** **

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

 

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**FORM 10-K/A**

 

**Amendment No. 1**

 

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**x**      **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**For the fiscal year ended December 31, 2015**

 

**OR**

 

**o**         **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**Commission File No. 0-17082**

 

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**QLT Inc.**

(Exact Name of Registrant as Specified in its Charter)

 

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| **British   Columbia, Canada**                                                            |   | **N/A**                                |
|-------------------------------------------------------------------------------------------|--------|----------------------------------------|
| (State or Other Jurisdiction of Incorporation   or Organization) |   | (I.R.S. Employer   Identification No.) |

 

| **250 -   887 Great Northern Way,****Vancouver, B.C., Canada** |   | **V5T 4T5** |
|----------------------------------------------------------------|--------|-------------|
| (Address of principal   executive offices)                     |   | (Zip Code)  |

 

Registrant’s telephone number, including area code:**(604) 707-7000**

 

Securities registered pursuant to Section 12(b) of the Act:

 

| **Title of each class** |   | **Name of each exchange on which registered** |
|----------------------------------------|--------|-----------------------------------------------------------------------------|
| Common Shares, without   par value     |   | The Nasdaq Stock Market                                                     |

 

Securities registered pursuant to Section 12(g) of the Act:**None**

 

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Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes o  No x

 

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes o  No x

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.  Yes x  No o

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

 

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 
| Large accelerated filer |   | o      |   | Accelerated filer              |   | x      |
|-----------------------------------|--------|--------|--------|-------------------------------------|--------|--------|
|                              |   |   |   |                                |   |   |
| Non-accelerated   filer           |   | o      |   | Smaller Reporting Company |   | o      |

 

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o  No x

 

As of June 30, 2015, the aggregate market value of the common shares held by non-affiliates of the registrant (based on the last reported sale price of the common shares of U.S. $4.13, as reported on the NASDAQ Stock Market) was approximately U.S. $218,174,469.

 

As of April 29, 2016 the registrant had 52,829,398 outstanding common shares.

 

 

 

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**QLT INC.**

**AMENDMENT NO. 1 TO ANNUAL REPORT ON FORM 10-K**

**DECEMBER 31, 2015**

** **

**Table of Contents**

 
| **PART III**     |
|-----------------------|
|                  |   |   |
| **Item 10.**     | **DIRECTORS, EXECUTIVE OFFICERS   AND CORPORATE GOVERNANCE** | **3** |
|                  |   |   |
| **Item 11.**     | **EXECUTIVE COMPENSATION** | **7** |
|                  |   |   |
| **Item 12.**     | **SECURITY OWNERSHIP OF CERTAIN   BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS** | **30** |
|                  |   |   |
| **Item 13.**     | **CERTAIN RELATIONSHIPS AND   RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE** | **33** |
|                  |   |   |
| **Item 14.**     | **PRINCIPAL ACCOUNTANT FEES AND   SERVICES** | **34** |
|                  |   |   |
|                  | **PART IV** |   |
|                  |   |   |
| **Item 15**      | **EXHIBITS, FINANCIAL STATEMENT   SCHEDULES** | **35** |
|                  |   |   |
| **Signatures**        |   | **36** |
|                  |   |   |
| **Exhibit 31.1** |   |   |
|                  |   |   |
| **Exhibit 31.2** |   |   |

 

**EXPLANATORY NOTE**

 

QLT Inc. (the “Company”) is filing this Amendment No. 1 to its Annual Report on Form 10-K, originally filed with the Securities and Exchange Commission on February 25, 2016 (the “Initial Filing”), solely for the purpose of amending and supplementing Part III of the Annual Report on Form 10-K. This amendment changes our Initial Filing by including information required by Part III  (Items 10, 11, 12, 13 and 14).

 

In addition, in connection with the filing of this Amendment No. 1, we are including new certifications of our principal executive officer and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Accordingly, Item 15 of Part IV of the Initial Filing has also been amended to reflect the filing of the new certifications.

 

Except as contained herein, this Amendment No. 1 does not modify or update disclosures contained in the Initial Filing. This Amendment No. 1 should be read in conjunction with the Company’s other filings made with the Securities and Exchange Commission subsequent to the date of the Initial Filing.

 

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**PART III**

 

**Item 10.**                            **Directors, Executive Officers and Corporate Governance**

 

**Background of Directors and Executive Officers**

 

Set forth below are the name and age of each of our current directors and the positions held by him with us, his principal occupation and business experience during the last five years, and the year of the commencement of his term as a director or executive officer. Additionally, for each director, included below is information regarding the specific experience, qualifications, attributes and skills that contributed to the decision of the Board of Directors to nominate him for election as a director and the names of other publicly held companies of which he serves or has served as a director in the previous five years. There is no family relationship between any of our directors, director nominees or executive officers. Except as otherwise disclosed below, no director was selected as a director or nominee pursuant to any arrangement or understanding.

 

***Directors***

 

**Jason M. Aryeh**, age 47, is the Chairman of the Board and a Director of QLT (since 2012) and serves as the Chairman of the Corporate Governance and Nominating Committee. Currently, Mr. Aryeh is the Founder and Managing General Partner of JALAA Equities, LP (since 1997), a private hedge fund focused on the biotechnology and specialty pharmaceutical sector. Mr. Aryeh also serves on the Board of Directors of Ligand Pharmaceuticals Incorporated (“Ligand”) (since 2006), a publicly-traded biotechnology company, where he serves as Chairman of the Nominating and Governance Committee, CorMatrix Cardiovascular, Inc. (“CorMatrix”) (since 2010), a privately-held medical device company, where he serves as Chairman of the Audit Committee, Aralez Pharmaceuticals Inc. (since 2016), a publicly-traded specialty pharmaceuticals company, where he serves as Chairman of the Transaction Committee, and the Cystic Fibrosis Foundation’s Therapeutics Board (since 2011). Previously, Mr. Aryeh served as a Director of both Nabi Biopharmaceuticals, prior to its merger with Biota Pharmaceuticals, Inc. (“Biota”) in November 2012, and of Myrexis, Inc. (2011 to 2013), both of which are publicly-traded biotechnology companies. Mr. Aryeh earned a B.A. in economics, with honors, from Colgate University, and is a member of the Omnicron Delta Epsilon Honor Society in economics.

 

The Board has concluded that Mr. Aryeh is well-qualified to serve on the Board and has the requisite qualifications, skills and perspectives stemming from his experience in the biotechnology and specialty pharmaceutical sector as a hedge fund manager and serving on the boards of publicly-traded companies. The Board believes that Mr. Aryeh’s strategic insight and in-depth understanding of health care trends and capital markets add significant value to the Board.

 

**Dr. Geoffrey F. Cox, Ph.D.**, age 72, is a Director of QLT (since 2012) and Interim CEO (since October 23, 2014). Dr. Cox has extensive pharmaceutical and biotechnology experience holding a broad range of senior management and board positions with private and publicly-traded companies. Dr. Cox remains the Principal of Beacon Street Advisors LLC (since 2013) which provides corporate, operational and organizational strategic advice and interim management support to life sciences companies, but is working full time for QLT. Previously, he was a partner with Red Sky Partners LLC, a life sciences consulting firm (from 2011 to 2013). Dr. Cox served as a Director (2000 to 2012) and the Non-Executive Chairman (2007 to 2012) of Nabi Biopharmaceuticals prior to its merger with Biota in 2012 and continues to serve as a Director of Biota (now Aviragen Therapeutics, Inc.), a publicly-traded anti-infective drug development company. He also served as a Director of Gallus Biopharmaceuticals LLC (2011 to 2014), a biologics contract manufacturing and development company, and currently serves as a Director of Lakewood-Amedex LLC (since 2013), a company developing novel antibiotics and RNA silencing technology. Dr. Cox was Chairman, President and CEO of GTC Biotherapeutics Inc. (now rEVO Biologics) (2001 to 2010), a company focused on the development of recombinant therapeutic proteins, including proteins for the treatment of rare diseases, using transgenic animal production technology. Prior to 2001, Dr. Cox was Executive VP, Operations, of Genzyme Corporation and later Chairman, President and CEO of Aronex Pharmaceuticals Inc. Dr. Cox is a past Chairman and current member of the Board of the Massachusetts Biotechnology Council. He previously served on the Board of the Biotechnology Industries Association and as a member of its Health Governing and Emerging Companies Sections. Dr. Cox received a B.Sc. (Hons) in biochemistry from the University of Birmingham, UK, and a Ph.D. in biochemistry from the University of East Anglia, UK.

 

The Board has concluded that Dr. Cox is well-qualified to serve on the Board and has the requisite qualifications, skills and perspectives derived from his extensive leadership experience in the biopharmaceutical industry, including as a director and executive officer of publicly-traded biotechnology companies. The Board believes that Dr. Cox’s strategic consulting, operations and business development expertise as well as his scientific background bring significant value to the Board.

 

**Dr. John W. Kozarich, Ph.D.**, age 66, is a Director of QLT (since 2012) and Chairman of the Scientific Review Committee. Dr. Kozarich has over 35 years of experience in academic and pharmaceutical research. Currently, Dr. Kozarich is also Chairman and President of ActivX Biosciences, Inc. (since 2001), a wholly-owned subsidiary of the international pharmaceutical company KYORIN Pharmaceutical Co., Ltd.; Director and Chairman of Ligand (since 2003 and 2007, respectively), a publicly-traded biotechnology company; a Director of Retrophin, Inc. (since 2015), a publicly-traded biopharmaceutical company; and a Senior Scientific Advisor to KinDex Therapeutics, Inc. (since 2009), a privately-held company developing molecules that modulate key metabolic regulatory networks. Dr. Kozarich was previously a Director of Corium International Inc. (2006 to 2015), a publicly-traded transdermal drug delivery company.

 

Dr. Kozarich is also an adjunct professor of chemical physiology at the Scripps Research Institute and previously held faculty positions at the University of Maryland and Yale University School of Medicine. He has authored over 150 primary scientific publications. Dr. Kozarich earned his B.S. in chemistry from Boston College (summa cum laude; Phi Beta Kappa), his Ph.D. in biological chemistry from the Massachusetts Institute of Technology, and was a National Institutes of Health postdoctoral fellow at Harvard University.

 

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The Board has concluded that Dr. Kozarich is well-qualified to serve on the Board and has the requisite qualifications, skills and perspectives based on his academic achievements and international experience as an advisor, executive officer and director of biotechnology companies. The Board believes that Dr. Kozarich is well-versed in the challenges of research and development given his extensive academic and pharmaceutical research and leadership background in the life sciences, and provides the Board with invaluable insight into a broad range of issues that impact QLT’s research and development efforts.

 

**Jeffrey A. Meckler**, age 49, is a Director of QLT (since 2012), Chairman of the Compensation Committee and a member of the Audit and Risk and Corporate Governance and Nominating Committees. Mr. Meckler has over 20 years of experience in the life sciences sector. Currently, Mr. Meckler is the CEO and a Director of Cocrystal Pharma, Inc. (since March 2015 and 2014, respectively), a virology focused life sciences company. He is also a Director (since October 2014) and former Chairman (from June 2015 to March 2016) of Retrophin, Inc., which is a publicly-traded biopharmaceutical company. Previously, Mr. Meckler was Managing Director of The Andra Group (2009-2015), a life sciences consulting firm that assists clients with strategic planning and business development. Additionally, Mr. Meckler acted as a Director (2011 to 2012) and Interim-CEO (2011) of Cypress Bioscience Inc. after its acquisition by Royalty Pharma; a Director of ClearFarma USA (2010 to 2012), a private sustainable food supply research and development company; a Director of Kyalin Bioscience (2011 to 2012), a private company developing therapies for autistic spectrum disorder acquired by Retrophin, Inc.; an Investment Analyst with Ridgeback Capital Management (2007 to 2009); a Director of Alveolus Inc. (2007 to 2009), a private, coated stent company acquired by Merit Medical; and held a series of positions at Pfizer Inc. in Manufacturing Systems, Market Research, Business Development, Strategic Planning and Corporate Finance which included playing a significant role in acquisitions and divestitures (1990 to 2007). Mr. Meckler is the past President and continues to serve on the Board of Children of Bellevue, a non-profit organization focused on advocating and developing pediatric programs at Bellevue Hospital Center (since 2001) and is past President of the Alumni Board of the Carnegie Mellon Tepper School of Business (2009 to 2015). Mr. Meckler received a B.S. in Industrial Management and M.S. in Industrial Administration from Carnegie Mellon University. In addition, Mr. Meckler received a J.D. from Fordham University School of Law.

 

The Board has concluded that Mr. Meckler is well-qualified to serve on the Board and has the requisite qualifications, skills and perspectives stemming from his extensive pharmaceutical and biotechnology industry, consulting and financial background. The Board believes that Mr. Meckler’s experience regarding strategic business development, operations and corporate finance opportunities as well as health care trends bring significant industry-specific insight to the Board.

 

**Dr. Stephen L. Sabba, M.D.**, age 56, is a Director of QLT (since 2012), Chairman of the Audit and Risk Committee and a member of the Scientific Review and Compensation Committees. Currently, Dr. Sabba is also a Partner and Health Care Portfolio Manager at Knott Partners, LP (since 2006), an investment fund, and a Director of Ligand (since 2008), a publicly-traded biotechnology company. Previously, he was a Partner and Director of Research with Kilkenny Capital Management (2001 to 2006), a Chicago-based hedge fund. Dr. Sabba received his medical degree from the New York University School of Medicine, and completed a residency in internal medicine and a fellowship in gastroenterology at the Veterans Administration Medical Center in New York City. He earned a Bachelor of Science degree with honors at Cornell University.

 

The Board has concluded that Dr. Sabba is well-qualified to serve on the Board and has the requisite qualifications, skills and perspectives based on his capital markets and financial expertise gained from his experience working in the hedge fund and investment fund industries. The Board believes that Dr. Sabba’s deep understanding of the biotechnology industry, medicine and health care trends adds significant value to the Board.

 

**John C. Thomas, Jr.**, age 62, is a Director of QLT (since 2012) and is a member of QLT’s Audit and Risk, Corporate Governance and Nominating and Compensation Committees. Mr. Thomas has more than 38 years of experience in a variety of financial and accounting positions, with the last 28 years spent in the medical, pharmaceutical and device fields. Currently, Mr. Thomas also serves as Chief Financial Officer, Secretary and Director of CorMatrix (since 2001), a privately-held medical device company, and as Chief Financial Officer, Secretary and Director of Motion Reality, Inc. (since 1991), a motion capture and simulation company. Since September 2013, Mr. Thomas has served on the Board of Medovex Corporation a publicly-traded medical device company (MDVXU). Since 2014, Mr. Thomas has served on the Board of Directors of NantKwest, Inc., a publicly-traded biotechnology company (NK). In the past ten years, Mr. Thomas served as acting Chief Financial Officer for DemeRx, Inc. (2010 to 2011); as Chief Financial Officer for MRI Interventions, Inc. (1998 to 2010), MiMedx Group, Inc. (2007 to 2008) and DARA BioSciences (2003 to 2009); and as a director of MRI Interventions, Inc. (2004 to 2011) and DARA BioSciences (2012). Previously, Mr. Thomas also served as a Trustee and subsequently the Chairman of the Finance Committee of The Walker School, a private Pre-K through 12 grade school (1999 to 2012). Mr. Thomas is a Certified Public Accountant and graduated from the University of Virginia, McIntire School of Commerce with a Bachelor of Science in Commerce degree in 1975.

 

The Board has concluded that Mr. Thomas is well-qualified to serve on the Board and has the requisite qualifications, skills and perspectives based on his financial and development stage company expertise and service on the Boards of pharmaceutical and medical device companies. The Board believes that Mr. Thomas’ background and experience serving as Chief Financial Officer of a number of life sciences companies provides him with valuable perspective on financial management, performance and strategy for a biotechnology company such as QLT.

 

The Board also has determined that Mr. Thomas is an “audit committee financial expert” as defined under the rules of the *Securities and Exchange Act of 1934*, as amended (the “Exchange Act”).

 

***Executive Officers***

 

Effective October 23, 2014, Dr. Geoffrey F. Cox was appointed Interim Chief Executive Officer of QLT. A summary of Dr. Cox’s experience and qualifications is set forth above under the *Background of Directors and Executive Officers — Directors* section above.

 

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Effective January 26, 2015, Sukhi Jagpal resigned from his role as Chief Financial Officer and Glen Ibbott was appointed Interim Chief Financial Officer of QLT.  Effective November 5, 2015, Mr. Ibbott was appointed Senior Vice President, Finance and Chief Financial Officer, Dori Assaly was appointed Senior Vice President, Legal and Corporate Secretary and Lana Janes was appointed Senior Vice President, Intellectual Property and Technology Development, and Chief Patent Officer.

 

**W. Glen Ibbott**

 

*Senior Vice President, Finance and Chief Financial Officer*

 

Mr. Ibbott, age 53, is the Senior Vice President, Finance and Chief Financial Officer of QLT (since November 2015).  Prior to that, Mr. Ibbott served as Interim Chief Financial Officer of QLT (since January 26, 2015). Previously, Mr. Ibbott held senior finance positions with a number of U.S. and Canadian exchange-listed pharmaceutical and biotechnology companies. From 2010 to 2014, Mr. Ibbott served as Vice President of Finance (and CFO of Targeted Therapies) at Nordion Inc., a New York Stock Exchange and Toronto Stock Exchange (“TSX”)-listed global specialty health science company. From 2012 to 2014, Mr. Ibbott also served as Chairman of the Board of LCC Legacy, a private venture fund. From 2008 to 2010, Mr. Ibbott served as Corporate Controller of International Forest Products Ltd., a TSX-listed forest products company. Prior to 2008, Mr. Ibbott held senior finance and accounting positions at Angiotech Pharmaceuticals Inc., Aspreva Pharmaceuticals Corp., Inex Pharmaceuticals Corp., NetNation Communications Inc., and KPMG LLP.  In addition, Mr. Ibbott has served on the boards of various charitable organizations, including Children’s Hospital of Eastern Ontario (2012 to 2014), the Community Foundation of Ottawa (2012 to 2014) and the Mulgrave School (2009 to 2010).  Mr. Ibbott is a Canadian Chartered Accountant, a U.S. Certified Public Accountant, and has Masters of Business Administration degrees from Cornell University and Queen’s University.

 

**Dori C. Assaly**

 

*Senior Vice President, Legal; Corporate Secretary*

 

Ms. Assaly, age 43, is the Senior Vice President, Legal and Corporate Secretary of QLT (since November 2015).  Ms. Assaly joined QLT in 2007 as Corporate Counsel, and subsequently became Senior Corporate Counsel and Corporate Secretary. In June 2013, Ms. Assaly was promoted to Vice President, Legal Affairs and Corporate Secretary.  Ms. Assaly acts as QLT’s Privacy Officer and is the Chair of the Company’s Disclosure Practices Committee.  Prior to joining QLT, Ms. Assaly was an Associate with the Securities group in the Vancouver office of Blake, Cassels & Graydon LLP from 2001 to 2007.  Ms. Assaly holds a LL.B. from the University of British Columbia and a Bachelor of Arts in Criminology from Simon Fraser University.

 

**Lana E. Janes**

 

*Senior Vice President, Intellectual Property and Technology Development; Chief Patent Officer*

 

Dr. Janes, age 49, is Senior Vice President, Intellectual Property and Technology Development, and Chief Patent Officer of QLT (since November 2015).  She joined QLT in August 2005 and has held positions of increasing responsibility in intellectual property and, since 2007, has overseen all aspects of global intellectual property matters for QLT. In January 2010, Dr. Janes was appointed Vice President, Intellectual Property and Chief Patent Officer. In March 2015, Dr. Janes assumed additional responsibilities in QLT’s research & development functions and, as of September 2015, assumed responsibility for the oversight and management of all research and development related activities for QLT’s synthetic retinoid program. Dr. Janes brings over 20 years of intellectual property and pharmaceutical development experience to her roles at QLT.

 

Prior to joining QLT, Dr. Janes worked for several years as a registered patent agent in the Toronto offices of Blake, Cassels & Graydon LLP, and Ogilvy Renault LLP (now Norton Rose Fulbright), and has also served as an in-house patent agent at F. Hoffmann-La Roche in Basel, Switzerland, where her practice focused on the strategic development and protection of IP portfolios in the fields of pharmaceutical and biological products.

 

Dr. Janes received her AB in Chemistry from Harvard University and her Ph.D. in organic chemistry from McGill University, where she also conducted post-Doctoral work in the field of biological organic chemistry. Dr. Janes is also a registered patent agent in both Canada and the United States. She is an author of numerous scientific publications in the field of organic and medical chemistry and worked for several years as a synthetic organic chemist in the chemical and food industries. Dr. Janes currently serves on the Board of Phoenix Molecular Designs, a privately held pharmaceutical company located in Vancouver, Canada.

 

**Section 16(a) Beneficial Reporting Compliance**

 

Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors and beneficial owners of more than 10% of a registered class of our equity securities to file reports of ownership on Form 3 and changes in ownership on Form 4 or 5 with the Securities and Exchange Commission (“SEC”). Such executive officers, directors and 10% beneficial owners are also required by SEC rules to furnish us with copies of all Section 16(a) reports they file.

 

To our knowledge, based solely on our review of the copies of such reports received by us or written representations from certain reporting persons that no Form 5s were required for such persons, we believe that during 2015 all Section 16(a) filing requirements applicable to our executive officers, directors and 10% beneficial owners were complied with.

 

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**Corporate Code of Ethics and Code of Exemplary Conduct**

 

QLT has adopted a Code of Ethics which is applicable to all directors, officers and employees of QLT, as well as a Code of Exemplary Conduct which applies to the Chairman, directors, executive officers and all senior financial managers, internal legal counsel and human resources managers of QLT. The Code of Ethics and Code of Exemplary Conduct are available on QLT’s website at *www.qltinc.com*. QLT intends to satisfy the disclosure requirements regarding any amendments to or waiver from, a provision of our Code of Ethics or Code of Exemplary Conduct for its principal executive, financial and accounting officers (or persons performing similar functions) by posting such information on *www.qltinc.com*.

 

**Audit Committee**

 

The Company has a separately-designated standing Audit and Risk Committee which has been established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit and Risk Committee currently consists of Dr. Sabba (Chairman), Mr. Meckler and Mr. Thomas. The Board has adopted a written charter for the Audit and Risk Committee. A copy of the charter is available on QLT’s website at *www.qltinc.com.*

 

Each member of the Audit and Risk Committee is financially sophisticated, as defined by the Marketplace Rules of NASDAQ, and is financially literate, as defined by Canadian securities regulations, and as required by such rules, able to read and understand fundamental financial statements, including QLT’s consolidated balance sheet, consolidated statement of income and consolidated statement of cash flows. The Board has determined that John Thomas is an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K under the Exchange Act, and that all of our Audit and Risk Committee members are “independent,” as independence for audit committee members is defined by the NASDAQ, TSX and applicable U.S. and Canadian securities rules.

 

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**Item 11.**  **Executive Compensation**

 

**Compensation Discussion and Analysis**

 

The Compensation Committee administers the compensation policies and programs for QLT’s named executive officers. A summary discussion of the 2015 named executive officer compensation actions taken by the Compensation Committee follows in this Compensation Discussion and Analysis report. Our named executive officers for 2015 are as follows:

 

·                  Dr. Geoffrey F. Cox, *Interim Chief Executive Officer*

·                  W. Glen Ibbott,*Senior Vice President, Finance and Chief Financial Officer*

·                  Dori C. Assaly, *Senior Vice President, Legal; Corporate Secretary*

·                  Dr. Lana E. Janes, *Senior Vice President, Intellectual Property and Technology Development; Chief Patent Officer*

·                  Sukhi Jagpal,*Former Chief Financial Officer*

 

At QLT’s 2015 annual general meeting (“2015 AGM”), its shareholders approved by 90%, in a non-binding advisory vote, the compensation of the Company’s named executive officers as disclosed in the Company’s proxy statement for its 2015 AGM. In the prior year at QLT’s 2014 annual general meeting (“2014 AGM”), its shareholders approved by 96%, in a non-binding advisory vote, the compensation of the Company’s named executive officers as disclosed in the Company’s proxy statement for its 2014 AGM. As the 2015 AGM did not occur until January 2016, the Compensation Committee considered the 2014 shareholder advisory vote in setting 2015 executive compensation.  The Compensation Committee will consider the 2015 shareholder advisory vote in setting 2016 executive compensation.

 

***Objectives of Our Compensation Program***

 

The Compensation Committee evaluates and sets executive compensation consistent with our stated philosophy to provide a compensation package that attracts, retains and motivates executives and rewards business successes that have the potential to increase shareholder value. More specifically, the Compensation Committee seeks to:

 

·                  provide a total compensation program that is competitive with other companies in the pharmaceutical and biotechnology industries with which we compete for executive talent;

 

·                  place a significant portion of executive compensation at risk by linking cash incentive compensation to the achievement of pre-established corporate financial and operational performance objectives and other individual key objectives within the executive’s area of responsibility and by using equity as a key component of our compensation program;

 

·                  provide long-term incentive compensation that focuses executives’ efforts on building shareholder value by aligning their interests with those of our shareholders; and

 

·                  promote stability and retention of our management team.

 

Consistent with our performance-based philosophy, a significant portion of potential compensation is based upon performance and equity-based programs. These programs include awards that are based on our operational and financial performance and provide compensation in the form of cash, and equity-based incentive awards that are tied to both our short-term and long-term performance and achievement of goals. The performance-based bonus program rewards short-term performance; while our equity awards, coupled with our stock ownership guidelines, reward long-term performance and align the interests of management with those of our shareholders.

 

***Compensation Philosophy***

 

We are engaged in a highly specialized and competitive industry. Success in this environment requires talented and motivated executives. The goal of our named executive officer compensation program is to attract, retain and motivate executives and reward business successes that have the potential to increase shareholder value. The Compensation Committee, which is composed of independent members of the Board, is responsible for implementing our executive compensation program and establishing corporate performance objectives and reviewing individual performance objectives that reward our named executive officers when those objectives are met. In considering executive compensation, the Compensation Committee strives to ensure that our total compensation program is competitive within the industry in which we operate, supports our overall strategy and objectives, reflects both risk and reward for our named executive officers and aligns our executive officers’ interests with those of our shareholders. The combination of base salary, annual incentives and long-term incentives that we provide to our named executive officers is designed to accomplish this.

 

The Compensation Committee obtains information from a number of sources, including North American surveys and reports on executive compensation in the biotechnology industry, as well as internally generated reports of executive compensation practices of a sub-group of biotechnology companies of similar size and market capitalization. To assist with its evaluation of executive compensation, the Compensation Committee has the authority to retain independent compensation consultants. The Compensation Committee has engaged Radford, an Aon Hewitt Company (“Radford”), to provide independent director and executive compensation assessments and recommendations to the Compensation Committee. Radford provides data on the compensation and relative performance of peer companies, provides opinions on the degree to which our compensation arrangements are consistent with market practices and our objectives, consults on other compensation matters as needed and, if 

 

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applicable, recommends compensation guidelines and provides suggestions on program design. Additionally, a representative from Radford attends Compensation Committee meetings when requested by the Compensation Committee.

 

***Compensation Governance and Advisors***

 

We are committed to having strong governance standards with respect to our compensation programs, procedures and practices. The Compensation Committee has, among other things, retained Radford, an independent compensation consultant, which reports directly to the Compensation Committee. Our Compensation Committee has assessed the independence of Radford and has concluded that no conflict of interest exists with respect to the services that Radford performs for our Compensation Committee. Radford did not provide any services to the Company other than with respect to the services provided to the Compensation Committee as described below. Radford also informed the Compensation Committee that it was not aware of any conflict of interest with respect to the services that it provides to our Compensation Committee and the services that it provides to other clients.

 

***Components of the Compensation Package***

 

The Compensation Committee supports the core principle that there should be both consequences for underperformance and incentives for outstanding performance. This is achieved through the design of a compensation program in which both fixed and variable components comprise the “pay mix” for each executive officer.

 

There are three major elements to our executive compensation:

 

·                  Base salary;

 

·                 Variable performance-based compensation, consisting of annual cash bonuses based on an assessment of individual and corporate performance to pre-set goals and objectives; and

 

·                  Long-term incentives, consisting of annual grants of long-term stock options.

 

In addition, our executives are eligible to participate in the benefit plans generally available to all of our employees (as described in *Health and Life Benefits* below).

 

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***Determining Compensation***

 

***Compensation Consultant and Peer Group.*** In November 2014 and September 2015, the Compensation Committee engaged Radford to provide market data and a comprehensive executive compensation assessment intended to help inform our Compensation Committee in establishing 2015 executive compensation. Specifically, in November 2014, the Compensation Committee engaged Radford to assist our Compensation Committee in establishing 2014 equity grants in connection with the Company’s annual general meeting of shareholders held on December 15, 2014 and director and executive compensation for 2015.

 

The following 19 public companies located in North America comprised our November 2014 peer group (the “November 2014 Peer Group”) and were considered comparable to QLT based on size (less than 100 employees), market capitalization (generally between $100 and $600 million), and stage of product pipelines (phase I/II development stage companies):

 
| **Canadian Peer Company**                                                                      |   | **U.S. Peer Companies**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Aurinia Pharmaceuticals Inc.   Nymox Pharmaceutical Corporation   Transition Therapeutics Inc. |   | ChemoCentryx, Inc.   Conatus Pharmaceuticals Inc.   Eleven Biotherapeutics, Inc.   Endocyte, Inc.   Fibrocell Science, Inc.   Five Prime Therapeutics, Inc.   Geron Corporation   Idera Pharmaceuticals, Inc.   Mirati Therapeutics, Inc.   Ocata Therapeutics Inc.   Regulus Therapeutics Inc.   Sangamo BioSciences, Inc.   Sarepta Therapeutics Inc.   Sunesis Pharmaceuticals, Inc.   Threshold Pharmaceuticals, Inc.   ZIOPHARM Oncology, Inc. |

 

In September 2015, the Compensation Committee engaged Radford to update our peer group and assist our Compensation Committee in evaluating our 2015 executive compensation and director compensation programs, including equity awards. The following 22 public companies located in North America comprised our September 2015 peer group (the “September 2015 Peer Group”) and were considered comparable to QLT based on size (less than 100 employees), market capitalization (generally between $75 and $500 million), and stage of product pipelines (pre-commercial phase II/III):

 
| **Canadian Peer Company**                                                                      |   | **U.S. Peer Companies**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| Aurinia Pharmaceuticals Inc.   Nymox Pharmaceutical Corporation   Transition Therapeutics Inc. |   | Aerie Pharmaceuticals, Inc.   Avalanche Biotechnologies Inc.   ChemoCentryx, Inc.   Conatus Pharmaceuticals Inc.   Cytokinetics Inc.   Eleven Biotherapeutics, Inc.   Endocyte, Inc.   Fibrocell Science, Inc.   Five Prime Therapeutics, Inc.   Geron Corporation   Idera Pharmaceuticals, Inc.   Mirati Therapeutics, Inc.   Ocata Therapeutics Inc.   OHR Pharmaceutical, Inc.   Regulus Therapeutics Inc.   Sangamo BioSciences, Inc.   Sunesis Pharmaceuticals, Inc.   Threshold Pharmaceuticals, Inc.   ZIOPHARM Oncology, Inc. |

 

***Base Salary***

 

Annual base salary is designed to provide a competitive fixed rate of pay recognizing different levels of responsibility and performance within QLT. Actual salaries reflect the Compensation Committee’s consideration of numerous factors, including the individual named executive officer’s experience, length of service, position criticality, scope of responsibilities, leadership skills and performance. In determining whether to increase the base salary for a particular executive officer, the Compensation Committee considers a variety of factors, including the results of each executive

 

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officer’s individual goal achievement and overall performance, comparative survey data, along with the other elements of compensation received by our executive officers.

 

***Principal Executive Officer***

 

Effective October 23, 2014, Dr. Geoffrey Cox assumed the position of “Principal Executive Officer” upon his appointment to Interim Chief Executive Officer. Dr. Cox receives an annual base salary. For 2015, Dr. Cox was not awarded a cash incentive opportunity under our cash incentive compensation program in connection with his role as Interim Chief Executive Officer given the expected short term nature of the role.

 

***Annual Cash Incentive Compensation***

 

The Compensation Committee’s compensation philosophy for 2015 (other than with respect to Dr. Cox as Interim Chief Executive Officer) included a pay-at-risk component under the annual cash incentive compensation program. The annual cash incentive award represents income at risk — it is only paid if and to the extent certain goals and objectives are met. The annual cash incentive compensation award that each executive officer is eligible to receive is based on a pre-determined target percentage of his or her base salary, determined in accordance with market data and taking into account the scope and level of responsibility of each executive. The Compensation Committee also believes that the success of QLT is based, in part, on the achievements of the executive officers as a group and, therefore, the target annual award percentage is determined by considering competitive rates of incentive compensation for the executive officers as a group and not just on a position-specific basis.

 

When combined with base salaries, cash incentive awards are intended to provide the opportunity for an executive officer to achieve total cash compensation, when targeted levels of performance are achieved or exceeded, that is competitive with total compensation paid by other companies that have similar profiles and circumstances. QLT defines “total cash compensation” as base salary plus annual target bonus under its annual cash incentive compensation program. The Compensation Committee believes that, given the competitive industry, this pay-for-performance compensation strategy allows a biotechnology company of QLT’s position and size to competitively attract and retain talented executives while aligning the strategic interests of its executives and shareholders.

 

In connection with executive officer promotions, following a review of the September 2015 Peer Group and each executive officer’s scope and level of responsibility within QLT, and in an effort to maintain internal parity, on November 5, 2015, the Board, upon recommendation of the Compensation Committee, adjusted the target annual award percentage for its Senior Vice Presidents and its Chief Financial Officer from 35% to 40% of base salary.

 

The amount of annual cash incentive compensation that our executive officers were eligible to receive for 2015 was as follows:

 
| **Level**                                                                                                          | ** ** | **Target Bonus   (as a % of   base salary)** | ** ** | **Range of Possible   Bonus Payment   (as a % of base salary)** | ** ** | **Weighting between   Corporate and   Individual Goals** | ** ** |
|--------------------------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------|------------|
| Dori Assaly,   Senior Vice President, Legal; Corporate Secretary                                                   |       | 35 - 40%                                                              |       | 0 - 45%                                                                                                 |       | 75% Corporate /   25% Individual                                        |       |
| Glen Ibbott,   Senior Vice President, Finance and Chief Financial Officer                                          |       | 35 - 40%                                                              |       | 0 - 45%                                                                                                 |       | 75% Corporate /   25% Individual                                        |       |
| Lana Janes,   Senior Vice President, Intellectual Property and Technology Development;   Chief Patent Officer |       | 35 - 40%                                                              |       | 0 - 45%                                                                                                 |       | 75% Corporate /   25% Individual                                        |       |

 

The Board, following the recommendation of the Compensation Committee, determined that executive officers could generally attain between 0% and 100% of corporate and individual goals depending on their performance, with the potential to attain up to 125% under exceptional circumstances.

 

***Cash Retention Bonus Program***

 

Maintaining a strong, focused executive team is critical to the Company’s continued progress. In December 2014, the Board determined that the Company’s annual incentive awards were insufficient to achieve this objective and that, given the significant headcount reductions that had occurred over the course of the recent prior years, the Company was at-risk with respect to competition for, and potential departures of, key executive officers.

 

Accordingly, in December 2014, the Board, following consultation with Radford and upon the recommendation of the Compensation Committee, approved the following one-time cash retention bonuses to its executive officers, other than Dr. Cox and Mr. Jagpal, to retain these individuals: Mr. Ibbott - 36% of base salary (C$100,000), Ms. Assaly - 50% of base salary (C$131,200) and Dr. Janes - 50% of base salary (C$131,400). In reaching this decision, the Board determined that modest cash retention bonuses would be more effective in achieving the goal of retaining key executives in the near-term than equity awards, which vest over a longer period and are of uncertain value. The Board also determined that the continued employment of these executives was critical to the Company’s success going forward.

 

Cash retention payments were payable in January 2016, if the executive officer was an active employee of the Company up to December 31, 2015, or upon the executive officer’s departure, if the Company terminated the executive officer’s employment without cause prior to December 31, 2015. In addition, cash retention payments were prorated if the executive officer was on a leave during the bonus period for any reason except approved vacation. See *2015 Summary Compensation Table* below.

 

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***Officer Promotions and Annual Cash Compensation Review***

 

In connection with the appointment of Dr. Cox to Interim Chief Executive Officer in October 2014, the Compensation Committee engaged Radford to provide market data and assist in determining compensation for Dr. Cox that was competitive and consistent with best practices. Due to the fact that Dr. Cox’s role as Interim CEO was considered short term at the time, the Compensation Committee did not request Radford to provide a formal report to the Compensation Committee or update the Company’s relevant peer group at that time.  In 2015, Dr. Cox’s base salary was determined to fall near the 25th percentile of the September 2015 Peer Group.  Given the continued interim nature of the appointment, the Board did not adjust Dr. Cox’s cash compensation in 2015. Dr. Cox was not eligible to participate in the annual cash incentive compensation program.

 

Mr. Ibbott was appointed as Interim Chief Financial Officer of the Company on January 26, 2015.  According to the November 2014 Peer Group, Mr. Ibbott’s base salary was positioned below the 25th percentile and his target annual award percentage was positioned at the 50th percentile for comparable positions.  In approving Mr. Ibbott’s total cash compensation for 2015, the Board, upon the recommendation of the Compensation Committee, considered many factors, including the other components of Mr. Ibbott’s total compensation package, the importance of the position for the Company and the interim nature of the appointment.

 

On November 5, 2015, Mr. Ibbott was promoted to Senior Vice President, Finance and Chief Financial Officer of the Company. In connection with his promotion, the Board, following the recommendation of the Compensation Committee, increased Mr. Ibbott’s salary from CAD$275,000 (US $214,995) to CAD$300,000 (US $234,540) and increased his target annual award percentage from 35% to 40% of his base salary. Mr. Ibbott’s increases put his total cash compensation below the 25th percentile of the Company’s September 2015 Peer Group for total cash compensation due to the decline in value of the Canadian dollar as compared to the US dollar.

 

On November 5, 2015, Ms. Assaly was appointed as Senior Vice President, Legal; Corporate Secretary. In connection with her promotion, the Board, following the recommendation of the Compensation Committee, increased Ms. Assaly’s salary from CAD$262,444 (US $205,179) to CAD$300,000 (US $234,540) and increased her target annual award percentage from 35% to 40% of her base salary. Ms. Assaly’s increases put her total cash compensation below the 25th percentile of the Company’s September 2015 Peer Group for total cash compensation due to the decline in value of the Canadian dollar as compared to the US dollar.

 

On November 5, 2015, Dr. Janes was appointed as Senior Vice President, Intellectual Property and Technology Development; Chief Patent Officer. In connection with her promotion, the Board, following the recommendation of the Compensation Committee, increased Dr. Janes’ salary from CAD$262,795 (US $205,453) to CAD$300,000 (US $234,540) and increased her target annual award percentage from 35% to 40% of her base salary. Dr. Janes’ increases put her total cash compensation below the 25th percentile of the Company’s September 2015 Peer Group for total cash compensation due to the decline in value of the Canadian dollar as compared to the US dollar.

 

For more information, refer to the *Employment Agreements, Post-Employment Compensation and Change in Control Arrangements* section below.

 

***Establishing Goals***

 

***Individual Goals.*** Each year, the criteria for assessing an individual named executive officer’s performance are developed and reviewed by the Compensation Committee in consultation with the particular named executive officer. The individual goals are primarily objective and measurable, relate to the individual named executive officer’s area of responsibility and are designed to facilitate the achievement of our corporate goals.

 

***Corporate Goals.*** Each year, the criteria for assessing QLT’s performance are: (i) developed by the Interim Chief Executive Officer in consultation with management, (ii) reviewed and approved by the Compensation Committee, (iii) approved by the Board, and (iv) communicated to the participants. In early 2015, on the recommendation of the Compensation Committee, the Board approved specific corporate goals for QLT to achieve. The 2015 corporate goals were qualitative rather than financial in nature given the fact that QLT’s product pipeline is in the pre-commercial phase of development. QLT’s corporate goals are described below and are weighted from 0-100% in relative allocation. As noted above, for 2015, the Board, following the recommendation of the Compensation Committee, determined that executive officers could generally attain between 0% and 100% of corporate and individual goals depending on their performance, with the potential to attain up to 125% for individual goals under exceptional circumstances.

 

The following is a description of the 2015 corporate goals:

 

·                  *Strategic Transactions: 35% -*Analyze, support and complete a review of strategic alternatives, and support and execute any strategic transaction as determined by the Board.

 

·                *Operational Activities: 25% -*Review and modify facilities and certain operations consistent with strategic goals, determinations and outcomes.

 

·                  *Synthetic Retinoid Program: 40% -*Achieve specific milestones related to the regulatory and clinical development progress for QLT091001, the Company’s synthetic retinoid, including evaluating the opportunity for conditional approval with the European Medicines Agency (“EMA”), completing development studies, regulatory meetings and submissions, and conducting preparation activities for the initiation of a pivotal trial for QLT091001.

 

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***2015 Corporate Goal Achievement***

 

In determining goal achievement, the Interim Chief Executive Officer presents a recommendation to the Compensation Committee for performance bonuses based on the results achieved as compared to targets established for a particular fiscal year. The Compensation Committee has the discretion to award bonuses that correspond to that level of achievement, or to modify the award payable if it believes a modification would be in the best interests of QLT and its shareholders. In performing its assessment, the Compensation Committee may also consider market, business or organizational factors that may have impacted achievement of a specific goal.

 

In early 2016, the Compensation Committee considered the performance of QLT relative to the corporate objectives set in early 2015. Based on the assessment of QLT’s performance and achievements against the corporate goals, the Board, upon recommendation of the Compensation Committee, determined that QLT achieved 86.75% of its 2015 corporate objectives. The following chart illustrates the weighting and level of achievement of each of the 2015 corporate goals:

 
| **Goal**                     | ** ** | **Weighting** | ** ** | **Achievement** | ** ** |
|------------------------------|------------|---------------|------------|-----------------|------------|
| Strategic   Transactions     |       | 35            | %          | 90              | %          |
| Operational   Activities     |       | 25            | %          | 85              | %          |
| Synthetic   Retinoid Program |       | 40            | %          | 85              | %          |

 

In evaluating QLT’s performance against the goals established for 2015, and determining the extent to which those goals were successfully achieved, the Compensation Committee considered the following factors, among others:

 

·                  **Strategic Transactions:**The following was achieved in 2015:

 

Following a comprehensive review of strategic alternatives, on June 8, 2015, the Company entered into an Agreement and Plan of Merger (as amended, the “InSite Merger Agreement”) among QLT, InSite Vision Incorporated, a Delaware corporation (“InSite”), and Isotope Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of QLT. InSite is an ophthalmic product development company advancing products to address unmet eye care needs. Under the terms of the InSite Merger Agreement, InSite would have become an indirect wholly owned subsidiary of QLT, and InSite stockholders would have received QLT common shares based on an exchange ratio equal to 0.078 of a QLT common share per share of InSite common stock, subject to a collar mechanism (the “InSite Merger”).

 

On September 15, 2015, the InSite Merger Agreement was terminated after InSite notified QLT that its board of directors had determined that a second unsolicited offer (as amended, the “Sun Proposal”) from Sun Pharmaceuticals Industries Ltd. (“Sun”) was superior to the proposed InSite Merger with QLT. The Sun Proposal was an all-cash offer to acquire InSite for $0.35 per share of InSite common stock. As a result, InSite notified QLT that it was exercising its right to terminate the InSite Merger Agreement in order to enter into an agreement with Sun, and InSite paid QLT a termination fee of $2.7 million.

 

Concurrent with the execution of the InSite Merger Agreement, on June 8, 2015 the Company entered into a Share Subscription Agreement (as amended) with other co-investors, providing for an investment of $45 million into common shares (“Aralez Shares”) of Aralez Pharmaceuticals Inc., newly formed by the business combination of Tribute Pharmaceuticals Canada Inc. and POZEN Inc. (the “Aralez Merger”), at a purchase price per share equal to: (a) the lesser of (i) US$7.20, and (ii) a five percent (5%) discount off the five day volume weighted average price per share of POZEN common stock calculated over the five trading days immediately preceding the date of closing of the Aralez Merger, not to be less than US$6.25 per share; multiplied by (b) the Aralez Merger exchange ratio of 0.1455. As announced on June 8, 2015, the Company intended to acquire the Aralez Shares in order to distribute the Aralez Shares to its shareholders as a special distribution (the “Special Distribution”).  The Company’s shareholders were also given the opportunity to receive, in lieu of their pro rata entitlement to Aralez Shares, cash up to a maximum aggregate amount of $15 million.  In order to fund the $15 million cash component, on June 8, 2015 the Company entered into a backstop agreement (as amended, the “Backstop Agreement”) with each of the following (the “Backstop Purchasers”): Broadfin Healthcare Master Fund Ltd., JW Partners, LP and JW Opportunities Master Fund Ltd..  Pursuant to the Backstop Agreement, the Backstop Purchasers agreed to acquire up to $15 million of Aralez Shares from the Company at the same price paid by the Company for the Aralez Shares.

 

On February 5, 2016, the Aralez Merger was consummated and QLT acquired 7,200,000 Aralez Shares at a price of US$6.25 per share for a total investment of $45 million.  On March 17, 2016, the Company completed the sale of 2,400,000 Aralez Shares to the Backstop Purchasers for total cash consideration of $15 million in order to fund the cash component of the Special Distribution. The Company completed the Special Distribution of the remaining Aralez Shares and $15 million in cash in lieu of Aralez Shares to the QLT Shareholders on April 5, 2016 by way of a reorganization of share capital, which permitted a tax efficient return of capital to shareholders.

 

In addition, concurrent with the execution of the InSite Merger Agreement, on June 8, 2015 the Company entered into a Share Purchase and Registration Rights Agreement (as amended) with certain third parties pursuant to which such third parties agreed to acquire an aggregate of 10,695,187 common shares of QLT at a purchase price of $1.87 per QLT common share (the “Private Placement”) following completion of the other transactions announced on June 8, 2015, including the Special Distribution. As a result of the termination of the InSite Merger Agreement and the Board’s determination that the Company’s current cash requirements do not justify the dilution that would have been caused by the Private Placement, the Company elected to terminate the Private Placement on April 28, 2016.

 

The Compensation Committee assigned 35% of the 2015 corporate goals to the Strategic Transactions goal. In determining the extent to 

 

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which we met this goal, the Compensation Committee acknowledged the extensive efforts undertaken by management to complete an exhaustive review of strategic alternatives, which ultimately resulted in the signing of multiple transactions that were designed to create significant liquidity and create near and long term value for the QLT shareholders.  The Compensation Committee acknowledged that the distribution of Aralez Shares to QLT shareholders provides shareholders with the opportunity to participate in the growth of a newly formed commercial-stage specialty pharmaceutical company, and together with the $15 million cash in lieu of Aralez Shares, resulted in a tax efficient return of capital to the QLT shareholders. The Compensation Committee also noted that the termination of the InSite Merger resulted from the Sun Proposal, an event beyond management’s control, and consequently determined that, in recognition of management’s efforts towards these transactions, QLT achieved 31.50% out of the targeted 35% with respect to this goal.

 

·                  **Operational Activities:**The following objectives were achieved in 2015:

 

·                  Reviewed organizational needs and executed plan to meet QLT’s future strategic and operational objectives.

 

·                  Executed transition to new facility.

 

·               Developed and executed on a plan to transition analytical laboratory functions to external contract research organizations by September 30, 2015.

 

The Compensation Committee assigned 25% of the 2015 corporate goals to the Operational Activities goal. Given that we achieved the three most value-enhancing operational objectives, despite the fact that we did not favorably resolve our dispute with Valeant Pharmaceuticals International, Inc. pertaining to the QcellusTM laser, the Compensation Committee determined that we achieved 21.25% out of the targeted 25% with respect to this goal.

 

·                  **Synthetic Retinoid Program:**The following principal clinical and regulatory development objectives to advance QLT’s synthetic retinoid program were achieved in 2015:

 

·                  Met with European Union regulatory authorities to evaluate the opportunity for conditional approval with the EMA.

 

·                  Completed process development studies to enable production of primary stability batches.

 

·                  Advanced start-up activities and manufactured drug product in order to progress QLT091001 toward pivotal trial.

 

·                  Commenced QLT’s natural history study of visual function in subjects with certain inherited retinal diseases.

 

The Compensation Committee assigned 40% of the 2015 corporate goals to the Synthetic Retinoid Program goal. As we deferred the reapplication to the FDA for breakthrough therapy designation until after the completion of the natural history study and did not complete all clinical trial activities required to initiate a pivotal trial in Q1 2016, the Compensation Committee determined that we achieved 34% out of the targeted 40% with respect to this goal.

 

***2015 Individual Goal Achievement and Total Cash Incentive Compensation.*** The extent to which individual goals have been achieved or exceeded is determined largely from the annual performance recommendations for each of the other named executive officers prepared by the Interim Chief Executive Officer, and recommended by the Compensation Committee to the Board for approval.

 

*Senior Vice President, Finance and Chief Financial Officer.*In 2015, individual goals were established for Mr. Ibbott including goals related to (i) supporting potential strategic activities, (ii) effectively managing financial reporting and internal controls, and (iii) executing the transition to a new facility. Mr. Ibbott was assessed as having met or exceeded each of these goals, to achieve, overall by percentage, 115% of his individual goals for 2015.

 

Based upon the achievement of the corporate goals and his individual goals, and the relative weighting between them, Mr. Ibbott was awarded a cash incentive compensation amount for 2015 equal to CAD $92,784 (USD $72,539), which represented approximately 33% of his actual base salary for 2015.

 

*Senior Vice President, Intellectual Property and Technology Development; Chief Patent Officer.* In 2015, individual goals were established for Dr. Janes including goals related to (i) assisting and advising on intellectual property, regulatory and scientific related aspects of various strategic alternatives, (ii) developing and overseeing the execution of a plan to transition internal analytical laboratory functions and facilities to external contract research organizations, (iii) advancing and strengthening QLT’s intellectual property portfolio, and (iv) supporting development activities to further advance the synthetic retinoid program. Commencing in October 2015, Dr. Janes’ R&D responsibilities were expanded to include managing and providing oversight of clinical operations and all other R&D functions. Dr. Janes was assessed as having met or exceeded each of these goals in addition to her expanded R&D responsibilities, to achieve, overall by percentage, 125% of her individual goals for 2015.

 

Based upon the achievement of the corporate goals and her individual goals, and the relative weighting between them, Dr. Janes was awarded a cash incentive compensation amount for 2015 equal to CAD $92,801 (USD $72,552), which represented approximately 35% of her actual base salary for 2015.

 

*Senior Vice President, Legal; Corporate Secretary.* In 2015, individual goals were established for Ms. Assaly including goals related to (i) supporting potential strategic activities, (ii) ensuring the preparation, review, approval and filing of continuous disclosure documents, (iii) overseeing all operational legal matters and managing legal risk, (iv) providing effective and efficient Board and Committee Secretary services, and (v) supporting the Compensation Committee’s annual review of director and executive compensation and the review of the employee equity program. Ms. Assaly was assessed as having met or exceeded each of these goals, to achieve, overall by percentage, 115% of her individual goals for 2015.

 

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Based upon the achievement of the corporate goals and her individual goals, and the relative weighting between them, Ms. Assaly was awarded a cash incentive compensation amount for 2015 equal to CAD $90,295 (USD $70,593), which represented approximately 34% of her actual base salary for 2015.

 

***Equity Awards***

 

Consistent with our compensation philosophy of attracting, retaining and motivating our named executive officers to deliver sustainable long-term value, equity compensation typically represents a significant portion of named executive officer total compensation at QLT. The amount and type of equity awards are intended to align QLT’s named executive officers’ interests with shareholder interests by rewarding our named executive officers for driving sustained increases in the value of the Company’s common shares. These equity-based awards also serve as a retention incentive. In setting the equity compensation levels of the executive officers (other than Dr. Cox), the Compensation Committee considers numerous factors, including market data, prior grants of stock options to the executive officer, the level of responsibility and expected future contributions of the executive officer, the performance of the named executive officer in the year, the total cash compensation level of the executive officer, the fair value of long-term incentives awarded to executives in similar positions in a comparator group, and the ability of stock options to retain named executive officers.

 

QLT currently maintains one equity compensation plan, the QLT 2000 Incentive Stock Plan (as amended and restated, the “2000 Plan”), which provides for the issuance of stock options to directors, officers, employees and key consultants of QLT and its affiliates. Option grants are meant to directly link executive compensation to value creation for shareholders, and the amount (if any) each executive ultimately realizes from the options depends solely on the increase in value of common shares from the date of grant through the date of exercise. The 2000 Plan also provides for the issuance of restricted stock units (“RSUs”).

 

The 2000 Plan is administered by the Compensation Committee. The Compensation Committee or the Board of Directors (upon the recommendation of the Compensation Committee) is authorized to grant equity awards. Generally, except in the case of awards for new hires and specific circumstances described below, equity awards are decided once a year at a regularly scheduled meeting approximate to the annual general meeting of shareholders.  Under the 2000 Plan, awards are deemed to be granted on the date that the Compensation Committee or the Board of Directors, as applicable, authorizes the grant or such later date as may be determined by the Compensation Committee or the Board of Directors, as applicable, at the time that the grant is authorized. All awards are granted after the market close on the date of grant and the exercise price of stock options will not be less than the closing price on the TSX on the date of grant. RSUs may be granted pursuant to the 2000 Plan with no consideration from the participant. RSUs are generally subject to vesting conditions, including continued employment. The Board of Directors did not grant any RSUs to employees during 2015.

 

Except as described below, all currently outstanding options granted to QLT’s executive officers are exercisable for a term of ten years and vest in 36 equal monthly installments. In QLT’s view, monthly vesting over three years facilitates retention while also providing a program that is consistent with market practices to attract and retain talent. In addition, in the event of a change of control, there is no automatic acceleration of options, however, the Board of Directors may, in its discretion, accelerate the vesting of all or a portion of any unvested options. These terms provide executives with certain financial incentives that enhance the Company’s ability to attract and retain key employees.

 

Upon his appointment as Interim Chief Executive Officer, on October 29, 2014 Dr. Cox was awarded, upon recommendation by the Compensation Committee, 150,000 stock options. Unlike other options granted to QLT’s executive officers, these options vested in six monthly installments in order to immediately align Dr. Cox’s interests with those of the shareholders, and to incentivize near-term stock price performance during his tenure. The options will expire, if unexercised, on the 90th day after the cessation of his service as an employee and director of QLT.

 

In December 2014, the Board of Directors, upon the recommendation of the Compensation Committee and following consultation with Radford, approved stock option grants to most of QLT’s employees to enhance motivation and retention in light of the Company’s reduced size, streamlined operations and the termination of a Merger Agreement that had been executed between the Company and Auxilium Pharmaceuticals Inc. in September 2014.  Ms. Assaly and Dr. Janes (prior to their promotions to named executive officer positions in November 2015) were each granted 100,000 stock options, exercisable for ten years and vesting in 36 equal monthly installments.

 

Upon his appointment in January 2015, Mr. Ibbott was awarded, upon recommendation by the Compensation Committee, 100,000 stock options.  According to Radford, Mr. Ibbott’s new hire stock option grant was below the 25th percentile of the November 2014 Peer Group, which reflected at that time the interim nature of his appointment.

 

In June 2015, in connection with the execution of the InSite Merger Agreement and the investment in and subsequent distribution of the Aralez Shares as described above under *2015 Corporate Goal Achievement*, the Board authorized the immediate accelerated vesting of all issued and outstanding stock options and RSUs, including the stock options and RSUs held by named executive officers and directors. This was intended to allow all grantees the opportunity to participate in the Company’s special election distribution of the Aralez Shares and also to account for the decrease in the Company’s share price that was anticipated to occur as a result, thereby rendering all outstanding stock options “out-of-the money”.

 

Other than the new hire stock option grant to Mr. Ibbott in January 2015 described above, stock options and other equity grants that may otherwise have been awarded to executive officers and other employees in 2015 were deferred due to the Company’s special election distribution of the Aralez Shares that was pending throughout 2015 and the decrease in the Company’s share price that was anticipated to occur as a result.

 

In accordance with historical annual practice, upon recommendation of the Compensation Committee, on November 4, 2015 the Board approved awards of 100,000 stock options to each of the executive officers, including Dr. Cox, subject to certain future events and conditions.  These grants are not reflected in the 2015 Summary Compensation Table or the Grants of Plan Based Awards table below as they have not yet been awarded.

 

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***Minimum Share Ownership Guidelines for Executive Officers.***

 

To further align our executives’ financial interests with those of our shareholders, the Board, on the recommendation of the Compensation Committee, has approved share ownership guidelines for executive officers, encouraging share ownership as follows within five years after the later of (i) the date the executive officer is hired; and (ii) the date the executive officer assumes a new position as an executive officer:

 

·                  Chief Executive Officer: an amount equal to 1.5 times the CEO’s annual base salary; and

 

·                  Other executive officers: an amount equal to 0.5 times the executive officer’s annual base salary.

 

The value of QLT “in-the-money” vested stock options held by the executive is counted towards fulfilling the share ownership guidelines. The value of the shares owned for the purposes of fulfilling the share ownership guidelines is determined as the greater of the acquisition cost or the market value at the time of the determination. Compliance with the share ownership guidelines is evaluated on an annual basis by the Corporate Governance and Nominating Committee. Assuming that Dr. Cox serves as Interim CEO for a short term period until the appointment of a permanent Chief Executive Officer, he will not be required to fulfill the share ownership guidelines set for the Chief Executive Officer. Given the appointment of Mr. Ibbott, Ms. Assaly and Dr. Janes as executive officers in 2015, they are not yet required to meet the guidelines.

 

***Health and Life Benefits***

 

Our named executive officers receive medical, dental, life insurance and other benefits generally made available to all of our employees.

 

***Registered Retirement Savings Plan (RRSP) Matching Program***

 

Our named executive officers resident in Canada are eligible, along with all other QLT employees resident in Canada, to participate in our registered retirement savings plan (“RRSP”) matching program. Under this program, we match the amount contributed by the named executive officer into his or her RRSP annually (or into QLT’s group RRSP Plan) up to 50% of the annual maximum amount allowable by the Canada Revenue Agency, less any applicable tax withholdings.

 

***Tax and Accounting Consideration***

 

The Board and the Compensation Committee generally consider the financial accounting and tax implications of their named executive officer compensation decisions. While QLT is not generally subject to tax in the United States, when applicable, the Compensation Committee and the Board will consider the potential future effects of Section 162(m) of the Internal Revenue Code on the compensation paid to our named executive officers. Section 162(m) disallows a tax deduction for any publicly-held corporation for individual compensation exceeding $1.0 million in any taxable year for the CEO and each of the other named executive officers (other than the Chief Financial Officer), unless compensation is performance-based. The Compensation Committee, where it determines that Section 162(m) is applicable and it is reasonably practicable, will seek to qualify the variable compensation paid to our named executive officers for an exemption from the deductibility limitations of Section 162(m).

 

**Compensation Committee Report**

 

The Compensation Committee has discussed and reviewed with management the Compensation Discussion and Analysis presented in this Annual Report on Form 10-K. Based on such review and discussions, the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this Annual Report on Form 10-K.

 
|   | COMPENSATION   COMMITTEE         |
|--------|----------------------------------|
|   |                             |
|   | Jeffrey   A. Meckler (Chairman)  |
|   | Dr. Stephen L.   Sabba |
|   | John   C. Thomas, Jr.       |

 

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**Compensation of Executive Officers**

 

Where our executive officers are paid in Canadian dollars, their compensation has been translated into U.S. dollars for reporting purposes in the tables below.

 

**2015 Summary Compensation Table**

 

The following table summarizes total compensation earned by QLT’s named executive officers for 2015, 2014 and 2013. With the exception of Dr. Cox, who receives a portion of his salary in U.S. dollars, all other salary amounts in the table below were paid in Canadian dollars and have been converted into U.S. dollars for reporting purposes.

 
| **Name**                 | ** ** | **Principal Position**                            | ** ** | **Year** | ** ** | **Salary ****(6)** | ** ** | **Bonus ****(7)** | ** ** | **Option   Awards ****(8)** | ** ** | **Non-Equity    Incentive Plan    Compensation** | ** ** | **All Other    Compensation** | ** ** | **Total** | ** ** |
|--------------------------|------------|--------------------------------------------------------|------------|----------|------------|-------------------------|------------|------------------------|------------|----------------------------------|------------|-----------------------------------------------------------------|------------|-----------------------------------------|------------|-----------|------------|
| Dr. Geoffrey F. Cox |       | Interim Chief Executive   Officer and                  |       | 2015     |       | $                       | 480,000    |                   | $          | —                           |       | $                                                               | —     |                                    | $          | —    |       | $ | 704 | (9) | $ | 480,704 |   |
|                     |       | Principal Executive Officer   (1)                 |       | 2014     |       | $                       | 94,398     |                   | $          | —                           |       | $                                                               | 287,965    |                                    | $          | —    |       | $ | 92,899 | (10) | $ | 475,262 |   |
| W. Glen Ibbott           |       | Senior VP Finance, Chief   Financial Officer and       |       | 2015     |       | $                       | 217,964    |                   | $          | 78,180                           |       | $                                                               | 165,742    |                                    | $          | 72,539    |       | $ | 9,745 | (11) | $ | 544,170 |   |
|                     |       | Principal Financial and   Accounting Officer (2)       |       |     |       |                    |       |                   |       |                             |       |                                                            |       |                                    |       |      |       |
| Dori Assaly              |       | Senior VP Legal and   Corporate Secretary (3)          |       | 2015     |       | $                       | 209,639    |                   | $          | 95,471                           |       | $                                                               | —     |                                    | $          | 70,593    |       | $ | 24,179 | (12) | $ | 399,882 |   |
| Dr. Lana Janes           |       | Senior VP Intellectual   Property and Technology       |       | 2015     |       | $                       | 209,872    |                   | $          | 102,728                          |       | $                                                               | —     |                                    | $          | 72,552    |       | $ | 22,375 | (13) | $ | 407,527 |   |
|                     |       | Development and Chief   Patent Officer (4)             |       |     |       |                    |       |                   |       |                             |       |                                                            |       |                                    |       |      |       |   |   |   |   |   |   |
| Sukhi Jagpal             |       | Former Chief Financial   Officer and                   |       | 2015     |       | $                       | 13,406     |                   | $          | —                           |       | $                                                               | —     |                                    | $          | 4,566     |       | $ | 207,697 | (14) | $ | 225,669 |   |
|                     |       | Principal Financial and   Accounting Officer (5)  |       | 2014     |       | $                       | 226,388    |                   | $          | —                           |       | $                                                               | —     |                                    | $          | 77,106    |       | $ | 26,372 | (15) | $ | 329,866 |   |
|                     |       |                                                   |       | 2013     |       | $                       | 233,844    |                   | $          | —                           |       | $                                                               | 211,650    |                                    | $          | 90,049    |       | $ | 18,919 | (16) | $ | 554,462 |   |

 

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| *         | Note:   Where amounts shown were paid or priced in Canadian dollars, amounts set out   in the Summary Compensation Table reflect the U.S. dollar equivalent of   those amounts, converted using an average of noon buying rates published by   the Federal Reserve Bank of New York, for each respective year as   follows: 2015 - US$1.00 = C$1.2791; 2014 - US$1.00 = C$1.1043 and 2013 -   US$1.00 = C$1.0300.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (1)       | Dr. Geoffrey Cox   was appointed Interim Chief Executive Officer on October 23, 2014.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (2)       | Mr. Ibbott   was appointed Interim Chief Financial Officer on January 26, 2015 and   Senior Vice President, Finance and Chief Financial Officer on   November 5, 2015.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (3)       | Ms. Assaly   was appointed Senior Vice President, Legal and Corporate Secretary on   November 5, 2015.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (4)       | Dr. Janes   was appointed Senior Vice President, Intellectual Property and   Technology Development and Chief Patent Officer on November 5, 2015.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (5)       | Mr. Jagpal   was appointed Chief Financial Officer on February 27, 2013. His   employment with QLT terminated on January 26, 2015 following his   resignation on November 26, 2014.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (6)       | With   the exception of Dr. Cox, who receives a portion of his salary in U.S.   dollars, all other salary amounts were paid in Canadian dollars and have been   converted into U.S. dollars for reporting purposes. The 2015 base salary   amounts for Mr. Ibbott, Ms. Assaly and Dr. Janes reflect the   salary increases which took effect on November 5, 2015 - for more   information refer to the *Employment Agreements,   Post-Employment Compensation and Change in Control Agreements*section   below. Dr. Cox’s 2014 base salary amount reflects the amount that he was   paid from October 23, 2014, the date of his appointment to Interim Chief   Executive Officer, to December 31, 2014. Following Mr. Jagpal’s   appointment to Chief Financial Officer on February 27, 2013, the Board   of Directors increased his annual base salary from C$192,500 to C$250,000.   The year over year declines in Mr. Jagpal’s annual base salary are due   in part to the deterioration of the Canadian to U.S. dollar exchange   rates and his resignation on January 26, 2015. |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (7)  | Reflects   2015 retention bonuses paid in early 2016. For more information refer to the *Employment Agreements, Post-Employment Compensation and Change in   Control Agreements*section below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (8)       | Represents   the grant date fair value of options granted calculated using the Black   Scholes option pricing model, in accordance with ASC Topic 718 for share   based payment transactions. For a discussion of the assumptions used in the   valuation of the options granted in each respective year, refer to Note 10 — *Share Capital* of QLT’s 2015 consolidated financial   statements on Form 10-K filed with the SEC on February 25, 2015.   For a summary of stock options exercised by named executive officers during   2015, refer to the *2015 Options Exercised   and Stock Vested*section below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (9)       | Amount   reported consists of reimbursement of Dr. Cox’s tax advisor fees paid in   connection with the preparation of Dr. Cox’s 2015 Canadian tax return.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (10)      | Represents   director fees earned or paid in cash in 2014 prior to Dr. Cox’s   appointment as Interim Chief Executive Officer on October 23, 2014. For   a breakdown of these director fees, see the *Directors   Compensation*section below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (11)      | Amount   reported consists of $9,745 contribution matched under QLT’s RRSP matching   program.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (12)      | Amount   reported consists of (i) $9,745 contribution matched under QLT’s RRSP   matching program, and (ii) a payment of $14,434 for 2015 accrued   vacation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (13)      | Amount   reported consists of (i) $9,745 contribution matched under QLT’s RRSP   matching program, and (ii) a payment of $12,629 for 2015 accrued   vacation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (14)      | Amount   reported primarily consists of Mr. Jagpal’s $205,195 severance and   termination payment, which includes a $195,450 (C$250,000) lump-sum payment   and $9,745 (C$12,465) of RRSP matching contributions. For more details about   these components of Mr. Jagpal’s severance and termination package,   refer to the *Employment Agreement with Sukhi Jagpal*   section below*.* The remaining balance of   $2,502 consists of Mr. Jagpal’s $1,564 (C$2,000) of vacation pay and   $938 (C$1,200) of RRSP matching contributions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

 

16

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| (15)   | Amount reported consists of (i) the $10,989 contribution matched   under QLT’s RRSP matching program, and (ii) 2014 accrued vacation of   $15,383, which was paid to Mr. Jagpal on January 30, 2015*.* |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                            |
| (16)   | Amount reported consists of (i) the $11,563 contribution matching   under QLT’s RRSP matching program and (ii) a payment of $7,356 for   accrued vacation.                                                       |

 

**Grants of Plan-Based Awards for the Fiscal Year Ended December 31, 2015**

 

The following table provides information related to grants of awards to named executive officers in 2015.

 
| ** **                 | ** ** | ** **           | ** ** | **Estimated Future Payouts   Under Non-Equity Incentives   Plan Awards** | ** ** | **All Other Option   Awards: Number of   Securities Underlying** | ** ** | **Exercise or   Base Price of   Option Awards** | ** ** | **Grant Date Fair   Value of    Stock   and Option** | ** ** |
|----------------------------|------------|----------------------|------------|---------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------|------------|-------------------------------------------------------------------------------|------------|
| **Name**                   | ** ** | **Grant Date**  | ** ** | **Target ****(1)**                                                                           | ** ** | **Maximum ****(1) **                                                            | ** ** | **Options**                                                         | ** ** | **($/Sh) ****(7) **                                                 | ** ** | **Awards ****(7) (8)** | ** ** |
| Dr. Geoffrey   F. Cox |       |                 |       | $                                                                                                 | —     |                                                                                      | $          | —                                                              | (2)        | —                                                                        |       | $ | — |   | $ | — |   |
| W. Glen Ibbott             |       | January 6, 2015 |       | $                                                                                                 | —     |                                                                                      | $          | —                                                              |       | 100,000                                                                       |       | $ | 3.78 |   | $ | 165,742 |   |
| W. Glen Ibbott             |       |                 |       | $                                                                                                 | 78,104     |                                                                                      | $          | 97,629                                                              | (3)        | —                                                                        |       | $ | — |   | $ | — |   |
| Dori Assaly                |       |                 |       | $                                                                                                 | 75,188     |                                                                                      | $          | 93,985                                                              | (4)        | —                                                                        |       | $ | — |   | $ | — |   |
| Dr. Lana Janes             |       |                 |       | $                                                                                                 | 75,270     |                                                                                      | $          | 94,087                                                              | (5)        | —                                                                        |       | $ | — |   | $ | — |   |
| Sukhi Jagpal               |       | —               |       | $                                                                                                 | —     |                                                                                      | $          | —                                                              | (6)        | —                                                                        |       | $ | — |   | $ | — |   |

 

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| *      | Note: Where amounts   shown were paid or priced in Canadian dollars, they have been converted to   U.S. dollars for disclosure purposes using an average of 2015 noon buying   rates published by the Federal Reserve Bank of New York: US$1.00 =   C$1.2791.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| (1)    | Amounts represent the   annual Target and Maximum for QLT’s cash incentive compensation program for   2015. There is no threshold minimum amount that could be paid as an incentive   bonus under QLT’s cash incentive compensation program for 2015.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| (2)    | In accordance with   Dr. Cox’s employment agreement with QLT, he does not participate in   QLT’s cash incentive compensation program.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| (3)    | The actual amount paid   to Mr. Ibbott under QLT’s cash incentive compensation program for 2015   was US$72,539 (C$92,784).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| (4)    | The actual amount paid   to Ms. Assaly under QLT’s cash incentive compensation program for 2015   was US$70,593 (C$90,295).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| (5)    | The actual amount paid   to Dr. Janes under QLT’s cash incentive compensation program for 2015   was US$72,552 (C$92,801).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| (6)    | No target or maximum   amounts have been reflected for Mr. Jagpal for the 2015 non-equity   incentive award given that he resigned on November 26, 2014. However, in   accordance with the terms of his employment agreement, he received US$4,566   (C$5,840) for his 2015 bonus entitlement payable under QLT’s cash incentive   compensation plan. His 2015 bonus entitlement was calculated as if all   individual goals were achieved but not exceeded and corporate goals were   assessed based on the average percentage of the three preceding years. In   addition, the bonus amount was pro-rated for the January 1 — 26 period   he worked during 2015.                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| (7)    | On January 6,   2015, Mr. Ibbott was granted 100,000 stock options priced at C$4.84   (US$3.78). These stock options were originally expected to vest and become   exercisable in thirty six (36) successive and equal monthly installments from   the grant date. In connection with certain strategic transactions announced   on June 8, 2015, on June 7, 2015 the Board of Directors accelerated   the vesting provisions applicable to all outstanding stock options at that   date. For more information, refer to Note 5 — *Terminated   Merger Transaction with InSite*, Note 6 — *Strategic   Transactions*and Note 10 — *Share Capital*   of QLT’s 2015 consolidated financial statements, included in the Initial   Filing. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| (8)    | Reflects the grant date   fair value of options granted was calculated using the Black-Scholes option   pricing model in accordance with ASC Topic 718 for share-based payment   transactions. For a discussion of the assumptions used in the valuation   reflected in this column, refer to Note 10 *— Share*Capital   of QLT’s 2015 consolidated financial statements, included in the Initial   Filing.                                                                                                                                                                                                                                                                                                                                                          |

 

17

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**Outstanding Equity Awards at 2015 Fiscal Year-End**

 

The following table provides information as at December 31, 2015 related to unexercised options, stock that has not vested, and outstanding equity incentive plan awards for named executive officers.

 
| ** **               | ** ** | **OPTION AWARDS**                                                                                | ** ** | **STOCK AWARDS ****(1)**                                                                  | ** ** |
|--------------------------|------------|-------------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------|------------|
| **Name**                 | ** ** | **Number of securities   underlying unexercised   options (#) exerciseable** | ** ** | **Number of securities   underlying unexercised   options (#)   unexercisable** | ** ** | **Option exercise price   ($)** | ** ** | **Option expiration   date** | ** ** | **Number of shares or units   of stock that have not   vested (#)** | ** ** | **Market value of shares of   units of stock that have   not vested ($)** | ** ** |
| Dr. Geoffrey F. Cox |       | 90,000                                                                                                |       | —                                                                                              |       | $ | 3.49 |   | October 28,   2024 |   | 2,139 | (2) | $ | 6,103 | (3) |
| W. Glen Ibbott           |       | 100,000                                                                                               |       | —                                                                                              |       | $ | 3.78 |   | January 5,   2025 |   | — |   | $ | — |   |
| Dori Assaly              |       | —                                                                                                |       | —                                                                                              |       | — |   | — |   | — |   | $ | — |   |
| Dr. Lana Janes           |       | —                                                                                                |       | —                                                                                              |       | — |   | — |   | — |   | $ | — |   |
| Sukhi Jagpal             |       | —                                                                                                |       | —                                                                                              |       | — |   | — |   | — |   | $ | — |   |

 

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| *      | Note: Where amounts shown were paid or priced in Canadian dollars,   they have been converted to U.S. dollars for disclosure purposes using an   average of 2015 noon buying rates published by the Federal Reserve Bank of   New York: US$1.00 = C$1.2791.                                                                                                                                                                                                                                        |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (1)    | Stock awards include DSUs and RSUs. DSUs vest in 36 successive and   equal monthly installments beginning on the first day of the first month   after the grant date and can only be settled in cash upon cessation of   service as a QLT director. RSU’s vest in 3 successive and equal annual   installments on the date of each of the first three annual general meetings.   Upon vesting each RSU represents the right to receive one common share of   QLT. No DSUs or RSUs were granted in 2015. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (2)    | As at December 31, 2015, Dr. Cox had 2,139 unvested DSUs.   DSUs were granted to Dr. Cox for his services as a director. No DSUs   were granted to Dr. Cox in 2015 or 2014, however, on July 15, 2013,   Dr. Cox was granted 11,000 DSUs and on July 10, 2012, Dr. Cox   was granted 11,000 DSUs.                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (3)    | The market value of Dr. Cox’s 2,139 unvested DSUs was calculated   by multiplying the quantity of such unvested DSUs by the C$3.65 (US$2.85)   closing price of QLT’s shares on the TSX on December 31, 2015, the last   trading day in 2015.                                                                                                                                                                                                                                       |

 

**2015 Option Exercises and Stock Vested**

 

The following table provides information with respect to vested stock awards and option exercises during 2015 by named executive officers.

 
| ** **                 | ** ** | **OPTION AWARDS ****(1)**                                      | ** ** | **STOCK AWARDS ****(1) (4) **                | ** ** |
|----------------------------|------------|--------------------------------------------------------------------------|------------|------------------------------------------------------------------|------------|
| **Name**                   | ** ** | **Number of Shares   Acquired on Exercise (#)** | ** ** | **Value Realized on   Exercise ($) ****(2)** | ** ** | **Number of Shares / Units   Acquired on Vesting (#)** | ** ** | **Value Realized on   Vesting ($)** | ** ** |
| Dr. Geoffrey   F. Cox |       | 72,500                                                                   | (3)        | $                                                                | 31,567     |   | 9,806 | (5) | $ | 35,774 |   |
| W. Glen Ibbott             |       | —                                                                   |       | $                                                                | —     |   | — |   | $ | — |   |
| Dori Assaly                |       | 200,000                                                                  |       | $                                                                | 145,021    |   | — |   | $ | — |   |
| Dr. Lana Janes             |       | 200,000                                                                  |       | $                                                                | 141,997    |   | — |   | $ | — |   |
| Sukhi Jagpal               |       | 50,000                                                                   |       | $                                                                | 41,245     |   | — |   | $ | — |   |

 

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|   | ** All stock options were granted with an exercise price denominated   in Canadian dollars. Exercise prices and sale prices have been converted to   U.S. dollars for disclosure purposes using an average of 2015 noon   buying rates published by the Federal Reserve Bank of New York: US$1.00   = C$1.2791.                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (1)    | In connection with certain strategic transactions announced on   June 8, 2015, on June 7, 2015 the Board of Directors accelerated   the vesting provisions applicable to all stock options and RSUs outstanding   at that date. See *Equity Awards*   section above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (2)    | The value realized upon exercise is determined by multiplying   (i) the closing price on the date of exercise, less the option exercise   price, by (ii) the number of options exercised.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (3)    | On July 15, 2013, Dr. Cox was granted 12,500 stock options   with an exercise price of US$3.55 (C$4.54) for his service as a director. On   June 29, 2015, he exercised all 12,500 of these options and realized a   gain of US$4,876 (C$6,238). On October 29, 2014, Dr. Cox was   granted 150,000 stock options with an exercise price of US$3.49 (C$4.47) for   his service as Interim CEO. On June 29, 2015, he exercised 60,000 of   these options and realized a gain of US$26,691 (C$34,140).                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (4)    | Stock awards consist of DSUs and RSUs. The DSUs vest in   36 successive and equal monthly installments beginning on the first day   of the first month after the grant date. The RSUs vest in three successive   and equal annual installments on the date of each of the first three annual   general meetings of QLT held after the date of grant. The value of the   DSUs realized upon vesting was determined by multiplying the closing price of   QLT’s common shares at each month’s vesting date, by the quantity of   DSUs vested in the period. The value of the RSUs vested was determined   by multiplying the applicable closing price of QLT’s shares on the TSX on the   share issuance date by the quantity of RSUs vested. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (5)    | In July 2013, Dr. Cox was granted 11,000 DSUs for his   service as a member of the Board of Directors, of which 3,667 vested during   2015. In July 2012, Dr. Cox was granted 11,000 DSUs for his   service as a member of the Board of Directors, of which 2,139 vested   during 2015. Vested DSUs are settled in cash and not shares and settled only   after a director ceases to be a member of the Board. The estimated value of   the units that vested in 2015 was US$21,201 (C$27,118).                                                                                                                                                                                                                                        |

 

18

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|   | In   July 2013, Dr. Cox was also granted 6,000 RSUs, of which 2,000   vested on December 15, 2014 (i.e. QLT’s 2014 annual meeting date) and   2,000 shares were consequently issued. As described above, on June 7,   2015 the Board of Directors accelerated the vesting provisions applicable to   all outstanding RSUs. As a result, 4,000 of Dr. Cox’s RSUs vested on   June 7, 2015 and 4,000 shares were issued.  The total value attributable to these   shares was estimated at US$14,573 (C$18,640) based on the C$4.66 (US $3.64)   closing price of QLT’s shares on the TSX on Friday June 5, 2015, the   last trading day before the accelerated vesting date of June 7, 2015, by   the quantity of RSUs vested. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

**Pension Benefits and Nonqualified Deferred Compensation**

 

We do not have any pension plans or nonqualified deferred compensation plans for our named executive officers.

 

**Employment Agreements, Post-Employment Compensation and Change in Control Arrangements**

 

We have entered into the agreements summarized below with our named executive officers.

 

***Employment Agreement with Dr. Geoffrey F. Cox.***On October 23, 2014, Dr. Cox entered into a six-month employment agreement with QLT to serve as the Company’s Interim Chief Executive Officer, which was extended for additional six month periods on April 21, 2015, October 8, 2015 and April 7, 2016. Dr. Cox is entitled to receive a base salary of US$40,000 per month, health-related benefits, paid vacation, and expense reimbursement in accordance with Company policies. Under the terms of Dr. Cox’s employment agreement, QLT is required to provide him with a tax equalization payment if the resulting Canadian taxes associated with his employment by QLT exceed the U.S. tax he would have been required to pay had his employment been entirely performed in the State of Massachusetts.  In connection with his appointment, on October 29, 2014 QLT granted Dr. Cox options to purchase 150,000 common shares of QLT at an exercise price of C$4.47 (being the closing price of QLT’s common shares on the TSX on the date of the grant). These options vested over 6 months and have a ten year term. On June 29, 2015, Dr. Cox exercised 60,000 of these stock options and was issued 60,000 common shares, leaving 90,000 stock options outstanding and vested as at December 31, 2015. If during his employment term Dr. Cox is either terminated without cause or there is a change of control followed by the termination of his employment, then any unvested portion of stock options he holds at that time will vest immediately.  Following his termination, all vested and unexercised options will be exercisable for 90 days following the later of his termination date and the date that Dr. Cox ceases to be an employee and director of QLT. In accordance with the amendment entered into on October 8, 2015, the Company also agreed, subject to Board approval, to grant Dr. Cox up to an additional 150,000 stock options subject to certain terms and conditions. In the event that QLT terminates the employment of Dr. Cox prior to the end of his employment term, other than for cause, he will be entitled to receive the lesser of two months of base salary and the base salary for the balance of his employment term. Following termination of employment, Dr. Cox will be bound by non-competition and non-solicitation terms, which prohibit him from participating in a competitive business or soliciting QLT’s customers or employees for a period of nine months following the termination of his employment with QLT. Dr. Cox does not receive director fees for Board service during the term of his employment.

 

***Employment Agreement with W. Glen Ibbott.***On January 5, 2015, Mr. Ibbott entered into an employment agreement with QLT to assume the position of Vice President, Finance and Interim Chief Financial Officer. Based on the terms of his employment agreement with QLT (as amended on November 5, 2015),  Mr. Ibbott is entitled to base salary, cash incentive compensation under QLT’s cash incentive compensation plan, participation in the 2000 Plan, and other health-related benefits and registered retirement savings plan employer matching contributions. On November 5, 2015, Mr. Ibbott’s employment was amended to reflect (a) his promotion to Senior Vice President, Finance and Chief Financial Officer, (b) a base salary increase from C$275,000 (US $214,995) to C$300,000 (US $234,540), and (c) an increase in his target bonus percentage from 35% to 40% of his base salary. In the event that QLT terminates the employment of Mr. Ibbott without cause, his employment agreement provides that he is entitled to (a) notice or pay in lieu of notice equal to six months of base salary, plus one additional month of base salary for each completed year of service (to a maximum of 12 months in total), (b) payment of bonus earned to the date of termination as if all corporate and individual goals for that year were achieved but not exceeded, (c)  continuation of health benefits with the exception of short-term disability, long-term disability and out of country travel coverage, for 30 days after his last active day of employment provided that such continuation is approved by QLT’s insurance provider, thereafter, compensation will be in the amount of 10% of base salary for the balance of the severance period, and (d) a prorated RRSP payment for the portion of the current calendar year worked plus the length of the severance period. On January 31, 2016, Mr. Ibbott received a C$100,000 (US $78,180) retention bonus in accordance with the terms of his employment agreement. Following termination of employment, Mr. Ibbott is bound by the terms of a non-competition and non-solicitation agreement, which prohibits him from participating in a competitive business or soliciting QLT’s customers or employees for a period of one year following the termination of his employment.

 

***Employment Agreement with Dori C. Assaly.***On June 14, 2013, Ms. Assaly entered into an employment agreement with QLT to assume the position of Vice President, Legal Affairs and Corporate Secretary. Based on the terms of the employment agreement, Ms. Assaly is entitled to base salary, cash incentive compensation under QLT’s cash incentive compensation plan, participation in the 2000 Plan, and other health-related benefits and registered retirement savings plan employer matching contributions. On November 5, 2015, Ms. Assaly’s employment was amended to reflect (a) her promotion to Senior Vice President, Legal and Corporate Secretary, (b) a base salary increase from C$262,444 (US $205,179) to C$300,000 (US $234,540), and (c) an increase in her target bonus percentage from 35% to 40% of her base salary. In the event that QLT terminates the employment of Ms. Assaly without cause, the employment agreement provides that she is entitled to (a) 12 months’ notice or at the election of Ms. Assaly, pay in lieu of notice equivalent to 12 months’ base salary, (b) payment of bonus earned to the date of termination as if all corporate and individual goals for that year were achieved but not exceeded, (c) continuation of health benefits with the exception of short-term disability, long-term disability and out of country travel coverage, for 30 days after her last active day of employment provided that such continuation is approved by QLT’s insurance provider, thereafter, compensation will be in the amount of 10% of base salary for the balance of the severance period, (d) a prorated  RRSP payment for the portion of the current calendar year worked plus the length of the severance period, and (e) payment for outplacement counselling services to assist her in seeking alternative employment.  On January 31, 2016, Ms. Assaly received a C$121,117 (US 

 

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$95,471) retention bonus in accordance with the terms of the letter agreement entered into with QLT on January 9, 2015.  Following termination of employment, Ms. Assaly is bound by the terms of a non-competition and non-solicitation agreement, which prohibits her from participating in a competitive business or soliciting QLT’s customers or employees for a period of one year following the termination of her employment.

 

***Employment Agreement with Dr. Lana E. Janes.***On January 1, 2010, Dr. Janes entered into an employment agreement with QLT to assume the position of Vice President, Intellectual Property and Chief Patent Officer. Based on the terms of the employment agreement, Dr. Janes is entitled to base salary, cash incentive compensation under QLT’s cash incentive compensation plan, participation in the 2000 Plan, and other health-related benefits and registered retirement savings plan employer matching contributions. On November 5, 2015, Dr. Janes’ employment was amended to reflect (a) her promotion to Senior Vice President, Intellectual Property and Technology Development, and Chief Patent Officer, (b) a base salary increase from C$262,795 (US $205,453) to C$300,000 (US $234,540), and (c) an increase in her target bonus percentage from 35% to 40% of her base salary. In the event that QLT terminates the employment of Dr. Janes without cause, the employment agreement provides that she is entitled to, subject to a duty to mitigate, (a) notice or pay in lieu of notice equal to nine months of base salary, plus one additional month of base salary for each complete year of service (to a maximum of 24 months in total), (b) payment of bonus earned to the date of termination as if all corporate and individual goals for that year were achieved but not exceeded, (c) continuation of health benefits with the exception of short-term disability, long-term disability and out of country travel coverage, for 30 days after the last active day of employment provided that such continuation is approved by QLT’s insurance provider, thereafter, compensation will be in the amount of 10% of base salary for the balance of the severance period, (d) a prorated RRSP payment  for the portion of the current calendar year worked, and (e) payment for outplacement counselling services to assist her in seeking alternative employment. Dr. Janes’ duty to mitigate does not apply in the event she executes and delivers to QLT within 30 days after termination a release in the form prescribed in her employment agreement. On January 31, 2016, Dr. Janes received a C$131,400 (US $102,728) retention bonus in accordance with the terms of the letter agreement entered into with QLT on January 9, 2015.  Following termination of employment, Dr. Janes is bound by the terms of a non-competition and non-solicitation agreement, which prohibits her from participating in a competitive business or soliciting QLT’s customers or employees for a period of one year following the termination of her employment.

 

***Employment Agreement with Sukhi Jagpal.***  On November 5, 2012, Mr. Jagpal entered into an amended and restated employment agreement with QLT, which was further amended on February 27, 2013. Based on the terms of the employment agreement (as amended), Mr. Jagpal was entitled to the following compensation during this employment with QLT: base salary, cash incentive compensation under QLT’s cash incentive compensation plan, participation in the 2000 Plan, and other health-related benefits and registered retirement savings plan employer matching contributions.

 

On November 26, 2014, Mr. Jagpal resigned from service as Chief Financial Officer of QLT and his employment ceased on January 26, 2015. On January 30, 2015 he received certain severance and termination benefits in accordance with the terms of his employment agreement, which are summarized below.

 
| **Compensation:**                             |   |   |    |
|-----------------------------------------------|--------|--------|---------|
| 12 Months’   Base Salary (1)        |   | $      | 195,450 |   |
| Cash Bonus                                    |   |   |    |
| 2014 Performance   Period (2)                 |   | 66,569 |    |
| 2015 Performance   Period (3)                 |   | 4,566  |    |
| **Benefits   and Perquisites:**               |   |   |    |
| 12 Months’   RRSP Contributions (4) |   | 9,745  |    |
| Benefits   Compensation (5)                   |   | — |    |
| **Total**                                     |   | $      | 276,330 |   |

 

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| *      | Note: The table above reflects the U.S. dollar equivalent of   amounts that were paid in Canadian dollars. These amounts were converted   using an average of 2015 noon buying rates published by the Federal Reserve   Bank of New York US$1.00 = C$1.2791.                                                                                                                                                                                                                                             |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (1)    | Represents a lump-sum severance payment of C$250,000 (US$195,450),   which is equivalent to 12 months of base salary.                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (2)    | Represents a lump-sum payment of C$85,148 (US$66,569) pertaining to   Mr. Jagpal’s 2014 bonus amount payable under QLT’s cash incentive   compensation plan.                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (3)    | Represents a lump-sum payment of C$5,840 (US$4,566) pertaining to   Mr. Jagpal’s 2015 bonus amount payable under QLT’s cash incentive   compensation plan for the 2015 performance period. The payment was calculated   as if all individual goals were achieved but not exceeded and corporate goals   were assessed based on the average percentage of the three preceding years.   Mr. Jagpal’s 2015 bonus amount was pro-rated for the actual period he   worked during the 2015 calendar year. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (4)    | Represents a RRSP matching contributions for the 12 month period   following Mr. Jagpal’s termination date. As Mr. Jagpal participated   in QLT’s RRSP program, the payment reflected above does not include his   contributions up to the resignation date, which were already paid prior to   his resignation date.                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (5)    | Upon his resignation, Mr. Jagpal was not entitled to receive any   benefit compensation payments given that he commenced employment with a third   party immediately following his resignation.                                                                                                                                                                                                                                                                                                                              |

 

Following termination of employment, Mr. Jagpal continues to be bound by the terms of a non-competition and non-solicitation agreement, which prohibits him from participating in a competitive business or soliciting QLT’s customers or employees for a period of two years following the termination of his employment.

 

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***Stock Options.***  Stock options that have been awarded to an executive officer are governed by the terms of the stock option agreements entered into between QLT and its executive officers, which provide:

 

·                  In the event of retirement, unless otherwise determined by the Compensation Committee, (i) if the executive officer has worked with QLT for at least 20 years, or (ii) is at least 60 years of age and has worked continuously on behalf of QLT for at least five years, then all of his previously unvested stock options will vest, and all stock options will remain exercisable until the expiration date of the stock options. In the event of retirement where neither (i) or (ii) above is applicable, and the retiree has received the consent of the Compensation Committee, then the retiree’s stock options will immediately vest and will terminate upon the earlier of (a) 90 days following the retirement date, or (b) the expiration date of the stock option.

 

·                  In the event of death or termination due to disability, all previously unvested stock options of the executive officer will vest, and all stock options will remain exercisable until the earlier of (a) twelve months following the date of death or termination due to disability of the named executive officer, or (b) the expiration date of the stock option.

 

·                  In the event of a termination of the executive officer’s employment other than for cause, all vested stock options will remain exercisable until the earlier of (a) 90 days following his termination of service, or (b) the expiration date of the stock option.

 

With the exception of stock options granted to Dr. Cox on October 29, 2014 which provide for automatic acceleration upon termination without cause following a change of control, any accelerated vesting of stock options granted to executive officers following a change of control will be at the QLT Board of Directors’ discretion.

 

***Change of Control Agreements*****.** Prior to the Company’s 2012 annual general meeting, the Company entered into separate change of control agreements with each of its named executive officers and executive officers at the time, including Dr. Janes. Other than Dr. Janes, none of the Company’s current named executive officers is a party to a change of control agreement.

 

Dr. Janes’ 2011 Change of Control Agreement contains a “double-trigger” change of control severance provision, such that the change of control does not, by itself, trigger the severance entitlements. The 2011 Change of Control Agreement provides that, in the event of termination by QLT of Dr. Janes’ employment without cause or by Dr. Janes after a triggering event (as the terms “cause” and “triggering event” are defined in the agreement) within a period of 24 months following a change of control of QLT, she will receive a severance payment equal to 18 months’ base salary, the maximum RRSP matching contribution to which Dr. Janes would otherwise be entitled during the severance period, amounts in lieu of certain other health and retirement benefits for the severance period, relocation expenses, outplacement counselling and an annual cash incentive compensation entitlement calculated at the target cash incentive compensation entitlement that would otherwise have been paid during the severance period. For more information, refer to the *Employment Agreements, Post-Employment Compensation and Change in Control Arrangements—Letter Agreement with Dr. Lana Janes* section above.

 

A change of control includes an event in which any person acquires 35% or more of the voting securities of QLT, the sale of all or substantially all of the assets of QLT (other than to an affiliate of QLT or to an entity in which our shareholders held 65% of the voting securities prior to the sale), a merger or other reorganization involving QLT in which the original shareholders of QLT own less than 65% of the resulting merged entity, or a change in the majority of the directors on the Board in any consecutive 24 month period or less such that a majority of the Board members ceases to comprise individuals who either have been (a) Board members continuously since the beginning of such period, or (b) appointed or nominated for election as Board members during such period by at least a majority of the Board members described in subsection (a) above who were still in office at the time the Board approved such appointment or nomination.

 

***Potential Payments upon Termination or Change in Control*****.**

 

The amount of compensation payable to our named executive officers in the event of a termination of employment or a change of control is set forth in the tables below. The amounts in the tables below were calculated assuming the termination of the named executive officer’s employment occurred as of December 31, 2015.

 

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***Geoffrey F. Cox***

 
| **Benefits and Payments upon   Termination** | ** ** | **Resignation ****(3)** | ** ** | **Retirement ****(4)** | ** ** | **Termination for   Cause ****(5) ** | ** ** | **Termination other   than for Cause ****(6) ** | ** ** | **Termination due   to Inability to Act**** ****(7)** | ** ** | **Death ****(8)** | ** ** | **Termination upon a   Change in Control   of QLT ****(9)** | ** ** |
|-------------------------------------------------------------|------------|------------------------------|------------|-----------------------------|------------|-----------------------------------------------------|------------|--------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------|------------|------------------------|------------|-------------------------------------------------------------------------------------------|------------|
| **Compensation:**                                           |       |                         |       |                        |       |                                                |       |                                                                     |       |                                                                           |       |                   |       |                                                                                      |       |
| Base Salary                                                 |       | $                            | 40,000     |                        | $          | 40,000                                              |       | $                                                                        | —     |                                                                           | $          | 80,000                 |       | $                                                                                         | 80,000     |   | $ | — |   | $ | 80,000 |   |
| **Option Awards**(1)                                        |       |                         |       |                        |       |                                                |       |                                                                     |       |                                                                           |       |                   |       |                                                                                      |       |
| Vested                                                      |       | $                            | —     |                        | $          | —                                              |       | $                                                                        | —     |                                                                           | $          | —                 |       | $                                                                                         | —     |   | $ | — |   | $ | — |   |
| Unvested and Accelerated                                    |       | $                            | —     |                        | $          | —                                              |       | $                                                                        | —     |                                                                           | $          | —                 |       | $                                                                                         | —     |   | $ | — |   | $ | — |   |
| **Stock Awards**(2)                                    |       |                         |       |                        |       |                                                |       |                                                                     |       |                                                                           |       |                   |       |                                                                                      |       |
| Vested                                                      |       | $                            | 56,675     |                        | $          | 56,675                                              |       | $                                                                        | —     |                                                                           | $          | 56,675                 |       | $                                                                                         | 56,675     |   | $ | 56,675 |   | $ | 56,675 |   |
| Unvested and Accelerated                                    |       | $                            | —     |                        | $          | —                                              |       | $                                                                        | —     |                                                                           | $          | —                 |       | $                                                                                         | 6,103      |   | $ | 6,103 |   | $ | 6,103 |   |
| **Benefits and Perquisites:**                               |       |                         |       |                        |       |                                                |       |                                                                     |       |                                                                           |       |                   |       |                                                                                      |       |
| Benefits Compensation                                       |       | $                            | 5,816      |                        | $          | 5,816                                               |       | $                                                                        | —     |                                                                           | $          | —                 |       | $                                                                                         | —     |   | $ | 15,048 |   | $ | — |   |
| Total                                                       |       | $                            | 102,491    |                        | $          | 102,491                                             |       | $                                                                        | —     |                                                                           | $          | 136,675                |       | $                                                                                         | 142,779    |   | $ | 77,826 |   | $ | 142,779 |   |

 

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| *      | Note: Where amounts were denominated in Canadian dollars under the   applicable agreement, the amounts reflected above represent the   U.S. dollar equivalent of those amounts converted using an average of   2015 noon buying rates published by the Federal Reserve Bank of   New York: US$1.00 = C$1.2791.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (1)    | As at December 31, 2015, Dr. Cox had 90,000 vested stock   options and nil unvested stock options outstanding. Given that the C$4.47   (US$3.49) exercise price applicable to these stock options exceeded the   December 31, 2015 C$3.65 (US $2.85) closing price of QLT’s share on the   TSX (i.e. the stock options are “out-of-the money”), no values have been   reflected in the table above for these stock options. For a summary of stock   options exercised by Dr. Cox during 2015, refer to the *2015 Options Exercised and Stock Vested*section above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (2)    | Stock awards include DSUs and RSUs. As at December 31, 2015,   Dr. Cox had nil RSUs and 22,000 DSUs outstanding. As of   December 31, 2015, 19,861 of Dr. Cox’s DSUs were vested and   2,139 were unvested. As at December 31, 2015, the value of   Dr. Cox’s vested DSUs was $56,675 and the value of his unvested DSUs was   $6,103 based on the C$3.65 (US$2.85) closing price of QLT’s shares on the TSX   on December 31, 2015, the last trading day in 2015.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (3)    | Under the terms of Dr. Cox’s employment agreement, he is required   to provide 30 days of written notice to QLT in the event of his resignation.   Upon satisfaction of the 30 day notice period, Dr. Cox is entitled to   base salary for the shorter of (i) the 30 day notice period and   (ii) either the period to the expiry of the original 6 month employment   term or, if applicable, the expiry of the extended employment term. Assuming   resignation on December 31, 2015, Dr. Cox is entitled to receive   $40,000 of base salary, which represents his base salary for the 30 day   notice period, and benefits of $5,816, which coincides with the 30 day notice   period.                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (4)    | Under the terms of Dr. Cox’s employment agreement, there are no   provisions with respect to retirement. However, if Dr. Cox did retire   the severance benefits under the *Resignation*category   would apply.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (5)    | In the event of termination for cause, Dr. Cox would not be   entitled to any advance notice of termination or pay in lieu thereof. In   addition, all vested and unvested stock options, vested and unvested DSUs and   unvested RSUs would be subject to immediate cancellation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (6)    | If Dr. Cox is terminated without cause, under the terms of his   employment agreement (as amended on October 8, 2015), he is entitled to   receive a severance amount equal to the lesser of (i) two months of base   salary and (ii) the base salary for the period from his termination date   to April 22, 2016 (i.e. the end of his employment term). In addition,   Dr. Cox’s benefits coverage will cease on his termination date. Assuming   termination without cause and Dr. Cox ceases to act as a director of   QLT, all vested DSUs would be subject to cash payout, the value of which is   estimated at $56,675 based on the December 31, 2015 closing TSX share   price, and unvested DSUs will be cancelled immediately. No value has been   ascribed to Dr. Cox’s 90,000 vested and outstanding stock options as at   December 31, 2015 given that they were “out-of-the-money”.                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (7)    | If Dr. Cox is terminated due to disability, under the terms of   his employment agreement (as amended on October 8, 2015), he is entitled   to receive a payment equal to the lesser of (i) two months of base   salary and (ii) the base salary for the period from his termination date   to April 22, 2016 (i.e. the end of his employment term). In addition,   Dr. Cox’s benefits coverage will cease on his termination date. In the   event of termination due to disability and assuming Dr. Cox ceases to   act as a director of QLT, all unvested DSUs are subject to immediate   accelerated vesting. The value of Dr. Cox’s vested DSUs and unvested   DSUs as at December 31, 2015 was $56,675 and $6,103, respectively (see   above for an explanation of calculated amounts).                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (8)    | In the event of death, Dr. Cox’s estate would be entitled to   receive his base salary up to the date of death and an amount equal to 10% of   his base salary for the period from the date of death to the expiry of his 18   month employment term (in lieu of benefits coverage for his eligible   dependents). Given that the date of death is assumed to be December 31,   2015 for the purposes of this analysis, no amounts would be outstanding in   respect of his base salary. The value of the benefits coverage payment is   estimated at $15,048. All unvested DSUs and RSUs are subject to immediate   accelerated vesting in the event of death. The value of Dr. Cox’s vested   and unvested DSUs as at December 31, 2015 was $56,675 and $6,103,   respectively (see above for an explanation of calculated amounts). No value   has been ascribed to Dr. Cox’s 90,000 vested and outstanding stock   options as at December 31, 2015 given that they were “out-of-the-money”.   However, his estate would have 12 months following the date of death to   exercise his vested options. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (9)    | Under the terms of Dr. Cox’s employment agreement, there are no   provisions with respect to termination upon a change of control. However, if   Dr. Cox was terminated following a change of control and assuming   Dr. Cox ceases to act as a director of QLT, the severance benefits under   the *Termination other than for Cause*category   would apply. In the event of termination due to a change of control, all   unvested DSUs are subject to immediate accelerated vesting. The value of   Dr. Cox’s unvested DSUs as at December 31, 2015 was $6,103 (see   above for an explanation of calculated amounts). No value has been ascribed   to Dr. Cox’s 90,000 vested and outstanding stock options as at   December 31, 2015 given that they were “out-of-the-money”.                                                                                                                                                                                                                                                                                                                  |

 

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***W. Glen Ibbott***

 
| **Benefits and Payments upon   Termination** | ** ** | **Resignation ****(2)** | ** ** | **Retirement ****(3)** | ** ** | **Termination for   Cause ****(4) ** | ** ** | **Termination other   than for Cause ****(5) ** | ** ** | **Termination due   to Inability to Act**

** ****(6)** | ** ** | **Death ****(7)** | ** ** | **Termination upon a   Change in Control   of QLT ****(8) ** | ** ** |
|-------------------------------------------------------------|------------|------------------------------|------------|-----------------------------|------------|-----------------------------------------------------|------------|--------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------|------------|------------------------|------------|-------------------------------------------------------------------------------------------------|------------|
| **Compensation:**                                           |       |                         |       |                        |       |                                                |       |                                                                     |       |                                                                             |       |                   |       |                                                                                            |       |
| Base Salary                                                 |       | $                            | 39,090     |                        | $          | 39,090                                              |       | $                                                                        | —     |                                                                             | $          | 117,270                |       | $                                                                                               | 117,270    |   | $ | — |   | $ | 117,270 |   |
| Cash Bonus                                                  |       |                         |       |                        |       |                                                |       |                                                                     |       |                                                                             |       |                   |       |                                                                                            |       |
| 2015 Performance Period                                     |       | $                            | —     |                        | $          | —                                              |       | $                                                                        | —     |                                                                             | $          | 78,104                 |       | $                                                                                               | 78,104     |   | $ | 78,104 |   | $ | 78,104 |   |
| Subsequent Performance Periods                              |       | $                            | —     |                        | $          | —                                              |       | $                                                                        | —     |                                                                             | $          | —                 |       | $                                                                                               | —     |   | $ | — |   | $ | — |   |
| 2015 Retention Period                                       |       | $                            | 78,180     |                        | $          | 78,180                                              |       | $                                                                        | 78,180     |                                                                             | $          | 78,180                 |       | $                                                                                               | 78,180     |   | $ | 78,180 |   | $ | 78,180 |   |
| **Option Awards**(1)                                        |       |                         |       |                        |       |                                                |       |                                                                     |       |                                                                             |       |                   |       |                                                                                            |       |
| Vested                                                      |       | $                            | —     |                        | $          | —                                              |       | $                                                                        | —     |                                                                             | $          | —                 |       | $                                                                                               | —     |   | $ | — |   | $ | — |   |
| Unvested and Accelerated                                    |       | $                            | —     |                        | $          | —                                              |       | $                                                                        | —     |                                                                             | $          | —                 |       | $                                                                                               | —     |   | $ | — |   | $ | — |   |
| **Benefits and Perquisites:**                               |       |                         |       |                        |       |                                                |       |                                                                     |       |                                                                             |       |                   |       |                                                                                            |       |
| RRSP Contributions                                          |       | $                            | 2,736      |                        | $          | 2,736                                               |       | $                                                                        | —     |                                                                             | $          | 8,209                  |       | $                                                                                               | 8,209      |   | $ | — |   | $ | 8,209 |   |
| Benefits Compensation                                       |       | $                            | 1,110      |                        | $          | 1,110                                               |       | $                                                                        | —     |                                                                             | $          | 10,327                 |       | $                                                                                               | 10,327     |   | $ | 23,454 |   | $ | 10,327 |   |
| Total                                                       |       | $                            | 121,116    |                        | $          | 121,116                                             |       | $                                                                        | 78,180     |                                                                             | $          | 292,090                |       | $                                                                                               | 292,090    |   | $ | 179,737 |   | $ | 292,090 |   |

 

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| *      | Note:   All amounts were denominated in Canadian dollars and have been converted into   U.S. dollar equivalents for reporting purposes using an average of 2015   noon buying rates published by the Federal Reserve Bank of New York:   US$1.00 = C$1.2791.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (1)    | On   January 6, 2015, Mr. Ibbott was granted 100,000 stock options, with   a 10 year expiration term, upon his appointment to Interim CFO. On   June 7, 2015 the Board of Directors accelerated the vesting of all   unvested stock options in connection with certain strategic transactions   announced on June 8, 2015. As a result, all of Mr. Ibbott’s stock   options were vested and exercisable as at December 31, 2015. However,   given that the applicable C$4.84 (US $3.78) exercise price of these stock   options exceeded the December 31, 2015 C$3.65 (US$2.85) closing price of   QLT’s shares on the TSX, they were determined to be “out-of-the money” as at   December 31, 2015. As such, the value of these stock options has been   reflected at a nil in the table above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (2)    | In   the event of resignation, Mr. Ibbott is required to provide 60 days of   written notice to QLT pursuant to the terms of his employment agreement (as   amended on November 5, 2015). If, following the receipt of his   resignation notice, QLT elects to terminate Mr. Ibbott’s employment   earlier than the 60 day notice period, QLT will be required to pay the   following amounts in lieu of notice: (i) US $39,090 (C$50,000) for base   salary owing for the 60 day notice period, (ii) US $2,736 (C$3,500) for   his RRSP contribution payment, which is prorated for the applicable 60 day   notice period, and (iii) US $1,110 (C$1,419) for health benefits   coverage for the balance of the 60 day notice period. However, any short term   disability, long term disability, life insurance benefits and accidental   death and dismemberment and out-of-country travel coverage will not continue   beyond his last active working day. Furthermore, upon resignation,   Mr. Ibbott will have no entitlement to his bonus for the year in which   he resigns or any prior year and if his resignation notice is provided prior   to December 31, 2015, he will have no entitlement to his US $78,180   (C$100,000) retention bonus. Given that Mr. Ibbott is assumed to have   resigned on December 31, 2015 for the purposes of this analysis, he is   not eligible to receive his target performance bonus of US $78,104 (C$99,902)   and will be eligible to receive his US $78,180 (C$100,000) retention bonus.   Although Mr. Ibbott’s stock options were “out-of-the money” on   December 31, 2015, he would have 90 days following the 60 day notice   period to exercise his vested stock options. Any unvested stock options   outstanding at the end of the 60 day notice period would be subject to   cancellation. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (3)    | Upon   retirement, Mr. Ibbott would be entitled to the same severance benefits   and subject to the same conditions as outlined under the *Resignation*category.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (4)    | In   the event of termination for cause, Mr. Ibbott would not be entitled to   any advance notice of termination, pay in lieu thereof or target performance   bonus amounts. However, under the terms of his employment agreement he would   still be entitled to receive his 2015 retention bonus. In addition, all vested   and unvested stock options would be subject to immediate cancellation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (5)    | Assuming   a December 31, 2015 termination date, Mr. Ibbott would be entitled   to receive the following severance benefits in the event of termination   without cause: (i) US $117,270 (C$150,000) for base salary owing for a 6   month severance period, which is subject to change depending on the length of   service and a maximum limit of 12 months, (ii) US $8,209 (C$10,500) for   his RRSP contribution payment, which is prorated for his applicable 6 month   severance period, and (iii) US $10,327 (C$13,210) for continuing health   benefits coverage, which represents the cost of coverage for 30 days   immediately following his last active working day plus 10% of his base salary   for the remaining 5 months of his applicable severance period. Short term   disability, long term disability, life insurance benefits and accidental   death and dismemberment and out-of-country travel coverage will not continue   beyond his last active working day. Mr. Ibbott would also be entitled to   receive his 2015 target performance bonus of $78,104 (C$99,902), which   assumes that all corporate and individual goals were met but not exceeded,   and his 2015 retention bonus of US $78,180 (C$100,000). Although   Mr. Ibbott’s stock options were “out-of-the money” on December 31,   2015, he would have 90 days following the December 31, 2015 termination   date to exercise his vested stock options. Any unvested stock options   outstanding as at December 31, 2015 would be subject to cancellation.                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (6)    | In   the event of termination due to disability, Mr. Ibbott would be entitled   to the same severance benefits and subject to the same conditions as outlined   under the *Termination other than for cause*category.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (7)    | In   the event of death, Mr. Ibbott’s estate would be entitled to receive his   base salary up to the date of death and an amount equal to 10% of his annual   base salary (in lieu of benefits coverage for his eligible dependents). Given   that the date of death is assumed to be December 31, 2015 for the   purposes of this analysis, no amounts would be outstanding in respect of his   base salary. The value of the benefits coverage payment is estimated at   $23,454 (C$30,000). Mr. Ibbott’s estate would also be entitled to   receive his 2015 target performance bonus of $78,104 (C$99,902), which assumes   that all corporate and individual goals were met but not exceeded, and his   2015 retention bonus of $78,180 (C$100,000). Upon death, all unvested stock   options would be subject to immediate accelerated vesting. In addition, his   estate would have 12 months following the date of death to exercise his   vested options. The value of Mr. Ibbott’s 100,000 stock options has not   been reflected in the table about given that they were “out-of-the money” on   December 31, 2015.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (8)    | Under   the terms of Mr. Ibbott’s employment agreement (as amended on   November 5, 2015), there are no provisions with respect to termination   upon a change of control. However, if Mr. Ibbott was terminated   following a change of control, the severance benefits under the *Termination other than for Cause*category would apply.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

 

23

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***Dori C. Assaly***

 
| **Benefits and Payments upon   Termination** | ** ** | **Resignation ****(2)** | ** ** | **Retirement ****(3)** | ** ** | **Termination for   Cause ****(4) ** | ** ** | **Termination other   than for Cause ****(5) ** | ** ** | **Termination due   to Inability to Act ****(6)** | ** ** | **Death ****(7)** | ** ** | **Termination upon a   Change in Control   of QLT ****(8) ** | ** ** |
|-------------------------------------------------------------|------------|------------------------------|------------|-----------------------------|------------|-----------------------------------------------------|------------|--------------------------------------------------------------------------|------------|----------------------------------------------------------------------------|------------|------------------------|------------|-------------------------------------------------------------------------------------------------|------------|
| **Compensation:**                                           |       |                         |       |                        |       |                                                |       |                                                                     |       |                                                                       |       |                   |       |                                                                                            |       |
| Base Salary                                                 |       | $                            | 39,090     |                        | $          | 39,090                                              |       | $                                                                        | —     |                                                                       | $          | 234,540                |       | $                                                                                               | 234,540    |   | $ | — |   | $ | 234,540 |   |
| Cash Bonus                                                  |       |                         |       |                        |       |                                                |       |                                                                     |       |                                                                       |       |                   |       |                                                                                            |       |
| 2015 Performance Period                                     |       | $                            | —     |                        | $          | —                                              |       | $                                                                        | —     |                                                                       | $          | 75,188                 |       | $                                                                                               | 75,188     |   | $ | 75,188 |   | $ | 75,188 |   |
| Subsequent Performance Periods                              |       | $                            | —     |                        | $          | —                                              |       | $                                                                        | —     |                                                                       | $          | —                 |       | $                                                                                               | —     |   | $ | — |   | $ | — |   |
| 2015 Retention Period                                       |       | $                            | 95,471     |                        | $          | 95,471                                              |       | $                                                                        | —     |                                                                       | $          | 95,471                 |       | $                                                                                               | 95,471     |   | $ | 95,471 |   | $ | 95,471 |   |
| **Option Awards**(1)                                        |       |                         |       |                        |       |                                                |       |                                                                     |       |                                                                       |       |                   |       |                                                                                            |       |
| Vested                                                      |       | $                            | —     |                        | $          | —                                              |       | $                                                                        | —     |                                                                       | $          | —                 |       | $                                                                                               | —     |   | $ | — |   | $ | — |   |
| Unvested and Accelerated                                    |       | $                            | —     |                        | $          | —                                              |       | $                                                                        | —     |                                                                       | $          | —                 |       | $                                                                                               | —     |   | $ | — |   | $ | — |   |
| **Benefits and Perquisites:**                               |       |                         |       |                        |       |                                                |       |                                                                     |       |                                                                       |       |                   |       |                                                                                            |       |
| RRSP Contributions                                          |       | $                            | 12,481     |                        | $          | 12,481                                              |       | $                                                                        | —     |                                                                       | $          | 19,662                 |       | $                                                                                               | 19,662     |   | $ | 9,745 |   | $ | 19,662 |   |
| Benefits Compensation                                       |       | $                            | 1,246      |                        | $          | 1,246                                               |       | $                                                                        | —     |                                                                       | $          | 22,122                 |       | $                                                                                               | 22,122     |   | $ | 23,454 |   | $ | 22,122 |   |
| Outplacement Counseling                                     |       | $                            | —     |                        | $          | —                                              |       | $                                                                        | —     |                                                                       | $          | 3,909                  |       | $                                                                                               | 3,909      |   | $ | — |   | $ | 3,909 |   |
| Total                                                       |       | $                            | 148,288    |                        | $          | 148,288                                             |       | $                                                                        | —     |                                                                       | $          | 450,893                |       | $                                                                                               | 450,893    |   | $ | 203,858 |   | $ | 450,893 |   |

 

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| *      | Note:   All amounts were denominated in Canadian dollars and have been converted into   U.S. dollar equivalents for reporting purposes using an average of 2015   noon buying rates published by the Federal Reserve Bank of New York:   US$1.00 = C$1.2791.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (1)    | As   of December 31, 2015, Ms. Assaly had no stock options outstanding.   For more information on stock options exercised by Ms. Assaly during   2015, refer to the *2015 Options Exercised   and Stock Vested*section above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (2)    | In   the event of resignation, Ms. Assaly is required to provide 60 days of   written notice to QLT pursuant to the terms of her employment agreement (as   amended on November 5, 2015). If, following the receipt of her   resignation notice, QLT elects to terminate Ms. Assaly’s employment   earlier than the 60 day notice period, QLT will be required to pay the   following amounts in lieu of notice: (i) US $39,090 (C$50,000) for base   salary owing for the 60 day notice period, (ii) US $12,481 (C$15,965)   for her 2015 RRSP contribution payment, which is reimbursed to her as a   matching contribution because she does not participate in the QLT group plan,   and a 2016 prorated RRSP contribution amount for the applicable 60 day notice   period, and (iii) US $1,246 (C$1,594) for health benefits coverage for   the balance of the 60 day notice period. However, any short term disability,   long term disability, life insurance benefits and accidental death and   dismemberment and out-of-country travel coverage will not continue beyond her   last active working day. Furthermore, upon resignation, Ms. Assaly would   have no entitlement to her bonus for the year in which she resigns or any   prior year and if her resignation notice was provided prior to   December 31, 2015, she would have no entitlement to her US $95,471   (C$122,117) retention bonus. Given that Ms. Assaly is assumed to have   resigned on December 31, 2015 for the purposes of this analysis, she   would not be eligible to receive her target performance bonus of US $75,188   (C$96,173) and would be eligible to receive her US $95,471 (C$122,117)   retention bonus. Furthermore, if Ms. Assaly had any vested and   outstanding stock options on December 31, 2015, she would have 90 days   following the 60 day notice period to exercise her stock options. Any   unvested stock options outstanding at the end of the 60 day notice period   would be subject to cancellation. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (3)    | Upon   retirement, Ms. Assaly would be entitled to the same severance benefits   and subject to the same conditions as outlined under the *Resignation*category.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (4)    | In   the event of termination for cause, Ms. Assaly would not be entitled to   any advance notice of termination, pay in lieu thereof or bonus amounts. In   addition, all vested and unvested stock options would be subject to immediate   cancellation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (5)    | Assuming   a December 31, 2015 termination date, Ms. Assaly would be entitled   to receive the following severance benefits in the event of termination   without cause: (i) US $234,540 (C$300,000) for base salary owing for a   fixed 12 month severance period, (ii) US $19,662 (C$25,150) for her 2015   RRSP contribution payment, which is reimbursed to her as a matching   contribution because she does not participate in the QLT group plan, and a   2016 RRSP contribution amount for the applicable 12 month severance term, and   (iii) US $22,122 (C$28,297) for continuing health benefits coverage,   which represents the cost of coverage for 30 days immediately following her   last active working day plus 10% of her base salary for the remaining 11   months of her 12 month severance term. In addition, QLT would pay for   outplacement counseling services to a maximum of US$3,909 (C$5,000) to assist   Ms. Assaly in seeking alternative employment options. Short term   disability, long term disability, life insurance benefits and accidental   death and dismemberment and out-of-country travel coverage will not continue   beyond her last active working day. Ms. Assaly would also be entitled to   receive her 2015 target performance bonus of US $75,188 (C$96,173), which   assumes that all corporate and individual goals were met but not exceeded,   and her 2015 retention bonus of $95,471 (C$122,117). If Ms. Assaly had   any vested and outstanding stock options as at December 31, 2015, she   would have 90 days following her December 31, 2015 termination date to   exercise her vested stock options. Any unvested stock options outstanding as   at December 31, 2015 would be subject to cancellation.                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (6)    | In   the event of termination due to disability, Ms. Assaly would be entitled   to the same severance benefits and subject to the same conditions as outlined   under the *Termination other than for cause*category.   Note that Ms. Assaly would only become entitled to the outplacement   counseling benefit if her employment is terminated if she becomes permanently   disabled and is unable to perform her duties for a period exceeding six   consecutive months or for a period of 180 days (not necessarily consecutive)   during any period of 365 consecutive days, and thereafter she ceases to be   disabled.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (7)    | In   the event of death, Ms. Assaly’s estate would be entitled to receive her   base salary up to the date of death and an amount equal to 10% of her annual   base salary (in lieu of benefits coverage for her eligible dependents). Given   that the date of death is assumed to be December 31, 2015 for the   purposes of this analysis, no amounts would be outstanding in respect of his   base salary. The value of the benefits coverage payment is estimated at   $23,454 (C$30,000). Ms. Assaly’s estate would also be entitled to   receive: (i) US$9,745 (C$12,465) for her 2015 RRSP contribution payment,   which is reimbursed to her as a matching contribution because she does not   participate in the QLT group plan, (ii) her 2015 target performance   bonus of $75,188 (C$96,173), which assumes that all corporate and individual   goals were met but not exceeded, and her 2015 retention bonus of $95,471   (C$122,117). If Ms. Assaly had outstanding stock options at the time of   her death, all of her unvested stock options would be subject to immediate   accelerated vesting. In addition, her estate would have 12 months following   the date of her death to exercise her vested options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (8)    | Under   the terms of Ms. Assaly’s employment agreement, there are no provisions   with respect to termination upon a change of control. However, if   Ms. Assaly was terminated following a change of control, the severance   benefits under the *Termination other than   for Cause*category would apply.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

 

24

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***Lana E. Janes***

 
| **Benefits and Payments upon   Termination** | ** ** | **Resignation ****(2)** | ** ** | **Retirement ****(3)** | ** ** | **Termination for   Cause ****(4) ** | ** ** | **Termination other   than for Cause ****(5) ** | ** ** | **Termination due   to Inability to Act ****(6)** | ** ** | **Death ****(7)** | ** ** | **Termination upon a   Change in Control   of QLT ****(8) ** | ** ** |
|-------------------------------------------------------------|------------|------------------------------|------------|-----------------------------|------------|-----------------------------------------------------|------------|--------------------------------------------------------------------------|------------|----------------------------------------------------------------------------|------------|------------------------|------------|-------------------------------------------------------------------------------------------------|------------|
| **Compensation:**                                           |       |                         |       |                        |       |                                                |       |                                                                     |       |                                                                       |       |                   |       |                                                                                            |       |
| Base Salary                                                 |       | $                            | 39,090     |                        | $          | 39,090                                              |       | $                                                                        | —     |                                                                       | $          | 371,355                |       | $                                                                                               | 371,355    |   | $ | — |   | $ | 351,810 |   |
| Cash Bonus                                                  |       |                         |       |                        |       |                                                |       |                                                                     |       |                                                                       |       |                   |       |                                                                                            |       |
| 2015 Performance Period                                     |       | $                            | —     |                        | $          | —                                              |       | $                                                                        | —     |                                                                       | $          | 75,270                 |       | $                                                                                               | 75,270     |   | $ | 75,270 |   | $ | 75,270 |   |
| 2015 Retention Period                                       |       | $                            | 102,728    |                        | $          | 102,728                                             |       | $                                                                        | —     |                                                                       | $          | 102,728                |       | $                                                                                               | 102,728    |   | $ | 102,728 |   | $ | 102,728 |   |
| Change of control bonus entitlement                         |       | —                       |       | —                      |       | —                                              |       | —                                                                   |       | —                                                                     |       | —                 |       | 140,724                                                                                         |       |
| **Option Awards**(1)                                        |       |                         |       |                        |       |                                                |       |                                                                     |       |                                                                       |       |                   |       |                                                                                            |       |
| Vested                                                      |       | $                            | —     |                        | $          | —                                              |       | $                                                                        | —     |                                                                       | $          | —                 |       | $                                                                                               | —     |   | $ | — |   | $ | — |   |
| Unvested and Accelerated                                    |       | $                            | —     |                        | $          | —                                              |       | $                                                                        | —     |                                                                       | $          | —                 |       | $                                                                                               | —     |   | $ | — |   | $ | — |   |
| **Benefits and Perquisites:**                               |       |                         |       |                        |       |                                                |       |                                                                     |       |                                                                       |       |                   |       |                                                                                            |       |
| RRSP Contributions                                          |       | $                            | 12,481     |                        | $          | 12,481                                              |       | $                                                                        | —     |                                                                       | $          | 9,745                  |       | $                                                                                               | 9,745      |   | $ | 9,745 |   | $ | 27,871 |   |
| Benefits Compensation                                       |       | $                            | 1,246      |                        | $          | 1,246                                               |       | $                                                                        | —     |                                                                       | $          | 35,804                 |       | $                                                                                               | 35,804     |   | $ | 23,454 |   | $ | 33,849 |   |
| Outplacement Counseling                                     |       | $                            | —     |                        | $          | —                                              |       | $                                                                        | —     |                                                                       | $          | 3,909                  |       | $                                                                                               | 3,909      |   | $ | — |   | $ | 3,909 |   |
| Moving Expenses                                             |       | $                            | —     |                        | $          | —                                              |       | $                                                                        | —     |                                                                       | $          | —                 |       | $                                                                                               | —     |   | $ | — |   | $ | — |   |
| Total                                                       |       | $                            | 155,546    |                        | $          | 155,546                                             |       | $                                                                        | —     |                                                                       | $          | 598,811                |       | $                                                                                               | 598,811    |   | $ | 211,197 |   | $ | 736,162 |   |

 

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| *      | Note:   All amounts were denominated in Canadian dollars and have been converted into   U.S. dollar equivalents for reporting purposes using an average of 2015   noon buying rates published by the Federal Reserve Bank of New York:   US$1.00 = C$1.2791.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (1)    | As   of December 31, 2015, Dr. Janes had no stock options outstanding.   For more information on stock options exercised by Dr. Janes during   2015, refer to the *2015 Options Exercised   and Stock Vested*section above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (2)    | In   the event of resignation, Dr. Janes is required to provide 60 days of   written notice to QLT pursuant to the terms of her employment agreement (as   amended on November 5, 2015). If, following the receipt of her   resignation notice, QLT elects to terminate Dr. Janes’ employment   earlier than the 60 day notice period, QLT will be required to pay the   following amounts in lieu of notice: (i) US $39,090 (C$50,000) for base   salary owing for the 60 day notice period, (ii) US $12,481 (C$15,965)   for her 2015 RRSP contribution payment, which is reimbursed to her as a   matching contribution because she does not participate in the QLT group plan,   and a 2016 prorated RRSP contribution amount for the applicable 60 day notice   period, and (iii) US $1,246 (C$1,594) for health benefits coverage for   the balance of the 60 day notice period. However, any short term disability,   long term disability, life insurance benefits and accidental death and   dismemberment and out-of-country travel coverage will not continue beyond her   last active working day. Furthermore, upon resignation, Dr. Janes would   have no entitlement to her bonus for the year in which she resigns or any   prior year and if her resignation notice was provided prior to   December 31, 2015, she would have no entitlement to her US $102,728   (C$131,400) retention bonus. Given that Dr. Janes is assumed to have   resigned on December 31, 2015 for the purposes of this analysis, she   would not be eligible to receive her target performance bonus of US $75,270   (C$96,278) and would be eligible to receive her US $102,728 (C$131,400)   retention bonus. Furthermore, if Dr. Janes had any vested and   outstanding stock options on December 31, 2015, she would have 90 days   following the 60 day notice period to exercise her stock options. Any   unvested stock options outstanding at the end of the 60 day notice period   would be subject to cancellation. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (3)    | Upon   retirement, Dr. Janes would be entitled to the same severance benefits   and subject to the same conditions as outlined under the *Resignation*category.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (4)    | In   the event of termination for cause, Dr. Janes would not be entitled to   any advance notice of termination, pay in lieu thereof or bonus amounts. In   addition, all vested and unvested stock options would be subject to immediate   cancellation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (5)    | Assuming   a December 31, 2015 termination date, Dr. Janes would be entitled   to receive the following severance benefits in the event of termination   without cause: (i) US $371,355 (C$475,000) for base salary owing for a   19 month severance period, which is subject to change depending on the length   of service and a maximum limit of 24 months, (ii) US $9,745 (C$12,465)   for her 2015 RRSP contribution payment, which is reimbursed to her as a   matching contribution because she does not participate in the QLT group plan,   and (iii) US $35,804 (C$45,797) for continuing health benefits coverage,   which represents the cost of coverage for 30 days immediately following her   last active working day plus 10% of her base salary for the remaining 18   months of her 19 month severance term. In addition, QLT would pay for   outplacement counseling services to a maximum of US$3,909 (C$5,000) to assist   Dr. Janes in seeking alternative employment options. Short term   disability, long term disability, life insurance benefits and accidental death   and dismemberment and out-of-country travel coverage will not continue beyond   her last active working day. Dr. Janes would also be entitled to receive   her 2015 target performance bonus of US $75,270 (C$96,278), which assumes   that all corporate and individual goals were met but not exceeded, and her   2015 retention bonus of US $102,728 (C$131,400). If Dr. Janes had any   vested and outstanding stock options as at December 31, 2015, she would   have 90 days following her December 31, 2015 termination date to   exercise her vested stock options. Any unvested stock options outstanding as   at December 31, 2015 would be subject to cancellation.                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | If   Dr. Janes is terminated without cause and she has not executed and   delivered a release to QLT within 30 days after her termination date, she   will be subject to a *Duty to Mitigate*clause   under the terms of her employment agreement (as amended on November 5,   2015). This clause specifies that Dr. Janes has a duty to mitigate the   above noted severance payments by looking for and accepting suitable   alternative employment or a service contract. If Dr. Janes obtains new   employment or a service contract for 4 weeks or longer, she is obligated to   notify QLT in writing within 5 working days of such an occurrence. Within 10   working days of receipt of her notification of her new employment, QLT is   then obligated to pay Dr. Janes a lump sum amount equivalent to 50% of   the severance pay and benefits compensation described under this scenario.   However, if Dr. Janes does execute and deliver a release to QLT within   the 30 day timeframe, the *Duty to Mitigate*clause   shall be waived and the severance payments and entitlements outlined above   would continue to apply.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (6)    | In   the event of termination due to disability, Dr. Janes would be entitled   to the same severance benefits and subject to the same conditions as outlined   under the *Termination other than for cause*category.   Note that Dr. Janes would only become entitled to the outplacement   counseling benefit if her employment is terminated if she becomes permanently   disabled and is unable to perform her duties for a period exceeding six   consecutive months or for a period of 180 days (not necessarily consecutive)   during any period of 365 consecutive days, and thereafter she ceases to be   disabled.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

 

25

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(7)                                     In the event of death, Dr. Janes’ estate would be entitled to receive her base salary up to the date of death and an amount equal to 10% of her annual base salary (in lieu of benefits coverage for her eligible dependents). Given that the date of death is assumed to be December 31, 2015 for the purposes of this analysis, no amounts would be outstanding in respect of his base salary. The value of the benefits coverage payment is estimated at $23,454 (C$30,000). Dr. Janes’ estate would also be entitled to receive: (i) US$9,745 (C$12,465) for her 2015 RRSP contribution payment, which is reimbursed to her as a matching contribution because she does not participate in the QLT group plan, (ii) her 2015 target performance bonus of $75,270 (C$96,278), which assumes that all corporate and individual goals were met but not exceeded, and her 2015 retention bonus of US $102,728 (C$131,400). If Dr. Janes had outstanding stock options at the time of her death, all of her unvested stock options would be subject to immediate accelerated vesting. In addition, her estate would have 12 months following the date of her death to exercise her vested options.

 

(8)                                    In the event of involuntary termination due to a change of control, Dr. Janes would be entitled to the following severance compensation and benefits: (i) US $351,810 (C$450,000) for base salary owing for a fixed 18 month severance period, (ii) US $140,000 (C$180,000) for an 18 month change of control bonus entitlement, which shall be calculated based on the assumption that all corporate and individual goals were met but not exceeded, (iii) US $75,270 (C$96,278) for her 2015 target performance bonus, which assumes that all corporate and individual goals were met but not exceeded, (iv) US $102,728 (C$131,400) for her 2015 retention bonus, (v) US $9,745 (C$12,465) for her 2015 RRSP contribution payment, which is reimbursed to her as a matching contribution because she does not participate in the QLT group plan, (vi) US $18,126 (C$23,185) for matching RRSP contributions throughout the 18 month severance period, and (vii) US $33,849 (C$43,297) for continuing health benefits coverage, which represents the cost of coverage for 30 days immediately following her last active working day plus 10% of her base salary for the remaining 17 months of her 18 month severance period. In addition, QLT would pay for outplacement counseling services to a maximum of US$3,909 (C$5,000) to assist Dr. Janes in seeking alternative employment options. Short term disability, long term disability, life insurance benefits and accidental death and dismemberment and out-of-country travel coverage will not continue beyond her last active working day. Under the terms of Dr. Janes’ change of control agreement, she is also entitled to reasonable moving expenses as may be incurred by her to relocate her and her family to a new location for future employment. Furthermore, if Dr. Janes had any vested and outstanding stock options as at December 31, 2015, she would have 90 days following her December 31, 2015 termination date to exercise her vested stock options.  Any unvested stock options outstanding as at December 31, 2015 would be subject to cancellation.

 

In the case of a change of control, Dr. Janes has the option to receive her severance compensation and benefits under the terms of her employment agreement or her change of control agreement. She is therefore not entitled to receive severance pay under both agreements. As such, upon a change of control she is required to deliver written notice to QLT with respect to which agreement she wishes to be paid out under.

 

***Sukhi Jagpal***

 

On November 26, 2014, Mr. Jagpal tendered his resignation and provided 60 days of written notice to QLT.  Following Mr. Japgal’s fulfillment of the 60 day notice period and the cessation of his employment on January 26, 2015, he became entitled to receive the severance benefits summarized under the *Post-Employment Compensation and Change in Control Arrangements — Letter Agreement with Sukhi Jagpal* section above.

 

**Compensation Policies and Practices as They Relate to Risk Management**

 

In determining if QLT has any compensation policies and practices that could create risks that would be reasonably likely to have a material adverse effect on QLT, the Compensation Committee reviews its compensation policies and practices, and the mix of compensation elements made available to the executive officers and employees, which generally includes a base salary component and a pay-at-risk component. The pay-at-risk component comprises: (i) variable performance-based compensation, consisting of short-term incentives such as annual cash bonuses based on individual and corporate performance compared to pre-set goals and objectives; and (ii) long-term incentives, consisting of annual grants of long-term stock options.

 

As a result of its review, the Compensation Committee believes that QLT’s compensation policies and practices are not reasonably likely to have a material adverse effect on QLT, and that the compensation policies and practices do not create any incentives for employees to take inappropriate risks for the following reasons, among others:

 

·                  QLT’s compensation is balanced among base salary, annual bonus opportunity and long-term equity;

 

·                  QLT’s annual cash bonus incentive compensation is directly linked to specific performance metrics identified by the Compensation Committee with input from management, such as achieving specific milestones related to the regulatory and clinical development progress for the synthetic retinoid program; completing specific operational activities; and evaluating and implementing shareholder value enhancing initiatives;

 

·                  the Compensation Committee annually designs and assesses performance-based compensation, thereby allowing the Compensation Committee to assess risk management and consequences annually; and

 

·                  QLT’s annual equity incentive awards to employees to date have had an expiration term of 10 years and typically vest over three years, thereby encouraging its employees to focus on sustained growth and stockholder value.

 

26

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**Director Compensation**

 

***Overview***

 

The compensation program for our non-employee directors is intended to fairly compensate them for the time and effort required of a director based upon the size and complexity of our business, as well as, through an equity component of the program, to further align the interests of our non-employee directors with those of our shareholders. The amount and form of director compensation is reviewed periodically by the Compensation Committee, with any resulting recommendations made to the Board, to ensure that such compensation accurately reflects the responsibilities and risks of being an effective director.

 

To assist in its evaluation of director compensation, the Compensation Committee has the authority to retain independent compensation consultants. During 2015, the Board worked with Radford to review QLT’s director compensation programs.

 

The independent directors receive cash and equity-based compensation for their services on the Board as described below.

 

***Cash Compensation***

 

The cash compensation component of our program in 2015 included annual Board and Committee member or Chairman position retainers, meeting attendance fees, and fees paid for attending to Board or Committee business other than for attendance at a meeting. Directors are also eligible for reimbursement of their expenses incurred in connection with attendance at Board meetings in accordance with our policies and up to CAD$1,500 reimbursement for preparation of annual Canadian tax returns. Director retainers and fees are paid to the Board monthly in arrears.

 

Fees paid to the non-employee directors in 2015 were as follows:

 
| **Nature of Board Duty — Effective January 1, 2015 — October 31, 2015**                                                              | ** ** | **Fee (US$)** | ** ** |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------|------------|
| Annual Board   Retainer Fee:                                                                                                                                                                               |       |               |       |
| ·       for all Directors                                                                                                                                               |       | $                  | 30,000     |   |
| ·       additional retainer for Chairman of the Board                                                                                                                   |       | $                  | 45,000     |   |
| Additional   Annual Retainer Fee for Chairman of the Audit and Risk Committee                                                                                                                              |       | $                  | 12,500     |   |
| Additional   Annual Retainer Fee for Chairman of the Scientific Review Committee                                                                                                                           |       | $                  | 10,000     |   |
| Additional   Annual Retainer Fee for Chairman of the Compensation Committee                                                                                                                                |       | $                  | 10,000     |   |
| Additional   Annual Retainer Fee for Chairman of the Corporate Governance and Nominating   Committee                                                                                                       |       | None               |       |
| Additional   Annual Retainer Fee for non-Chairman committee members of Audit and Risk   Committee, Scientific Review Committee, Compensation Committee and Corporate   Governance and Nominating Committee |       | $                  | 5,000      |   |
| Fee for each   Board meeting attended:                                                                                                                                                                     |       |               |       |
| ·       by telephone                                                                                                                                                    |       | $                  | 1,500      |   |
| ·       in person                                                                                                                                                       |       | $                  | 3,000      |   |
| Fee for each   meeting of the Audit and Risk Committee, Scientific Review Committee,   Compensation Committee and Corporate Governance and Nominating Committee   attended:                                |       |               |       |
| ·       by telephone                                                                                                                                                    |       | $                  | 1,500      |   |
| ·       in person                                                                                                                                                       |       | $                  | 3,000      |   |
| Fee to perform   Board or committee business (other than attendance at a Board or committee   meeting) at the specific request of the Board or relevant committee:                                         |       |               |       |
| ·       if no out-of-town travel is required                                                                                                                            |       | $                  | 1,500      |   |
| ·       if out-of-town travel is required                                                                                                                               |       | $                  | 3,000      |   |
| Fee to QLT Board   member for attending operating subsidiary Board meeting as a member of the   Board of Directors of the operating subsidiary (whether in person or by   telephone)                       |       | $                  | 1,500      |   |

 

Effective November 1, 2015, following consultation with Radford and review of the September 2015 Peer Group, the Board, upon recommendation of the Compensation Committee, amended the cash component of our director compensation program to eliminate all per meeting attendance fees and amended retainers associated with Chairmanship and Board and Committee membership positions. The amended retainer fees are outlined in the table below. In addition, directors continued to be eligible for: (i) fees incurred in connection with services provided for Board or Committee business other than meeting attendance, and (ii) reimbursement of expenses incurred in connection with attendance of Board meetings. Director fees continue to be paid to the Board monthly in arrears.

 
| **Nature of Board Duty — Effective November 1, 2015** | ** ** | **Fee (US$)** | ** ** |
|----------------------------------------------------------------------------------------------------|------------|--------------------|------------|
| Annual Board   Retainer Fee:                                                                       |       |               |       |
| ·       for all Directors                                       |       | $                  | 40,000     |   |
| ·       additional retainer for Chairman of the Board           |       | $                  | 40,000     |   |
| Additional   Annual Retainer Fee for Chairman of the:                                              |       |               |       |
| ·       Audit and Risk Committee                                |       | $                  | 20,000     |   |
| ·       Compensation Committee                                  |       | $                  | 15,000     |   |
| ·       Corporate Governance and Nominating Committee           |       | $                  | 10,000     |   |
| ·       Scientific Review Committee                             |       | $                  | 10,000     |   |
| Additional   Annual Retainer Fee for Member of the:                                                |       |               |       |
| ·       Audit and Risk Committee                                |       | $                  | 10,000     |   |
| ·       Compensation Committee                                  |       | $                  | 7,500      |   |
| ·       Corporate Governance and Nominating Committee           |       | $                  | 5,000      |   |
| ·       Scientific Review Committee                             |       | $                  | 5,000      |   |

 

27

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***Equity-Based Compensation***

 

In addition to cash compensation, our non-employee directors also receive equity-based compensation to ensure that their interests are fully aligned with those of our shareholders.

 

We maintain a Directors’ Deferred Share Unit Plan, which we refer to as the “DDSU Plan”. Under the DDSU Plan, at the discretion of the Board, non-employee directors receive a portion of their equity-based compensation in the form of DSUs, each of which has a value equal to the price of our common shares on the TSX. A DSU is convertible only into cash (i.e. no shares are issued), and can only be converted after the director ceases to be a member of the Board. The DSUs vest monthly over 36 months from the first month after the date of grant. The value of a DSU, when converted to cash, will be equivalent to the market value of a QLT common share at the time the conversion takes place. We do not have a history of paying dividends on our common shares; however, if dividends are ever paid on our common shares, a non-employee director’s DSU account will be credited with dividends at the same rate.

 

In addition, directors are eligible to receive grants of options and RSUs under the 2000 Plan. The RSUs vest in 3 successive and equal annual installments on the date of each of the first 3 annual general meetings held by QLT after the grant date. Upon vesting, each RSU represents the right to receive one common share. The Compensation Committee’s objective in recommending the grant of equity awards to independent directors is to provide a reasonable, market-based incentive for directors to deliver increased value to shareholders. Based in part on advice received from Radford in October 2015, the Compensation Committee and the Board have concluded that, going forward, stock options alone are an effective way to align the interests of the non-employee directors with those of the shareholders.

 

Equity grants to the directors typically occur annually, promptly following each annual general meeting of shareholders. For 2015, there were no equity awards made to directors. Stock options and other equity grants that may otherwise have been awarded in 2015 were deferred due to the Company’s special election distribution of the Aralez Shares that was pending throughout 2015 and the decrease in the Company’s share price that was anticipated to occur as a result.

 

On November 4, 2015, the Board of Directors approved a grant of 50,000 stock options for Mr. Aryeh, as Chairman of the Board, and 25,000 for each of the other directors, with the exception of Dr. Cox, our Interim Chief Executive Officer, subject to certain future events and conditions. These grants are not reflected in the Director Awards Outstanding as at December 31, 2015 table as they have not yet been awarded.

 

Also on November 4, 2015, in order to address the loss in value of the DSUs granted to directors in 2012 and 2013 as a result of the special election distribution of the Aralez Shares, the Board of Directors approved a grant of 12,800 DSUs for Mr. Aryeh, as Chairman of the Board, and 6,400 for each of the other directors, including Dr. Cox, subject to certain future events and conditions.  These grants are not reflected in the Director Awards Outstanding as at December 31, 2015 table as they have not yet been awarded.

 

***Minimum Share Ownership Guidelines for Directors***

 

The Board believes it to be in the best interests of our shareholders to specify a minimum level of equity holdings in QLT by each non-employee director to further align the interests of our Board and shareholders. As a result, following consultation with Radford, the independent compensation advisor to our Compensation Committee, we adopted share ownership guidelines for our non-employee directors. Under these guidelines, non-employee directors are encouraged to acquire (if not already held) common shares of QLT as follows:

 

·                  Chairman: an amount equal to three times the Chairman’s annual retainer, satisfied within five years from the date he or she assumes the office of Chairman; and

 

·                  Directors other than the Chairman: an amount equal to three times the director’s annual Board retainer, satisfied within five years from the date the director joined the Board.

 

Holdings of vested in-the-money stock options and vested DSUs are counted towards fulfilling the guidelines. According to Radford, the implementation of share ownership guidelines instituted by the Board is consistent with Institutional Shareholder Services’ guidelines and the broader market best practices.

 

The value of the shares owned for the purposes of fulfilling the share ownership guidelines is determined as the greater of the acquisition cost or the market value at the time of the determination. All of the members of the Board have satisfied the share ownership guidelines to date.

 

Our share ownership guidelines for executive officers are described above under the heading “*Compensation Discussion and Analysis*”.

 

The following table provides information regarding the compensation of our non-employee directors for 2015.

 

28

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**2015 Non-Employee Director Compensation**

 
| ** **                 | ** ** | **Fees Earned or** | ** ** | ** **       | ** ** |
|----------------------------|------------|------------------------------|------------|------------------|------------|
| ** **                 | ** ** | **Paid in Cash**   | ** ** | **Total**        | ** ** |
| **Name ****(1)**      | ** ** | **($) USD**             | ** ** | **($) USD** | ** ** |
| Jason M. Aryeh             |       | $                            | 185,167    |             | $          | 185,167 |   |
| John Kozarich              |       | 71,667                       |       | 71,667           |       |
| Jeffrey A.   Meckler       |       | 107,333                      |       | 107,333          |       |
| Stephen Sabba              |       | 108,333                      |       | 108,333          |       |
| John C.   Thomas, Jr. |       | 101,917                      |       | 101,917          |       |
|                       |       | $                            | 574,417    |             | $          | 574,417 |   |

 

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(1)                                 No stock options, DSUs or RSUs were awarded to QLT’s directors in 2015.

 

**Director Awards Outstanding as at December 31, 2015**

 
| ** **               | ** ** | **Option Awards**                                                                      | ** ** | **Stock Awards ****(3)**                                                            | ** ** |
|--------------------------|------------|---------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------|------------|
| **Name**                 | ** ** | **Total # of   shares   underlying   unexercised   options -   exercisable** | ** ** | **Total # of   shares   underlying   unexercised   options -   unexercisable** | ** ** | **Option   exercise   price** | ** ** | **Option expiration   date** | ** ** | **Value of   unexercised in-   the-money   options ****(1)** | ** ** | **Total # of DSUs   outstanding** | ** ** | **Total # of   vested DSUs** | ** ** | **Value of   outstanding   DSUs ****(4)** | ** ** |
| Jason M. Aryeh           |       | —                                                                                      |       | —                                                                                        |       | — |   | — |   | — |   | 44,000 |   | 39,722 |   | $ | 125,557 |   |
| Geoffrey F. Cox          |       | 90,000                                                                                      | (2)        | —                                                                                        |       | $ | 3.49 |   | October 28,   2024 |   | — |   | 22,000 |   | 19,861 |   | 62,779 |   |
| John Kozarich            |       | —                                                                                      |       | —                                                                                        |       | — |   | — |   | — |   | 22,000 |   | 19,861 |   | 62,779 |   |
| Jeffrey A. Meckler       |       | 225,000                                                                                     |       | —                                                                                        |       | $ | 4.21 |   | November 21,   2023 |   | — |   | 22,000 |   | 19,861 |   | 62,779 |   |
| Stephen Sabba            |       | —                                                                                      |       | —                                                                                        |       | — |   | — |   | — |   | 22,000 |   | 19,861 |   | 62,779 |   |
| John C. Thomas, Jr. |       | —                                                                                      |       | —                                                                                        |       | — |   | — |   | — |   | 22,000 |   | 19,861 |   | 62,779 |   |
|                     |       | 315,000                                                                                     |       | —                                                                                        |       |   |   |   |   |   |   | 154,000 |   |   |   | 439,450 |   |
|                          |            |                                                                                             |            |                                                                                               |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

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*Stock and option awards that were granted/priced in Canadian dollars and have been converted to U.S. dollars for disclosure purposes using an average of 2015 noon buying rates published by the Federal Reserve Bank of New York: US$1.00 = C$1.2791.

 
| (1)    | The   value of the unexercised in-the-money stock options represents the difference   between the December 31, 2015 closing price of QLT’s common shares on   the TSX, being US $2.85 (C$3.65), and the exercise price.                                                                                                                                                                       |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                    |
| (2)    | Reflects   stock options outstanding as at December 31, 2015 that were granted to   Dr. Cox on October 29, 2014 for his service as Interim Chief   Executive Officer and not in his capacity as a director. For more information   on compensation received by Dr. Cox for his service as Interim Chief   Executive Officer, refer to the *Executive Compensation*   section above. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                    |
| (3)    | Stock   awards include RSUs and DSUs. As at December 31, 2015, no RSUs were   outstanding. For a summary of RSUs vested and shares issued in 2015 refer to   the *Director Awards — Value Realized from 2015 Option   Exercises and Stock Awards Vested*section below.                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                    |
| (4)    | The   value of outstanding DSUs as at December 31, 2015 was calculated by   multiplying the total quantity of DSUs outstanding by the December 31,   2015 closing price of QLT’s common shares on the TSX, being US $2.85   (C$3.65). DSUs are settled in cash and can only be converted once a director   ceases to be a member of the Board.                                           |

 

**Compensation Committee Interlocks and Insider Participation**

 

During 2015, each of Jeffrey Meckler, John Thomas, Jr., and Dr. Stephen Sabba served on the Compensation Committee. None of the members of the Compensation Committee during 2015 is or was previously an officer or employee of QLT or has any relationships requiring disclosure under Item 404 of Regulation S-K promulgated by the SEC.

 

None of QLT’s executive officers served during 2015 as members of the compensation committee, or other board committee which performs a similar function, of any entity that had one or more executive officers serving as a member of the QLT Compensation Committee or QLT Board. 

 

John C. Thomas Jr. is a director and a member of the Compensation, Audit and Risk and Corporate Governance and Nominating Committees of QLT. Mr. Thomas is also a director and Chief Financial Officer of CorMatrix Cardiovascular, Inc. (“CorMatrix”). Jason M. Aryeh is a member of the Board of Directors and Compensation Committee of CorMatrix and as such, participates in compensation decisions about Mr. Thomas and CorMatrix’s other executive officers. Mr. Aryeh is the Chairman of the Board of QLT. Mr. Aryeh has not at any time received compensation from QLT other than for his service as a director of QLT.

 

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**Item 12.**                           **Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters**

 

**Securities Authorized for Issuance under Equity Compensation Plans**

 

QLT currently maintains one equity compensation plan, the 2000 Plan. The shareholders and directors of QLT have previously approved the 2000 Plan, pursuant to which directors, officers, employees and consultants of QLT and its affiliates may be granted RSUs and stock options to acquire common shares.

 

The following table sets out information regarding our common shares that may be issued upon the exercise of options, warrants and other rights granted to employees, consultants or directors under our equity compensation plans, as of December 31, 2015:

 
| **Plan Category**                                                    | ** ** | **Number of securities to   be issued upon exercise   of outstanding options,   warrants and rights   (a)** | ** ** | **Weighted-average   exercise price of   outstanding options,   warrants and rights   (b)** | ** ** | **Number of securities   remaining available for   future issuance under   equity compensation plans   (excluding securities   reflected in column (a))   (c)** | ** ** |
|---------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
| Equity   compensation plans approved by security holders (2000 Plan) |       | 428,152                                                                                                                                                       |       | $                                                                                                                    | 3.10       | (1)                                                                                                                                                                                                                         | 3,007,042  | (2) |
| Equity   compensation plans not approved by security holders         |       | —                                                                                                                                                        |       | —                                                                                                               |       | —                                                                                                                                                                                                                      |       |
| Total                                                                     |       | 428,152                                                                                                                                                       |       | $                                                                                                                    | 3.96       | (1)                                                                                                                                                                                                                         | 3,007,042  |   |

 

----

 
| (1)    | Reflects   the weighted average exercise price of stock options outstanding. Where   options were granted/priced in Canadian dollars, the calculated weighted   average exercise price has been converted to U.S. dollars for disclosure   purposes using the December 31, 2015 period end rate published by the   Federal Reserve Bank of New York: U.S.$1.00 = C$1.2791. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                           |
| (2)    | Total   number of securities remaining available for future issuances does not   include stock option grants approved by the Board in 2015, but that have not   yet been awarded.                                                                                                                                                                                                              |

 

30

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**SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT**

 

The following table sets forth the common shares in QLT’s authorized share structure beneficially owned by (i) each of our current directors, (ii) each of our named executive officers, (iii) all of our directors and executive officers as a group, and (iv) all persons known by us to beneficially own more than 5% of our outstanding voting shares. We have determined the beneficial ownership shown on this table in accordance with the rules of the SEC and the applicable Canadian securities regulators. Under those rules, shares are considered beneficially owned if held by the person indicated, or if such person, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares the power to vote, to direct the voting of and/or to dispose of or to direct the disposition of such security. Except as otherwise indicated in the accompanying footnotes, beneficial ownership is shown as of April 22, 2016.

 
| ** **                                                          | ** ** | **Amount and Nature of Beneficial   Ownership** | ** ** | **Total Beneficial   Ownership**                                                                                    | ** ** |
|---------------------------------------------------------------------|------------|---------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------------------|------------|
| **Name of Beneficial Owner****(4)**                  | ** ** | **Shares   Beneficially   Owned**                                   | ** ** | **Shares for Which   Beneficial Ownership   Can Be Acquired Within   60 Days****(1)** | ** ** | **Number of   Shares****(2)** | ** ** | **Percent of Class****(3)** | ** ** |
| **Directors**                                                       |       |                                                                |       |                                                                                                                     |       |   |   |   |   |
| Jason M. Aryeh                                                      |       | 535,478                                                             |       | —                                                                                                                   |       | 535,478 |   | * |   |
| Dr. John W.   Kozarich                                         |       | 57,000                                                              |       | —                                                                                                                   |       | 57,000 |   | * |   |
| Jeffrey A.   Meckler                                                |       | 107,000                                                             |       | 225,000                                                                                                                  |       | 332,000 |   | * |   |
| Dr. Stephen   L. Sabba                                         |       | 37,000                                                              |       | —                                                                                                                   |       | 37,000 |   | * |   |
| John C.   Thomas, Jr.                                          |       | 37,000                                                              |       | —                                                                                                                   |       | 37,000 |   | * |   |
| **Officers**                                                        |       |                                                                |       |                                                                                                                     |       |   |   |   |   |
| W. Glen Ibbott                                                      |       | —                                                              |       | 100,000                                                                                                                  |       | 100,000 |   | * |   |
| Dr. Geoffrey   F. Cox                                          |       | 78,500                                                              |       | 90,000                                                                                                                   |       | 168,500 |   | * |   |
| Dori C. Assaly                                                      |       | 500                                                                 |       | —                                                                                                                   |       | 500 |   | * |   |
| Dr. Lana E.   Janes                                                 |       | —                                                              |       | —                                                                                                                   |       | — |   | * |   |
| Sukhi Jagpal                                                        |       | —                                                              |       | —                                                                                                                   |       | — |   | * |   |
| All directors   and executive officers as a group (10 persons) |       | 852,478                                                             |       | 415,000                                                                                                                  |       | 1,267,478 |   | 2.4 | % |
| **5% Shareholders**                                                 |       |                                                                |       |                                                                                                                     |       |   |   |   |   |
| NB Public Equity   K/S(5)                                           |       | 6,447,626                                                           |       | —                                                                                                                   |       | 6,447,626 |   | 12.20 | % |
| Biotechnology   Value Fund, L.P.(6)                                 |       | 5,364,385                                                           |       | —                                                                                                                   |       | 5,364,385 |   | 10.15 | % |
| Broadfin   Capital LLC(7)                                      |       | 4,445,527                                                           |       | —                                                                                                                   |       | 4,445,527 |   | 8.41 | % |
| Kingstown   Capital Management LP(8)                           |       | 3,250,000                                                           |       | —                                                                                                                   |       | 3,250,000 |   | 6.15 | % |

 

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|   |   |
|--------|--------|

 
| *      | Represents   less than 1%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (1)    | Indicates common shares   that may be acquired upon exercise of outstanding stock options that are   presently exercisable or will be exercisable within 60 days of   April 22, 2016 by the persons named in the table above and by all   directors and executive officers as a group, except where otherwise described   in the Notes to the above table.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (2)    | Excludes DSUs, which   are issued to directors and are payable only in cash. As of April 22,   2016, each of Messrs. Cox, Kozarich, Meckler, Sabba and Thomas hold   21,083 vested DSUs and Mr. Aryeh holds   42,167 vested DSUs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (3)    | Percentage ownership of   QLT common shares is based on 52,829,398 common shares of QLT outstanding on   April 22, 2016.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (4)    | The information in the   table is derived from the System for Electronic Disclosures by Insiders   (SEDI) and Electronic Data Gathering, Analysis, and Retrieval system (EDGAR).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (5)    | The information in the   table and this note is derived from a Schedule 13D/A filed by NB Public   Equity K/S with the SEC on July 15, 2014. Based on information contained   in the Schedule 13D/A, NB Public Equity K/S, NB Public Equity   Komplementar ApS, Cora Madsen and Florian Schönharting (collectively, the “NB   Entities”) are deemed beneficial owners of 6,447,626 shares. Each of the   NB Entities has shared voting and dispositive power over all shares they are   deemed to beneficially own. The business address of NB Public Equity K/S is   Ostergade 24A, 1, DK-1100, Copenhagen K, Denmark.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (6)    | The information in the   table and this note is derived from a Schedule 13G/A filed by   Biotechnology Value Fund, L.P. (“BVF”) with the SEC on December 31,   2015. Based on information contained in the Schedule 13G/A, as of   December 31, 2015, (i) BVF beneficially owned   2,300,892 shares, (ii) Biotechnology Value Fund II, L.P.   (“BVF2”) beneficially owned 1,340,268 shares, and   (iii) Biotechnology Value Trading Fund OS LP (“Trading   Fund OS”) beneficially owned 471,390 shares. BVF Partners   OS Ltd. (“Partners OS”), as the general partner of Trading Fund OS,   may be deemed to beneficially own the 471,390 shares beneficially owned   by Trading Fund OS. BVF Partners L.P. (“Partners”), as the general   partner of BVF, BVF2, the investment manager of Trading Fund OS, and the   sole member of Partners OS, may be deemed to beneficially own the   5,364,385 shares beneficially owned in the aggregate by BVF, BVF2,   Trading Fund OS, and certain Partners management accounts (the “Partners   Management Accounts”), including |

 

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|   | 1,251,835 shares   held in the Partners Management Accounts. BVF Inc., as the general   partner of Partners, may be deemed to beneficially own the   5,364,385 shares beneficially owned by Partners. Mark N. Lampert   (together with BVF, BVF2, Trading Fund OS, Partners OS, Partners   and BVF Inc., the “BVF Entities”),   as a director and officer of BVF Inc., may be deemed to beneficially own   the 5,364,385 shares beneficially owned by BVF Inc. Each of the BVF   Entities has shared voting and dispositive power over all shares they are   deemed to beneficially own. The business address of BVF is 1 Sansome   Street, 30th Floor, San Francisco, California 94104.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (7)    | The   information in the table and this note is derived from a Schedule 13G   filed by Broadfin Capital, LLC with the SEC on June 25, 2015. Based   on information contained in the Schedule 13G, Broadfin   Capital, LLC, Broadfin Healthcare Master Fund, Ltd., and Kevin   Kotler (collectively, the “Broadfin   Entities”) are deemed beneficial owners of 4,445,527 shares. Each   of the Broadfin Entities has shared voting and dispositive power over all   shares they are deemed to beneficially own. The business address of Broadfin   Capital, LLC is 300 Park Avenue, 25th Floor, New York,   New York 10022, United States of America. Broadfin Healthcare   Master Fund, Ltd. was a party to the Backstop Agreement and, on   March 17, 2016, acquired 1,800,000 Aralez Shares from QLT for an   aggregate purchase price of $11.25 million. As announced by QLT on   June 8, 2015, Broadfin Healthcare Master Fund, Ltd. had also agreed   to acquire 5,347,594 common shares of QLT pursuant to the Private   Placement., which transaction was terminated on April 28, 2016.  See the disclosure under the heading “*Compensation Discussion and Analysis — 2015   Corporate Goal Achievement”*for   details on the Backstop Agreement and the Private Placement.                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (8)    | The   information in the table and this note is derived from the   Schedule 13D/A filed by Kingstown Partners Master Ltd., Kingstown   Partners II, L.P., Ktown, LP, Kingstown Capital Partners, LLC,   Kingstown Capital Management L.P., Kingstown   Management GP LLC, Michael Blitzer and Guy Shanon (collectively,   the “Kingstown Entities”) with   the SEC on July 9, 2014. Based on information contained in the   Schedule 13D/A, Kingstown Partners Master Ltd. beneficially owns   2,488,132 shares, Kingstown Partners II, L.P. beneficially owns   316,212 shares, Ktown, L.P. beneficially owns 445,656 shares,   Kingstown Capital Partners, LLC beneficially owns 3,250,000 shares,   and each of Kingstown Capital Management L.P., Kingstown   Management GP LLC, Michael Blitzer and Guy Shanon may be deemed to   be the beneficial owner of 3,250,000 shares. Each of the Kingstown   Entities has shared voting and dispositive power over all shares they are   deemed to beneficially own. The business address of Kingstown Partners   Master Ltd. is c/o Walkers Corporate Services Limited, Walkers House,   87 Mary Street, George Town, Grand Cayman Ky1-9005, Cayman Islands. The   business address of each of the other Kingstown Entities is 100 Park   Avenue, 21st Floor, New York City, New York, 10017. |

 

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**Item 13.**                            **Certain Relationships and Related Transactions, and Director Independence**

 

**Transactions with Related Persons**

 

It is QLT’s policy that each director and nominee for election as director delivers to QLT annually a questionnaire that includes, among other things, a request for information relating to any transactions in which both the director or nominee, or their family members, and QLT participates, and in which the director or nominee, or such family member, has a material interest. The Board of Directors is requested to review all such transactions reported to it by a director or nominee in response to the questionnaire, or that are brought to its attention by management or otherwise. After the review, the disinterested directors approve, ratify or disapprove such transactions. Management also updates the Board of Directors as to any material changes to proposed transactions as they occur. This policy is not in writing but is followed consistently by the Board of Directors.

 

During 2015, except for Broadfin Healthcare Master Fund Ltd. being a party to the Backstop Agreement and the Share Purchase and Registration Rights Agreement as described under *Compensation Discussion and Analysis — 2015 Corporate Goal Achievement*and *Security Ownership of Certain Beneficial Owners and Management*in this report, which is incorporated herein by reference, QLT was not a party to any transaction where the amount involved exceeded $120,000 and in which an executive officer, director, director nominee or 5% shareholder (or their immediate family members) had a material direct or indirect interest, and no such person was indebted to QLT.

 

**Independence of Directors**

 

To ensure QLT maintains good and objective governance, the Board strives to maintain strong independence from management. In determining whether directors are independent, each year the Board considers and discusses the nature and materiality of all direct or indirect relationships between each director nominee and QLT, including any family or business relationships. Under the applicable Canadian and United States securities laws, a relationship is considered material where that relationship could, in the view of the Board, reasonably interfere with the exercise of the director’s independent judgment. A director who also serves as CEO of a company would be considered a non-independent director of that company under applicable Canadian and United States securities laws.

 

As a result, and in connection with a review of the nature and materiality of all direct or indirect relationships between each director and QLT, the Board has determined that all members of the Board are and have been “independent”, under the independence standards of the NASDAQ Marketplace Rules, since their respective appointments to the Board, except Dr. Cox who ceased being “independent” upon his appointment as Interim Chief Executive Officer effective October 23, 2014.

 

In addition, each director who served as a member on each of the Audit and Risk Committee, Compensation Committee, and Corporate Governance and Nominating Committee during 2015 was “independent”, as independence for members of such committees is defined in Multilateral Instrument 52-110 — Audit Committees, the Marketplace Rules of NASDAQ and the rules of the SEC, as applicable, at the time they served on such committee.

 

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**Item 14.**                           **Principal Accounting Fees and Services**

 

**Audit Fees**

 

The following table sets forth the aggregate fees billed by Deloitte LLP (formerly Deloitte & Touche LLP), the member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively, “Deloitte”) for the following services during 2015 and 2014.

 
| **Description of Service**                 | ** ** | **2015****(3)**** ****(US$)** | ** **  | **2014****(3)**** ****(US$)** | ** ** |
|------------------------------------------------------|------------|------------------------------------|-------------|------------------------------------|------------|
| Audit Fees(1)                                        |       | $                                  | 268,275     |                               | $          | 292,493 |   |
| Audit-Related   Fees                                 |       | —                             |        | —                             |       |
| Tax Fees (Tax   compliance, tax advice and planning) |       | —                             |        | —                             |       |
| All Other Fees(2)                                    |       | $                                  | 274,391     |                               | 145,013    |   |
| **Total   Fees**                                     |       | **$**                              | **542,666** |                               | **$**      | **437,506** |   |

 

----

| (1)    | Audit Fees consist of   fees for the audit of QLT’s annual financial statements for each respective   year, reviews of QLT’s quarterly financial statements, and services provided   in connection with statutory and regulatory filings and audit of the   Company’s internal controls over financial reporting. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                             |
| (2)    | All Other Fees consist   of fees related to the filing of the Registration Statement on the   Form S-4 filed with the SEC pursuant to the Insite Merger Agreement,   which was terminated on September 15, 2015.                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                             |
| (3)    | Where amounts shown   were paid in Canadian funds, the amounts set out in the above table represent   the US dollar equivalent of those payments converted using the following   weighted average exchange rates: US$1.00 = C$1.2791 for 2015 and   US$1.00 = C$1.1043 for 2014.                                       |

 

**Pre-Approval Policies and Procedures**

 

The charter of the Audit and Risk Committee provides that the Audit and Risk Committee is responsible for the pre-approval of all audit and permitted non-audit services to be performed for QLT by the independent auditors. The fees paid to the independent auditors that are shown in the chart above for 2015 and 2014 were approved by the Audit and Risk Committee in accordance with the procedures described below.

 

The Audit and Risk Committee reviews and approves audit and non-audit services proposed to be provided by the independent auditors. The Audit and Risk Committee has delegated to its Chairman, or an alternate member of the Audit and Risk Committee, the authority to grant pre-approvals if either deems it necessary or appropriate to consider a pre-approval request without approval and/or meeting of the full Audit and Risk Committee. Pre-approvals by the Chairman of the Audit and Risk Committee or an alternate member are reviewed with the Audit and Risk Committee at its next regularly scheduled meeting.

 

In considering the pre-approval of proposed audit or non-audit services by the independent auditors, management reviews with the Audit and Risk Committee or its delegate a description of and the budget for the proposed service and the reasons that the independent auditors are being requested to provide the services, including any possible impact on the independence of the independent auditors. Additional Audit and Risk Committee approval is required if the pre-approved services exceed the pre-approved budgeted amount for the services.

 

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**PART IV**

** **

**Item 15.         Exhibits and Financial Statement Schedules**

** **

**Exhibits**

** **

The exhibits filed with this Amendment No. 1 to the Annual Report on Form 10-K are set forth in the Exhibit Index.

** **

 

35

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**SIGNATURES**

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Dated: April 29, 2016

 
| ** ** | **QLT INC.** |
|------------|--------------|
|       |         |   |
|       | By:          | /s/   Dr. Geoffrey F. Cox |
|       |         | Dr. Geoffrey   F. Cox, Interim Chief Executive Officer |
|       |         | (Principal   Executive Officer) |
|       |         |   |
|       | By:          | /s/   W. Glen Ibbott |
|       |         | W.   Glen Ibbott, Chief Financial Officer |
|       |         | (Principal   Financial and Accounting Officer) |

 

36

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**Exhibit Index**

** **

| **Exhibit** | ** ** | **Description**                                                                                                                                                                                                                                   | ** ** | **Location**      |
|-------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------|
|        |       |                                                                                                                                                                                                                                              |       |              |
| 31.1        |       | Certification pursuant to Rule 13a-14(a) of the Securities   Exchange Act of 1934 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley   Act of 2002: Dr. Geoffrey F. Cox, Interim Chief Executive Officer (Principal   Executive Officer).   |       | Filed   herewith. |
|        |       |                                                                                                                                                                                                                                              |       |              |
| 31.2        |       | Certification pursuant to Rule 13a-14(a) of the Securities   Exchange Act of 1934 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley   Act of 2002: W. Glen lbbott, Chief Financial Officer (Principal Financial and   Accounting Officer). |       | Filed   herewith. |

 

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