For the month of
|
April
|
|
2020
|
Commission File Number
|
001-37400
|
|
|
Shopify Inc.
|
|||
(Translation of registrant’s name into English)
|
|||
150 Elgin Street, 8th Floor
Ottawa, Ontario, Canada K2P 1L4
|
|||
(Address of principal executive offices)
|
Form 20-F
|
|
Form 40-F
|
X
|
|
Shopify Inc.
|
||||
|
(Registrant)
|
||||
Date:
|
|
April 21, 2020
|
|
By:
|
/s/ Joseph A. Frasca
|
|
Name: Joseph A. Frasca
Title: Chief Legal Officer and Corporate Secretary
|
Date:
|
May 27, 2020
|
|
|
Time:
|
10 a.m. (Eastern Time)
|
|
|
Virtual Meeting Site:
|
Virtual only Meeting via live audio webcast online at https://web.lumiagm.com/281483373
|
|
|
Business of the
Meeting:
|
(a) receiving our financial statements for the year ended December 31, 2019, including the auditor’s report thereon;
|
|
(b) electing six (6) directors to our Board of Directors, who will serve until the end of the next annual shareholder meeting or until their successors are elected or appointed;
|
|
(c) re-appointing PricewaterhouseCoopers LLP as our auditors and authorizing the Board of Directors to fix their remuneration;
|
|
(d) considering an advisory, non-binding resolution on our approach to executive compensation; and
|
|
(e) to transact any other business that may properly come before the Meeting and any postponement(s) or adjournment(s) thereof.
|
|
|
Voting
Matter
|
Board
Recommendation
|
For more information
see pages
|
Election of Directors
|
FOR each nominee
|
14 - 22
|
Appointing PricewaterhouseCoopers LLP as auditors
|
FOR
|
23 - 24
|
Advisory vote on executive compensation
|
FOR
|
Name
|
Age
|
Independent
|
Director Since
|
Position
|
Committees
|
Board and Committee Attendance
in 2019
|
Other
Public
Boards
|
Votes FOR in 2019
|
Tobias Lütke
|
39
|
No
|
2004
|
CEO, Shopify
|
none
|
100%
|
0
|
99.52%
|
Robert Ashe
|
61
|
Yes
|
2014
|
Corporate Director
|
- Lead Independent Director - Audit - Compensation (Chair)
|
95%
|
2
|
97.48%
|
Gail Goodman
|
59
|
Yes
|
2016
|
Corporate Director
|
- Audit - Compensation
|
100%
|
0
|
99.55%
|
Colleen Johnston
|
61
|
Yes
|
2019
|
Corporate Director
|
- Audit (Chair) - Nominating and Corporate Governance
|
94%
|
0
|
99.97%
|
Jeremy Levine
|
46
|
Yes
|
2011
|
Partner at Bessemer Venture Partners
|
- Nominating and Corporate Governance
|
93%
|
1
|
99.61%
|
John Phillips
|
69
|
Yes
|
2010
|
CEO, Klister Credit Corp.
|
- Compensation
- Nominating and Corporate Governance (Chair) |
100%
|
0
|
99.48%
|
|
Year ended December 31
(CAD)
|
Three-month Period ended March 31 (CAD)
|
||
2019
|
2018
|
2017
|
2020
|
|
Rate at end of Period
|
1.2988
|
1.3642
|
1.2545
|
1.4187
|
Average rate during Period(1)
|
1.3269
|
1.2957
|
1.2986
|
1.3449
|
High during Period
|
1.3600
|
1.3642
|
1.3743
|
1.4496
|
Low during Period
|
1.2988
|
1.2288
|
1.2128
|
1.2970
|
Name of Shareholder
|
Number of Class A Subordinate Voting Shares Owned, Controlled or Directed
|
Percentage of Outstanding Class A Subordinate Voting Shares Owned, Controlled or Directed
|
Number of Class B Multiple Voting Shares Owned, Controlled or Directed
|
Percentage of Outstanding Class B Multiple Voting Shares Owned, Controlled or Directed
|
Percentage of Votes Attaching to all Outstanding Shares Owned, Controlled or Directed
|
|||
Tobias Lütke(1)
|
253,791
|
0.24
|
%
|
8,051,852
|
64.21
|
%
|
34.95
|
%
|
Klister Credit Corp.(2)
|
72,000
|
0.07
|
%
|
3,892,000
|
31.04
|
%
|
16.87
|
%
|
Entities affiliated with Fidelity(3)
|
11,378,564
|
10.76
|
%
|
-
|
-
|
|
4.92
|
%
|
a)
|
the election of directors of the Company, who will serve until the end of the next annual shareholder meeting or until their successors are elected or appointed (see page 14);
|
b)
|
the appointment of PricewaterhouseCoopers LLP as the auditors of the Company and authorizing the directors to fix their remuneration (see page 23);
|
c)
|
an advisory, non-binding resolution in respect of Shopify’s approach to executive compensation (see page 25); and
|
d)
|
any other business that may properly come before the Meeting.
|
•
|
Registered shareholders: The Username is the 15-digit control number located on your Form of Proxy and the password is "shopify2020" (case sensitive).
|
•
|
Duly appointed proxyholders: Computershare will provide duly appointed proxyholders with a Username by email after the proxy voting deadline (May 25, 2020 at 10:00 a.m. (EDT)) has passed. The password to the Meeting is "shopify2020" (case sensitive).
|
|
Tobias Lütke co-founded Shopify in September 2004. Mr. Lütke has served as our Chief Executive Officer since April 2008. Prior to that, Mr. Lütke acted as our Chief Technology Officer between September 2004 and April 2008. Mr. Lütke worked on the core team of the Ruby on Rails framework and has created many popular open source libraries such as Active Merchant.
|
||||
Board and Committee Attendance
|
|||||
Mr. Lütke is Chair of our Board. Mr. Lütke does not sit on any Board committees. He attended every Board meeting held in 2019.
|
|||||
Current Public Directorships
|
|||||
Mr. Lütke has no other public directorships.
|
|||||
Share, Option and RSU Holdings
|
|||||
Shares: 7,648,504 Class B multiple voting shares are currently held by Tobias Lütke and by 7910240 Canada Inc., which Tobias Lütke is deemed to beneficially own. 170,063 Class A subordinate voting shares are currently held by Mr. Lütke and by 7910240 Canada Inc. This represents 34.17% of votes attaching to all outstanding Shares.
|
|||||
Tobias Lütke
|
|
Options: Mr. Lütke also currently holds 282,679 options to purchase Class A subordinate voting shares under our Stock Option Plan, and 403,348 options to purchase Class B multiple voting shares under our Legacy Option Plan.
|
|||
39
|
|
||||
Ontario, Canada
|
|
||||
Director since 2004
|
|
RSUs: Mr. Lütke currently holds 21,833 Restricted Share Units (RSUs) under our Long-Term Incentive Plan.
|
|||
Non-Independent
|
|
||||
|
|
2019 Annual Meeting Votes
|
|||
|
|
Mr. Lütke received 99.52% of all votes cast at our 2019 Annual General Meeting.
|
|||
|
|
|
Robert Ashe held a variety of positions over 24 years with increasing responsibility at Cognos Incorporated, a business intelligence and performance management software company. Mr. Ashe ultimately served as Chief Executive Officer of Cognos Incorporated from 2005 to 2008 before the company was acquired by IBM. Mr. Ashe remained with IBM as a general manager of business analytics from 2008 to 2012. Mr. Ashe holds a Bachelor of Commerce from the University of Ottawa and is a Fellow of the Institute of Chartered Accountants of Ontario.
|
||||
Board and Committee Attendance
|
|||||
Mr. Ashe is our Lead Independent Director, is Chair of our Compensation Committee and is a member of our Audit Committee. Until May 30, 2019, he served as a member of our Nominating and Corporate Governance Committee. He attended 9/10 (90%) of Board meetings and every Compensation Committee and Audit Committee meeting held in 2019. Mr. Ashe also attended every Nominating and Corporate Governance Committee meeting held in 2019 while he was a member of that Committee.
|
|||||
Current Public Directorships
|
|||||
Mr. Ashe currently serves on the Board of Directors of ServiceSource International (Nasdaq) and MSCI Inc. (NYSE).
|
|||||
Share, Option and RSU Holdings
|
|||||
Robert Ashe
|
|
Shares: Mr. Ashe currently owns 22,533 Class A subordinate voting shares. This represents less than 1% of votes attaching to all outstanding Shares.
|
|||
61
|
|
||||
Ontario, Canada
|
|
Options: Mr. Ashe currently holds 75,000 options for Class B multiple voting shares under our Legacy Option Plan, which options were granted on December 17, 2014 prior to our becoming a public company. Mr. Ashe currently holds 1,624 options to purchase Class A subordinate voting shares under our Stock Option Plan.
|
|||
Director since 2014
|
|
||||
Independent
|
|
||||
|
|
||||
|
|
RSUs: Mr. Ashe currently holds 894 Restricted Share Units (RSUs) under our Long-Term Incentive Plan.
|
|||
|
|
||||
|
|
DSUs: Mr. Ashe currently holds 751 Deferred Share Units (DSUs) under our Long-Term Incentive Plan.
|
|||
|
|
||||
|
|
2019 Annual Meeting Votes
|
|||
|
|
Mr. Ashe received 97.48% of all votes cast at our 2019 Annual General Meeting.
|
|||
|
|
|
Gail Goodman is currently the Chief Product Officer at Pepperlane and previously served as President and Chief Executive Officer of Constant Contact, a software company providing small businesses with online marketing tools to grow their businesses, for over 16 years. Over that time Ms. Goodman served as a director and chairwoman of the board and led Constant Contact through its initial public offering and for eight years as a publicly traded company, until its acquisition by Endurance International Group Holdings, Inc. (Nasdaq) in February 2016. Ms. Goodman holds a B.A. from the University of Pennsylvania and an M.B.A. from The Tuck School of Business at Dartmouth College.
|
||||
Board and Committee Attendance
|
|||||
Ms. Goodman is a member of our Audit Committee and Compensation Committee. Until May 30, 2019, she served as a member of our Nominating and Corporate Governance Committee. She attended every Board, Compensation Committee and Audit Committee meeting held in 2019. Ms. Goodman also attended every Nominating and Corporate Governance Committee meeting held in 2019 while she was a member of that Committee.
|
|||||
Current Public Directorships
|
|||||
None.
|
|||||
Share, Option and RSU Holdings
|
|||||
Shares: Ms. Goodman currently owns 2,762 Class A subordinate voting shares. This represents less than 1% of votes attaching to all outstanding Shares.
|
|||||
Gail Goodman
|
|
Options: Ms. Goodman currently holds 9,802 options to purchase Class A subordinate voting shares under our Stock Option Plan.
|
|||
59
|
|
||||
Massachusetts, United States
|
RSUs: Ms. Goodman currently holds 1,645 Restricted Share Units (RSUs) under our Long-Term Incentive Plan.
|
||||
Director since 2016
|
|
||||
Independent
|
|
2019 Annual Meeting Votes
|
|||
|
|
Ms. Goodman received 99.55% of all votes cast at our 2019 Annual General Meeting.
|
|||
|
|
|
Colleen Johnston is the former Chief Financial Officer of Toronto-Dominion Bank. Prior to her retirement in 2018 Colleen spent 14 years at TD, ten of which she spent as Group Head, Finance, Sourcing, Corporate Communications and Chief Financial Officer. Prior to TD, Ms. Johnston held senior leadership roles at Scotiabank over the course of 15 years, including as CFO of Scotia Capital. Ms. Johnston currently serves on the board of directors of McCain Foods, Unity Health Toronto, and the Shaw Festival Theatre. Ms. Johnston holds a Bachelor of Business Administration from York University’s Schulich School of Business and is a Fellow of the Institute of Chartered Accountants of Ontario.
|
||||
Board and Committee Attendance
|
|||||
Ms. Johnston is Chair of our Audit Committee and a member of our Nominating and Corporate Governance Committee. She attended 9/10 (90%) of Board meetings and every Audit Committee and Nominating and Corporate Governance Committee meeting held in 2019, and every Nominating and Corporate Governance Committee meeting after she was appointed to that Committee.
|
|||||
Current Public Directorships
|
|||||
None.
|
|||||
Share, Option and RSU Holdings
|
|||||
Shares: Ms. Johnston currently owns 318 Class A subordinate voting shares. This represents less than 1% of votes attaching to all outstanding Shares.
|
|||||
RSUs: Ms. Johnston currently holds 2,257 Restricted Share Units (RSUs) under our Long-Term Incentive Plan.
|
|||||
Colleen Johnston
|
|
||||
61
|
|
DSUs: Ms. Johnston currently holds 37 Deferred Share Units (DSUs) under our Long-Term Incentive Plan.
|
|||
Ontario, Canada
|
|
||||
Director since 2019
|
|
2019 Annual Meeting Votes
|
|||
Independent
|
|
Ms. Johnston received 99.97% of all votes cast at our 2019 Annual General Meeting.
|
|||
|
|
||||
|
|
|
Jeremy Levine has been a Partner at Bessemer Venture Partners since January 2007, a venture capital firm he joined in May 2001. Prior to joining Bessemer, Mr. Levine was Vice President of Operations at Dash.com Inc., an internet software publisher, from 1999 to 2001. Prior to that, Mr. Levine was an Associate at AEA Investors, a management buyout firm, where he specialized in consumer products and light industrials, from 1997 to 1999. Mr. Levine was with McKinsey & Company as a management consultant from 1995 to 1997. Mr. Levine holds a B.S. degree in Computer Science from Duke University.
|
||||
Board and Committee Attendance
|
|||||
Mr. Levine is a member of our Nominating and Corporate Governance Committee. He attended 9/10 (90%) of Board meetings and every Nominating and Corporate Governance Committee meeting held in 2019.
|
|||||
Current Public Directorships
|
|||||
Mr. Levine currently serves on the Board of Directors of Pinterest, Inc. (NYSE).
|
|||||
Share, Option and RSU Holdings
|
|||||
Shares: Mr. Levine currently owns 72,052 Class A subordinate voting shares. This represents less than 1% of votes attaching to all outstanding shares.
|
|||||
Jeremy Levine
|
|
2019 Annual Meeting Votes
|
|||
46
|
|
Mr. Levine received 99.61% of all votes cast at our 2019 Annual General Meeting.
|
|||
New York, United States
|
|
||||
Director since 2011
|
|
||||
Independent
|
|
Audit Committee
|
Compensation Committee
|
Nominating and Corporate Governance Committee
|
Colleen Johnston (Chair)
|
Robert Ashe (Chair)
|
John Phillips (Chair)
|
Robert Ashe
|
Gail Goodman
|
Colleen Johnston
|
Gail Goodman
|
John Phillips
|
Jeremy Levine
|
Fees
|
2019
|
2018
|
Audit
|
$1,133,000
|
$764,000
|
Audit-Related
|
$0
|
$0
|
Tax
|
$0
|
$0
|
Other
|
$3,000
|
$2,000
|
Total
|
$1,136,000
|
$766,000
|
Growth
|
Our mission is to make commerce better for everyone, and we believe we can help merchants of all sizes, from aspirational entrepreneurs to large enterprises, and all retail verticals realize their potential at all stages of their business life cycle.
As of December 31, 2019, we had over one million merchants from approximately 175 countries using our platform.
Total revenue for the year grew 47% to $1,578.2 million.
|
Strategy
|
Our growth strategy is driven by our mission: make commerce better for everyone.
We have focused on rapidly growing our business and plan to continue making investments to drive future growth. We believe that our investments will increase our revenue base, improve the retention of this global base and strengthen our ability to increase sales to our merchants.
Key elements of our strategy include: growing our merchant base, growing our merchants' revenue, continuing innovation and expansion of our platform, continuing to grow and develop our ecosystem, continuing to expand our referral partner programs, and continuing to build for the long term.
|
People & Culture
|
We grew our employee population by approximately 25% in 2019, ending the year with more than 5,000 employees and contractors worldwide.
If you have ambitious goals, you need an equally ambitious team. We are composed of highly talented, deeply caring individuals all working on making commerce better for everyone. We are intentional in building a culture and environment that empowers care and growth in high-impact people. Our employee survey, conducted in the third quarter of 2019, reflected industry-leading levels of engagement. We consider our relationship with our employees to be excellent.
Personal growth and development and constant learning are central to our culture. We encourage Shopifolk to map their personal learning journey through our "Own Your Own Development" program. Employees can access courses, conferences, and workshops to build their skills and mastery, no matter where they're located.
|
Innovation
|
We grew our set of features and enhanced platform functionality in 2019, enabling more merchants around the world to launch businesses and start selling, helping merchants sell more and sell more efficiently, and catalyzing entrepreneurship throughout our ecosystem.
Some of the new product launches included: 13 additional native language capabilities on the platform; Shopify Payments in four additional countries, expanding the availability to 15 countries; Shopify Retail Kit, a suite of new brick-and-mortar hardware products; Shopify Fulfillment Network, providing merchants with a network of distributed fulfillment centers, and further accelerated the growth of our fulfillment network with the acquisition of 6 River Systems allowing us to leverage their machine learning and collaborative mobile robots to increase the speed and reliability of our warehouse operations; and Shopify Studios, a full-service TV, film, and digital content development and production house to inspire movements toward entrepreneurship through thought-provoking and original storytelling.
|
•
|
Provide market-competitive compensation opportunities to attract and retain talented, high-performing and experienced executive officers, whose knowledge, skills and level of impact are critical to our success.
|
•
|
Motivate these executive officers to deliver outstanding outcomes.
|
•
|
Align the interests of our executive officers with those of Shopify by providing long-term incentives that tie directly to the long-term value and growth of our business.
|
•
|
Provide long-term incentives that encourage appropriate levels of risk-taking by the executive team.
|
•
|
reviewed and advised on our comparator group composed of industry-related, public companies with comparable revenue, market capitalization and employee populations for use in executive and Board compensation benchmarking;
|
•
|
conducted executive and board compensation assessments against compensation for similarly situated executives and board members at our comparator group companies;
|
•
|
assisted in reviewing the competitiveness and design of our recommended cash and equity compensation arrangements for our executives and board members;
|
•
|
assisted in designing the size and structure of new equity awards for our executives;
|
•
|
assisted with the review and development of our broader equity compensation strategy; and
|
•
|
attended and supported all compensation committee meetings.
|
Year
|
Consulting Firm
|
Executive Compensation Consulting-Related Fees ($)
|
All Other Fees
|
Total Fees ($)
|
Currency
|
||
2019
|
Compensia
|
101,560
|
|
-
|
101,560
|
|
USD
|
2018
|
Compensia
|
105,652
|
|
-
|
105,652
|
|
USD
|
Component
|
Form
|
Rationale
|
Review Process
|
Award Determination
|
Base Salary
|
Cash
|
Provided as a fixed source of compensation
|
Reviewed annually
Adjustments may be warranted throughout the year
|
Established based on the scope of the executive officer’s responsibilities, impact, internal fairness, criticality and market data.
Takes into consideration:
-Total compensation opportunity
- Individual level of impact
- Promotions or other changes in the scope or breadth of role or responsibilities
- Desired positioning relative to market
- Shopify performance on key business measures
- Internal fairness
|
Long-Term Incentive (Equity)
|
Stock Options and Restricted Share Units (RSUs)
|
Serves as an effective retention tool and focuses the executive officers on creating long term value over time
|
Reviewed annually
Prior to November 2017, equity awards were subject to time-based vesting at a rate of 25% on the first anniversary of the vesting start date, the remainder vesting in equal quarterly installments over the next three years.
After November 2017, equity awards are subject to time-based vesting at a rate of 33.33% on the first anniversary of the vesting start date, the remainder vesting in equal quarterly installments over the next two years.
|
Size and frequency of equity awards are based on:
- Total compensation opportunity
- Attraction and retention
- Market competitiveness
- CEO’s recommendations for his direct reports:
- Individual level of impact
- Increased scope of role / level of impact
- Existing equity award holdings (including the unvested portion of such awards)
- Internal fairness
-Our available equity plan funding /
dilution limitations
-Review of market practices related
to aggregate equity dilution metrics
such as burn rate and compensation expense
|
Component
|
Form
|
Rationale
|
Review Process
|
Award Determination
|
Employee Benefits & Perks
|
Flexible vacation, benefits and perks
|
Attraction and retention of key talent
|
Ongoing
|
- Benefits include health, dental, life, disability insurance benefits
- Voluntary perquisites are limited and include catered meals, flexible vacation and a flexible spending allowance
- Same benefits and perks are offered to all Shopify employees
|
Name
|
Base Salary ($US)
|
Base Salary ($CAD)
|
Increase from fiscal 2018 ($CAD) (%)
|
Tobias Lütke
|
615,920
|
800,000
|
0%
|
Amy Shapero
|
538,930
|
700,000
|
0%
|
Craig Miller
|
423,445
|
550,000
|
0%
|
Harley Finkelstein
|
423,445
|
550,000
|
0%
|
Brittany Forsyth
|
307,960
|
400,000
|
0%
|
1
|
All base salaries are paid to our NEOs in Canadian dollars. The 2019 base salary amounts reported in the above table, and the 2018 base salary amount used to calculate the percentage increase have been converted to U.S dollars using an exchange rate of C$1.00 = US$0.7699, which was the Bank of Canada average rate on December 31, 2019.
|
2
|
Base salaries for 2018 reported in our 2019 management information circular were converted to U.S. dollars using an exchange rate of C$1.00=US$0.7330, which was the Bank of Canada average rate on December 31, 2018.
|
Name
|
Share-based Awards(1)
($US)
|
Option-based Awards(2)
($US)
|
Tobias Lütke
|
—
|
10,000,032
|
Amy Shapero
|
2,000,053
|
2,000,023
|
Craig Miller
|
2,000,053
|
2,000,023
|
Harley Finkelstein
|
2,000,053
|
2,000,023
|
Brittany Forsyth
|
1,250,033
|
1,250,036
|
1
|
The value of share-based awards shown for our NEOs are the grant date fair values for restricted share unit ("RSU") awards granted under the Long-Term Incentive Plan, being equal to the number of share units granted multiplied by the weighted average trading price per common share on the New York Stock Exchange for the five (5) trading days immediately preceding the grant date. This compensation has not actually been received by our NEOs and the actual value received, if any, will differ.
|
||
2
|
The value of option-based awards shown for our NEOs are the grant date fair values for stock option awards granted under the Stock Option Plan, being equal to the number of stock options granted multiplied by the Black-Scholes value of the options at the time of grant.
|
Balance between short- and long-term performance objectives
|
þ
|
We do not offer annual / short-term incentives. We expect all employees to perform at a high level of impact and provide a base salary for this contribution.
In addition to base salary we provide long-term incentives in the form of stock options and restricted share units. We want our primary focus to be on the long-term growth of Shopify.
|
Preservation of Board discretion
|
þ
|
The Board has the ability to apply its discretion on base salary increases and the value, award mix and vesting of equity compensation.
|
External independent advice
|
þ
|
The Compensation Committee has retained independent advisors to deliver independent advice on executive compensation and related matters.
The majority of our Board (and 100% of the Compensation Committee) is also
independent.
|
Stress testing and predictive modeling of equity program
|
þ
|
Equity plan outcomes are stress tested to ensure appropriate pay and performance alignment and retention. Predictive modeling of equity programs is reviewed quarterly.
|
Vesting of equity awards
|
þ
|
Equity awards generally vest over three years at a rate of 33.33% on the first anniversary of the vesting start date, the remainder vesting in equal quarterly installments over the next two years.
|
No hedging
|
þ
|
All Shopify directors, officers and employees are prohibited from purchasing financial instruments designed to hedge or offset a decrease in the market value of Shopify securities, and may not buy Shopify securities on margin.
|
Regular monitoring of market practice/Investor Outreach
|
þ
|
The Compensation Committee reviews and considers evolving good compensation governance practices and policies. In 2019 at our fourth annual general meeting as a public company, Shopify presented a non-binding advisory vote on the Board of Director’s approach to executive compensation (Say on Pay) as part of our process of shareholder engagement. 92.65% of the votes cast were in favour of Shopify’s approach to executive compensation. Shopify is presenting a Say on Pay vote again this year.
We value feedback from our shareholders on our executive compensation program and corporate governance policies and welcome input, as it impacts our decision-making. We believe that ongoing engagement builds mutual trust with our shareholders and will continue to monitor feedback from our shareholders and may solicit outreach on our programs, as appropriate.
|
Name and Principal
Position |
Year
|
Salary(1)
($) |
Share-
based Awards(2) ($) |
Option-
based Awards(3) ($) |
Non-Equity
Incentive Plan Compensation(4) ($) |
Pension
Value(5) ($) |
All Other
Compensation(6) ($) |
Total
Compensation ($) |
|
Annual
incentive plans ($) |
Long-term
incentive plans ($) |
||||||||
Tobias Lütke
|
2019
|
615,920
|
-
|
10,000,032
|
-
|
-
|
-
|
-
|
10,615,952
|
CEO
|
2018
|
586,400
|
4,000,096
|
4,000,486
|
-
|
-
|
-
|
-
|
8,586,982
|
2017
|
637,680
|
3,000,043
|
4,569,000
|
-
|
-
|
-
|
-
|
8,206,723
|
|
Amy Shapero
|
2019
|
538,930
|
2,000,053
|
2,000,023
|
-
|
-
|
-
|
-
|
4,539,006
|
CFO
|
2018
|
384,825
|
7,700,063
|
3,300,256
|
|
-
|
-
|
275,656
|
11,660,800
|
2017
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Craig Miller
|
2019
|
423,445
|
2,000,053
|
2,000,023
|
-
|
-
|
-
|
-
|
4,423,521
|
Chief Product Officer
|
2018
|
403,150
|
3,000,004
|
3,000,329
|
-
|
-
|
-
|
-
|
6,403,483
|
2017
|
418,478
|
1,250,023
|
1,903,750
|
-
|
-
|
-
|
-
|
3,572,251
|
|
Harley Finkelstein
|
2019
|
423,445
|
2,000,053
|
2,000,023
|
-
|
-
|
-
|
-
|
4,423,521
|
Chief Operating Officer
|
2018
|
403,150
|
2,000,048
|
2,000,243
|
-
|
-
|
-
|
-
|
4,403,441
|
2017
|
418,478
|
750,026
|
1,142,250
|
-
|
-
|
-
|
-
|
2,310,754
|
|
Brittany Forsyth
|
2019
|
307,960
|
1,250,033
|
1,250,036
|
-
|
-
|
-
|
-
|
2,808,029
|
Chief Talent Officer
|
2018
|
293,200
|
1,000,092
|
1,000,157
|
-
|
-
|
-
|
-
|
2,293,449
|
2017
|
318,840
|
500,059
|
761,593
|
-
|
-
|
-
|
-
|
1,580,492
|
1
|
Base salaries are paid to our NEOs in Canadian dollars. The 2019 base salary amounts reported in the above table have been converted to U.S. dollars using an exchange rate of C$1.00 = US$0.7699, which was the Bank of Canada average rate on December 31, 2019. The 2018 base salary amounts reported in the above table have been converted to U.S. dollars using an exchange rate of C$1.00 = US$0.7330, which was the Bank of Canada average rate on December 31, 2018. The 2017 base salary amounts reported in the above table have been converted to U.S. dollars using an exchange rate of C$1.00 = US$0.7971, which was the Bank of Canada average rate on December 29, 2017.
|
|
Ms. Shapero began her employment with Shopify on April 2, 2018. The 2018 base salary in the above table reflects the compensation received from April 2, 2018 to December 31, 2018.
|
2
|
The value of share-based awards shown for our NEOs are the grant date fair values for restricted share unit ("RSU") awards granted under the Long-Term Incentive Plan, being equal to the number of share units granted multiplied by the weighted average trading price per common share on the New York Stock Exchange for the five (5) trading days immediately preceding the grant date. This compensation has not actually been received by our NEOs and the actual value received, if any, will differ.
|
3
|
The value of option-based awards shown for our NEOs are the grant date fair values for stock option awards granted under the Stock Option Plan, being equal to the number of stock options granted multiplied by US$84.38 in 2019, either US$70.78 or US$70.83 in 2018 and US$30.46 in 2017.
|
|
These values were used both for the purposes of compensation (grant date fair value) and accounting value and were derived using the Black-Scholes methodology. The underlying assumptions used in fair valuing the options were as follows:
2019 Grant: Date February 25, 2019; Share price: $180.38; Expected dividend yield: nil; Expected volatility: 50.97%; Risk-free interest rate: 2.50%; Expected option life: 5.02 years; Fair value per stock option granted: $84.38.
2018 Grants: Date March 1, 2018; Share price: $136.55; Expected dividend yield: nil; Expected volatility: 55.83%; Risk-free interest rate: 2.68%; Expected option life: 5.35 years; Fair value per stock option granted: $70.78. Date May 10, 2018; Share price: $137.72; Expected dividend yield: nil; Expected volatility: 55.28%; Risk-free interest rate: 2.81%; Expected option life: 5.30 years; Fair value per stock option granted: $70.83.
2017 Grants: Date: February 24, 2017; Share price: $62.15; Expected dividend yield: nil; Expected volatility: 56.31%; Risk-free interest rate: 1.77%; Expected option life: 4.90 years; Fair value per stock option granted: $30.46.
|
|
This compensation has not actually been received by our NEOs and the actual value received, if any, will differ.
|
4
|
We do not currently offer non-equity incentive plan compensation.
|
5
|
We do not currently offer a deferred compensation plan or pension plan.
|
6
|
Ms. Shapero received relocation support (including flights, temporary housing, moving allowance and related taxes, in addition to tax preparation services & immigration services) in 2018, which was paid in Canadian dollars. Ms. Shapero also received a lump sum signing bonus when she was hired in 2018, which was paid in Canadian dollars. The 2018 amounts reported in the above table has been converted into U.S dollars using an exchange rate of C$1.00 = US$0.7330, which was the Bank of Canada average rate on December 31, 2018.
|
|
None of the NEOs are entitled to perquisites or other personal benefits which, in the aggregate, are worth over C$50,000 or over 10% of their base salary.
|
|
Option-Based Awards
|
Share-Based Awards
|
|||||
Name and Principal Position
|
Number of
Securities
underlying
unexercised
options
(#)
|
Option
Exercise
Price
($)
|
Option
expiration
date
|
Value of
Unexercised
In-The-
Money
Options(3)
($)
|
Number of
shares or
units of shares that
have not
vested
(#)
|
Market or
payout
value of share- based awards that have
not vested(4)
($)
|
Market or
payout
value of
vested
share-based
awards not
paid out or
distributed
($)
|
Tobias Lütke CEO
|
403,348(1)
|
6.22
|
December 17, 2024
|
157,854,273
|
27,291
|
10,850,356
|
—
|
56,250(2)
|
62.15
|
February 24, 2027
|
18,867,938
|
—
|
—
|
—
|
|
56,522(2)
|
136.55
|
March 1, 2028
|
14,753,938
|
—
|
—
|
—
|
|
118,509(2)
|
180.38
|
February 25, 2029
|
25,740,155
|
—
|
—
|
—
|
|
Amy Shapero CFO
|
34,943(2)
|
137.72
|
May 10, 2028
|
9,080,288
|
39,044
|
15,523,114
|
—
|
23,702(2)
|
180.38
|
February 25, 2029
|
5,148,074
|
—
|
—
|
—
|
|
Craig Miller Chief Product Officer
|
136,109(1)
|
6.22
|
December 17, 2024
|
53,267,618
|
26,527
|
10,546,605
|
—
|
62,500(2)
|
62.15
|
February 24, 2027
|
20,964,375
|
—
|
—
|
—
|
|
42,391(2)
|
136.55
|
March 1, 2028
|
11,065,323
|
—
|
—
|
—
|
|
23,702(2)
|
180.38
|
February 25, 2029
|
5,148,074
|
—
|
—
|
—
|
|
Harley Finkelstein Chief Operating Officer
|
7,146(1)
|
6.22
|
December 17, 2024
|
2,796,659
|
25,140
|
9,995,161
|
—
|
53,800(2)
|
22.44
|
March 3, 2026
|
20,182,532
|
—
|
—
|
—
|
|
37,500(2)
|
62.15
|
February 24, 2027
|
12,578,625
|
—
|
—
|
—
|
|
28,261(2)
|
136.55
|
March 1, 2028
|
7,376,969
|
—
|
—
|
—
|
|
23,702(2)
|
180.38
|
February 25, 2029
|
5,148,074
|
—
|
—
|
—
|
|
Brittany Forsyth Chief Talent Officer
|
7,500(1)
|
4.22
|
June 26, 2024
|
2,950,200
|
13,540
|
5,383,233
|
—
|
12,216(1)
|
6.22
|
December 17, 2024
|
4,780,854
|
—
|
—
|
—
|
|
13,500(2)
|
22.44
|
March 3, 2026
|
5,064,390
|
—
|
—
|
—
|
|
25,000(2)
|
62.15
|
February 24, 2027
|
8,385,750
|
—
|
—
|
—
|
|
14,131(2)
|
136.55
|
March 1, 2028
|
3,688,615
|
—
|
—
|
—
|
|
14,814(2)
|
180.38
|
February 25, 2029
|
3,217,601
|
—
|
—
|
—
|
1
|
These stock options were granted under our Legacy Option Plan and each such option is exercisable for one Class B multiple voting share. Each Class B multiple voting share is convertible, at the option of the holder, into one Class A subordinate voting share. For a description of the terms of stock options granted under our Legacy Option Plan, see "Incentive Plans - Legacy Option Plan", below.
|
2
|
These stock options were granted under our current Stock Option Plan and each such option is exercisable for one Class A subordinate voting share. For a description of the terms of stock options granted under our Stock Option Plan, see "Incentive Plans - Stock Option Plan", below.
|
3
|
Options are "in-the-money" if the market price of the shares covered by the options is greater than the option exercise price. Values for stock options that have an exercise price in US dollars are calculated based on the difference between closing market price of Shopify’s Class A subordinate voting shares on the NYSE on December 31, 2019, which was of US$397.58, and the exercise price. Actual value realized will be the difference between the market price and the option exercise price upon exercise of the options.
|
4
|
Restricted Share Units ("RSUs") were granted under our Long-Term Incentive Plan ("LTIP") and each unit vests as one Class A subordinate voting share. For a description of the terms of RSUs granted under our LTIP, see "Incentive Plans - Long-Term Incentive Plan", below. Values are calculated based on the closing market price of Shopify’s Class A subordinate voting shares on NYSE on December 31, 2019, which was US$397.58.
|
Name
|
Option-Based Awards-
Value Vested
During the Year(1)
($)
|
Share-Based Awards-
Value Vested
During the Year(2)
($)
|
Non-Equity Incentive Plan Compensation Value Earned During the Year ($)
|
Tobias Lütke
|
12,091,297
|
7,793,606
|
—
|
Amy Shapero
|
3,403,397
|
7,934,116
|
—
|
Craig Miller
|
16,808,695
|
4,682,300
|
—
|
Harley Finkelstein
|
7,621,202
|
8,000,564
|
—
|
Brittany Forsyth
|
3,227,505
|
2,901,929
|
—
|
1
|
Represents the value of potential gains from options that vested during 2019. Values are calculated based on the difference between closing market price of Shopify’s Class A subordinate voting shares on the NYSE on the vesting date and the exercise price. Actual value realized will be the difference between the market price and the option exercise price upon exercise of the options.
|
2
|
Represents the actual value of realized gains resulting from RSUs that vested during 2019. Gains reflect the received sale price of Shopify's Class A subordinate shares on the NYSE on the vesting date.
|
•
|
a termination payment equal to a period of 12 months plus one additional month of base salary for each complete calendar year of service performed by him, up to a maximum termination payment equal to a period of 18 months; and
|
•
|
continued benefits for such period of time, and all eligible bonuses.
|
•
|
a termination payment equal to 12 months of base salary, plus one additional week of pay of base salary for each year of service; and
|
•
|
continued benefits for such period of time or compensation in lieu of any benefits that cannot be continued.
|
•
|
a termination payment equal to a period of three months plus one additional month of base salary for each year of service performed by him, up to a maximum termination payment equal to a period of six months; and
|
•
|
continued benefits for such period of time and all eligible bonuses.
|
•
|
In the case of termination of employment other than for cause, Mr. Miller is entitled to a termination payment equal to a period of twelve months plus one additional week of base salary for each year of service performed by him, dependent on him signing a full release of all claims against Shopify.
|
•
|
In the case of a change in control, the vesting of any unvested equity awarded to Mr. Miller will be accelerated in the event of a termination by Shopify without cause or resignation for good reason within 12 months following a change in control of the company, dependent on him signing a full release of all claims against Shopify.
|
•
|
In the case of termination of employment other than for cause, Mr. Finkelstein is entitled to a termination payment equal to a period of twelve months plus one additional week of base salary for each year of service performed by him, dependent on him signing a full release of all claims against Shopify.
|
•
|
In the case of a change in control, the vesting of any unvested equity awarded to Mr. Finkelstein will be accelerated in the event of a termination by Shopify without cause or resignation for good reason within 12 months following a change in control of the company, dependent on him signing a full release of all claims against Shopify.
|
•
|
In the case of termination of employment other than for cause, Ms. Forsyth is entitled to a termination payment equal to a period of twelve months plus one additional week of base salary for each year of service performed by her, dependent on her signing a full release of all claims against Shopify.
|
•
|
In the case of a change in control, the vesting of any unvested equity awarded to Ms. Forsyth will be accelerated in the event of a termination by Shopify without cause or resignation for good reason within 12 months following a change in control of the Company, dependent on her signing a full release of all claims against Shopify.
|
Name and Principal
Position
|
Event
|
Severance(1)
($)
|
Options(2)
($)
|
Share-Based
Awards(3)
($)
|
Total
($)
|
Tobias Lütke
CEO
|
Termination other than for cause
|
923,880
|
50,755,610
|
10,850,356
|
62,529,846
|
Change in control(4)
|
923,880
|
50,755,610
|
10,850,356
|
62,529,846
|
|
Amy Shapero
CFO
|
Termination other than for cause;
Change in control(5)
|
559,658
|
11,201,773
|
15,523,114
|
27,284,545
|
Craig Miller(6)
Chief Product Officer
|
Termination other than for cause;
Involuntary termination on or immediately prior to a change in control
|
211,723
|
-
|
-
|
211,723
|
Harley Finkelstein(6)
Chief Operating Officer
|
Termination other than for cause;
Change in control
|
-
|
-
|
-
|
-
|
Brittany Forsyth(6)
Chief Talent Officer
|
Termination other than for cause;
Change in control
|
-
|
-
|
-
|
-
|
1
|
Severance payments are calculated based on the base salary we pay to the NEO, which is paid in Canadian dollars. The severance amounts reported in the table have been converted to U.S. dollars using an exchange rate of C$1.00 = US$0.7699, which was the Bank of Canada daily average rate on December 31, 2019. Under the employment agreements in place as of December 31, 2019, Ms Forsyth and Mr. Finkelstein were entitled to minimum statutory entitlements upon termination without cause, as well as common law entitlements under applicable law, which may entitle NEOs to an award of reasonable notice or pay in lieu. The determination of "reasonable notice" depends on the particular circumstances taking into account a number of relevant factors, and as a result these amounts cannot be quantified with any specificity at this time.
|
2
|
The value of unvested options is calculated based on the closing price on the NYSE of $397.58 on December 31, 2019 of our Class A subordinate voting shares.
|
3
|
The value of unvested share-based awards is calculated based on the closing price on the NYSE of $397.58 on December 31, 2019 of our Class A subordinate voting shares.
|
4
|
Mr. Lütke’s employment agreement provides that the vesting of any unvested equity awarded will be accelerated in the event of a change in control transaction.
|
5
|
Ms. Shapero's employment agreement provides that the vesting of any unvested equity awarded will be accelerated in the event of her involuntary termination of employment or resignation for good cause solely as a result, and within 12 months, after a change in control transaction.
|
6
|
The payments outlined in the table above reflect amounts payable if the termination or change of control occurred on December 31, 2019 and therefore reflect the terms of the employment agreements as of December 31, 2019. For a summary of the current terms of the employment agreements of Mr. Miller, Mr. Finkelstein and Ms. Forsyth, which were amended in February 2020, please see the description of such agreements under "Executive Employment Arrangements and Termination and Change in Control Benefits".
|
1)
|
commensurate with the efforts we expect from our existing Board members;
|
2)
|
competitive in our industry in order that we might attract the best possible candidates to assist the Company and its Shareholders in a fiduciary capacity to maximize our opportunity presented by that growth; and,
|
3)
|
aligned with our Shareholders' interests as we grow.
|
Position
|
2019 Fees
|
||
Annual Board retainer
|
$
|
40,000
|
|
Audit Committee Chair
|
$
|
20,000
|
|
Compensation Committee Chair
|
$
|
15,000
|
|
Nomination and Governance Committee Chair
|
$
|
10,000
|
|
Audit Committee Member
|
$
|
10,000
|
|
Compensation Committee Member
|
$
|
6,000
|
|
Nomination and Governance Committee Member
|
$
|
3,000
|
|
Director
|
Fee Earned(1)
|
Deferred Share Units(2)
|
Share Based Awards(3)
|
Option Based Awards(4)
|
Non-Equity Incentive Plan Compensation(5)
|
Pension Value(6)
|
All Other Compensation(7)
|
Total
|
||||
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
|||||
Robert Ashe
|
-
|
66,500
|
|
230,053
|
|
-
|
-
|
-
|
-
|
296,553
|
|
|
Steven Collins(8)
|
30,000
|
|
-
|
-
|
-
|
-
|
-
|
-
|
30,000
|
|
||
Gail Goodman
|
59,000
|
|
-
|
200,203
|
|
-
|
-
|
-
|
-
|
259,203
|
|
|
Jeremy Levine
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||
Colleen Johnston (9)
|
56,500
|
|
-
|
600,286
|
|
-
|
-
|
-
|
-
|
656,786
|
|
|
John Phillips
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1
|
Messrs. Levine, and Phillips declined fees in 2019.
|
2
|
Mr. Ashe deferred 100% of his cash compensation in 2019 to DSUs.
|
3
|
Messrs. Levine, and Phillips declined equity compensation awards in 2019. The value of share based awards shown for the other directors is the grant date fair value for RSU awards granted to her under the LTIP, being equal to the number of share units granted multiplied by the weighted average trading price per common share on the New York Stock Exchange for the five (5) trading days immediately preceding the grant date. This compensation has not actually been received by the directors, and the actual value received, if any, will differ.
|
4
|
We do not currently offer option based awards to our Directors.
|
5
|
We do not currently offer non-equity incentive plan compensation to our Directors.
|
6
|
We do not currently offer a pension plan to our Directors.
|
7
|
None of the Directors are entitled to perquisites or other personal benefits which, in the aggregate, are worth over C$50,000 or over 10% of their fees.
|
8
|
Within fiscal year 2019 Mr. Collins served on the Board of Directors from January 1, 2019 to May 29, 2019.
|
9
|
Colleen Johnston joined the board on January 24, 2019. In 2019, Ms. Johnston received both an annual equity award and a new hire equity award.
|
Director
|
Option-Based Awards
|
Share-Based Awards
|
|||||||
Number of
Securities
underlying
unexercised
options
|
Option
Exercise
Price
|
Option
Expiration
Date
|
Value of
Unexercised
In-The-
Money
Options(3)
|
Number of
shares or
units of shares that
have not
vested
|
Market or
payout
value of share- based awards that have
not vested(4)
|
Market or
payout
value of
vested
share-based
awards not
paid out or
distributed
|
|||
|
(#)
|
($)
|
|
($)
|
(#)
|
($)
|
($)
|
||
Robert Ashe
|
75,000(1)
|
6.22
|
December 17, 2024
|
29,352,000
|
894
|
355,437
|
-
|
||
1,624(2)
|
137.72
|
May 10, 2028
|
422,013
|
673
|
-
|
267,472
|
|||
Steven Collins (5)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||
Gail Goodman
|
7,143(2)
|
39.72
|
November 16, 2026
|
2,556,194
|
1,934
|
768,920
|
-
|
||
1,247(2)
|
98.34
|
November 15, 2027
|
373,152
|
-
|
-
|
-
|
|||
1,412(2)
|
137.72
|
May 10, 2028
|
366,922
|
-
|
-
|
-
|
|||
Colleen Johnston
|
-
|
-
|
-
|
-
|
2,996
|
1,191,150
|
-
|
||
Jeremy Levine
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||
John Phillips
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1
|
Stock options were granted under our Legacy Option Plan and each such option is exercisable for one Class B multiple voting share. Each Class B multiple voting share is convertible, at the option of the holder, into one Class A subordinate voting share. For a description of the terms of stock options granted under our Legacy Option Plan, see "Incentive Plans - Legacy Option Plan", below.
|
2
|
Stock options were granted under our current Stock Option Plan and each such option is exercisable for one Class A subordinate voting share. For a description of the terms of stock options granted under our Stock Option Plan, see "Incentive Plans - Stock Option Plan", below.
|
3
|
Values are calculated based on the difference between closing market price of Shopify’s Class A subordinate voting shares on the NYSE on December 31, 2019, which was of US$397.58, and the exercise price.
|
4
|
Value is calculated based on the closing market price of Shopify’s Class A subordinate voting shares on NYSE on December 31, 2019, which was US$397.58.
|
5
|
Within fiscal year 2019, Mr. Collins served on the Board of Directors from January 1, 2019 to May 29, 2019.
|
Director
|
Option-Based Awards-
Value Vested
During the Year(1)
($)
|
Share-Based Awards-
Value Vested
During the Year(2)
($)
|
Robert Ashe
|
196,683
|
216,382
|
Gail Goodman
|
700,975
|
512,824
|
Colleen Johnston (3)
|
-
|
-
|
1
|
Values are calculated based on the difference between closing market price of Shopify’s Class A subordinate voting shares on the NYSE on the vesting date and the exercise price.
|
2
|
Values are calculated based on the number of units vested and the actual realized sale price of Shopify's Class A subordinate shares on the NYSE on the vesting date.
|
3
|
Colleen Johnston joined the Board on January 24, 2019.
|
•
|
amendments of a general housekeeping or clerical nature that clarify, correct or rectify any ambiguity, defective provision, error or omission;
|
•
|
amendments to the provisions governing vesting, assignability and effect of termination of a participant’s employment or office;
|
•
|
the addition of a form of financial assistance and any amendment to a financial assistance provision which is adopted;
|
•
|
a change to advance the date on which any option may be exercised under the Stock Option Plan; and
|
•
|
a change to the eligible participants of the Stock Option Plan.
|
•
|
any amendment which reduces the exercise price of any option after the options have been granted, or any cancellation of an option and the substitution of that option by a new option with a reduced price, except in the case of an adjustment pursuant to a change in capitalization;
|
•
|
any amendment which extends the expiry date of any option beyond the original expiry date, except in case of an extension due to a blackout period;
|
•
|
any increase to the maximum number of Class A subordinate shares issuable from treasury under the Stock Option Plan and any other treasury-based share compensation plans, other than an adjustment pursuant to a change in capitalization;
|
•
|
any amendment to remove or to exceed the limits with respect to "Insiders" (as defined by the TSX) set out in the Stock Option Plan; and
|
•
|
any amendment to the amendment provisions of the Stock Option Plan.
|
Eligibility
|
The Stock Option Plan allows for the grant of Options to our Directors, Executive Officers, Employees, and Consultants. Eligibility is subject to an "insider participation limit"; a limit on grants to "Insiders" so that the maximum number of shares issued to insiders within any one year period, or issuable to Insiders at any time, under the Stock Option Plan, the Legacy Option Plan and any other security-based compensation arrangement of the Company, may not exceed 10% of the total number of issued and outstanding Class B multiple voting shares and Class A subordinate voting shares at such time.
|
Expired / Cancelled / Forfeited Options
|
All of the Class A subordinate voting shares covered by expired, cancelled or forfeited options granted under the Stock Option Plan or units under the LTIP will automatically become available as Class A subordinate voting shares for the purposes of options or units that may be subsequently granted under the Stock Option Plan and the LTIP.
|
Exercise Price
|
All options granted under the Stock Option Plan will have an exercise price determined and approved by our Board of Directors at the time of grant, which shall not be less than the market price of the Class A subordinate voting shares at such time.
|
Market Price
|
The market price of the Class A subordinate voting shares shall be the volume weighted average trading price of the Class A subordinate voting shares on the NYSE for the five trading days ending on the last trading day before the day on which the option is granted.
|
Option Term
|
An option shall be exercisable during a period established by our Board of Directors which shall commence on the date of the grant and shall terminate not later than ten years after the date of the granting of the option.
|
Vesting
|
Typically, are subject to time-based vesting at a rate of 33.33% on the first anniversary of the vesting start date, the remainder vesting in quarterly installments over the next two years.
|
Black Out Period
|
The Stock Option Plan provides that the exercise period shall automatically be extended if the date on which it is scheduled to terminate shall fall during a blackout period. In such cases, the extended exercise period shall terminate ten business days after the last day of the blackout period.
|
Plan Adjustments
|
The Stock Option Plan provides that appropriate adjustments will be made by our Board of Directors in order to maintain the optionees’ economic rights in respect of their options in connection with a reclassification, reorganization or other change of shares, consolidation, distribution, merger or amalgamation or similar corporate transaction. Such adjustments could include adjustments to the exercise price and/or the number of Class A subordinate voting shares to which an optionee is entitled upon exercise of options, or permitting the immediate exercise of any outstanding options that are not otherwise exercisable.
|
Termination
|
For cause: Forfeiture of all unvested options, cancellation of all unexercised options as of date of termination.
|
|
Other than for cause (but excluding death or incapacity): Forfeiture of all unvested options, 90 days to exercise vested options.
|
|
Death or incapacity: Forfeiture of all unvested options, one year to exercise vested options.
|
Change In Control
|
A participant’s grant agreement or any other written agreement between a participant and Shopify may provide that unvested options be subject to acceleration of vesting and exercisability in certain circumstances, including in the event of certain change of control transactions. Our Board of Directors may at its discretion accelerate the vesting of any outstanding options notwithstanding the previously established vesting schedule, regardless of any adverse or potentially adverse tax consequences resulting from such acceleration or, subject to applicable regulatory provisions and shareholder approval, extend the expiration date of any option, provided that the period during which an option is exercisable does not exceed ten years from the date such option is granted.
|
Assignment
|
Except as specifically provided in an option agreement approved by our Board of Directors, options granted under the Stock Option Plan are generally not transferable; however, an optionee may, with the prior approval of the Company, transfer options to (i) such optionee’s family or retirement savings trust, or (ii) registered retirement savings plans or registered retirement income funds of which the optionee is and remains the annuitant.
|
Eligibility
|
The 6RS Stock Option Plan allowed for the grant of options covering shares of the common stock of 6RS to eligible officers, employees, directors, consultants and other key persons of 6RS or any subsidiary. On October 17, 2019, Shopify acquired 6RS by way of merger (the "Merger"). Pursuant to the merger and subject to exercise of a consent agreement, each unvested 6RS option (each, a "6RS Option") that was held by an individual who was employed by 6RS immediately prior to the closing of the merger (each, a "Continuing Employee") was cancelled and in exchange each Continuing Employee received options exercisable for Class A subordinate voting shares of Shopify Inc (each, a "Substitute Option"). The number of Class A subordinate voting shares subject to each Substitute Option was determined based on an exchange ratio determined in accordance with the merger agreement (the "Exchange Ratio"). Only Continuing Employees received Substitute Options. In total 88,665 Class A subordinate shares were issuable to Continuing Employees on exercise of Substitute Options following the Merger. Following the Merger, no additional options have been or will be granted pursuant to the 6RS Stock Option Plan.
|
Expired / Cancelled / Forfeited Options
|
None of the Class A subordinate voting shares covered by expired, cancelled or forfeited Substitute Options will become available as Class A subordinate voting shares for the purposes of options or units that may be subsequently granted under the 6RS Stock Option Plan, the Stock Option Plan or the LTIP.
|
Exercise Price
|
The exercise price for each share of 6RS common stock covered by a 6RS Option was not less than 100% of the fair market value of the 6RS common stock on the date of grant. The per share exercise price of each Substitute Option was determined by dividing the per share exercise price of the applicable 6RS Option by the Exchange Ratio. The fair market value of the 6RS common stock was based on the reasonable application of a valuation method not inconsistent with 409A of the U.S. Internal Revenue Code of 1986 as amended.
|
Option Term
|
Each Substitute Option has the same expiration date as its corresponding 6RS Option. Each 6RS Stock Option had an exercise term commencing on the date of grant and terminating not later than ten years from the date of grant.
|
Vesting
|
Following the Merger, the Substitute Options are subject to the same vesting schedule applicable to the underlying 6RS Options.
Typically the Substitute Options are subject to time-based vesting at a rate of 25% on the first anniversary of the vesting start date, the remainder vesting in monthly installments over the next three years.
|
Plan Adjustments
|
Appropriate adjustments will be made by our Board of Directors in order to maintain the optionees’ economic rights in respect of the Substitute Options in connection with a reclassification, reorganization or other change of shares, consolidation, distribution, merger or amalgamation or similar corporate transaction. Such adjustments could include adjustments to the exercise price and/ or the number of Class A subordinate voting shares to which an optionee is entitled upon exercise of Substitute Options or permitting the immediate exercise of any outstanding options that are not otherwise exercisable.
|
Termination
|
For cause: Forfeiture of all unvested options and, if provided in grant agreement, cancellation of all unexercised options as of date of termination.
|
|
Other than for cause (but excluding death or incapacity): Forfeiture of all unvested options, right to exercise vested options continues until 90 days after termination on the expiration date of the award, whichever is earlier.
|
|
Death or incapacity: Forfeiture of all unvested options, right to exercise vested options continues until one year after termination on the expiration date of the award, whichever is earlier.
|
Change In Control
|
In connection with the Merger, each Continuing Employee agreed to waive any acceleration of vesting that would occur solely by reason of a change in control of Shopify following the Merger. In the event a change of control, the outstanding Substitute Options will terminate unless assumed or unless new awards are substituted therefor. In the event of termination in connection with a change of control, each holder of Substitute Options shall be permitted to exercise all such options. In a change of control, Shopify shall also have the right (but not the obligation) to make or provide for a cash payment to holders of the Substitute Options without their consent in exchange for cancellation of the Substitute Options.
|
Assignment
|
Substitute Options are generally not transferable; however, the grant agreement may provide that an optionee may gift options to such optionee’s family, trusts for the benefit of family members or partnerships in which such family members are the only partners, provided the transferee agrees in writing to be bound by all terms and conditions of the 6RS Stock Option Plan.
|
•
|
amendments of a general housekeeping or clerical nature that, among others, clarify, correct or rectify any ambiguity, defective provision, error or omission in the LTIP;
|
•
|
changes that alter, extend or accelerate the terms of vesting or settlement applicable to any LTIP Units; and
|
•
|
a change to the eligible participants under the LTIP;
|
•
|
increase the maximum number of Class A subordinate voting shares issuable under the LTIP, other than an adjustment pursuant to a change in capitalization; or
|
•
|
amend the amendment provisions of the LTIP.
|
•
|
any increase to the maximum number of Class A subordinate shares issuable from treasury under the LTIP and any other treasury-based share compensation plans, other than an adjustment pursuant to a change in capitalization;
|
•
|
any amendment to remove or to exceed the limits with respect to "Insiders" (as defined by the TSX) set out in the LTIP; and
|
•
|
any amendment to the amendment provisions of the LTIP.
|
Eligibility
|
The LTIP allows for the grant of units to directors, executive officers, employees and consultants of the Company or any of its affiliates. Eligibility is subject to an "insider participation limit"; a limit on grants to "Insiders" (as defined by the TSX) so that the maximum number of shares issued to insiders within any one year period, or issuable to Insiders at any time, under the Stock Option Plan, the Legacy Option Plan and any other security-based compensation arrangement of the Company, may not exceed 10% of the total number of issued and outstanding Multiple Voting Shares and Subordinate Voting Shares at such time.
|
Vesting
|
RSUs: Unless otherwise approved by our Board of Directors and except as otherwise provided in a participant’s grant agreement or any other provision of the LTIP, RSUs will vest as to 1/3 on the first anniversary date of the grant, and will then vest in equal quarterly installments over the following two years.
|
|
DSUs: Unless otherwise approved by our Board of Directors, DSUs recorded in a participant’s DSU notional account shall vest on the day that the DSU participant ceases to be a director and, if applicable, an employee of the Company for any reason including as a result of retirement, death, voluntary or involuntary termination without cause, or incapacity.
|
|
PSUs: PSUs will vest upon achievement of the performance criteria described in a participant’s grant agreement, provided the PSU participant is continuously employed by or in service with the Company, or any of its affiliates, from the grant date until such PSU vesting date.
|
Dividend Equivalents
|
In the event a dividend is paid on our Subordinate Voting Shares, then each participant’s notional account shall, unless otherwise determined by the Board of Directors in respect of any grant of units, be credited with additional units (including fractional units) equivalent in value to the dollar amount that the participant would have received as dividends if the participant had on the dividend payment date held a number of Subordinate Voting Shares equal to the number of share units in such participant’s account prior to the payment of such dividends.
|
Black out period
|
In the event that a participant receives Class A subordinate voting shares in satisfaction of a grant of RSUs, PSUs or DSUs during a blackout period, such participant shall not be entitled to sell or otherwise dispose of such Class A subordinate voting share until such blackout period has expired.
|
Plan Adjustments
|
The LTIP provides that appropriate adjustments, if any, will be made by our Board of Directors in connection with a reclassification, reorganization or other change of shares, consolidation, distribution, merger or amalgamation, in the Class A subordinate voting shares issuable or amounts payable to preclude a dilution or enlargement of the benefits under the LTIP.
|
Termination
|
Unless otherwise approved by our Board of Directors, unvested RSUs previously credited to the participant's account will expire when the participant ceases to be an eligible person under the LTIP.
|
Assignment
|
Units granted under the LTIP are generally not transferable; however, a participant may, with the prior approval of the Company, transfer units to (i) such participant’s family or any registered retirement savings plans or registered retirement income funds of which the participant is and remains the annuitant.
|
Plan Category
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
Weighted average exercise price of outstanding options, warrants and rights(2)
|
Number of securities remaining available for future issuance under equity compensation plans(3)
|
|
($)
|
($)
|
(#)
|
||
Equity Compensation Plans Approved by Shareholders(1)
|
||||
Legacy Option Plan(4)
|
1,506,573
|
|
4.29
|
-
|
Stock Option Plan(5)
|
2,686,109
|
|
63.49
|
see "Total"
|
Long Term Incentive Plan(5)
|
-
|
|
-
|
see "Total"
|
Equity Compensation Plans Not Approved by Shareholders(1)
|
||||
6RS Stock Option Plan(6)
|
88,105
|
|
31.58
|
-
|
Total
|
2,774,214
|
|
n/a
|
13,996,174(7)
|
1
|
Each of the Legacy Option Plan, Stock Option Plan and LTIP were approved by shareholders at the Company’s 2015 Annual General and Special Meeting. The Stock Option Plan and LTIP were amended and restated and approved by shareholders at the Company's 2018 Annual General and Special Meeting. The 6RS Stock Option Plan was assumed in connection with the Company's acquisition of 6RS on October 17, 2019.
|
2
|
Some of these options have an exercise price in Canadian dollars. Such exercise prices have been converted to U.S. dollars using an exchange rate of C$1.00 = US$0.7699, which was the Bank of Canada daily average rate on December 31, 2019.
|
3
|
No additional options were granted under the Legacy Option Plan after our May 2015 IPO.
The number of Class A subordinate voting shares available for issuance, in the aggregate, under the Stock Option Plan and the LTIP are automatically increased on January 1 of each year, beginning on January 1, 2016 and ending on January 1, 2026, in an amount equal to 5% of the aggregate amount of outstanding Class A subordinate voting shares and Class B multiple voting shares on December 31 of the preceding calendar year, unless the Board of Directors determines to increase by a lesser percentage or not at all. For each of 2017, 2018 and 2019 the Board approved the 5% increase.
|
4
|
Options issued under the Legacy Option Plan are exercisable for Class B multiple voting shares.
|
5
|
Options issued under the Stock Option Plan are exercisable for Class A subordinate voting shares. Each unit granted under the LTIP represents the right to receive one Class A subordinate voting shares in accordance with the terms of the plan.
|
6
|
Options issued under the 6RS Stock Option Plan are exercisable for Class A subordinate voting shares. No post-acquisition options have been or will be granted under the 6RS Stock Option Plan.
|
7
|
5,821,448 additional securities were added on January 1, 2019, for a total of 19,817,622.
|
•
|
acted honestly and in good faith with a view to our best interests, or the best interests of the other entity for which the individual acted as director or officer or in a similar capacity at our request; and
|
•
|
in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds for believing that his or her conduct was lawful.
|
•
|
appointing our Chief Executive Officer;
|
•
|
developing the corporate goals and objectives that our Chief Executive Officer is responsible for meeting, and reviewing the performance of our Chief Executive Officer against the corporate goals and objectives;
|
•
|
taking steps to satisfy itself as to the integrity of our Chief Executive Officer and other executive officers and that our Chief Executive Officer and other executive officers create a culture of integrity throughout the organization;
|
•
|
reviewing and approving our Code of Conduct and reviewing and monitoring compliance with the code of conduct and our enterprise risk management processes;
|
•
|
reviewing and approving management’s strategic and business plans and our financial objectives, plans and actions, including significant capital allocations and expenditures; and
|
•
|
reviewing and approving material transactions not in the ordinary course of business.
|
•
|
an ability to read and understand fundamental financial statements, including a balance sheet, income statement and cash flow statement;
|
•
|
an understanding of generally accepted accounting principles ("GAAP") and financial statements;
|
•
|
an ability to assess the general application of GAAP in connection with the accounting for estimates, accruals and reserves or provisions;
|
•
|
experience in preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Company's financial statements, or experience actively supervising one or more persons engaged in such activities;
|
•
|
an understanding of internal controls and procedures for financial reporting; and
|
•
|
an understanding of audit committee functions.
|
•
|
the quality and integrity of our financial statements and related information;
|
•
|
the independence, qualifications, appointment and performance of our external auditor;
|
•
|
our disclosure controls and procedures, internal control over financial reporting and management’s responsibility for assessing and reporting on the effectiveness of such controls;
|
•
|
our compliance with applicable legal and regulatory requirements; and
|
•
|
our enterprise risk management processes.
|
•
|
identifying individuals qualified to become members of our Board of Directors;
|
•
|
selecting or recommending that our Board of Directors select director nominees for the next annual meeting of shareholders and determining the composition of our Board of Directors and its committees;
|
•
|
developing and overseeing a process to assess our Board of Directors, the Chair of the Board, the committees of the Board, the chairs of the committees, individual directors and management;
|
•
|
developing and implementing our corporate governance guidelines; and
|
•
|
overseeing the Company's strategy and initiatives relating to environmental, social and corporate governance matters that are significant to the Company.
|
•
|
reviewing at least annually our executive compensation plans;
|
•
|
evaluating at least once a year our Chief Executive Officer’s performance in light of the goals and objectives established by our Board of Directors and, based on such evaluation, with appropriate input from other independent members of our Board of Directors, determining the Chief Executive officer’s annual compensation;
|
•
|
reviewing on an annual basis the evaluation process and compensation structure for our executive officers and, in consultation with our Chief Executive Officer, reviewing the performance of the other executive officers in order to make recommendations to our Board of Directors with respect to the compensation for such officers;
|
•
|
assessing the competitiveness and appropriateness of our policies relating to the compensation of executive officers on an annual basis; and
|
•
|
reviewing and, if appropriate, recommending to our Board of Directors the approval of any adoption, amendment and termination of our incentive and equity-based incentive compensation plans (and the aggregate number of shares to be reserved for issuance thereunder), and overseeing their administration and discharging any duties imposed on the Compensation Committee by any of those plans.
|
•
|
in co-operation with the Chair, provide leadership to enable the Board to act effectively in carrying out its duties and responsibilities as described in the Board Charter and as otherwise may be appropriate;
|
•
|
in consultation with the Chair, the CEO, the CFO, the Corporate Secretary's Office, and others as required, review the annual work plan and the meeting agendas so as to bring all required business before the Board;
|
•
|
preside over executive sessions of independent Directors, and serve as a liaison between the Chair and the independent Directors;
|
•
|
if the Chair is not present at meetings, the Lead Independent Director will chair such meetings;
|
•
|
in consultation with the CEO, ensure that there is an effective relationship between management and the members of the Board; and
|
•
|
as appropriate, carry out any other or special assignments or any functions as may be requested by the Chair or Management.
|
•
|
Serve as a role model for Shopify’s vision, values and rules of engagement, and foster a culture of integrity at Shopify;
|
•
|
Maintain perspective on Shopify’s overall long-term goals, and effectively communicate these goals to all employees, provide leadership and overall guidance in the administration and operation of Shopify, and motivate a high-performing and innovative organization;
|
•
|
Provide high-level strategic and tactical leadership to the Board and the executive management team;
|
•
|
Work with the executive management team to develop, review and refine Shopify’s business strategy;
|
•
|
Execute on Shopify's business strategy to improve and develop the platform and its products, develop and nurture new and existing merchants, partnerships, strategic alliances, and other market opportunities, and encourage growth in a responsible and profitable manner both organically and through mergers and acquisitions where appropriate;
|
•
|
Provide the Board assurance that the proper systems are in place to identify and manage business risks and that such risks are acceptable and are within the guidelines established by the Audit Committee, if any;
|
•
|
Guide Shopify to be well positioned in the public marketplace and build relationships to provide the necessary resources to fund and grow Shopify;
|
•
|
Together with the Chief Financial Officer and other senior management, as appropriate, establish, maintain and oversee the implementation of Shopify’s disclosure controls and procedures, internal controls over financial reporting, and processes for the certification of public disclosure documents as required;
|
•
|
With the Nominating and Corporate Governance Committee and the Board, assemble and oversee an effective executive management team, allow the Board regular exposure to executive management team members, and put into place an effective plan of succession and development for the CEO and executive management team; recommend appointments to the executive management team, monitor performance of the executive management team members and provide feedback and training as appropriate;
|
•
|
With the Nominating and Corporate Governance Committee and the Board, participate in refining the CEO Position Description and participate in developing CEO annual targets consisting of personal and corporate goals and objectives, present them to the Board for review and approval, and participate in the Board’s annual evaluation of CEO performance against such goals and objectives; and
|
•
|
Carry out any other appropriate duties and responsibilities assigned by the Board.
|
•
|
relates primarily to the Director’s remuneration as a director, officer, employee, agent or mandatary of Shopify or an affiliate;
|
•
|
is for indemnity or insurance otherwise permitted under the CBCA; or
|
•
|
is with an affiliate.
|
•
|
Maintain an inclusive environment with a commitment to attaining, maintaining and valuing diversity on the Board.
|
•
|
Provide education and training to all Board members on diversity and inclusion-related issues.
|
•
|
Ensure that the Nominating and Corporate Governance Committee periodically assesses the skills, experience, perspectives, and backgrounds of the Board’s directors in light of the strategic needs of the Company and the environment in which it operates.
|
•
|
Ensure that the Nominating and Corporate Governance Committee maintains an ongoing list of highly qualified diverse potential candidates, which includes candidates that are beyond the networks of existing Board members.
|
•
|
Ensure that, in the event the Nominating and Corporate Governance Committee chooses to retain a search firm, that it directs any such firm to deliver a list of highly qualified diverse potential candidates. If the firm cannot find appropriately qualified diverse candidates, the Nominating and Corporate Governance Committee will inquire with the firm as to why it couldn’t and as to the process the firm followed in putting together its recommendations.
|
•
|
Ensure that the Nominating and Corporate Governance Committee, in selecting director candidates to propose to the Board, assesses candidates based on merit, competencies, education, experience, past performance, character, independence, and expected contribution to the Board’s performance. The Nominating and Corporate Governance Committee will take into account Shopify’s diversity objectives and the diverse nature of the business environment in which Shopify operates.
|
•
|
change the rights, privileges, restrictions or conditions attached to the shares of that class;
|
•
|
increase the rights or privileges of any class of shares having rights or privileges equal or superior to the shares of that class; and
|
•
|
make any class of shares having rights or privileges inferior to the shares of such class equal or superior to the shares of that class.
|
(a)
|
offers a price per Class A subordinate voting share at least as high as the highest price per share paid or required to be paid pursuant to the take-over bid for the Class B multiple voting shares;
|
(b)
|
provides that the percentage of outstanding Class A subordinate voting shares to be taken up (exclusive of shares owned immediately prior to the offer by the offeror or persons acting jointly or in concert with the offeror) is at least as high as the percentage of outstanding Class B multiple voting shares to be sold (exclusive of Class B multiple voting shares owned immediately prior to the offer by the offeror and persons acting jointly or in concert with the offeror);
|
(c)
|
has no condition attached other than the right not to take up and pay for Class A subordinate voting shares tendered if no shares are purchased pursuant to the offer for Class B multiple voting shares; and
|
(d)
|
is in all other material respects identical to the offer for Class B multiple voting shares.
|
Requirement Under
Form 58-101F1
|
|
Comments
|
Board of Directors
|
||
Disclose the identity of directors who are independent.
|
|
The Board has determined that all of the directors of the Company, with the exception of Mr. Lütke, are independent. See disclosure under the "Director Independence" section in Section 2 of the Circular.
All of the Committees of the Board are composed entirely of independent directors.
|
Disclose the identity of directors who are not independent, and describe the basis for that determination.
|
|
The Board has determined that Mr. Lütke is not independent as he is the Chief Executive Officer of the Company. See disclosure under the "Director Independence" section in Section 2 of the Circular.
|
Disclose whether or not a majority of directors are independent. If a majority of directors are not independent, describe what the Board of Directors (the "Board") does to facilitate its exercise of independent judgment in carrying out its responsibilities.
|
|
All director nominees, with the exception of Mr. Lütke, are independent. See disclosure under the "Director Independence" section in Section 2 of the Circular.
|
If a director is presently a director of any other issuer that is a reporting issuer (or the equivalent) in a jurisdiction or a foreign jurisdiction, identify both the director and the other issuer.
|
|
All other directorships have been disclosed in the "Election of Directors" section of this Circular.
|
Disclose whether or not the independent directors hold regularly scheduled meetings at which non-independent directors and members of management are not in attendance. If the independent directors hold such meetings, disclose the number of meetings held since the beginning of the issuer’s most recently completed financial year. If the independent directors do not hold such meetings, describe what the Board does to facilitate open and candid discussion among its independent directors.
|
|
In camera non-executive sessions of the Board are held at the end of all Board and Committee meetings. See "Election of Directors" in Section 2 and "Director Independence" and "Meetings of Independent Directors" in Section 4 of this Circular.
|
Requirement Under
Form 58-101F1
|
|
Comments
|
Disclose whether or not the chair of the Board is an independent director. If the Board has a chair or lead director who is an independent director, disclose the identity of the independent chair or lead director, and describe his or her role and responsibilities. If the Board has neither a chair that is independent nor a lead director that is independent, describe what the Board does to provide leadership for its independent directors.
|
|
The Chair of the Board is Mr. Lütke, who is not an independent director.
The Lead Independent Director is Mr. Ashe, who is an independent director. See "Lead Independent Director" in Section 4 of this Circular. The Board has developed and approved a position description for the Lead Independent Director which can be found on the Company’s website at https://investors.shopify.com/governance. |
Disclose the attendance record of each director for all Board meetings held since the beginning of the issuer’s most recently completed financial year.
|
|
Each Director standing for re-election has attended at least 90% of Board meeting held since January 1, 2019, and each director standing for re-election has attended each Committee meeting of which he or she was a member since January 1, 2019. See Section 2(1) - Election of Directors for detailed attendance information for each Director.
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Board Mandate
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||
Disclose the text of the Board’s written mandate. If the Board does not have a written mandate, describe how the Board delineates its role and responsibilities.
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The Board’s Charter is attached to this Circular as Schedule B.
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Requirement Under
Form 58-101F1
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|
Comments
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Position Descriptions
|
||
Disclose whether or not the Board has developed written position descriptions for the chair and the chair of each Board committee. If the Board has not developed written position descriptions for the chair and/or the chair of each Board committee, briefly describe how the Board delineates the role and responsibilities of each such position.
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The Board has developed and approved a position description for the Board Chair and each Committee Chair, which position descriptions form part of the Board Charter and each respective Committee Charter, each of which can be found on the Company’s website at https://investors.shopify.com/governance.
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Disclose whether or not the Board and CEO have developed a written position description for the CEO. If the Board and CEO have not developed such a position description, briefly describe how the Board delineates the role and responsibilities of the CEO.
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The Board has developed a written position description for the CEO. See "Chief Executive Officer" in Section 4 of this Circular.
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Orientation and Continuing Education
|
||
Briefly describe what measures the Board takes to orient new directors regarding:
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See "Orientation and Continuing Education" in Section 4 of this Circular.
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the role of the Board, its committees and its directors, and
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|
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the nature and operation of the issuer’s business.
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Briefly describe what measures, if any, the Board takes to provide continuing education for its directors. If the Board does not provide continuing education, describe how the Board ensures that its directors maintain the skill and knowledge necessary to meet their obligations as directors.
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Ethical Business Conduct
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Disclose whether or not the Board has adopted a written code for the directors, officers and employees. If the Board has adopted a written code:
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The Board has adopted a written Code of Conduct for the directors, officers and employees.
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disclose how a person or company may obtain a copy of the code;
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Shopify’s Code of Conduct can be found at https://investors.shopify.com/governance.
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Requirement Under
Form 58-101F1
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Comments
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describe how the Board monitors compliance with its code, or if the Board does not monitor compliance, explain whether and how the Board satisfies itself regarding compliance with its code; and
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The Board receives quarterly reports from the Chief Legal Officer as to compliance with the Code of Conduct and is notified of any reported issues. The Chair of the Audit Committee is automatically notified if there are any reports made to Shopify’s anonymous whistleblowing hotline.
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provide a cross-reference to any material change report filed since the beginning of the issuer’s most recently completed financial year that pertains to any conduct of a director or executive officer that constitutes a departure from the code.
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To the Company’s knowledge there has been no conduct by our directors or executive officers that constitutes a departure from our Code of Conduct since January 1, 2019 and, accordingly, no material change reports related thereto have been required.
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Describe any steps the Board takes to ensure directors exercise independent judgment in considering transactions and agreements in respect of which a director or executive officer has a material interest.
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See "Conflicts of Interest" in Section 4 of this Circular.
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Describe any other steps the Board takes to encourage and promote a culture of ethical business conduct.
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See "Code of Conduct", "Monitoring Compliance with the Code of Conduct" and "Complaint Reporting" in Section 4 of this Circular.
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Nomination of Directors
|
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Describe the process by which the Board identifies new candidates for Board nomination.
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See "Nominating and Corporate Governance Committee" and "Diversity" in Section 4 of this Circular.
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Disclose whether or not the Board has a nominating committee composed entirely of independent directors. If the Board does not have a nominating committee composed entirely of independent directors, describe what steps the Board takes to encourage an objective nomination process.
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The Nominating and Corporate Governance Committee is composed entirely of independent directors.
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If the Board has a nominating committee, describe the responsibilities, powers and operation of the nominating committee.
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The responsibilities, powers and operation of the Nominating and Corporate Governance Committee are set out in its charter, which is available on the Company’s website at https://investors.shopify.com/governance.
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Requirement Under
Form 58-101F1
|
|
Comments
|
Compensation
|
||
Describe the process by which the Board determines the compensation for the issuer’s directors and officers.
|
|
See "Compensation of Executives" and "Compensation of Directors" in Section 3 of this Circular.
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Disclose whether or not the Board has a Compensation Committee composed entirely of independent directors. If the Board does not have a Compensation Committee composed entirely of independent directors, describe what steps the Board takes to ensure an objective process for determining such compensation.
|
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The Compensation Committee is composed entirely of independent directors.
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If the Board has a Compensation Committee, describe the responsibilities, powers and operation of the Compensation Committee.
|
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The responsibilities, powers and operation of the Compensation Committee are set out in its charter, which is available on the Company’s website at https://investors.shopify.com/governance.
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Other Board Committees
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|
|
If the Board has standing committees other than the audit, compensation and nominating committees, identify the committees and describe their function.
|
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The Board has no standing committees other than the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee.
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Assessments
|
||
Disclose whether or not the Board, its committees and individual directors are regularly assessed with respect to their effectiveness and contribution. If assessments are regularly conducted, describe the process used for the assessments. If assessments are not regularly conducted, describe how the Board satisfies itself that the Board, its committees, and its individual directors are performing effectively.
|
|
See "Board, Committee and Director Evaluations" in Section 4 of this Circular.
|
Requirement Under
Form 58-101F1
|
|
Comments
|
Director Term Limits and Other Mechanisms of Board Renewal
|
||
Disclose whether or not the issuer has adopted term limits for the directors on its board or other mechanisms of board renewal and, if so, include a description of those director term limits or other mechanisms of board renewal. If the issuer has not adopted director term limits or other mechanisms of board renewal, disclose why it has not done so.
|
|
We have not adopted term limits for directors on our board or other automatic mechanisms of Board renewal. See "Mechanisms of Board Renewal" in Section 4 of this Circular, for a discussion as to why we have not done so.
|
Policies Regarding the Representation of Women on the Board
|
||
(a) Disclose whether the issuer has adopted a written policy relating to the identification and nomination of women directors. If the issuer has not adopted such a policy, disclose why it has not done so.
|
|
In 2019 the Board adopted a Board Diversity Policy relating to the identification and nomination of diverse directors. Gender is one axis of diversity considered in this policy. See "Diversity" in Section 4 of this Circular, for more information about the Board Diversity Policy.
|
(b) If an issuer has adopted a policy referred to in (a), disclose the following in respect of the policy:
|
|
|
a short summary of its objectives and key provisions,
|
|
|
the measures taken to ensure that the policy has been effectively implemented,
|
|
|
annual and cumulative progress by the issuer in achieving the objectives of the policy, and
|
|
|
Whether and, if so, how the board or its nominating committee measures the effectiveness of the policy.
|
|
|
Consideration of the Representation of Women in Director Identification and Selection Process
|
||
Disclose whether and, if so, how the board or nominating committee considers the level of representation of women on the board in identifying and nominating candidates for election or re-election to the board. If the issuer does not consider the level of representation of women on the board in identifying and nominating candidates for election or re-election to the board, disclose the issuer’s reasons for not doing so.
|
|
See "Diversity" in Section 4 of this Circular, for a discussion as to how the Board and Nominating and Corporate Governance Committee considers the level of representation of women on the board in identifying and nominating candidates for election or re-election to the Board.
|
Requirement Under
Form 58-101F1
|
|
Comments
|
Consideration Given to the Representation of Women in Executive Officer Appointments
|
||
Disclose whether and, if so, how the issuer considers the level of representation of women in executive officer positions when making executive officer appointments. If the issuer does not consider the level of representation of women in executive officer positions when making executive officer appointments, disclose the issuer’s reason for not doing so.
|
|
See "Diversity" in Section 4 of this Circular, for a discussion as to how we consider the level of representation of women in executive officer positions when making executive officer appointments.
|
Issuer’s Targets Regarding the Representation of Women on the Board and in Executive Officer Positions
|
||
(a) For purposes of this Item, a "target" means a number of percentage, or a range of numbers or percentages, adopted by the issuer of women on the issuer’s board or in executive officer positions of the issuer by a specific date.
|
|
|
(b) Disclose whether the issuer has adopted a target regarding women on the issuer’s board. If the issuer has not adopted a target, disclose why it has not done so.
|
|
We have not adopted a target regarding women on our Board. See "Diversity" in Section 4 of this Circular, for a discussion as to why we have not done so.
|
(c) Disclose whether the issuer has adopted a target regarding women in executive officer positions of the issuer. If the issuer has not adopted a target, disclose why it has not done so.
|
|
We have not adopted a target regarding women in executive officer positions. See "Diversity" in Section 4 of this Circular, for a discussion as to why we have not done so.
|
(d) If the issuer has adopted a target referred to in either (b) or (c), disclose:
|
|
|
the target, and
|
|
|
the annual and cumulative progress of the issuer in achieving the target.
|
|
|
Number of Women on the Board and in Executive Officer Positions
|
||
Disclose the number and proportion (in percentage terms) of directors on the issuer’s board who are women.
|
|
Currently, there are two women on our board, representing 33% of Shopify's six directors. After the Annual General Meeting, we expect there will be two women on our board, representing 33% of Shopify's six directors.
|
Disclose the number and proportion (in percentage terms) of executive officers of the issuer, including all major subsidiaries of the issuer, who are women.
|
|
Currently, we have two executive officers who are women, representing 29% of Shopify's seven executive officers.
|
I.
|
Purpose
|
II.
|
Access to Information and Authority
|
III.
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Composition and Meetings
|
IV.
|
Responsibilities and Duties of the Board
|
1.
|
Appointing the Chief Executive Officer ("CEO") and, together with the CEO, developing a written position description for the role of the CEO.
|
2.
|
Developing the corporate goals and objectives that the CEO is responsible for meeting and reviewing the performance of the CEO against such corporate goals and objectives.
|
3.
|
Taking steps to satisfy itself as to the integrity of the CEO and other executive officers and that the CEO and other executive officers create a culture of integrity throughout the organization.
|
4.
|
Succession planning for the CEO and other key personnel.
|
5.
|
Approving:
|
•
|
the annual financial statements and related Management’s Discussion and Analysis or MD&A, and their filing and disclosure; and
|
•
|
the Company’s annual earnings press releases, including any pro forma or non-GAAP information included therein, and their filing and disclosure.
|
6.
|
Reviewing and monitoring, with the assistance of the Audit Committee:
|
•
|
the quality and integrity of the Company’s financial statements;
|
•
|
the external reporting of the Company’s financial and operating performance in compliance with all regulatory and statutory requirements; and
|
•
|
the appointment and performance of the external auditor.
|
7.
|
Reviewing and monitoring, with the assistance of the Audit Committee:
|
•
|
the adequacy and effectiveness of the Company’s system of internal controls over financial reporting, including any significant deficiencies and significant changes in internal controls; and
|
•
|
the quality and integrity of the Company’s external financial reporting processes.
|
8.
|
Reviewing and approving the Company’s code of conduct ("Code of Conduct").
|
9.
|
Reviewing and monitoring:
|
•
|
compliance with the Code of Conduct and other ethical standards adopted by the Company;
|
•
|
the Company’s compliance with applicable legal and regulatory requirements, though notwithstanding the foregoing and subject to applicable law, nothing contained in this Charter is intended to require the Board to ensure the Company's compliance with applicable laws or regulations; and
|
•
|
the Company’s enterprise risk management processes.
|
10.
|
Reviewing and approving management’s strategic and business plans.
|
11.
|
Reviewing and approving the Company’s financial objectives, plans, and actions, including significant capital allocations and expenditures.
|
12.
|
Reviewing and approving material transactions not in the ordinary course of business.
|
13.
|
In consultation with management, oversee and review the Company’s procedures with respect to the Company’s public disclosure to ensure that communications with the public are timely, factual, accurate and broadly disseminated in accordance with all applicable legal and regulatory requirements.
|
14.
|
Providing an orientation program for new Directors to the Board and continuing education opportunities for all Directors.
|
15.
|
Overseeing the assessment by the Nominating and Governance Committee of the Board, each committee and each director.
|
16.
|
Developing and overseeing a method for interested parties to communicate directly with the Board.
|
17.
|
Performing any other activities consistent with this Charter, the Company’s by-laws, and governing laws that the Board determines are necessary or appropriate.
|
V.
|
Responsibilities and Duties of the Chair
|
•
|
chair meetings of the Board;
|
•
|
chair the annual meeting, and any special meetings, of the shareholders;
|
•
|
in consultation with the Corporate Secretary, determine the frequency, dates and locations of meetings of the Board;
|
•
|
in consultation with the Lead Independent Director, the CEO, the CFO, the Corporate Secretary’s Office and others as required, review the annual work plan and the meeting agendas so as to bring all required business before the Board; and
|
•
|
as appropriate, carry out any other or special assignments or any functions as may be requested by the Board or management.
|
VI.
|
Limitation on the Board’s Duties
|
VII.
|
Review of Charter
|
|
|
000001
|
8th Floor, 100 University Avenue
Toronto, Ontario M5J 2Y1
www.computershare.com
|
Mr A Sample
|
|
Designation (if any)
|
|
Add1
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Security Class
|
Add2
|
CLASS A SUBORDINATE VOTING SHS
|
add3
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Holder Account Number
|
add4
|
C1234567890 XXX
|
add5
|
|
add6
|
|
|
|
Form of Proxy - Annual General Meeting of Shopify Inc. (the "Company") to be held on May 27, 2020
|
1.
|
Every holder has the right to appoint some other person or company of their choice, who need not be a holder, to attend and act on their behalf at the meeting or any adjournment or postponement thereof. If you wish to appoint a person or company other than the persons whose names are printed herein, please insert the name of your chosen proxyholder in the space provided (see reverse).
|
2.
|
If the securities are registered in the name of more than one owner (for example, joint ownership, trustees, executors, etc.), then all those registered should sign this proxy. If you are voting on behalf of a corporation or another individual you must sign this proxy with signing capacity stated, and you may be required to provide documentation evidencing your power to sign this proxy.
|
3.
|
This proxy should be signed in the exact manner as the name(s) appear(s) on the proxy.
|
4.
|
If this proxy is not dated, it will be deemed to bear the date on which it is mailed by Management to the holder.
|
5.
|
The securities represented by this proxy will be voted as directed by the holder, however, if such a direction is not made in respect of any matter, this proxy will be voted as recommended by Management.
|
6.
|
The securities represented by this proxy will be voted in favour or withheld from voting or voted against each of the matters described herein, as applicable, in accordance with the instructions of the holder, on any ballot that may be called for and, if the holder has specified a choice with respect to any matter to be acted on, the securities will be voted accordingly.
|
7.
|
This proxy confers discretionary authority in respect of amendments or variations to matters identified in the Notice of Meeting or other matters that may properly come before the meeting or any adjournment or postponement thereof.
|
8.
|
This proxy should be read in conjunction with the accompanying Notice of Meeting and Management Information Circular of the Company.
|
|
|
|
|
|
Call the number listed BELOW from a touch tone telephone.
1-866-732-VOTE (8683) Toll Free
|
Go to the following web site: www.investorvote.com Smartphone?
Scan the QR code to vote now.
|
|
You can enroll to receive future securityholder communications electronically by visiting www.investorcentre.com and clicking at the bottom of the page.
|
You can attend the meeting virtually by visiting the URL provided on the back of this proxy
|
+
|
MR SAM SAMPLE
|
C1234567890
|
|
+
|
|
|
XXX 123
|
|
|
Appointment of Proxyholder
|
|
|
|
I/We, being shareholder(s) of Shopify Inc. hereby appoint: Amy Shapero, Chief Financial Officer of the Company, or failing her, Joseph A. Frasca, Chief Legal Officer and Corporate Secretary of the Company, or failing him, Harley Finkelstein, Chief Operating Officer of the Company
|
OR
|
Print the name of the person you are appointing if this person is someone other than Amy Shapero or Joseph A. Frasca or Harley Finkelstein
|
|
|
|
Note: If completing the appointment box above and your appointee intends on attending online YOU MUST go to http://www.computershare.com/shopify and provide Computershare with the name and email address of the person you are appointing. Computershare will use this information ONLY to provide the appointee with a user name to gain entry to the online meeting.
|
Interim Financial Statements - These documents are available at investors.shopify.com so we encourage you not to mark this box in order to protect the environment and reduce costs. Mark this box if you would like to receive Interim Financial Statements and accompanying Management’s Discussion and Analysis by mail.
|
|
Annual Financial Statements - The Annual Financial Statements are available at investors.shopify.com so we encourage you not to mark this box in order to protect the environment and reduce costs. Mark this box if you would like to receive the Annual Financial Statements and accompanying Management's Discussion and Analysis by mail.
|
|
|
|
|||||
If you are not mailing back your proxy, you may register online to receive the above financial report(s) by mail at www.computershare.com/mailinglist.
|
■
|
Z S H Q
|
295109
|
XXXX
|
A R 1
|
999999999999
|
+
|
|
|
Have questions about this notice? Call the Toll Free Number below or scan the QR code to find out more
|
||
|
||||
|
|
|
Toll Free 1-866 964-0492
|
|
|
|
|
|
www.computershare.com/noticeandaccess
|
When:
|
May 27, 2020
|
Where:
|
Online at https://web.lumiagm.com/281483373
|
|
|
10:00 am (Eastern Time)
|
|
|
For Holders with a 15 digit Control Number:
|
For Holders with a 16 digit Control Number:
|
||
Request materials by calling Toll Free, within North America - 1-866-962-0498 or direct, from Outside of North America - (514) 982-8716 and entering you control number as indicated on your Voting Instruction Form or Proxy.
|
Request materials by calling Toll Free, within North America - 1-877-907-7643 or direct, from Outside of North America - (905) 507-5450 and entering your control number as indicated on your Voting Instruction Form.
|
||
To obtain paper copies of the materials after the meeting date, please contact 1-613-241-2828 ext. 1024.
|
To obtain paper copies of the materials after the meeting date, please contact 1-613-241-2828 ext. 1024.
|
•
|
No Annual Report (or Annual Financial Statements) is (are) included in this mailing.
|