reporting and MIS for the ADT Corporation. Prior to ADT, from 2008 through 2012 Mr. Torres held a number of roles with Tyco International, including North America Regional Assistant Controller, Corporate Controller for SimplexGrinnell (a Division of Tyco International), Controller for optical retailer Sterling Vision and Assistant Treasurer at Safety Components International. Mr. Torres started his career in New York as a public accountant with Arthur Andersen. Mr. Torres has a Bachelor of Science degree in accounting and business management from Boston College, and an MBA from Florida Atlantic University.  As announced by the Company  on  March 20, 2019, Mr. Torres tendered his resignation as Senior Vice President and Chief Accounting Officer effective March 29, 2019.

Michael Greenley joined Maxar in January 2018 and is our MDA Group President.  Prior to joining Maxar, Mr. Greenley was Sector President of L‑3 WESCAM, based in Burlington, Ontario from 2016  through 2017.  From 2013 to 2016,  Mr. Greenley served as vice president and general manager of CAE Canada, supporting defence and security markets. Prior to CAE, he served from 2008 to 2013 with General Dynamics (GD), first as vice president of strategy and business development for GD Canada, then as vice president international for GD Mission Systems. From 2004 to 2008, he served as vice president of the modeling and simulation business at CAE. Mr. Greenley holds a Bachelor of Science (Hons) degree and a Master of Science degree from the University of Waterloo. He is a former Chairman of the Board of the Canadian Association of Defence and Security Industries (CADSI). He is a past chair of the Industry Advisory Board, Department of Foreign Affairs and International Trade (DFAIT) in Canada. In 2016, Mr. Greenley was named Defence Executive of the Year by Canadian Defence Review. He is also a 2012 recipient of the Queen Elizabeth II Diamond Jubilee Medal for service to peers and country.

Megan Fitzgerald is our Senior Vice President, General Manager Space Solutions.  Ms. Fitzgerald joined Space Systems/Loral in 2007 and held a variety of key roles including Senior Vice President of Program Management, Vice President of Production, Vice President of Systems Production and Executive Director of Advanced Programs and Systems.  Ms. Fitzgerald was first affiliated with SSL in 1994, joining a Loral Space & Communications limited partnership with Qualcomm, as the customer executive responsible for the procurement of the Globalstar LEO space segment from SSL. In that job, she directed the development, deployment and operation of the Globalstar space segment as well as procurement of the space and launch segments for the second generation Globalstar satellite constellation.  Earlier in her career, Ms. Fitzgerald worked for Lockheed Missiles and Space Company in both engineering management and business development roles. She holds a Bachelor of Science degree in civil engineering from the University of Michigan and a Master of Science in structural engineering from the University of California at Berkeley.

James Lee will join Maxar in April 2019 as our Senior Vice President, General Counsel and Corporate Secretary.  Prior to joining Maxar, Mr. Lee was Senior Vice President and Deputy General Counsel at Aramark Corp. where he was employed since August 2004.  At Aramark, Mr. Lee led the legal function for Aramark Uniform Services, a segment of the business with $2.4 billion in annual revenue and 21,000 employees, and for Aramark Refreshment Services, as well as the real estate, M&A and labor relations functions for those businesses.  Prior to that role, Mr. Lee was a mergers & acquisitions and securities attorney at O’Melveny & Myers in Los Angeles. He also served as Vice President and General Counsel at eConnections, Inc., a supply chain and purchasing software company.  Mr. Lee received his bachelor’s degree in Economics from Yale University and his J.D. from Harvard Law School.

E. Jeff Robertson joined Maxar in 2017 after its acquisition of DigitalGlobe and serves as our Senior Vice President, Chief Operations Officer.  Mr. Robertson previously served as Maxar’s Senior Vice President, Chief Information Officer and Chief Risk Officer and as DigitalGlobe’s Chief Information officer and Chief Security Officer.  Prior to joining DigitalGlobe, from 2009-2013, Mr. Robertson led the Information Technology organization at ADT Security Services, where he served as Chief Information Officer.  ADT provides security, video and home automation solutions to over 6.5 million residential customers and over 100,000 large corporations and U.S. Government agencies.  Mr. Robertson started his career at IBM and spent ten years at Andersen Consulting (later known as Accenture) supporting Finance & Performance Management for some of their largest global customers.  Mr. Robertson holds a BA in Economics from Northwestern University.  

 

 

 

AUDIT RELATED MATTERS

Audit Committee Report

 

 

Audit and Non‑Audit Fees

 

The following table summarizes the aggregate fees billed to either the Company or Maxar Canada, our predecessor, by KPMG LLP and its affiliated member firms for fiscal years 2017 and 2018:

 

Pre‑Approval of Independent Auditor Services

 

All services, audit and non‑audit, provided by the independent auditor must be pre‑approved by the Audit Committee or its delegate. As set forth in its charter, the Audit Committee has the sole authority to review in advance, and grant any appropriate pre‑approval of: (i) all auditing services to be provided by the independent registered public accounting firm and (ii) all non‑audit services to be provided by the independent registered public accounting firm as permitted by Section 10A of the Exchange Act, and in connection therewith to approve all fees and other terms of engagement. Such pre‑approval can be given as part of the Audit Committee’s approval of the scope of the engagement of the independent registered public accounting firm or on an individual basis. The Audit Committee may delegate responsibility for pre‑approval of non‑auditing services to one or more of its members, but the decision must be presented to the full Audit Committee. In 2018 and 2017, all services of KPMG LLP were pre‑approved by the Audit Committee. The Audit Committee concluded that the provision of non-audit services was compatible with maintaining the independence of KPMG LLP. Effective July 29, 2018, KPMG Canada resigned as auditor for our predecessor issuer Maxar Technologies Ltd., and KPMG U.S.  was appointed to fill the vacancy effective July 29, 2018.

COMPENSATION DISCUSSION & ANALYSIS

Table of Contents

 

 

Executive Summary

 

The Compensation Discussion & Analysis (the "CD&A") describes the Company’s compensation philosophy and program for the Named Executive Officers listed below during 2018. It also describes our 2018 performance and the compensation decisions made by the Compensation Committee (or the “Committee” within this CD&A).

2018 Named Executive Officers (NEOs)

Our NEOs and their titles are as follows:

 

Leadership Transitions

2018 was a transitional year for Maxar. There were several leadership transitions, as follows:

Also, within the first quarter of 2019, Maxar made the following additional leadership transitions:

Business Journey

Maxar Technologies Inc., successor entity to Maxar Technologies Ltd. and MacDonald Dettwiler & Associates (“MDA”), began the implementation of the U.S. Domestication in 2016, with the appointment of a chief executive officer in the United States and the establishment of its U.S. headquarters in San Francisco, California. Maxar was created through the transformative merger of MDA with DigitalGlobe, Inc. (“DigitalGlobe”) in October 2017. Through this combination, the Company’s portfolio of operating companies came to include MDA, SSL, DigitalGlobe and Radiant Solutions. Following the merger, the Company moved its U.S. headquarters from San Francisco, California to Westminster, Colorado. On January 1, 2019, Maxar successfully changed its jurisdiction of organization from the Province of British Columbia in Canada to the State of Delaware in the United States.

The Company’s decision to undertake the merger with DigitalGlobe and effect the U.S. Domestication took into account a number of strategic considerations, including, but not limited to, the expectation that:

We believe that the successful completion of the business combination and the U.S. Domestication has enabled Maxar to become a global leader of advanced space technology solutions at the nexus of the new space economy.  Every day, billions of people rely on Maxar to communicate, share information and data, and deliver insights that Build a Better World.

Key Business, Leadership and Executive Compensation Milestones

 

Summary of 2018 Performance and Strategic Initiatives

2018 was Maxar’s first full year as a new company with a more than 50‑year heritage. In October 2017 we combined four industry-leading companies – MDA, SSL, DigitalGlobe and Radiant Solutions – into Maxar Technologies. The vision for the combination is to

unlock capabilities and end-to-end solutions for customers that would be greater than what any of these companies could do on their own.

Maxar posted significant accomplishments in 2018 including: extension of a $300 million per year EnhancedView contract through 2023;  renewal of Maxar’s Imagery segment’s Global EGD contract; an award to integrate imagery infrastructure with U.S. government systems through a secure, cloud-based system; Radiant Solutions’ JANUS win and the award of an NGA Small Business Innovation Research Phase III contract; successful deployments of Maxar’s satellites for Telesat, Azerspace‑2/Intelsat, and Planet; Space System’s-built robotic arm on the InSight Lander commencing operations to explore Mars; Maxar’s MDA-built laser altimeter aboard OSIRIS-Rex spacecraft beginning to examine the asteroid Bennu; and completion of U.S. Domestication that positions us to win a broader range of U.S. government programs.

The Company also faced several challenges in 2018, chief among them was the continued downturn in the GEO Comsat business and the loss of the WorldView‑4 (“WV4”) satellite. 2018 revenues of $2,141 million increased $510 million compared to 2017, primarily driven by the inclusion of a full year of revenues related to DigitalGlobe compared with approximately three months of revenue in 2017. Imagery and Services segment posted positive year-over-year revenue growth while the Space Systems segment faced headwinds from the cyclical downturn in the GEO Comsat market and the expected wind-down of work on the multi-year RCM contract. The company recognized a net $1.1 billion in impairment and other charges driven by the decline in market value relative to book value, the loss of the WV4 satellite, and the continuation of a weak GEO Comsat market.

The Company took steps to drive cash flows, pay down debt, and improve financial flexibility. Steps included the sale of a portion of Maxar’s real estate assets in Palo Alto, with proceeds totaling $70 million applied to pay down debt, and the negotiation of an amended credit agreement that provides additional flexibility with regard to the Company’s consolidated debt leverage ratio. The Company also began implementing solutions to offset the impact of the non-recoverable failure of Maxar’s WV4 satellite functionality. The satellite is insured, and the plan is to apply these proceeds toward improving liquidity and reducing debt. Actions have been identified to meet as many of the existing customer commitments and obligations as possible until the new WorldView satellite assets are in place.

Finally, the Company is focused on driving sustainable profitable growth in all segments, building on our unique and industry-leading Earth intelligence and insights and space innovations capabilities to deliver the products, solutions, and services our customers are seeking, while demonstrating discipline in capital allocation and operating costs. Maxar’s plan includes leveraging its unique capabilities including deep customer intimacy with the U.S. and Canadian governments and global International Defense & Intelligence customers; world-class talent; commercial mindset; unrivaled product quality and AI capabilities to unlock the value in its content; industry-leading satellite manufacturing capabilities and track record; and finally, a worldwide sales team.

Our compensation philosophy and governance guidelines are the foundation for our program design and decision making. The key components are listed on page 39 of this document, and our actions are highlighted throughout the document with a corresponding green check mark. √

2018 Say on Pay Vote Results, Stockholder Outreach and What We Heard

In 2018, while still a Canadian-domiciled company, Maxar held a voluntary advisory vote on the executive compensation program (a “Say on Pay” vote). Of the votes cast, 47.3% supported the Company’s 2017 executive pay program. Given this result, we engaged ina comprehensive outreach effort to: (1) listen to any stockholder concerns (2) solicit feedback on our executive pay programs and potential changes; (3) answer any questions about Maxar’s executive pay strategy, or other governance related questions, and (4) clearly articulate our journey and plans for transformation.

This effort included highlighting Company actions and decisions via individual investor calls with management, at analyst conferences, and the Investor Day. More specifically, a concerted outreach effort involved contacting Maxar’s largest thirty investors, who collectively represented approximately 87% of the Company’s voting stock.

The outreach efforts were led by the Chair of the Compensation Committee, with support from Maxar’s Chief Human Resources Officer and others. The focus of these conversations were:

■Provide overview of business and strategy; discuss rationale for past decisions

■Link business strategy and incentive plans (e.g., metrics)

■Discuss compensation philosophy and commitment to pay for performance

■Discuss committed actions for 2019 (e.g., LTI mix, peer group) and ask for feedback

■Highlight Board governance practices; discuss other governance/pay policy changes, as appropriate

■Set expectations for 2019 disclosure

■Listen to concerns and perspectives on pay programs

The results were as follows:

 

We will continue outreach efforts in 2019, to validate what we heard, and gather feedback from existing and new investors. We will deploy the same process of email outreach and then phone calls held by the Chair of the Compensation Committee and the Chief Human Resources Officer.

2018 and 2019 Compensation-Related Actions  √

In 2018 and early 2019, the Board made the following compensation determinations and adopted changes to certain policies and programs to demonstrate responsiveness to stockholders, evolve our pay practices toward U.S. market expectations and further align our executives with stockholders.

As described further in this CD&A, we also:

2018 CEO Compensation Alignment with Stockholder Interests    √

Our executive compensation practices are designed to tie pay with performance and align incentives with stockholder interests. Because a significant portion of the reported compensation of our CEO represents potential future compensation, not the economic value actually realized, we’ve supplemented the information in the Summary Compensation Table with the information below.

The graph summarizes the realized compensation of our CEO for Fiscal Years 2016‑2018, demonstrating the inherent pay for performance relationship in our program.

The graph summarizes the difference between target cash and equity compensation, and the actual realized compensation for our now former CEO, Mr. Lance.  With over 86% of his target compensation comprised of short- and long-term variable pay, our stock price and business results had a significant negative impact on his realized pay.

Notes:

Compensation Philosophy and Governance Highlights

The Compensation Committee has designed CEO and executive total compensation packages to drive actions that align with both the short-term and long-term interests of our stockholders, through application of the following principles:

 

Compensation Philosophy and Objectives

 

At the beginning of 2019 we completed our U.S. Domestication. Over the course of fiscal 2018 and into early 2019, we have been refining our compensation philosophy and plan designs to better align executive pay with Company performance, align with U.S. public company common practices, and ensure effective talent attraction and retention. Maxar’s executive compensation philosophy is built on a commitment to link pay to performance and align our compensation incentives with stockholder interests. Executives are rewarded for achieving our key strategic business goals, and a substantial portion of each executive’s compensation opportunity is in the form of equity awards with value directly linked to our stock price. Our executive compensation program is also designed to attract and retain executive talent in a competitive marketplace and to compensate executives at competitive, but responsible, levels. We maintain executive compensation and governance risk-mitigating best practices (such as clawback policies and executive and board stock ownership guidelines) to help ensure that our compensation programs do not encourage excessive risk taking. In addition, the majority of our compensation for our executives is in the form of equity, which further ties their interests to those of our stockholders. We believe that our balanced, performance‑based approach best serves the interests of our stockholders.

A key component of our business strategy is to provide appropriate incentives to attract, retain, and motivate top talent. The Compensation Committee has designed CEO and executive total compensation packages to drive actions that align with both the short-term and long-term interests of our stockholders.

Executive Compensation Decision-Making Process

The Compensation Committee devotes significant time throughout the year to executive compensation matters in order to align executive pay with corporate performance and stockholder interests. In determining executive compensation, the Compensation Committee obtains input and advice from our independent compensation consultants, and reviews recommendations from our CEO with respect to the performance and compensation of our other NEOs. The Board of Directors, upon recommendation from the Compensation Committee, reviews and approves CEO and NEO compensation.

In determining appropriate executive compensation levels and design parameters, the Compensation Committee reviews the feedback we receive from investors and considers Maxar’s financial and stock price performance.  The Compensation Committee structures the executive compensation program to: (1) link pay and performance; (2) align compensation with stockholder interests; (3) drive and support our business strategy (4) attract and retain a qualified senior executive team to provide business continuity and strategic leadership; and (5) incorporate market and best practices with respect to compensation-related governance.

Key Participants and Their Roles    √

The key roles and responsibilities of all parties involved with executive compensation include the following:

 

Engagement of Independent Compensation Consultant  √

In 2018 the Compensation Committee engaged Meridian Compensation Partners to provide advice on compensation of the Company’s executive officers and Non-Employee Directors. Previously the Committee engaged Radford Consulting, an Aon company (“Radford”).  Neither Radford nor Meridian provided any other services to the Company in 2018. Pursuant to SEC rules, the Compensation Committee has assessed the independence of both consultants engaged in 2018, and concluded that neither Radford nor Meridian had any conflict of interest with the Company or any of its directors or executive officers.

Risk Considerations    √

While the Board of Directors has overall responsibility for risk oversight, each of the standing committees of the Board of Directors regularly assesses risk in connection with executing its responsibilities. As such, the Compensation Committee assesses the potential risks arising from our compensation policies and practices. The Compensation Committee and its independent compensation consultant reviewed and discussed the Compensation Committee’s risk assessment for 2018, including the governance components and roles and decision-making described earlier.  The Compensation Committee determined that our compensation programs do not create risks that are reasonably likely to have a material adverse effect on our Company.

Compensation Competitive Analysis and Market Data    √

The Compensation Committee’s decision-making on executive pay levels and executive compensation program design is informed by benchmark compensation market data. Executive compensation levels are not targeted to any particular reference point against peer group or other market data; instead the Compensation Committee reviews each individual’s compensation against available data, the executive’s background and experience, past performance where known, span and scope of the role and other factors as appropriate.

Executive compensation determinations are based on various factors, some of which include  (1) the results of the competitive market analysis and peer practices (2) input from the Compensation Committee’s independent consultant; (3) the Company’s performance; (4) the performance of each NEO and their contribution to our overall results; (5)  each NEO’s experience, skill set and tenure and (6) internal equity. The weight of each factor is likely to vary from year to year and from executive to executive.

Peer Group    √

In the second and third quarters of 2018 the Compensation Committee, management, and Meridian worked together to develop a new peer group of public companies, for executive compensation benchmarking.  Following consideration of the acquisition of DigitalGlobe, the Company’s planned U.S. Domestication and other changes occurring at the Company, the Compensation Committee determined that a new peer group would provide for appropriate benchmarking of executive compensation pay levels, pay structure, and policies, in support of Company decision-making.

Maxar has few natural peers due to the unique mix of business offerings and operations, so companies were sought to represent the complexity of the Company and the markets in which Maxar competes for executive talent. The peer screening criteria included the following:

Additional considerations included: (1) key competitors for executive and non-executive talent; (2) investor peers (and peers of those peers); and (3) other qualitative factors about peer candidate degree of business similarity to Maxar.

Some of Maxar’s closest business peers and competitors for talent from the list below exceeded the higher end of the revenue range, but the Compensation Committee determined to include them in the peer group given their similarities to Maxar otherwise. (None of the peers from the list below exceeded the market cap parameters used.)

Moreover, the number of companies selected for the final group anticipated some consolidation particularly in the Aerospace & Defense sector. The Compensation Committee chose a final group that would remain robust enough even if a number of companies were to be acquired (which happened later in 2018 and in 2019, with a number of transactions announced).

The final 2018 benchmark peer group includes companies from a cross-section of industries to help mirror Maxar’s business and operations.  At the time of the competitive benchmarking analysis, the median revenue of the peer group was $2.5 billion compared to Maxar’s $2.1 billion revenue in 2018.  The Compensation Committee viewed this positioning as appropriate while also taking this relative positioning into account when evaluating market data results.  Market data results are just one factor among many that influence pay decisions at Maxar.