##### Table of Contents



UNITED STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 20-F



| ̈ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------------

OR



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

For fiscal year ended August 31, 2013

OR



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

For the transition period from            
to

OR



| ̈ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | -------------------------------------------------------------------------------------------

Commission file number: 333-174780

POSTMEDIA NETWORK CANADA

CORP.

(Exact names of
registrants as specified in their charters)





N/A

(Translation of registrants name into English)

Postmedia Network Canada Corp.

Canada

(Jurisdiction of
incorporation or organization)

98-0667225

(I.R.S. Employer Identification No.)





1450 Don Mills
Road

Toronto, Ontario Canada M3B 2X7

(416) 383-2300

(Address, of each of the registrants principal executive offices)







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Douglas Lamb, Executive Vice President and Chief Financial Officer

1450 Don Mills Road

Toronto, Ontario Canada M3B 2X7

Phone: (416) 383-2300 Fax: 416-443-6046

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)





Securities registered or to be registered pursuant to Section 12(b) of the Act.

None

Securities for
which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period covered
by the annual report.

982,061 Class C voting shares and 39,227,558 Class NC variable voting shares

outstanding as of August 31, 2013

Indicate by check mark if the registration is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act

 ̈  Yes      
x  No

If this report is an annual or transition report, indicate by check mark if the registrant
is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

x  Yes       ̈  No

Note  Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 from their obligations under those Sections.

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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.

 ̈  Yes      x  No

Indicate by check mark whether the registrant is a large accelerated filer, or a
non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.

Large accelerated
filer   ̈            Accelerated
file   ̈            Non-accelerated filer  x

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:



|             |  |                                                                                                          |  |         
|------------ |  | -------------------------------------------------------------------------------------------------------- |  | --------
| ̈  U.S. GAAP |  | x  International Financial Reporting
Standards as issued by the International Accounting Standards Board |  |  ̈  Other

If Other has been checked in response to the previous question, indicate by check mark which financial statement
item the registrant has elected to follow.

Item 17.   ̈    Item 18.   ̈

If this is an annual report, indicate by check mark whether the Company is a shell company (as defined in Rule
12b-2 of the Exchange Act).

Yes   ̈      No  x







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TABLE OF CONTENTS



|                                                                                      |  |  |    | 
|------------------------------------------------------------------------------------- |  |  | -- | 
|General Information                                                                   |  |  | 1  | 
|Notice Regarding Forward Looking Statements                                           |  |  | 5  | 
|Notice Regarding Presentation of Financial Information                                |  |  | 7  | 
|GAAP Financial Matters                                                                |  |  | 8  | 
|Part I                                                                                |  |  | 8  | 
|Item 1. Identity of Directors, Senior Management and Advisors                         |  |  | 8  | 
|Item 2. Offer Statistics and Expected Timetable                                       |  |  | 8  | 
|Item 3. Key Information                                                               |  |  | 9  | 
|Item 4. Information on the Company                                                    |  |  | 14 | 
|Item 4A. Unresolved Staff Comments                                                    |  |  | 28 | 
|Item 5. Operating and Financial Review and Prospects                                  |  |  | 28 | 
|Item 6. Directors, Senior Management and Employees                                    |  |  | 29 | 
|Item 7. Major Shareholders and Related Party Transactions                             |  |  | 68 | 
|Item 8. Financial Information                                                         |  |  | 69 | 
|Item 9. The Offer and Listing                                                         |  |  | 70 | 
|Item 10. Additional information                                                       |  |  | 71 | 
|Item 11. Quantitative and Qualitative Disclosures About Market Risk                   |  |  | 87 | 
|Item 12. Description of Securities Other than Equity Securities                       |  |  | 87 | 
|Part II                                                                               |  |  | 88 | 
|Item 13. Defaults, Dividend Arrearages and Delinquencies                              |  |  | 88 | 
|Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds |  |  | 88 | 
|Item 15. Controls and Procedures                                                      |  |  | 88 | 
|Item 15T. Controls and Procedures                                                     |  |  | 89 | 
|Item 16. [Reserved]                                                                   |  |  | 90 | 
|Item 16A. Audit Committee Financial Expert                                            |  |  | 90 | 
|Item 16B. Code of Ethics                                                              |  |  | 90 | 
|Item 16C. Principal Accountant Fees and Services                                      |  |  | 91 | 
|Item 16D. Exemptions From the Listing Standards for Audit Committees                  |  |  | 91 | 
|Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers      |  |  | 91 | 
|Item 16F. Change in Registrants Certifying Accountant                                 |  |  | 91 | 
|Item 16G. Corporate Governance                                                        |  |  | 91 | 
|Item 16H. Mine Safety Disclosure                                                      |  |  | 91 | 
|Part III                                                                              |  |  | 91 | 
|Item 17. Financial Statements                                                         |  |  | 91 | 
|Item 18. Financial Statements                                                         |  |  | 92 | 
|Item 19. Exhibits                                                                     |  |  | 92 | 



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GENERAL INFORMATION

Unless otherwise indicated, all references herein are to Canadian dollars.

Capitalized terms, except as otherwise defined herein, are defined in the section entitled Glossary of Terms.

Except as otherwise indicated or the context otherwise requires in this annual report, for periods prior to the Acquisition, references
to the Corporation, the Company, we, us and our refer to Canwest LP and its consolidated subsidiaries; and for periods following the Acquisition, those terms refer to Postmedia Network
Canada Corp. and, if the context requires, Postmedia Network Inc.





The Corporation was incorporated under the Canada Business Corporations Act, which is referred to as the CBCA.
The Corporations principal executive offices are located at 1450 Don Mills Road, Toronto, Ontario, Canada, M3B 2X7 and its telephone number at that address is (416) 383-2300. The Corporation plans to change its principal executive offices
in early calendar 2014 to 365 Bloor Street East 12th Floor Toronto, Ontario, Canada M4W 3L4. The Corporations website is located at http://www.postmedia.com. Information about the
Corporation is included on its website. The Corporations website and the information contained on its website are not part of this report.

Glossary of terms

In
this annual report, the following terms will have the meanings set forth below, unless otherwise indicated. Words importing the singular include the plural and vice versa and words importing any gender include all genders.

ABL Collateral means the accounts receivable, cash and cash equivalents, inventory and related assets of Postmedia Network Inc. and
Postmedia Network Canada Corp., which constitute collateral for the ABL Facility on a first-priority basis, for the First-Lien Notes on a second-priority basis and for the Second-Lien Notes on a third-priority basis.

ABL Credit Agreement has the meaning ascribed to such term in Item 10.C Material Contracts ABL Facility.

ABL Facility has the meaning ascribed to such term in Item 10.C Material Contracts ABL Facility.

Acquisition has the meaning ascribed to such term in Item 4.A History and Development of the Corporation.

Acquisition Consideration has the meaning ascribed to such term in Item 4.A History and Development of the Corporation.

Ad Hoc Committee means the ad hoc committee of senior subordinated noteholders and lenders of Canwest LP.

annual report means this annual report on Form 20-F.

Asset Purchase Agreement means an asset purchase agreement dated May 10, 2010 that was entered into in connection with the
implementation of the Plan under the CCAA relating to the LP Entities, whereby Postmedia Network Inc. purchased substantially all of the assets, including the shares of National Post Inc., and assumed certain liabilities of Canwest LP for $1.05
billion.

Board or Board of Directors means the board of directors of Postmedia Network Canada Corp.



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Borrowing Base refers to a provision contained in the credit agreement governing the ABL
Facility limiting Postmedia Network Inc.s availability under the ABL Facility to the lesser of a borrowing base and $60 million, less an excess availability amount of $15.0 million. This results in a maximum availability under the ABL Facility
which is no greater than $45 million.

Business Day means a day on which banks are open for business in Toronto, but does not
include a Saturday, Sunday or a holiday in the Province of Ontario.

CBCA means the Canada Business Corporations Act.

CBI means Canwest Books Inc., a corporation incorporated under the laws of Canada and a wholly-owned subsidiary of CPI.

CCAA means the Companies Creditors Arrangement Act (Canada).

CCI means Canwest (Canada) Inc., a corporation incorporated under the laws of Canada and a wholly-owned subsidiary of 4501071 Canada
Inc.

CPI means Canwest Publishing Inc./Publications Canwest Inc., a corporation incorporated under the laws of Canada and a
wholly-owned subsidiary of CCI.

Canadian GAAP or CGAAP means generally accepted accounting principles in accordance
with Part V of the Handbook of the Canadian Institute of Chartered Accountants.

Canwest Global means Canwest Global
Communications Corp., a corporation incorporated under the laws of Canada and, prior to the Acquisition, the indirect parent company of Canwest LP.

Canwest Group means Canwest Global and its subsidiaries, but specifically excluding the LP Entities.

Canwest LP means the Canwest Limited Partnership/Canwest Societe en Commandite, a limited partnership formed under the laws of the
province of Ontario whose general and limited partnership interests were owned by CCI and 4501071 Canada Inc., respectively, together with its subsidiaries.

digital media and online means the digital media assets and the online websites of the Corporation reported within the Newspaper
segment.

Disposed Properties has the meaning ascribed to such term in Item 4.A History and Development of the Corporation.

dollars or $ means Canadian dollars.

DSU means a right to receive, on a deferred basis, an amount of money subject to and in accordance with the terms of the DSU Plan, credited to a
Member (as such term is defined in the DSU Plan) and reflected as an entry in a Members DSU Account (as such term is defined in the DSU Plan) in accordance with the DSU Plan.

DSU Plan means the deferred share unit plan of the Corporation dated as of July 13, 2010.

EDGAR means the Electronic Data-Gathering, Analysis and Retrieval system of the US Securities and Exchange Commission.

First-Lien Notes means the 8.25% Senior Secured Notes due 2017 issued by Postmedia Network Inc. on August 16, 2012 pursuant to
the terms and conditions of the First-Lien Notes indenture.



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First-Lien Notes Collateral means substantially all the assets of Postmedia Network Inc.
and Postmedia Network Canada Corp. (other than ABL Collateral) and certain customary exclusions, which constitutes collateral for the First-Lien Notes on a first-priority basis, Second-Lien Notes on a second-priority basis and for the ABL Facility
on a third-priority basis.

Fiscal or Fiscal year means the twelve month period ending on August 31 of such year.

Funding Commitment has the meaning ascribed to such term in Item 4.A History and Development of the Corporation.

Glacier Transactionhas the meaning ascribed to such term in Item 4.A History and Development of the Corporation.

IFRS means generally accepted accounting principles in accordance with Part I of the Handbook of the Canadian Institute of
Chartered Accountants. IFRS as applied by the Corporation is in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

LP Entities means CPI, CBI, CCI and Canwest LP.

MD&A means Postmedia Network Canada Corps managements discussion and analysis for the years ended August 31,
2013, 2012 and 2011, attached hereto as Exhibit 15.2.

National Post means the daily national newspaper published by the
Corporation.

Newspaper operations means, collectively, the operations of each of the Corporations newspapers reported
within the Newspaper segment.

Non-Canadian has the meaning ascribed to such term in Item 10.B Memorandum and Articles of
Association  Voting Shares.

Option means the right to purchase Voting Shares or Variable Voting Shares, as applicable,
under the Option Plan.

Option Plan means the stock option plan of the Corporation dated as of July 13, 2010.

PES has the meaning ascribed to such term in Item 4. Information on the Company  B. Business Overview  General.

PIA has the meaning ascribed to such term in Item 4. Information on the Company  B. Business Overview  General.

Plan has the meaning ascribed to such term in Item 4.A History and Development of the Corporation.

Postmedia or PNCCmeans Postmedia Network Canada Corp. and, if the context requires, its subsidiary, Postmedia
Network Inc.

Postmedia Rights Plan means the Shareholder rights plan agreement entered into between Postmedia and Computershare
Investor Services Inc., as rights agent.

Prospectus means the Canadian non-offering prospectus filed by Postmedia on
June 7, 2011.

Qualifying Public Corporation has the meaning ascribed to such term under Item 4.B Business Overview
 Regulation.

SEC means the U.S. Securities and Exchange Commission.



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Sarbanes-Oxley means the U.S. Sarbanes-Oxley Act of 2002.

Second-Lien Notes means the 12.50% Senior Secured Notes due 2018 issued by Postmedia Network Inc. on July 13, 2010 pursuant to
the terms and conditions of the Second-Lien Notes indenture.

SEDAR means the System for Electronic Data Analysis and Retrieval
operated by the Canadian Securities Administrators.

Shareholder means both registered and non-registered owners of the Shares.

Shares means, collectively, the Voting Shares and the Variable Voting Shares.

Subscription Agreement has the meaning ascribed to such term in Item 4.A History and Development of the Company.

Tax Act means the Income Tax Act (Canada).

Term Loan Facility means the previous Senior Secured Term Loan Credit Facility of Postmedia Network Inc. entered into on
July 13, 2010.

Toronto Head Office means the Corporations registered office located at 1450 Don Mills Road, Toronto,
Ontario, M3B 2X7.

TSX means the Toronto Stock Exchange.

US$ and US dollars means United States dollars.

US GAAP means generally accepted accounting principles in the United States.

Variable Voting Shares means the Class NC variable voting shares in the capital of the Corporation which trade on the TSX under the
symbol PNC.B.

Voting Shares means the Class C voting shares in the capital of the Corporation which trade on the TSX under the
symbol PNC.A.



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NOTICE REGARDING FORWARD LOOKING STATEMENTS

This annual report includes statements that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections
regarding future events or future results, and therefore are, or may be deemed to be, forward-looking statements. These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms
believes, estimates, anticipates, expects, seeks, projects, intends, plans, may, will, could or should
or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this annual report and include
statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies, expenditures, costs and the industry in which we operate.
These statements reflect managements current beliefs with respect to future events and are based on information currently available to management. Forward-looking statements involve significant known and unknown risks, uncertainties and
assumptions. Many factors could cause the Corporations actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking
statements, including, without limitation, those listed in the Risk Factors section of the MD&A, attached hereto as Exhibit 15.2. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the
forward-looking statements prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking statements contained in this annual report. Such risks include, but are not limited
to: competition from other newspapers and alternative forms of media; the Corporations ability to compete successfully in newspaper and online industries; the influence of prevailing economic conditions and the prospects of the
Corporations advertising customers on advertising revenue; the failure to fulfill the Corporations strategy of building its digital media and online businesses; failure to maintain print and online newspaper readership and circulation
levels; the negative impact of decreases in advertising revenue on results of operations; financial difficulties of certain contractors and vendors; competition with alternative emerging technologies; not being able to achieve a profitable balance
between circulation levels and advertising revenues; not realizing anticipated cost savings from cost savings initiatives; seasonal variations; intellectual property rights; damage to the Corporations reputation; variations in the cost and
availability of newsprint; disruptions in information systems and technology and other manufacturing systems; labour disruptions; equipment failure; environmental, health and safety laws and regulations; controversial editorial content; unresolved
litigation matters; failure to comply with Canadian Newspaper status for purposes of the Tax Act; the collectability of accounts receivable; goodwill and intangible asset impairment charges; disruptions in the credit markets; changes to
insurance policies; under-funded registered pension plans; changes in pension fund investment performance; foreign exchange fluctuations; increases in distribution costs due to increases in fuel prices; outsourcing certain aspects of the business to
third-party vendors; retaining and attracting sufficient qualified personnel; increases in sales and other taxes; the occurrence of natural or man-made disasters; failure to comply with the Sarbanes-Oxley Act; failure to maintain effective
internal controls; change of laws; the substantial indebtedness of the Corporation and the possibility that it may be able to incur substantially more debt which could adversely affect its financial condition; the Corporation may not be able to
refinance its ABL Facility on attractive terms or at all; the terms of the ABL Facility, and the indentures that govern the First-Lien Notes and Second-Lien Notes, may restrict the Corporations current and future operations; interest rate
risks; the possibility that the Corporation will not be able to generate sufficient cash to service all of its indebtedness; the possibility that an active public market for the Shares will not develop; volatility of the market price for Shares;
dual class share structure; Postmedia Network Canada Corp. having a holding company structure; risks relating to the future sales of Shares by directors and officers and risks relating to dilution. See the section entitled Risk Factors
in the Corporations MD&A dated October 24, 2013, attached hereto as Exhibit 15.2 and which is posted on SEDAR and EDGAR for a complete description of risks relating to an investment in the Corporation. These risk factors are
incorporated in this annual report by reference. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Those factors should not
be construed as exhaustive and should be read with the other cautionary statements in this annual report.



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These risk factors should be considered carefully and readers should not place undue
reliance on the forward-looking statements. Although the Corporation bases its forward-looking statements on assumptions that it believes were reasonable when made, which assumptions include, but are not limited to, the Corporations future
growth potential, results of operations, future prospects and opportunities, execution of the Corporations business strategy, a stable workforce, no material variations in the current tax and regulatory environments, future levels of
indebtedness and the ability to achieve future cost savings, the Corporation cautions the reader that forward-looking statements are not guarantees of future performance and that the Corporations actual results of operations, financial
condition and liquidity, and the development of the industry in which the Corporation operates, may differ materially from those made in or suggested by the forward-looking statements contained in this annual report. In addition, even if the
Corporations results of operations, financial condition and liquidity, and the development of the industry in which it operates are consistent with the forward-looking statements contained in this annual report, those results or developments
may not be indicative of results or developments in subsequent periods.

Any forward-looking statements which are made in this
annual report speak only as of the date of such statement, and the Corporation does not undertake, and specifically declines, except as required by applicable law, any obligation to update such statements or to publicly announce the results of any
revisions to any such statements to reflect future events or developments. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and
should only be viewed as historical data. All of the forward-looking statements made in this annual report are qualified by these cautionary statements.

The Corporation owns or has rights to use the trademarks, service marks and trade names that it uses in connection with its business,
such as Postmedia Network, Infomart and National Post. Each trademark, service mark and trade name of any other company appearing in this annual report is to the Corporations knowledge, owned by such other company. Solely for convenience, the
trademarks, service marks and trade names referred to in this annual report are listed without the ® and  symbols, but such references are not intended to indicate in any way that the
Corporation will not assert, to the fullest extent under applicable law, its rights or the rights of the applicable licensors to these trademarks, service marks and trade names.

Industry Information

This annual report includes market share, ranking, industry data and forecasts that the Corporation obtained from industry publications,
surveys, public filings, documents and internal sources. Industry publications, surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but there can be no assurance as to
the accuracy or completeness of included information. The Corporation has not independently verified any of the data from third-party sources nor has it ascertained the underlying economic assumptions relied upon therein.

Unless otherwise stated herein:



| |  |  | individual newspaper circulation figures were obtained from the Alliance for Audited Media (AAM), the Canadian Media Circulation Audit
(CMCA) and the Canadian Circulations Audit Board (CCAB), which are independent audit organizations that audit the circulation of print media entities, including newspapers;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | information regarding industry-wide newspaper circulation revenue and circulation were obtained from Newspapers Canada, a partnership between the Canadian
Newspaper Association and the Canadian Community Newspaper Association, which are not-for-profit industry associations representing publishers of Canadian daily newspapers and weekly newspapers, respectively. The Circulation Data Report, prepared by
Newspapers Canada, calculates paid circulation levels based on data provided by AAM, CMCA and CCAB reports. No single publication schedule applies across the Canadian newspaper industry. Therefore, in the Circulation Data Report, Newspapers Canada
makes further calculations based on AAM, CMCA and CCAB data to derive industry-wide figures;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | newspaper readership information was obtained from the Newspaper Association of America/Scarborough Research, and NADbank Inc. (NADbank), a research organization that provides market information for
its newspaper, advertising agency and advertiser members; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | internet audience measurement information was obtained from (a) comScore Media Metrix, the audience measurement division of comScore, Inc.
(comScore), which defines total unique visitors, a measure that the Corporation cites throughout this document, as the estimated number of different individuals (in thousands) that visited any content of a
website, a category, a channel, or an application during the reporting period; (b) the SiteCatalyst application provided by Omniture, Inc. (Omniture Site Catalyst); and (c) Google Analytics provided by Google Inc.
(Google Analytics).
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Statements as to the Corporations market position and ranking are
based in part on market data currently available to it and managements estimates and assumptions that have been made regarding the size of its markets within its industry. The Corporation believes data regarding the size of the markets and
market share are inherently imprecise, but generally indicate size and position and market share within its markets. Although the Corporation is not aware of any misstatements regarding the industry data presented herein, the estimates involve risks
and uncertainties and are subject to change based on various factors, including those discussed under the section entitled Risk Factors in the Corporations MD&A dated October 24, 2013, attached hereto as Exhibit 15.2. The
Corporation cannot guarantee the accuracy or completeness of such information contained in this annual report.

NOTICE
REGARDING PRESENTATION OF FINANCIAL INFORMATION

The financial statements included in this annual report are presented in
Canadian dollars. In this annual report, references to $ and dollars are to Canadian dollars and references to US$ and US dollars are to United States dollars. See Item 3.A Selected Financial Data
 Currency and Exchange Rates.

The Corporation is a holding company that has a 100% interest in its subsidiary Postmedia
Network Inc. The Corporation was incorporated on April 26, 2010 to purchase indirectly, the assets and certain liabilities of Canwest Limited Partnership, or Canwest LP, on July 13, 2010, which we refer to as the
Acquisition. Concurrent with such Acquisition, Postmedia Network Canada Corp. issued 27 million shares for gross proceeds of $250 million. Pursuant to the asset purchase agreement, which we will refer to as the Asset
Purchase Agreement, in connection with the implementation of the Plan under the Companies Creditors Arrangement Act (Canada), which we refer to as the CCAA, relating to the LP Entities and certain of their
affiliates, Postmedia Network Inc. purchased substantially all of the assets, including all of the outstanding shares of National Post Inc., and assumed certain liabilities of Canwest LP for $927.8 million payable in cash and the issuance of
13 million shares of the Corporation.

Unless otherwise indicated, all financial statement data in this annual report in
respect of periods commencing on or after September 1, 2010 has been prepared in accordance with IFRS. For the periods prior to September 1, 2010, financial statement data has been prepared in accordance with Canadian GAAP
and therefore may not be comparable. In 2010, the Handbook of the Canadian Institute of Chartered Accountants was revised to incorporate IFRS, and require publicly accountable enterprises to apply such standards effective for fiscal years (and
comparative prior year periods) beginning on or after January 1, 2011, which for Postmedia Network Canada Corp. is Fiscal 2012, which began on September 1, 2011. Accordingly, Postmedia Network Canada Corp.s audited consolidated
financial statements for the years ended August 31, 2013, 2012 and 2011 included in this annual report, attached hereto as Exhibit 15.1 and the selected financial data included in this annual report for Postmedia Network Canada Corp. as at and
for the years ended August 31, 2013, 2012 and 2011 are prepared in accordance with IFRS. For a discussion of Postmedia Network Canada Corp.s transition to IFRS, see note 25 in our audited consolidated financial statements for the years
ended August 31, 2012 and 2011, filed previously with the SEC as Exhibit 15.1 to our annual report on Form 20-F for the year ended August 31, 2012.



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As a result of the Glacier Transaction which closed on November 30, 2011, the results
of the Disposed Properties were presented as discontinued operations and as such, the consolidated statement of operations and consolidated statement of comprehensive income for the year ended August 2011 were revised to reflect this change in
presentation. The consolidated statement of financial position as at August 31, 2011 and consolidated statement of cash flows for the year ended August 31, 2011, were not revised. In addition, industry data presented herein for the periods
Fiscal 2008 through Fiscal 2011 includes the Disposed Properties. Industry data for Fiscal 2012 and subsequent Fiscal years excludes the Disposed Properties.

GAAP FINANCIAL MATTERS

Canadian GAAP differs from U.S. GAAP in several respects. For a discussion of the principal differences between Canadian GAAP and U.S.
GAAP please see note 20 to our audited consolidated financial statements for the year ended August 31, 2011 filed previously with the SEC as Exhibit 15.1 to our annual report on Form 20-F for the year ended August 31, 2011.





PART I

ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

Not applicable

ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable



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ITEM 3.  KEY INFORMATION

A. Selected Financial Data.

Set forth below
is selected financial data of the Corporation and Canwest LP, at the dates and for the periods indicated.

The selected financial
data, presented in accordance with IFRS, as of and for the years ended August 31, 2013, 2012 and 2011 have been derived from Postmedias audited consolidated financial statements for the years ended August 31, 2013, 2012 and 2011,
attached hereto as Exhibit 15.1, which have been audited by PricewaterhouseCoopers LLP, our independent auditors, and were prepared in accordance with IFRS.

The selected financial data, presented in accordance with Canadian GAAP, as of August 31, 2011 and August 31, 2010, and for
the year ended August 31, 2011 and the period from July 13, 2010 to August 31, 2010 have been derived from Postmedias audited consolidated financial statements for the year ended August 31, 2011 and the period ended
August 31, 2010, which have been audited by PricewaterhouseCoopers LLP, our independent auditors, and were prepared in accordance with Canadian GAAP.

The selected financial data, presented in accordance with Canadian GAAP, as of and for the year ended August 31, 2009 and for
the nine months ended May 31, 2010 and the period from June 1, 2010 to July 12, 2010 have been derived from Canwest LPs audited financial statements for the periods ended May 31, 2010 and July 12, 2010 and the year
ended August 31, 2009. Canwest LPs financial data has been reclassified where possible to be consistent with Postmedias revenue and expense presentation, excluding the presentation of the Disposed Properties as discontinued
operations. Canwest LPs audited financial statements for the periods ended May 31, 2010 and July 12, 2010 and year ended August 31, 2009 have been audited by PricewaterhouseCoopers LLP, its independent
auditors, and were prepared in accordance with Canadian GAAP.

Canwest LP adopted the liquidation basis of accounting as of
May 31, 2010 and as a result, did not present a statement of earnings or statement of cash flows subsequent to May 31, 2010 or a balance sheet as at May 31, 2010 or subsequent thereto.

The selected financial data should be read in conjunction with, and are qualified by reference to, Items 4 and 5 of this annual report
on Form 20-F. The audited consolidated financial statements, attached hereto as Exhibit 15.1, and related notes of Postmedia for the years ended August 31, 2013, 2012 and 2011 and the historical financial statements of Canwest LP are not
comparable following the Acquisition due to the effect of the Plan and do not represent and are not purported to represent the results that would have been achieved had Postmedia owned the assets of Canwest LP and shares of National
Post Inc. at that time.

Financial information based on IFRS is not comparable to financial information prepared in accordance
with Canadian GAAP. In addition, Canadian GAAP differs from U.S. GAAP in several respects. For a discussion of the principal differences between Canadian GAAP and U.S. GAAP please see note 20 to our audited consolidated financial statements for the
year ended August 31, 2011, filed previously with the SEC as Exhibit 15.1 to our annual report on Form 20-F for the year ended August 31, 2011.



9



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During the year ended August 31, 2013, Postmedia amended its operating segments to
reflect its change to a functional reporting structure which resulted in the elimination of publishers at the individual newspapers and the creation of Senior Vice President roles which will be responsible for specific functions across the entire
business. Prior to the change to a functional reporting structure, Postmedia disclosed separately the results of both the Newspaper operating segment and an All other category which included other business activities and an operating segment that
was not separately reportable. As a result of the changes to the reporting structure Postmedia has one operating segment, the Newspaper operating segment. Changes in reporting segments are to be applied retroactively; so because we now operate in
only one operating segment there is no segment information to disclose and accordingly we have reclassified the prior periods to remove the segment information. These changes did not impact our consolidated net loss or cash flows.

IFRS DATA:



|                                                                                 |  |                       |         |  |          |  |         |          |  |  |         | 
|-------------------------------------------------------------------------------- |  | --------------------- | ------- |  | -------- |  | ------- | -------- |  |  | ------- | 
|                                                                                 |  | Postmedia(1)          |        
|                                                                                 |  | Years ended August31, |        
|                                                                                 |  | 2011(16)              |         |  | 2012(16) |  |         | 2013(16) | 
|(basis of presentation)                                                          |  | IFRS                  |         |  | IFRS     |  |         | IFRS     | 
|(in millions of Canadian dollars)                                                |  |                       |         |  |          |  |         |          |  |  |         | 
|                                                                                 |  |                       |        
|Revenues                                                                         |  |                       | 898.9   |  |          |  | 831.9   |          |  |  | 751.6   | 
|Expenses                                                                         |  |                       | 709.7   |  |          |  | 687.5   |          |  |  | 621.2   | 
|                                                                                 |  |                       |         |  |          |  |         |          |  |  |         | 
|Operating income before depreciation, amortization, impairment and restructuring |  |                       | 189.2   |  |          |  | 144.4   |          |  |  | 130.4   | 
|Depreciation (2)                                                                 |  |                       | 27.0    |  |          |  | 26.2    |          |  |  | 29.9    | 
|Amortization (2)                                                                 |  |                       | 45.2    |  |          |  | 43.6    |          |  |  | 43.3    | 
|Impairments (3)                                                                  |  |                       | -       |  |          |  | -       |          |  |  | 100.0   | 
|Restructuring and other items (4)                                                |  |                       | 38.0    |  |          |  | 35.3    |          |  |  | 34.2    | 
|                                                                                 |  |                       |         |  |          |  |         |          |  |  |         | 
|Operating income (loss)                                                          |  |                       | 79.0    |  |          |  | 39.3    |          |  |  | (77.0)  | 
|Interest expense                                                                 |  |                       | 72.3    |  |          |  | 65.4    |          |  |  | 61.9    | 
|Loss on debt repayment (5)                                                       |  |                       | 11.0    |  |          |  | 9.2     |          |  |  | -       | 
|Net financing expense relating to employee benefit plans(6)                      |  |                       | 3.0     |  |          |  | 3.9     |          |  |  | 1.5     | 
|(Gain) loss on derivative financial instruments(9)                               |  |                       | 21.4    |  |          |  | (8.6)   |          |  |  | 7.3     | 
|Foreign currency exchange (gains) losses(11)                                     |  |                       | (17.9)  |  |          |  | 6.4     |          |  |  | 7.1     | 
|(Gain) loss on disposal of property and equipment and intangible assets          |  |                       | 0.2     |  |          |  | 0.3     |          |  |  | (1.0)   | 
|Acquisition costs (12)                                                           |  |                       | 1.2     |  |          |  | -       |          |  |  | -       | 
|                                                                                 |  |                       |         |  |          |  |         |          |  |  |         | 
|Net loss before income taxes                                                     |  |                       | (12.2)  |  |          |  | (37.3)  |          |  |  | (153.8) | 
|Provision for income taxes(14)                                                   |  |                       | -       |  |          |  | -       |          |  |  | -       | 
|                                                                                 |  |                       |         |  |          |  |         |          |  |  |         | 
|Net loss from continuing operations                                              |  |                       | (12.2)  |  |          |  | (37.3)  |          |  |  | (153.8) | 
|Net earnings from discontinued operations(16)                                    |  |                       | 2.6     |  |          |  | 14.1    |          |  |  | -       | 
|                                                                                 |  |                       |         |  |          |  |         |          |  |  |         | 
|Net loss                                                                         |  |                       | (9.6)   |  |          |  | (23.2)  |          |  |  | (153.8) | 
|                                                                                 |  |                       |         |  |          |  |         |          |  |  |         | 
|                                                                                 |  |                       |        
|Net loss per share from continuing operations:                                   |  |                       |         |  |          |  |         |          |  |  |         | 
|Basic                                                                            |  |                       | $(0.30) |  |          |  | $(0.92) |          |  |  | $(3.82) | 
|Diluted                                                                          |  |                       | $(0.30) |  |          |  | $(0.92) |          |  |  | $(3.82) | 
|Net loss per share:                                                              |  |                       |         |  |          |  |         |          |  |  |         | 
|Basic                                                                            |  |                       | $(0.24) |  |          |  | $(0.58) |          |  |  | $(3.82) | 
|Diluted                                                                          |  |                       | $(0.24) |  |          |  | $(0.58) |          |  |  | $(3.82) | 
|                                                                                 |  |                       |        
|Balance sheet data:                                                              |  |                       |         |  |          |  |         |          |  |  |         | 
|Long-term debt (including current portion)                                       |  |                       | 572.3   |  |          |  | 499.9   |          |  |  | 486.9   | 
|Total assets                                                                     |  |                       | 1,180.2 |  |          |  | 1,044.8 |          |  |  | 862.8   | 
|Net assets                                                                       |  |                       | 315.3   |  |          |  | 233.8   |          |  |  | 135.9   | 
|Capital stock                                                                    |  |                       | 371.1   |  |          |  | 371.1   |          |  |  | 371.1   | 



10



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CANADIAN GAAP DATA:



|                                                                        |  |                     |           |  |                        |  |              |                                   |  |  |         |  |                                    |  |  |                     |         |  |  |  |         | 
|----------------------------------------------------------------------- |  | ------------------- | --------- |  | ---------------------- |  | ------------ | --------------------------------- |  |  | ------- |  | ---------------------------------- |  |  | ------------------- | ------- |  |  |  | ------- | 
|                                                                        |  | Canwest LP(1)       |           |  |                        |  | Postmedia(1) |                                  
|                                                                        |  | YearendedAugust 31, |           |  | NinemonthsendedMay 31, |  |              | Period fromJune 1,2010 toJuly 12, |  |  |         |  | PeriodfromJuly 13,2010 toAugust31, |  |  | Year endedAugust31, |        
|                                                                        |  | 2009(16)            |           |  | 2010(16)               |  |              | 2010(16)                          |  |  |         |  | 2010(16)                           |  |  | 2011(16)            |        
|(basis of presentation)                                                 |  | CGAAP               |           |  | CGAAP                  |  |              | CGAAPLiquidation                  |  |  |         |  | CGAAP                              |  |  | CGAAP               |        
|(in millions of Canadian dollars)                                       |  |                     |           |  |                        |  |              |                                   |  |  |         |  |                                    |  |  |                     |         |  |  |  |         | 
|                                                                        |  |                     |           |  |                        | 
|Revenues                                                                |  |                     | 1,099.1   |  |                        |  | 811.2        |                                   |  |  | 119.2   |  |                                    |  |  |                     | 122.1   |  |  |  | 1,019.1 | 
|Expenses                                                                |  |                     | 927.2     |  |                        |  | 650.3        |                                   |  |  | 99.7    |  |                                    |  |  |                     | 111.4   |  |  |  | 818.0   | 
|Depreciation (2)                                                        |  |                     | 40.3      |  |                        |  | 30.6         |                                   |  |  | 7.1     |  |                                    |  |  |                     | 4.6     |  |  |  | 29.2    | 
|Amortization (2)                                                        |  |                     | 0.2       |  |                        |  | 0.1          |                                   |  |  | -       |  |                                    |  |  |                     | 6.5     |  |  |  | 45.9    | 
|Restructuring and other items (4)                                       |  |                     | 28.8      |  |                        |  | 2.7          |                                   |  |  | (0.5)   |  |                                    |  |  |                     | 11.2    |  |  |  | 42.8    | 
|                                                                        |  |                     |           |  |                        |  |              |                                   |  |  |         |  |                                    |  |  |                     |         |  |  |  |         | 
|Operating income (loss)                                                 |  |                     | 102.6     |  |                        |  | 127.5        |                                   |  |  | 12.9    |  |                                    |  |  |                     | (11.6)  |  |  |  | 83.2    | 
|Interest expense                                                        |  |                     | 98.4      |  |                        |  | 60.6         |                                   |  |  | 4.5     |  |                                    |  |  |                     | 12.7    |  |  |  | 80.3    | 
|Loss on debt repayment (5)                                              |  |                     | -         |  |                        |  | -            |                                   |  |  | -       |  |                                    |  |  |                     | -       |  |  |  | 11.0    | 
|Other income(7)                                                         |  |                     | (2.5)     |  |                        |  | (1.5)        |                                   |  |  | (0.3)   |  |                                    |  |  |                     | -       |  |  |  | -       | 
|Loss on disposal of interest rate swap(8)                               |  |                     | 180.2     |  |                        |  | -            |                                   |  |  | -       |  |                                    |  |  |                     | -       |  |  |  | -       | 
|Ineffective portion of hedging derivative instrument(8)                 |  |                     | 60.1      |  |                        |  | -            |                                   |  |  | -       |  |                                    |  |  |                     | -       |  |  |  | -       | 
|(Gain) loss on derivative financial instruments(9)                      |  |                     | -         |  |                        |  | -            |                                   |  |  | -       |  |                                    |  |  |                     | (7.6)   |  |  |  | 21.4    | 
|Foreign currency exchange (gains) losses(8) (11)                        |  |                     | (154.5)   |  |                        |  | (49.6)       |                                   |  |  | (4.5)   |  |                                    |  |  |                     | 9.6     |  |  |  | (18.0)  | 
|(Gain) loss on disposal of property and equipment and intangible assets |  |                     | (2.2)     |  |                        |  | -            |                                   |  |  | -       |  |                                    |  |  |                     | -       |  |  |  | 0.2     | 
|Impairment loss on masthead (10)                                        |  |                     | 28.3      |  |                        |  | -            |                                   |  |  | -       |  |                                    |  |  |                     | -       |  |  |  | -       | 
|Acquisition costs (12)                                                  |  |                     | -         |  |                        |  | -            |                                   |  |  | -       |  |                                    |  |  |                     | 18.3    |  |  |  | 1.2     | 
|                                                                        |  |                     |           |  |                        |  |              |                                   |  |  |         |  |                                    |  |  |                     |         |  |  |  |         | 
|Net earnings (loss) before reorganization costs and income taxes        |  |                     | (105.2)   |  |                        |  | 118.0        |                                   |  |  | 13.2    |  |                                    |  |  |                     | (44.6)  |  |  |  | (12.9)  | 
|Reorganization costs(13)                                                |  |                     | 25.8      |  |                        |  | 41.2         |                                   |  |  | 16.5    |  |                                    |  |  |                     | -       |  |  |  | -       | 
|                                                                        |  |                     |           |  |                        |  |              |                                   |  |  |         |  |                                    |  |  |                     |         |  |  |  |         | 
|Net earnings (loss) before income taxes                                 |  |                     | (131.0)   |  |                        |  | 76.8         |                                   |  |  | (3.3)   |  |                                    |  |  |                     | (44.6)  |  |  |  | (12.9)  | 
|Recovery of income taxes(14)(15)                                        |  |                     | (8.9)     |  |                        |  | (18.1)       |                                   |  |  | n/a     |  |                                    |  |  |                     | -       |  |  |  | -       | 
|                                                                        |  |                     |           |  |                        |  |              |                                   |  |  |         |  |                                    |  |  |                     |         |  |  |  |         | 
|Net earnings (loss) (15)                                                |  |                     | (122.1)   |  |                        |  | 94.9         |                                   |  |  | n/a     |  |                                    |  |  |                     | (44.6)  |  |  |  | (12.9)  | 
|                                                                        |  |                     |           |  |                        |  |              |                                   |  |  |         |  |                                    |  |  |                     |         |  |  |  |         | 
|                                                                        |  |                     |           |  |                        | 
|Net loss per share:                                                     |  |                     |           |  |                        |  |              |                                   |  |  |         |  |                                    |  |  |                     |         |  |  |  |         | 
|Basic                                                                   |  |                     | n/a(17)   |  |                        |  | n/a(17)      |                                   |  |  | n/a(17) |  |                                    |  |  |                     | $(1.11) |  |  |  | $(0.32) | 
|Diluted                                                                 |  |                     | n/a(17)   |  |                        |  | n/a(17)      |                                   |  |  | n/a(17) |  |                                    |  |  |                     | $(1.11) |  |  |  | $(0.32) | 
|                                                                        |  |                     |           |  |                        | 
|Balance sheet data:                                                     |  |                     |           |  |                        |  |              |                                   |  |  |         |  |                                    |  |  |                     |         |  |  |  |         | 
|Long-term debt (including current portion)                              |  |                     | 1380.1    |  |                        |  | n/a(15)      |                                   |  |  | n/a(15) |  |                                    |  |  |                     | 646.0   |  |  |  | 572.3   | 
|Total assets                                                            |  |                     | 654.9     |  |                        |  | n/a(15)      |                                   |  |  | n/a(15) |  |                                    |  |  |                     | 1,266.2 |  |  |  | 1,180.2 | 
|Net assets (liabilities)                                                |  |                     | (1,229.0) |  |                        |  | n/a(15)      |                                   |  |  | n/a(15) |  |                                    |  |  |                     | 315.4   |  |  |  | 304.3   | 
|Capital stock                                                           |  |                     | n/a(17)   |  |                        |  | n/a(15)      |                                   |  |  | n/a(15) |  |                                    |  |  |                     | 371.1   |  |  |  | 371.1   | 
|                                                                        |  |                     |           |  |                        | 
|US GAAP data:(18)                                                       |  |                     |           |  |                        |  |              |                                   |  |  |         |  |                                    |  |  |                     |         |  |  |  |         | 
|Operating income (loss)                                                 |  |                     | 102.6     |  |                        |  | 127.5        |                                   |  |  | 12.9    |  |                                    |  |  |                     | (11.6)  |  |  |  | 85.2    | 
|Net earnings (loss)                                                     |  |                     | (90.9)    |  |                        |  | 94.9         |                                   |  |  | n/a(15) |  |                                    |  |  |                     | (44.7)  |  |  |  | (11.0)  | 
|Net loss per share                                                      |  |                     |           |  |                        |  |              |                                   |  |  |         |  |                                    |  |  |                     |         |  |  |  |         | 
|Basic                                                                   |  |                     | n/a(17)   |  |                        |  | n/a(17)      |                                   |  |  | n/a(17) |  |                                    |  |  |                     | $(1.11) |  |  |  | $(0.27) | 
|Diluted                                                                 |  |                     | n/a(17)   |  |                        |  | n/a(17)      |                                   |  |  | n/a(17) |  |                                    |  |  |                     | $(1.11) |  |  |  | $(0.27) | 



11



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Notes:



|(1) | The financial data of Postmedia prepared in accordance with Canadian GAAP as at and for the year ended August 31, 2011 and the period ended
August 31, 2010 and the financial data of Canwest LP are not comparable to the financial data of Postmedia as at and for the years ended August 31, 2013, 2012 and 2011 which have been prepared in accordance with IFRS.
Additionally, the results of Postmedia prepared in accordance with Canadian GAAP as at and for the year ended August 31, 2011 and the period ended August 31, 2010 and the results of Canwest LP for the periods ended
May 31, 2010 and July 12, 2010 and the year ended August 31, 2009 have not been restated to reflect the presentation of the Disposed Properties as discontinued operations.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Depreciation expense reflects depreciation of property and equipment. Amortization expense reflects amortization of definite life intangible assets. Postmedia
presents software as an intangible asset on the statement of financial position and the related amortization as amortization in the statement of operations. Canwest LP presented software as property and equipment on the statement of financial
position and the related amortization as depreciation in the statement of operations.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | During the year ended August 31, 2013, as a result of interim and annual impairment testing of goodwill and indefinite life intangible assets Postmedia
recorded an impairment loss of $93.9 million which consists of $73.9 million related to goodwill, $16.4 million related to indefinite life intangible assets and $3.6 million related to property and equipment. The impairments were as a result of
lower than anticipated long-term revenue projections due to economic and structural factors including the uncertainty of the print advertising market and the rapidly evolving digital advertising market. In addition, during the year ended August 31,
2013, Postmedia recorded an impairment loss of $6.1 million with respect to a production facility upon reclassification of the asset from property and equipment to asset held-for-sale.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Restructuring and other items expense primarily reflects employee termination costs related to various initiatives undertaken by Canwest LP and PNCC with
the objective of permanently reducing or eliminating costs. Also included in this line item for the year ended August 31, 2013 is an expense related to changes made to an employee benefit plan as a result of an arbitrators ruling. In addition,
also included in this line item for the years ended August 31, 2011 and 2012 are curtailment gains relating to employee benefit plans a result of the termination of employees under the restructuring initiatives. The restructuring initiatives
resulted in the elimination, for a significant number of employees, of the right to earn defined benefits and as a result curtailments occurred.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | During the years ended August 31, 2011 and 2012, Postmedia recorded a loss on debt repayment related to the first amendment of its ABL Credit Agreement
and termination of the Term Loan Facility, respectively.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Under IFRS, Postmedia elected an accounting policy of recognizing the components of the defined benefit expense for its employee benefit plans within
different line items in the statement of operations. Under Canadian GAAP, the components of the defined benefit expense for employee benefit plans were aggregated and presented as a net amount in expenses in the statement of operations. Comparative
periods prior to September 1, 2010 have not been restated to reflect this change in presentation.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Other income recognized by Canwest LP represents a charge to the Canwest group of companies under the shared services agreement for the use of equipment
that was owned by Canwest LP.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | On May 29, 2009, as a result of a payment default by Canwest LP, the hedging agreements in place were terminated resulting in the termination
of hedging derivative instruments. In the year ended August 31, 2009, Canwest LP recorded an interest rate and foreign currency swap loss of $180.2 million, reclassified $60.1 million of accumulated other comprehensive
losses to the income statement as a result of hedge ineffectiveness and recorded a foreign currency exchange gain on the related long-term debt of $152.1 million.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(9) | (Gain) loss on derivative financial instruments for the year ended August 31, 2013 reflects Postmedias accounting treatment for variable prepayment
options on Postmedias First-Lien Notes and Second-Lien Notes that represent embedded derivatives that are accounted for separately at fair value. (Gain) loss on derivative financial instruments for the years ended August 31, 2013 and 2012
reflects Postmedias accounting treatment for a foreign currency interest rate swap that was not designated as a hedge, variable prepayment options on Postmedias First-Lien Notes and Second-Lien Notes that represent embedded derivatives
that are accounted for separately at fair value, and the settlement of foreign currency interest rate swaps designated as hedges that were settled during the year ended August 31, 2012.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10) | During Fiscal 2009, due to a decline in operating results, and lower expectations for revenue growth, Canwest LP recorded an impairment charge on intangible
assets of $28.3 million related to the masthead of the National Post.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(11) | For the year ended August 31, 2009, the nine months ended May 31, 2010 and the period ended July 12, 2010, Canwest LP did not enter
into any derivatives to hedge foreign currency risk. Postmedia has entered into derivative financial instruments to hedge foreign currency risk on a portion of its US dollar denominated debt. The foreign currency exchange gains and losses of
Postmedia represent gains and losses on the portion of US dollar denominated debt that is not subject to hedge accounting.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(12) | Acquisition costs relate to advisory, legal, valuation, and other professional fees incurred in connection with the Acquisition of Canwest LP which are
non-recurring. These costs were expensed as they were not directly related to either the issuance of debt or equity.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(13) | Reorganization costs represent costs that can be directly associated with the reorganization and CCAA filing of Canwest LP. These costs consist of
professional fees, advisory fees, management incentive plan and key employee retention plan costs, and foreign currency exchange losses resulting from translating monetary items that are subject to compromise at the period end compared to the
translated amounts at January 8, 2010, the date of the CCAA filing, and amounts related to resolution of legal claims outstanding on the date of Canwest LPs CCAA filing.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(14) | Canwest LP was not a taxable entity, so the income tax recoveries for the year ended August 31, 2009 as well as the nine months ended
May 31, 2010 represent income taxes recoverable by its corporate subsidiaries. Postmedia has not recorded a current or deferred tax expense or recovery as any current taxes payable or recoverable result in a decrease or increase,
respectively, to Postmedias tax loss carryforward balances. The cumulative tax loss carryforward balances have not been recognized as a net deferred tax asset on the statement of financial position.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(15) | Canwest LP adopted the liquidation basis of accounting as of May 31, 2010 and, as a result, a consolidated balance sheet was not presented. As
Canwest LP was under the liquidation basis of accounting for the period from June 1, 2010 to July 12, 2010, the supplementary financial information in note 5 of the annual audited financial statements of Canwest LP did
not include a provision for income taxes. Additionally, under the liquidation basis of accounting a balance sheet as at July 12, 2010 and a cash flow statement for the period from June 1, 2010 to July 12, 2010 was not
prepared for Canwest LP, and as a result balance sheet information as at May 31, 2010 and July 12, 2010 has not been presented in the above table.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



12



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##### Table of Contents

|(16) | On November 30, 2011, Postmedia completed the sale of the Disposed Properties. As a result of the sale, Postmedia has presented the results of the
Disposed Properties as discontinued operations as at and for the period ended November 30, 2011, and as such the statement of operations for the year ended August 31, 2011 prepared in accordance with IFRS has been revised to
reflect this change in presentation. The statement of financial position and the statements of cash flows for the year ended August 31, 2011 and for prior periods have not been revised to reflect this change in presentation. The results of
operations presented for Postmedia prepared in accordance with Canadian GAAP for the year ended August 31, 2011 and the period from July 13, 2010 to August 31, 2010 have not been revised to reflect this change in
presentation. Furthermore, the results of operations for Canwest LP have not been revised to reflect the change in presentation. Net earnings from discontinued operations for the year ended August 31, 2012 includes a gain on sale of
discontinued operations of $17.1 million and additional interest expense allocated to discontinued operations of $6.4 million. The following table provides the revenue and operating income of the Disposed Properties for the periods noted above that
have not been revised:
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                               |  |                     |       |  |                        |  |           |                                 |  |  |       |  |                                     |  |  |                     |       |  |  |  |       | 
|---------------------------------------------- |  | ------------------- | ----- |  | ---------------------- |  | --------- | ------------------------------- |  |  | ----- |  | ----------------------------------- |  |  | ------------------- | ----- |  |  |  | ----- | 
|                                               |  | Canwest LP          |       |  |                        |  | Postmedia |                                
|                                               |  | Year endedAugust 31 |       |  | Nine monthsendedMay 31 |  |           | PeriodfromJune 1,2010 toJuly 12 |  |  |       |  | Period fromJuly 13,2010 toAugust 31 |  |  | Year endedAugust 31 |      
|(in millions of Canadian dollars)              |  | 2009                |       |  | 2010                   |  |           | 2010                            |  |  |       |  | 2010                                |  |  | 2011                |      
|(basis of presentation)                        |  | CGAAP               |       |  | CGAAP                  |  |           | CGAAPliquidation                |  |  |       |  | CGAAP                               |  |  | CGAAP               |      
|Summary information of the Disposed Properties |  |                     |       |  |                        |  |           |                                 |  |  |       |  |                                     |  |  |                     |       |  |  |  |       | 
|Revenue                                        |  |                     | 133.9 |  |                        |  | 96.5      |                                 |  |  | 14.2  |  |                                     |  |  |                     | 15.5  |  |  |  | 120.2 | 
|Operating income (loss)                        |  |                     | 2.8   |  |                        |  | 5.3       |                                 |  |  | (1.9) |  |                                     |  |  |                     | (1.4) |  |  |  | 10.6  | 



|(17) | Canwest LP was a partnership and as a result no capital stock balance has been presented. In addition, earnings per share information have not been provided for the partnership units of Canwest LP.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(18) | For a discussion of the principal differences between Canadian GAAP and U.S. GAAP please see note 20 to our audited consolidated financial statements for the year ended August 31, 2011, filed previously with the SEC as
Exhibit 15.1 to our annual report on Form 20-F for the year ended August 31, 2011.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Currency and Exchange Rates:

The following table lists the monthly high and low exchange rates for US$1.00 to the Canadian dollar for the following periods based on
the noon buying rate for US dollars published by the Bank of Canada. These rates are presented for information purposes. For information about the basis of translating US dollars into Canadian dollars in our financial statements, see note 2 to our
audited consolidated financial statements attached hereto as Exhibit 15.1.



|       |  |      |      |  |                 |  |        |                |  |  |        | 
|------ |  | ---- | ---- |  | --------------- |  | ------ | -------------- |  |  | ------ | 
|Month  |  | Year |      |  | High (CAD$) (1) |  |        | Low (CAD$) (1) | 
|August |  |      | 2013 |  |                 |  | 1.0553 |                |  |  | 1.0297 | 
|July   |  |      | 2013 |  |                 |  | 1.0576 |                |  |  | 1.0261 | 
|June   |  |      | 2013 |  |                 |  | 1.0532 |                |  |  | 1.0170 | 
|May    |  |      | 2013 |  |                 |  | 1.0371 |                |  |  | 1.0023 | 
|April  |  |      | 2013 |  |                 |  | 1.0270 |                |  |  | 1.0072 | 
|March  |  |      | 2013 |  |                 |  | 1.0314 |                |  |  | 1.0156 | 



|(1) | noon buying rate for US dollars published by the Bank of Canada
|--- | ---------------------------------------------------------------



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The following table lists, for each period presented, the high and low exchange rates, the
average of the closing exchange rates, or Closing Rates, on the last day of each month during the period indicated and the exchange rates at the end of the applicable period for one US dollar, expressed in Canadian dollars, based
on the closing rate as announced by the Bank of Canada.



|                      |  |      |        |  |     |   |        |         |  |   |            |  |  |   |        | 
|--------------------- |  | ---- | ------ |  | --- | - | ------ | ------- |  | - | ---------- |  |  | - | ------ | 
|(Canadian dollars)    |  | High |        |  | Low |   |        | Average |  |   | Period end | 
|Year ended August 31, |  |      |        |  |     |   |        |         |  |   |            |  |  |   |        | 
|2009                  |  | $    | 1.2991 |  |     | $ | 1.0328 |         |  | $ | 1.1776     |  |  | $ | 1.0950 | 
|2010                  |  | $    | 1.1048 |  |     | $ | 0.9988 |         |  | $ | 1.0452     |  |  | $ | 1.0665 | 
|2011                  |  | $    | 1.0535 |  |     | $ | 0.9428 |         |  | $ | 0.9893     |  |  | $ | 0.9794 | 
|2012                  |  | $    | 1.0549 |  |     | $ | 0.9755 |         |  | $ | 1.0092     |  |  | $ | 0.9857 | 
|2013                  |  | $    | 1.0567 |  |     | $ | 0.9683 |         |  | $ | 1.0111     |  |  | $ | 1.0530 | 
|                      |  |      |        |  |     |   |        |         |  |   |            |  |  |   |        | 

In this annual report, the relevant period end closing rate has been used to calculate statement of
financial position data and the average closing rate has been used to calculate statement of operations data. We do not represent that Canadian dollar or US dollar amounts could be converted into US dollars or Canadian dollars, as the case may be,
at any particular rate, the rates above, or at all. The closing rate used to record the transactions that occurred on July 13, 2010, including the Acquisition, was $1.0337, which is the closing rate announced by the Bank of Canada on
July 13, 2010 to convert one US dollar to one Canadian dollar. On November 15, 2013, the corresponding closing rate was $1.0447.

B. Capitalization and
indebtedness.

Not applicable

C. Reason
for the Offer and Use of Proceeds.

Not applicable

D. Risk Factors.

The Corporation is subject
to a number of risks and uncertainties which are described in detail in its MD&A, attached hereto as Exhibit 15.2, under the section entitled Risk Factors which section is incorporated by reference in this annual report. The risks
and uncertainties described in the MD&A, are those the Corporation currently believe to be material, but they are not the only ones the Corporation faces. If any of the risks, or any other risks and uncertainties that have not yet been
identified or that are currently considered not to be material, actually occur or become material risks, the Corporations business, financial condition, results of operations and cash flows and consequently, the price of the Corporations
securities could be materially and adversely affected.

ITEM 4.  INFORMATION ON THE COMPANY

A. History and Development of the Corporation.

Incorporation

7535538 Canada Inc. was incorporated under the CBCA on April 26, 2010. Its name was changed to Postmedia Network Canada Corp.
pursuant to Articles of Amendment filed on June 25, 2010. 7536321 Canada Inc. was incorporated under the CBCA on April 27, 2010. Its name was changed to Postmedia Network Inc. pursuant to Articles of Amendment filed on June 25, 2010
and it is a wholly-owned subsidiary of the Corporation.



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Both Postmedia Network Canada Corp. and Postmedia Network Inc. were specifically
incorporated for the sole purpose of facilitating the acquisition of substantially all of the newspaper and related online, digital, and mobile assets of the LP Entities including the shares of National Post Inc. See History and Development of
the Corporation  Acquisition below.

Acquisition

Canwest LP previously owned newspaper and related online, digital, and mobile assets and was wholly-owned by Canwest Global, a parent
company that also wholly-owned, among other entities, CPI, CBI and CCI.

CPI, CBI, and CCI sought, and on January 8, 2010
obtained, protection under the CCAA granting protection from creditors. Although not itself an applicant, the protections provided by the CCAA were extended to Canwest LP. National Post Inc. was excluded from the CCAA protection.

Pursuant to the Asset Purchase Agreement that was entered into in connection with the implementation of the plan of arrangement and
compromise under the CCAA relating to the LP Entities (the Plan), Postmedia Network Inc. purchased substantially all of the assets, including the shares of National Post Inc., and assumed certain liabilities of Canwest LP (the
Acquisition) for $1.05 billion (the Acquisition Consideration). The Acquisition Consideration consisted of cash consideration of $927.8 million and non-cash consideration, through the issuance of equity, having
a value of $120.1 million. To satisfy the cash portion of the purchase price and to fund certain transaction costs under the Asset Purchase Agreement and the Plan, Postmedia raised an aggregate of $954.4 million of financing, consisting of the Term
Loan Facility, Second-Lien Notes and the Funding Commitment (as defined below). See Item 10. C Material Contracts  Second-Lien Notes Indenture.

Pursuant to an amended funding commitment letter received by the Corporation and Postmedia Network Inc. (the Funding
Commitment) and a subscription agreement dated July 2, 2010 (the Subscription Agreement), on the acquisition date of July 13, 2010, members of the Ad Hoc Committee or their assignees purchased 27 million
Shares of Postmedia Network Canada Corp. for an aggregate of $250 million. The proceeds from the sale of the Shares to the members of the Ad Hoc Committee or their assignees pursuant to the Funding Commitment and the Subscription Agreement were
contributed by Postmedia Network Canada Corp. to Postmedia Network Inc. as a capital contribution and Postmedia Network Inc. used such capital contribution as part of the consideration for the Acquisition.

The Acquisition closed and the Plan was implemented on July 13, 2010 and, at such time, title to and in all of the assets were
transferred to Postmedia Network Inc., free and clear of encumbrances (other than certain permitted encumbrances) pursuant to a vesting order of the Ontario Superior Court of Justice (Commercial List) issued on June 18, 2010 and an assignment
and assumption agreement dated as of July 13, 2010 between certain of the LP Entities and Postmedia Network Inc.

Significant Post-Acquisition Events

On January 31, 2011, National Post Inc. was dissolved and its assets and liabilities were transferred to Postmedia Network Inc.

On June 7, 2011, the Corporation filed the Prospectus in all provinces of Canada other than Quebec. On June 14, 2011, the
Corporations Voting Shares and Variable Voting Shares were listed and began trading on the TSX under the symbols PNC.A and PNC.B, respectively.



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On October 18, 2011, the Corporation entered into an asset purchase agreement
with affiliates of Glacier Media Inc. (the Glacier Transaction) to sell substantially all of the assets and liabilities of the Lower Mainland Publishing Group, the Victoria Times Colonist and the Vancouver Island Newspaper
Group, collectively herein referred to as the Disposed Properties, for a purchase price of $86.5 million. On November 30, 2011, the Corporation completed the Glacier Transaction and recorded a gain on the sale of
the Disposed Properties of $17.1 million. In accordance with the terms and conditions of the Term Loan Facility, on November 30, 2011, the proceeds from the sale of the Disposed Properties were used to make a principal payment of
US$84.6 million ($86.5 million) on the Term Loan Facility. Additional information on the Glacier Transaction is available in note 23 of the Corporations audited consolidated financial statements for the years ended
August 31, 2013, 2012 and 2011.

On June 26, 2012, the Corporation entered into an agreement of purchase and
sale with The Rose & Thistle Group Ltd. for the sale of the Toronto Head Office at a purchase price of $24 million. The sale closed October 12, 2012. The purchase and sale agreement includes a leaseback of the property
to Postmedia Network Inc. for a period of 18 to 24 months while new accommodations are readied for relocation. On August 17, 2012, Postmedia announced that it had entered into a 15-year lease commencing December 1, 2013 for its
new head office located at 365 Bloor Street East in downtown Toronto, Ontario. The net proceeds from the sale of the Toronto Head Office were used on November 13, 2012 for a mandatory redemption of $23.2 million aggregate principal
amount of First-Lien Notes at par in accordance with the terms and conditions of the First-Lien Notes indenture.

On
August 16, 2012, the Corporation issued $250.0 million in aggregate principal amount of First-Lien Notes, the proceeds of which were used to repay the Term Loan Facility in its entirety. In conjunction with the issuance of the First-Lien
Notes and the repayment of the Term Loan Facility, the Corporation settled the foreign currency interest rate swaps related to the Term Loan Facility. See Item 10.C Material Contracts  First-Lien Notes Indenture.

In September 2012, the Corporation settled a notional amount of US$97.5 million of the foreign currency interest rate swap associated
with the Second-Lien Notes for cash consideration of $9.6 million.

B. Business Overview.

General

Postmedia is the largest publisher
by circulation of paid English-language daily newspapers in Canada, according to Newspapers Canadas 2012 Circulation Data Report. The Corporation has the highest weekly print readership of paid English-language daily newspapers in Canada,
based on NADbank 2012 survey data. The Corporations business consists of news and information gathering and dissemination operations, with products offered in major Canadian markets and a number of regional and local markets in Canada through
a variety of print, web, tablet and smartphone platforms. The combination of these distribution platforms provides readers with a variety of mediums through which to access and interact with Postmedias content. The breadth of Postmedias
reach and the diversity of its content enable advertisers to reach their target audiences on a local, regional or national scale through the convenience of a single provider.

Postmedia had an approximately 25% share of Canadas total daily newspaper paid circulation according to Newspapers Canadas
2012 Circulation Data Report, and weekly readership of 4.2 million Canadian adults according to 2012 NADbank survey data. The Corporation has the leading paid English-language daily newspapers, based on weekly print readership, in five out of
the six largest advertising markets in Canada according to 2012 NADbank survey data. Its daily metropolitan newspaper brands are among the oldest in Canada with an average publication history of 137 years.



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During the year ended August 31, 2013, Postmedia amended its operating segments to
reflect its change to a functional reporting structure which resulted in the elimination of publishers at the individual newspapers and the creation of Senior Vice President roles which will be responsible for specific functions across the entire
business. Prior to the change to a functional reporting structure, Postmedia had one reportable operating segment, the Newspaper operating segment and an All other category which included other business activities and an operating segment that was
not separately reportable. As a result of the changes to the reporting structure Postmedia has one operating segment, the Newspaper operating segment. The Newspaper operating segment publishes daily and non-daily newspapers and operates digital
media and online assets including the canada.com website, each newspapers online website, various classified advertising websites and Infomart, the Corporations media monitoring service.

The Corporation owns and operates the National Post, which is one of Canadas two daily national newspapers, nine daily
metropolitan newspapers, five non-daily community newspapers, and various non-daily shopping guides and newspaper-related publications. Its operations also include Postmedia Editorial Services (PES), a newspaper production
service, Postmedia Integrated Advertising (PIA), an integrated advertising division, and Flyer Force, a distribution service for advertising flyers and circulars for third parties.

Postmedia also has an extensive portfolio of digital media and online assets. It owns and represents 22 destination websites that make
up the Postmedia digital network, one of Canadas leading online general news and information sources, covering its newspapers websites, including classified websites and other online properties. The Corporation also provides sales
representation services to third-party branded sites.

The Corporation has also developed its mobile network, which includes mobile
optimized websites and mobile applications across various tablet and smartphone platforms such as iOS, Android and Blackberry. The Corporations mobile applications include, but are not limited to, applications relating to its newspaper
operations.



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##### Table of Contents

Newspaper Operations

Daily
newspapers

The Corporation publishes nine daily metropolitan newspapers (eight broadsheets and one tabloid) and a national
newspaper. Its daily metropolitan newspapers are geographically diverse and located in major metropolitan centres across Canada, which provides the Corporation and its advertisers access to target audiences throughout Canada. The average publication
history of Postmedias daily metropolitan newspapers is 137 years. Postmedias daily newspapers are well-established in the communities that they serve. Postmedias combination of national reach and local presence makes the
Corporations daily newspapers attractive to both national and local advertisers. Postmedias newspapers have consistently been recognized for the quality of their content, having received numerous nominations and awards. Recent
recognition includes: National Newspaper Awards for Ottawa Citizen, Postmedia News and Edmonton Journal; Canadian Association of Journalists Awards for both Postmedia News and The Vancouver Sun; National Post, Edmonton Journal and The Gazette were
all honoured by the Society of News Design, with National Post winning the second-highest number of awards in the world  66 awards in total; Glen McGregor and Stephen Maher of Ottawa Citizen/Postmedia News took home the Michener Award for
their investigation into the robocalls scandal. They also won a World Press Freedom Award, the Canadian Hillman Prize in Journalism, as well as a Canadian Association of Journalists Award and National Newspaper Award (mentioned above) for the same
work; and Postmedia Newspapers took home six first place awards at the Newspapers Canada 2013 Great Ideas Competition  five for The Vancouver Sun and one for The Province. According to Newspapers Canadas 2012 Circulation Data Report, the
Corporation had an approximately 25% share of Canadas total paid daily newspaper circulation. In addition, each of the Corporations daily metropolitan newspapers has the highest circulation and readership among English-language
newspapers in the market that it serves (except for The Province and The Vancouver Sun, both of which are Postmedias newspapers, which are second in their market to each other for circulation and readership, respectively)based on average daily
paid circulation and readership.

The National Post, the Corporations daily national newspaper, provides benefits to the
Corporations overall operations, including the provision of a newspaper with a national audience footprint and editorial content infrastructure for the Toronto market.

The following table provides details about the Corporations paid daily newspapers.



|                              |  |           |  |                     |  |                       |  |                                   |     |  |  |  |     |      |  |  |  |  |  | 
|----------------------------- |  | --------- |  | ------------------- |  | --------------------- |  | --------------------------------- | --- |  |  |  | --- | ---- |  |  |  |  |  | 
|Publication                   |  | Market    |  | Year    Established |  | Market    Position(1) |  | LocalNewspaper    Market Share(1)
|Daily Metropolitan Newspapers |  |           |  |                     |  |                       |  |                                   |     |  |  |  |     |     
|The Province                  |  | Vancouver |  | 1884                |  |                       |  | 2                                 | (2) |  |  |  | 100 | %(4)
|The Vancouver Sun             |  | Vancouver |  | 1886                |  |                       |  | 1                                 |     |  |  |  | 100 | %(4)
|The Gazette                   |  | Montreal  |  | 1778                |  |                       |  | 3                                 | (3) |  |  |  | 100 | %   
|Calgary Herald                |  | Calgary   |  | 1883                |  |                       |  | 1                                 |     |  |  |  | 66  | %   
|Edmonton Journal              |  | Edmonton  |  | 1903                |  |                       |  | 1                                 |     |  |  |  | 70  | %   
|Ottawa Citizen                |  | Ottawa    |  | 1845                |  |                       |  | 1                                 |     |  |  |  | 73  | %   
|The Windsor Star              |  | Windsor   |  | 1918                |  |                       |  | 1                                 |     |  |  |  | 100 | %   
|The StarPhoenix               |  | Saskatoon |  | 1902                |  |                       |  | 1                                 |     |  |  |  | 100 | %   
|Leader-Post                   |  | Regina    |  | 1883                |  |                       |  | 1                                 |     |  |  |  | 100 | %   
|Daily National Newspaper      |  |           |  |                     |  |                       |  |                                   |     |  |  |  |     |     
|National Post                 |  | National  |  | 1997                |  |                       |  | 2                                 |     |  |  |  | N/A |     



Notes:

| | (1) | Market position and local newspaper market share for English language newspapers are determined by average paid circulation of daily newspapers. Source: Newspapers Canada  2012 Circulation Data Report.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Second to The Vancouver Sun, which is also operated by the Corporation.
| | --- | -----------------------------------------------------------------------

| | (3) | Number one English-language paid daily newspaper; number three overall among paid daily newspapers.
| | --- | ---------------------------------------------------------------------------------------------------

| | (4) | Includes The Vancouver Sun and The Province.
| | --- | --------------------------------------------



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Non-daily newspapers

The Corporation publishes five non-daily free newspapers distributed in the Windsor-Essex region in Ontario. Postmedias non-daily
newspapers are generally delivered to every household in the respective communities in which they operate, thereby providing advertisers with substantial coverage of these community markets.

Digital Media and Online Operations

Postmedia intends to grow its revenue by leveraging its industry leading print brands and strong customer relationships into its
expanding digital media product offerings. The Corporations digital media and online operations include the Postmedia digital network, websites for the Corporations daily and community newspapers, online classified websites, and Infomart
(a subscription-based media monitoring service). In addition, Postmedias digital media and online operations sell advertising on behalf of third-party websites. The Corporation has also developed its mobile network, which includes mobile
optimized websites and mobile applications across various tablet and smartphone platforms.

Postmedia digital network

The Postmedia digital network is a comprehensive 24/7 online news, entertainment and information network of websites that leverages the
Corporations content, brands and customer relationships. The Postmedia digital network is one of Canadas leading online general news and information sources that integrates Canadian news and specialty content and had a monthly average of
6.7 million unique visitors in the year ended August 31, 2013, according to comScore. The Postmedia digital network hosts the websites and electronic editions of the Corporations daily and community newspapers as well as other
select websites. Being hosted on the Postmedia digital network offers these websites a platform to extend their audience reach and market, as well as to build and reinforce relationships with respect to both advertisers and audiences.

Through the Corporations proprietary content, as well as technology partners and third party content providers, the Postmedia
digital network provides a number of personalized online tools, including internet search and other services. The Postmedia digital network currently provides up-to-date international, national and local news coverage sourced from the
Corporations newspapers and third-party newswire services.

Newspaper Websites and e-Papers

As part of its effort to grow its digital media and online business, Postmedias newspapers deliver content across multiple
platforms including desktop, tablet and mobile devices.

Through their expertise in exporting electronic press pages intended for
print editions to web-friendly formats, the daily newspapers publish page-by-page e-Papers (formerly referred to as digital editions), complete with stories, columns, photos and advertising. The e-Papers are available without charge to print
subscribers and as digital-only paid subscriptions. Readers of the e-Papers are able to view page layouts, photos and advertisements exactly as they appear in the print edition of the newspaper. The experience is enhanced by a variety of digital
features and tools, including search, aimed to ease navigation and add value.



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Postmedias print subscribers receive free access to their print newspapers
website via desktop, tablet and mobile devices, each of which provides headlines, breaking news, analysis, commentary and selected stories from the daily newspaper editions. For non-print subscribers, Canadian users can access ten free articles and
international users can access five free articles every 30 days or purchase a digital access subscription to obtain unlimited access. The Corporations newspapers websites also serve as customer relationship tools, promoting subscriptions
to the print editions, allowing for the purchase or renewal of newspaper subscriptions, permitting notification of vacation stops and reactivations, and processing of billing inquiries.

Postmedia newspaper website audiences have continued to grow, having expanded from approximately 2.3 million average monthly unique
visitors in Fiscal 2008 to more than 5.6 million average monthly unique visitors in Fiscal 2013, according to comScore. Postmedias newspaper websites ranked number one for average monthly unique visitors in the newspaper category
based on the year ended August 31, 2013 in Canada, also according to comScore, and these sites reach 33% of all Canadians who visit newspaper websites.

Infomart

Infomart is a subscription-based
business-to-business service for Canadian news and business information and a one-stop resource for media monitoring, research insights, brand solutions and financial and corporate data. The service offers online media monitoring covering print,
broadcast television and radio, social media, and newswires in a single integrated platform. Print sources include all of the Corporations publications plus other Canadian and international sources such as third party newspapers. As of
August 31, 2013, Infomart had approximately 1,000 subscribers.

In addition to subscriptions, Infomart also generates
revenue through an electronic licensing and rights management service of the Corporations news content, corporate data and third-party content via domestic and international third-party channels used by businesses across North America.

Mobile Applications

The Corporation has
also developed its mobile network, which includes mobile optimized websites and mobile applications across various smartphone platforms such as iOS, Android and Blackberry. The Corporations mobile network had over 5.5 million average
monthly unique visitors during the year ended August 31, 2013, according to Omniture Site Catalyst and Google Analytics.

Third-party and other websites

The Corporation sells online advertising and advertising production and placement services on third-party branded websites. These
agreements extend the reach of the Postmedia digital network and increase the Corporations advertising sales opportunities.

Other digital media
agreements

The Corporation is party to various agreements under which it licenses content from third parties for its websites,
including text, photos, videos, databases and interactive applications. The licensed content covers a broad range of topics, including sports, entertainment, automotive, recreation and travel from a variety of well-known content providers.



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Operations

Editorial

Editorial content is generated across the Corporations digital platforms and publications and Postmedias
infrastructure allows for sharing of its generated content among newspapers in an efficient and cost effective manner. Editorial policy is developed for each of the Corporations newspapers by local newsroom management. This leadership ensures
that each newspaper is responsive to local issues and meets the editorial needs of its readers. The Corporations newspapers and digital platforms focus on readers of various ages and demographics and aim to reflect the values and interests of
their respective markets. Each of the Corporations newspapers has its own editorial staff that is responsible for producing local editorial content of the newspaper and digital platforms supplemented by certain content which comes from PES,
other wire services and freelancers.

The Corporation owns or has the rights to use the editorial content that is produced by its
employees and freelancers, which allows for sharing of information and editorial content among its various publications. Further, since the Corporations newspapers operate across a broad geographic spectrum, reporters familiar with local
issues can be assigned to cover events in a particular region. Management believes that sharing of editorial content and expertise allows the Corporation to achieve substantial operating efficiencies compared to other publishers which own a smaller
number of publications.

The Corporation also provides various centralized editorial services, including PES, the Corporations
editorial services division, to its newspapers and third parties. PES provides centralized pagination and production services, and standardized editorial content packages to all of the Corporations newspapers and external newspaper clients,
reducing editorial content costs across Postmedias Newspaper operations. External clients rely on PESs pagination products for sports and business updates, television listings, comics and puzzles, and paginated features content. PES
supports the Corporations newspapers and serves a number of third party clients in Canada and the United States. The number of third party clients changes over the year due to the seasonal fluctuations associated with professional sports
seasons.



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##### Table of Contents

Sales and advertising

The following charts provide a breakdown of the Corporations revenue for Fiscal 2013 and 2012:



LOGO

The following charts provide a breakdown of the Corporations total print advertising revenue for
Fiscal 2013 and 2012:



LOGO

The Corporation offers advertisers extensive audience reach through a combination of circulation and
readership of its newspapers, e-Papers, unique visitors to its websites and various mobile products.

Each of the Corporations
newspapers has a dedicated sales force and uses a centralized classified call centre to generate local sales. The centralized classified call centre is located in Calgary. The remainder of the Corporations advertising sales are generated from
local, national and multi-market accounts. National and multi-market sales for the Corporation are sold by PIA, the Corporations integrated advertising division. PIA operates through offices in Toronto, Montreal and Vancouver, in addition to one
contract representative in the U.S.



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##### Table of Contents

The Corporations local advertising is sold on a publication-by-publication basis.
Each of the Corporations newspapers has a locally-based sales team that sells display, commercial and third-party classified advertisement space, principally to local businesses and organizations. The majority of commercial classifieds relate
to automotive, employment and real estate advertisements. In addition to commercial classified advertising, each newspaper also sells private party classifieds and online classified advertisement placement, which are primarily administered locally.

In addition, Postmedia has digital advertising sales specialists to develop digital advertising opportunities for its newspapers.
Currently, a significant portion of the Corporations local and national sales forces sell both newspaper and digital media and online advertising.

National advertising takes the form of advertisements primarily from large national companies. The sale of national advertisements is
handled by PIA, which employs a dedicated sales team that services the Corporations group of newspapers and digital properties and provides individual newspapers with advertising sales representation, insertion order processing, invoicing and
payment processing. The largest segment of the Corporations total advertising revenues is its advertising that runs in the printed newspaper, often referred to as Postmedias run-of-press advertising revenue. PIA also
represents several third-party publishers and publications acting as their national advertising sales agent on a commissioned basis.

Production and Services

Circulation and distribution

The
Corporations circulation revenue is generated from home delivery sales, single copy sales made through retailers and vending boxes, and corporate bulk sales. Newspapers are shipped from printing plants to depot drop locations or single copy
retail outlets by independent trucking companies in each market. Postmedias newspaper distribution is carried out primarily by independent distributors and carriers along with other third-party distributors that deliver newspapers to
subscribers. These third-party distribution networks enable the Corporation to operate via short-term contracts and reduce supplier concentration issues. Single copies are also sold through vending boxes and retail outlets in the relevant
circulation areas.

The Corporation benefits from agreements with distributors which provide for the delivery of newspapers from
printing facilities to bulk locations, retailers, vending boxes and residential and corporate subscribers. Typically, a newspaper division is party to several distribution agreements, covering different stages of delivery and geographical areas.

The Corporation offers pre-authorized monthly payment programs to its subscribers. These automatic credit card and bank debit
payment programs lower the cost of collection and enhance subscriber retention.

In addition to distributing newspapers, Postmedia
also offers three types of insert distribution services:



| |  |  | Paid subscriber basedistribution to existing newspaper subscribers;
| | - |  | --------------------------------------------------------------------



| |  |  | Extended market coveragedistribution of flyers or other materials to non-subscriber households; and
| | - |  | ----------------------------------------------------------------------------------------------------



| |  |  | Total market coverageboth subscriber and non-subscriber households for full coverage to specific areas.
| | - |  | --------------------------------------------------------------------------------------------------------



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These distribution options allow broader penetration of the Corporations markets,
allowing advertisers to target specific demographic and geographic segments. In addition, Flyer Force, a distribution service for advertising flyers, distributes insert packages to non-subscribers in Calgary, Edmonton and Ottawa, providing extended
market coverage for their associated Postmedia newspapers (the Calgary Herald, the Edmonton Journal and the Ottawa Citizen, respectively).

Customer service

The Corporation has outsourced subscriber services to a third party. These subscriber services include answering and handling
customer calls, customer service inquiries and complaints.

Printing

Other than as described in Production and Services - Outsourcing below, the Corporation owns all of the manufacturing
equipment for its newspapers and other publications, including printing presses and mailroom inserting equipment. In some markets, in order to improve the operating efficiency of its printing presses, the Corporation also uses its printing press
capacity to print advertising inserts, flyers and other third-party publications.

Outsourcing

As part of Postmedias ongoing focus on cost containment, various outsourcing initiatives have been implemented. In Fiscal 2011,
Postmedia completed the outsourcing of advertising production at certain of its daily newspapers to lower cost suppliers in the Philippines and India. Postmedia has also outsourced certain call centre operations to a third party. Except for the
Ottawa market, the National Post is printed by various third parties in all other regions in Canada where the National Post is distributed. In Fiscal 2012, the Corporation outsourced certain of its flyer force and inserting operations, and in August
2013 outsourced its printing operations for the Edmonton Journal. The Corporation also entered into a print outsourcing agreement for the production of the Calgary Herald, beginning November 2013. During November 2013 the Corporation committed to
third party outsourcing contracts for the production of both The Vancouver Sun and The Province. The outsourcing is expected to take place in early calendar 2015. The Corporation continues to look at future outsourcing opportunities as part of
its business transformation initiatives.

Competitive Conditions

The Corporation faces competition in each of its markets as information is now widely disseminated through many media platforms on a
local, national and international basis. Participants in the newspaper publishing industry depend primarily upon advertising sales, paid subscriptions and single copy newspaper sales in order to generate revenue. Competition for advertising,
subscribers, readers and distribution is intense and comes primarily from television; radio; local, regional and national newspapers; magazines; free publications; direct mail; internet; telephone directories; and other communications and
advertising and subscriber-based media that operate in these markets. In recent years there has been a growing shift in advertising dollars from newspaper advertising to other advertising platforms, including new media outlets, and this shift may be
permanent. Participants in the online media industry also depend upon the sale of advertisements and paid subscriptions in order to generate revenue. The online media industry experiences additional competitive challenges because barriers to entry
are low and geographic location is less relevant. Newspapers attract a relatively high percentage of local advertising in Canada. The Corporation believes local radio is the primary competitor to local newspapers for Canadian retail advertisers who
utilize daily newspapers and local radio more than television or digital media.



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In addition, there is increasing consolidation in the Canadian newspaper publishing and
other media industries, and competitors increasingly include market participants with interests in multiple media. These competitors may be more attractive than Postmedia to certain advertisers because they may be able to bundle advertising sales
across newspaper, television and internet platforms. Some of these competitors also have access to greater financial and other resources than Postmedia does.

In 2012, the Canadian newspaper industry comprised approximately 95 paid daily English and French newspapers and 29 free
dailies for a total of 124 daily newspapers. Paid daily newspapers accounted for a total of 4,210,340 copies on an average publishing day, according to Newspapers Canada.

The Canadian daily newspaper industrys revenue was over $3.0 billion in 2012, with 74% of that revenue derived from print and
online advertising and the balance from circulation, according to the Canadian Newspaper Association. Canadian newspaper publishers typically sell advertising based primarily on readership and secondarily on circulation. In contrast, U.S. newspaper
publishers typically sell advertising based solely on circulation figures. Canadian newspapers have higher penetration compared to the U.S., with 69% of Canadian adults reading a daily newspaper each week compared to only 61% of American adults,
according to NADBank and the Newspaper Association of America/Scarborough Research data, respectively.

In recent years and
continuing to date, the economic downturn and structural changes in the industry have driven significant declines in print advertising as well as a continuing shift in advertising dollars from print newspaper advertising to advertising in other
formats, particularly online and other digital platforms, including search and social media websites. This shift may be permanent. To date, the newspaper industry has made limited progress in replacing print advertising revenue with digital
advertising revenue.

Components

Newsprint is the principal raw material used in the production of Postmedias daily newspapers and other print publications. It is
a commodity that is generally subject to price volatility. Newsprint expenses fluctuate due to both changes in volume and changes in price.

Postmedias cost of newsprint is influenced by its strong supplier relationships, volume purchasing power, proximity to Canadian
paper mills and regional supply arrangements that reduce transportation costs. The Corporation opportunistically enters into newsprint purchase agreements with varying terms of up to six months depending on external factors such as foreign export
demand, North American mill capacity, operating rates and inventory.

Intangible Properties

Postmedia uses a number of trademarks, service marks and trade names to identify its products and services. Many of these trademarks are
registered by the Corporation in the appropriate jurisdictions. In addition, the Corporation has legal rights in the unregistered marks arising from their use. Postmedia has taken affirmative legal steps to protect its trademarks, and it believes
its trademarks are adequately protected.

The content of Postmedias newspapers and websites is protected by copyright. The
Corporation owns copyrights in each of its publications as a whole and in all individual content items created by its employees in the course of their employment, subject to limited exceptions. Postmedia has entered into licensing agreements with
wire services, freelancers and other content suppliers on terms that it believes are sufficient to meet the needs of its publishing operations. Postmedia believes that it has taken appropriate and reasonable measures to secure, protect and maintain
its rights or obtain agreements from licensees to secure, protect and maintain copyright protection of content produced or distributed by the Corporation.



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Postmedia has registered a number of domain names, many of which constitute trademarks,
service marks and trade names used in its business, under which it operates websites associated with its publishing and online operations. As every Internet domain name is unique, its domain names cannot be registered by other entities as long as
its registrations are valid.

Postmedias intellectual property constitutes a significant part of the value of the Company. The
Corporation relies on the trademark, copyright, internet/domain name, trade secret and other laws of Canada and other countries, as well as nondisclosure and confidentiality agreements, to protect its intellectual property rights. However, the
Corporation may be unable to prevent third parties from using its intellectual property without its authorization, breaching any nondisclosure agreements with the Corporation, acquiring and maintaining domain names that infringe or otherwise
decrease the value of its trademarks and other proprietary rights, or independently developing intellectual property that is similar to the Corporations, particularly in those countries that do not protect the Corporations proprietary
rights as fully as in Canada.

Third parties may challenge the validity or scope of Postmedias intellectual property rights
from time to time, and such challenges could result in the limitation or loss of intellectual property rights. Irrespective of their validity, such claims may result in substantial costs and diversion of resources, which could have an adverse effect
on the Corporations operations.

Cycles

Postmedias revenues largely depend on its customers advertising budgets. Advertisers budgets tend to be cyclical,
reflecting the general economic climate and consumers buying habits. As a result, Postmedias revenue has experienced, and is expected to continue to experience, significant seasonal variances due to advertising patterns and influences on
peoples media consumption habits. Typically, the Corporations revenue is lowest during the fourth quarter of its Fiscal year, which ends in August, and highest during the first and third quarters, which end in November and May,
respectively, while expenses are relatively constant throughout the Fiscal year. These seasonal variations may lead to increased borrowing needs at certain points within the Fiscal year. As a result, Postmedia may use amounts available under the ABL
Facility to mitigate the impact of short-term fluctuations in cash flow. See Risk Factors - We may not be able to refinance our ABL Facility on attractive terms, or at all in the Corporations MD&A, attached hereto as Exhibit
15.2.

Environmental Protection

Postmedias operations are subject to a variety of laws and regulations concerning, among other things, emissions to the air, water
and land, sewer discharges, handling, storage and disposal of, or exposure to, hazardous substances and wastes, recycling, remediation of contaminated sites or otherwise relating to protection of the environment and employee health and safety. The
Corporation uses and stores hazardous substances such as inks and solvents in conjunction with its operations at its printing facilities. Such hazardous substances have in the past been stored in underground storage tanks at some of the
Corporations properties. Some of its printing and other facilities are located in areas with a history of long-term industrial use, and may be impacted by past activities onsite or by contamination emanating from nearby industrial sites. In
the past, a Postmedia predecessor has had contamination resulting from leaks and spills at some of its locations. Postmedia has incurred and will continue to incur costs to comply with environmental, health and safety requirements; but, to date,
such costs have not been material.

Regulation

The publication of newspapers in Canada is not directly regulated by federal or provincial laws. There are, however, indirect
restrictions on the foreign ownership of Canadian newspapers by virtue of certain provisions of the Tax Act. The Tax Act limits the deductibility by Canadian taxpayers of expenditures for advertisements in issues of newspapers other than, except in
limited circumstances, Canadian issues of Canadian newspapers.



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In order to qualify as a Canadian issue, the issue generally must have its type
set in Canada, be edited in Canada by individuals resident in Canada for purposes of the Tax Act and be printed and published in Canada. Issues of Postmedias newspapers currently meet these criteria.

The test of whether a newspaper is a Canadian newspaper depends on the jurisdiction, governance, factual control and share
ownership of the corporation which directly publishes the newspaper. Postmedia Network Inc. publishes its newspapers directly. In order to satisfy the requirements of a Canadian newspaper (subject to a statutory 12 month grace period),
Postmedia Network Inc. must satisfy the following: (i) the corporation must be incorporated under the laws of Canada or a province thereof, (ii) the chairperson or other presiding officer and at least 75% of the directors or other similar
officers of the corporation must be Canadian citizens, and (iii) the corporation must not be controlled, in fact, directly or indirectly, by citizens or subjects of a country other than Canada.

In addition, under the share ownership requirements set out in subsection (iii) of the preceding paragraph, at least 75% of the
voting shares of a non-public corporation and shares having a fair market value in total of at least 75% of the fair market value of all issued shares of a non-public corporation, must be beneficially owned by either (i) Canadian citizens or
(ii) one or more corporations incorporated in Canada each of which is a public corporation a class or classes of shares of which are listed on a designated stock exchange in Canada (which includes the TSX) other than a public corporation
controlled by citizens or subjects of a country other than Canada (Qualifying Public Corporation). Upon the listing of Postmedia Network Canada Corp.s shares on the TSX, Postmedia Network Canada Corp. became a Qualifying
Public Corporation. As Postmedia Network Inc. is a direct, wholly-owned subsidiary of Postmedia Network Canada Corp., Postmedias newspapers qualify as Canadian newspapers.

Issues of Postmedia Network Inc.s newspapers therefore qualify as Canadian issues of Canadian newspapers
(or otherwise fall outside of the limitation on deductibility of advertising expenses) and as a result advertisers currently have the right to deduct their advertising expenditures for Canadian tax purposes.

C. Organizational Structure.

The following
chart illustrates Postmedias corporate structure.



LOGO

D. Property, Plant and Equipment.

Postmedia operates from facilities located in each of its major markets. The facilities meet the Corporations current needs and
Postmedia believes they are adequate to meet anticipated future demands. The following table provides certain information with respect to Postmedias largest facilities, both owned and leased.



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|                                |  |                     |  |                  |                        |  |                |  |                 | 
|------------------------------- |  | ------------------- |  | ---------------- | ---------------------- |  | -------------- |  | --------------- | 
|Location of Facilities          |  | Office orProduction |  | Area(Sq. Ft.)(1) |                        |  | Leased orOwned | 
|Vancouver, BC                   |  | Office              |  |                  | 56,159                 |  |                |  | Leased          | 
|Surrey, BC(2)                   |  | Production          |  |                  | 208,047                |  |                |  | Owned           | 
|Edmonton, AB(3)                 |  | OfficeProduction    |  |                  | 133,250        187,000 |  |                |  | Leased    Owned | 
|Calgary, AB(2)                  |  | Combined facilities |  |                  | 383,000                |  |                |  | Owned           | 
|Regina, SK                      |  | Combined facilities |  |                  | 102,537                |  |                |  | Owned           | 
|Saskatoon, SK                   |  | Combined facilities |  |                  | 110,884                |  |                |  | Owned           | 
|Winnipeg, MB                    |  | Office              |  |                  | 72,378                 |  |                |  | Leased          | 
|Windsor, ON                     |  | OfficeProduction    |  |                  | 25,000        60,000   |  |                |  | Leased    Owned | 
|Toronto, ON(4)                  |  | Office              |  |                  | 146,398                |  |                |  | Leased          | 
|Ottawa, ON                      |  | Combined facilities |  |                  | 183,000                |  |                |  | Owned           | 
|Montreal, QC                    |  | OfficeProduction    |  |                  | 59,750        165,000  |  |                |  | Leased    Owned | 
|                                |  |                     |  |                  |                        |  |                |  |                 | 
|Total                           |  |                     |  |                  | 1,892,403              |  |                |  |                 | 
|                                |  |                     |  |                  |                        |  |                |  |                 | 
|Total Leased                    |  |                     |  |                  | 492,935                |  |                |  |                 | 
|Total Owned                     |  |                     |  |                  | 1,399,468              |  |                |  |                 | 
|Total % of Area (sq. ft.) Owned |  |                     |  |                  | 74%                    |  |                |  |                 | 



Notes:

| | (1) | The square footage for leased properties is shown net of subleased square footage if applicable.
| | --- | ------------------------------------------------------------------------------------------------

| | (2) | In September 2013, the Corporation announced its intention to sell these real estate holdings.
| | --- | ----------------------------------------------------------------------------------------------

| | (3) | The lease is subject to a sale lease-back agreement, whereby Postmedia owns the land and space above and has the right to repurchase the building in 2041. The
Corporation has accounted for this lease as a finance lease on its consolidated financial statements. The other leased properties listed in this table are accounted for as operating leases. As a result of the outsourcing of certain functions the
production facility is no longer required and the Corporation has engaged a third party to market it for sale.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | On June 26, 2012, Postmedia entered into an agreement of purchase and sale with The Rose & Thistle Group Ltd. for the sale of the
Toronto Head Office at a purchase price of $24 million. The sale closed on October 12, 2012. The purchase and sale agreement includes a leaseback of the property to Postmedia Network Inc. for a period of 18 to 24 months while new
accommodations are readied for relocation. Postmedia has entered into a 15-year lease for 86,500 leasable square feet commencing December 1, 2013 for its new head office located at 365 Bloor Street East in downtown Toronto, Ontario. The net
proceeds from the sale of the Toronto Head Office were used on November 13, 2012 for a mandatory redemption of $23.2 million aggregate principal amount of First-Lien Notes at par in accordance with the terms and conditions of the
First-Lien Notes indenture.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ITEM 4A.  UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS

A. Operating Results.

See Operating
Results in the MD&A, attached hereto as Exhibit 15.2.

B. Liquidity and Capital Resources.

See Liquidity and Capital Resources in the MD&A, attached hereto as Exhibit 15.2.

C. Research and Development, Patents and Licenses, etc.

Not applicable.

D. Trend Information.

See Key Factors Affecting Operating Results in the MD&A, attached hereto as Exhibit 15.2.



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E. Off-Balance Sheet Arrangements.

See Guarantees and Off-Balance Sheet Arrangement in the MD&A, attached hereto as Exhibit 15.2.

F. Tabular Disclosure of Contractual Obligations.

See the table included in Financial Instruments and Financial Instruments Risk Management  Liquidity Risk in the
MD&A, attached hereto as Exhibit 15.2.

G. Safe Harbor.

See Notice Regarding Forward Looking Statements in this annual report.

ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management.

Name, Occupation and Security
Holding

The following table sets forth the name and residence of those individuals who are directors and executive officers of
the Corporation as of November 15, 2013, their current positions or offices with the Corporation, the date when they first became a director and/or executive officer of the Corporation and their principal occupation. The term of each of the
directors expires on the date of the Corporations upcoming annual and special meeting of Shareholders., currently scheduled for January 9, 2014, or until the election of his or her successor, unless he or she resigns or his or her office
becomes vacant by reasons of his or her death, removal or other cause.



|                                                          |  |                                                                  |  |                                                                             |  |                                                                    
|--------------------------------------------------------- |  | ---------------------------------------------------------------- |  | --------------------------------------------------------------------------- |  | -------------------------------------------------------------------
|Name andResidence                                         |  | Position with theCorporation                                     |  | Director or ExecutiveOfficer Since                                          |  | Principal Occupation ifDifferent from PositionHeld                 
|                                                          |  |                                                                  | 
|Paul GodfreyToronto, Ontario, Canada                      |  | Interim Chairman, Director, President and ChiefExecutive Officer |  | April 26, 2010 (Director, Chief Executive Officer)July 12, 2010 (President) |  | -                                                                  
|                                                          |  |                                                                  | 
|Charlotte Burke(1)(4)(5)Toronto, Ontario, Canada          |  | Director                                                         |  | September 20, 2010                                                          |  | Chief Marketing and SalesOfficer, QuickPlay MediaInc.              
|                                                          |  |                                                                  | 
|Hugh F. Dow(2)(4)(5)Toronto, Ontario, Canada              |  | Director                                                         |  | January 6, 2011                                                             |  | Corporate Director                                                 
|                                                          |  |                                                                  | 
|Jane Peverett(1)(3)(5)Vancouver, British
Columbia, Canada |  | Director                                                         |  | April 10, 2013                                                              |  | Corporate Director                                                 
|                                                          |  |                                                                  | 
|Graham Savage(1)(2)(5)Toronto, Ontario, Canada            |  | Director                                                         |  | July 12, 2010                                                               |  | Corporate Director                                                 
|                                                          |  |                                                                  | 
|Steven Shapiro(3)New York, New York, United
States        |  | Director                                                         |  | July 12, 2010                                                               |  | Founding Partner andPortfolio Manager,GoldenTree AssetManagement LP
|                                                          |  |                                                                  | 
|Peter Sharpe(2)(3)(5)Toronto, Ontario, Canada             |  | Lead Director                                                    |  | June 17, 2010                                                               |  | Corporate Director                                                 
|                                                          |  |                                                                  | 
|Robert Steacy(1)(2)(5)Toronto, Ontario, Canada            |  | Director                                                         |  | July 14, 2010                                                               |  | Corporate Director                                                 
|                                                          |  |                                                                  | 
|Wayne ParrishToronto, Ontario, Canada                     |  | Chief Operating Officer                                          |  | July 19, 2010                                                               |  | -                                                                  



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|                                      |  |                                                     |  |                                    |  |                                                   
|------------------------------------- |  | --------------------------------------------------- |  | ---------------------------------- |  | --------------------------------------------------
|Name andResidence                     |  | Position with theCorporation                        |  | Director or ExecutiveOfficer Since |  | Principal Occupation ifDifferent from PositionHeld
|Douglas LambToronto, Ontario, Canada  |  | Executive Vice Presidentand Chief Financial Officer |  | July 12, 2010                      |  | -                                                 
|                                      |  |                                                     | 
|Jeffrey HaarToronto, Ontario, Canada  |  | Executive Vice President,Legal and General Counsel  |  | January 11, 2012                   |  | -                                                 
|                                      |  |                                                     | 
|Michelle HallToronto, Ontario, Canada |  | Executive Vice President,Human Resources            |  | July 13, 2010                      |  | -                                                 
|                                      |  |                                                     | 
|Gordon FisherToronto, Ontario, Canada |  | President, PacificNewspaper Group                   |  | July 13, 2010                      |  | -                                                 
|                                      |  |                                                     | 
|Gillian AkaiToronto, Ontario, Canada  |  | Vice President, Legal Affairsand Secretary          |  | July 12, 2010                      |  | -                                                 



Notes:

|(1) | Member of the Audit Committee.
|--- | ------------------------------

|(2) | Member of the Compensation and Pension Committee.
|--- | -------------------------------------------------

|(3) | Member of the Corporate Governance and Nominating Committee.
|--- | ------------------------------------------------------------

|(4) | Member of Digital Oversight Committee.
|--- | --------------------------------------

|(5) | Independent member of the Board.
|--- | --------------------------------

As a group, the directors and executive officers of
the Corporation, as of November 15, 2013, beneficially own or exercise control or direction, directly or indirectly, over 183,532 Voting Shares (representing 18.69% of the total Voting Shares issued and outstanding) and 70,453 Variable Voting
Shares (representing 0.18% of the total Variable Voting Shares issued and outstanding).

Mr. Osborne ceased being a director of
the Corporation upon his passing on April 9, 2013. On April 18, 2013, Mr. Godfrey was appointed Interim Chairman of the Board. On October 24, 2013, Mr. Sharpe was appointed Lead Director of the Board. The Lead Director
position description provides that the Lead Director is appointed where the Chairman of the Board is not an independent director, to assist the Chairman of the Board in fulfilling his duties and the Board of Directors in fulfilling its duties
independent of senior management and to ensure that directors have an independent leadership contact. On November 4, 2013, Mr. Paton resigned as Director.

Biographies

The following are brief
profiles of our directors and executive officers, including a description of each individuals principal occupation within the past five years.

Paul
Godfrey (Interim Chairman and Director)

Mr. Godfrey is the President and Chief Executive Officer of Postmedia and its
subsidiary, Postmedia Network Inc. Prior to this he served as President and Chief Executive Officer of National Post Inc., President and Chief Executive Officer of the Toronto Blue Jays Baseball Club, and spent 16 years with Sun Media Corporation,
eventually taking the role of President and Chief Executive Officer. Mr. Godfrey has a proud record of public service including a record four terms (11 years) as the Chairman of the Municipality of Metropolitan Toronto. He is Chairman of the
board of RioCan Real Estate Investment Trust and currently serves on the board of Cargojet Income Fund and serves as Vice Chair of Baycrest Centre for Geriatric Care.



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Charlotte Burke (Director)

Ms. Burke is currently Chief Marketing and Sales Officer with QuickPlay Media Inc., a leading provider of multiscreen managed
services. Ms. Burke also operates a consulting firm focused on new business development in mobile, Internet and digital media, through which she recently provided services to Accenture in the communications, media and technology
practice. Prior to assuming her current positions, Ms. Burke was the Senior Vice President of Sales and Marketing, Americas for Hewlett Packard and President of Asurion Canada. In addition, Ms. Burke was an officer and Senior
Vice President with Bell Canada from 1996 to 2008, where she led the Consumer Internet business and Bell Mobilitys digital cellular business. Ms. Burke is also an advisor with the MaRS Ontario Innovation Center, Next 36, and was
formerly on the boards of Acadia University, Ontario Lottery and Gaming Corporation, Women in Telecommunications and National Ballet School.

Hugh F. Dow
(Director)

Mr. Dow retired as Chairman of Mediabrands Canada in December 2010. Prior to this, Mr. Dow was
President of M2 Universal and held global responsibilities with Universal McCann, of which M2 Universal is the Canadian arm. Mr. Dow has also held many key advertising industry positions including Vice Chairman of BBM Bureau of Measurement,
Director and Chairman of Canadian Media Directors Council, Chairman of PMB Print Measurement Bureau, Chairman and Director of ABC Audit Bureau of Circulation, and Chairman of Media Medical Audience Committee. Mr. Dow also serves as a
director of Reshift Media Inc.

Jane Peverett (Director)

Ms. Peverett is Chair of the Board of the BC Ferry Authority. Ms. Peverett is the former President and Chief Executive Officer
of the British Columbia Transmission Corporation (BCTC) having previously served as its Chief Financial Officer. Prior to BCTC, Ms. Peverett held a senior executive role at Westcoast Energy Inc. and was President and Chief Executive Officer of
Union Gas Limited. Ms. Peverett currently serves as director on the boards of Encana Corporation, Associated Electric & Gas Insurance Services Limited (AEGIS), Canadian Imperial Bank of Commerce (CIBC) and Northwest Natural Gas
Company. She is also a director of the United Way of Lower Mainland.

Graham Savage (Director)

Mr. Savage is retired but was a Founding Partner of Callisto Capital, a merchant banking firm. Prior to that, Mr. Savage spent
21 years as a senior officer at Rogers Communications Inc. He is currently a director of Canadian Tire Corp., Canadian Tire Bank, Cott Corporation and Whistler Blackcomb Holdings Inc. Mr. Savage previously served as a director of Rogers
Communications Inc., Sun Media Corp., Royal Group Technologies Ltd., Hollinger International Inc., and The Daily Telegraph (UK), among others.

Steven Shapiro
(Director)

Mr. Shapiro is a founding partner and portfolio manager at GoldenTree, and is a member of its executive
committee. GoldenTree is an asset management company specializing in corporate and structured credit markets. Mr. Shapiro is responsible for the firms investments in media and communications as well as its investments in distressed
assets. Prior to joining GoldenTree, Mr. Shapiro was a Managing Director in the High Yield Group at CIBC World Markets, where he headed Media and Telecommunications Research. He is a member of the boards of various corporate and not-for-profit
entities, including Source Interlink Media, Source Home Entertainment, Inc., the holding company of Source Interlink Distribution, RDA Holding/Readers Digest, The University of Pennsylvania School of Law and The Abraham Joshua Heschel School.



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Peter Sharpe (Lead Director)

Mr. Sharpe retired as President and CEO of Cadillac Fairview Corporation in 2010, having served with the company for over 25 years.
Mr. Sharpe is currently a director of Morguard Corporation, First Industrial REIT (US), and Allied Property REIT. Mr. Sharpe is also a past chairman and current trustee of the International Council of Shopping Centers.

Robert Steacy (Director)

Mr. Steacy retired in 2005 after spending more than 16 years as the senior financial officer of Torstar Corporation.
Mr. Steacy is a director and chair of the Audit Committees of Domtar Corporation and Cineplex Inc. From 2005 to 2007 he served on the boards of Alliance Atlantis Communications Inc. and Somerset Entertainment Income Fund, and was a director of
Canadian Imperial Bank of Commerce from 2008 to 2012.

Wayne Parrish (Chief Operating Officer)

Mr. Parrish became the Corporations Chief Operating Officer in January 2012. Prior to that, he was appointed in July 2010 to
head up Postmedias business transformation (which services he provided through his management company, Sport Media Enterprises Inc.). Before joining Postmedia, Mr. Parrish acted as CEO of Canada Basketball from 2007 to 2010.
Mr. Parrish spent the first two decades of his career as a journalist and was a senior executive with Sun Media Corporation during a period that culminated in a management buyout of the company from Rogers Communication Inc., and eventual sale
to Quebecor Inc. He has been General Manager and Executive Editor of the Toronto Sun, Vice-President Strategy at Sun Media, Chairman and President & CEO of the CANOE Online Network, President & CEO of Quebecor New Media, and
President & CEO of Sport Media Group.

Douglas Lamb (Executive Vice President and Chief Financial Officer)

Mr. Lamb was appointed as Executive Vice President and Chief Financial Officer of Postmedia in July 2010. Prior to that, he was
Executive Vice President and Chief Financial Officer of Canwest LP since 2005. He is a veteran Canadian newspaper executive. Mr. Lamb also served as Vice President of Corporate Development of Metroland, the community publishing business of
Torstar Corporation. Prior to his employment with Torstar Corporation, he held a variety of financial roles at Hollinger International Inc. and Southam Inc.

Jeffrey Haar (Executive Vice President, Legal and General Counsel)

Mr. Haar was appointed as Executive Vice President, Legal and General Counsel of the Corporation in 2012. Mr. Haar was
previously Senior Vice President, Legal & Corporate Secretary at Brookfield Asset Management. Mr. Haar has also served as General Counsel and Corporate Secretary for a number of public and private companies, including Architel Systems
Corporation, which was acquired by Nortel Networks in 2000. Prior to Architel, Mr. Haar was in private practice at Skadden, Arps, Slate, Meagher & Flom LLP in Toronto, Ontario and at Shearman & Sterling LLP in New York, New
York.

Michelle Hall (Executive Vice President, Human Resources)

Ms. Hall was appointed as Executive Vice President, Human Resources in 2012 after serving as Senior Vice President, People since
2010. She oversees the development and implementation of the Corporations human resources strategy. Previously she served as Senior Vice President, People for a predecessor Canwest LP entity from 2008 to 2010 and Vice President, Human
Resources of the Canadian operations of Canwest Media Inc. between 2005 and 2008. Prior to joining Canwest, Ms. Hall held senior level human resources roles at a variety of organizations, most recently at the Canada Life Assurance Company.



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Gordon Fisher (President, Pacific Newspaper Group)

Mr. Fisher was appointed the President, Pacific Newspaper Group of Postmedia in January 2013. Prior to that, Mr. Fisher served
as the President of National Post and the Executive Vice President Eastern Canada of Postmedia beginning in July 2010. Previously, he served as Publisher of the National Post under a predecessor Canwest LP entity. Mr. Fisher has an extensive
media background. He has held a number of senior executive positions in many Canadian cities on both the editorial and business sides of the media industry. Prior to his appointment as Publisher of the National Post, Mr. Fisher served as
President, News and Information, Canwest Global Communications Corp., with responsibilities covering newspaper, television and digital information. Other responsibilities of note include roles as editor-in-chief, general manager and publisher of the
Ottawa Citizen; publisher of the Kingston-Whig Standard and managing editor of the Vancouver Sun.

Gillian Akai (Vice President, Legal Affairs and Secretary)

Ms. Akai was appointed to the role of Vice President, Legal Affairs and Secretary in July 2010. Previously she served
as Director, Legal Affairs/Legal Counsel for Canwest Media Inc. from April 2006 to July 2010. Ms. Akai was previously in private legal practice in the Toronto office of Fraser Milner Casgrain LLP.

Cease Trade Orders or Bankruptcies

Other
than as described below, no director or executive officer of Postmedia is, or within 10 years before the date hereof, has been a director, chief executive officer or chief financial officer of any company (including Postmedia) that,
(i) was subject to an order that was issued while the director or executive officer was acting in the capacity as director, chief executive officer or chief financial officer, or (ii) was subject to an order that was issued after the
director or officer ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial
officer. For the purposes of the preceding sentence, order means; (a) a cease trade order; (b) an order similar to a cease trade order; or (c) an order that denied the relevant company access to any exemption under
securities legislation.

Other than as described below, to the knowledge of the Corporation, no director or executive officer, or
Shareholder holding a sufficient number of securities to affect materially the control of Postmedia: (a) is at the date hereof, or has been within 10 years before the date hereof, a director or executive officer of any company (including
Postmedia) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or
instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or (b) has, or within 10 years before the date hereof, become bankrupt, made a proposal under any
legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director, executive
officer or Shareholder.

On October 6, 2009, the subordinate voting shares and the non-voting shares of Canwest Global were
suspended from trading on the TSX while a review to determine whether the company was meeting the continued listing requirements was conducted. On October 15, 2009, Canwest Global received a notice from the TSX informing the company that its
subordinate voting shares and non-voting shares would be delisted from the exchange effective November 13, 2009 for failure to meet the continued listing requirements. In response to this notice, on November 13, 2009, Canwest Global
announced that its subordinate voting shares and non-voting shares would begin trading on the TSX Venture Exchange effective November 16, 2009. Messrs. Paul Godfrey, the President and Chief Executive Officer of Postmedia and Douglas Lamb,
Executive Vice President and Chief Financial Officer of Postmedia, were senior officers of certain subsidiaries of Canwest Global throughout the period described above.



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Prior to their mandates with Postmedia, Messrs. Godfrey, Lamb, and Ms. Hall were
executive officers of certain of the LP Entities or one of the LP Entities wholly-owned subsidiaries. On January 8, 2010, the Ontario Superior Court of Justice issued an order that, among other things, granted the LP Entities protection from
their creditors under the CCAA. Postmedia acquired substantially all of the newspaper and online publishing and digital media businesses previously owned by the LP Entities pursuant to a plan of compromise or arrangement that was implemented during
the course of the LP Entities proceedings under the CCAA. On April 24, 2013, the Ontario Superior Court of Justice made an order terminating the CCAA proceedings of the LP Entities.

Mr. Godfrey served on the board of directors of Mobilicity (formerly known as Data & Audio Visual Enterprises Mobilicity),
from November 20, 2008 to April 30, 2013. Mobilicity sought and received CCAA protection on September 30, 2013.

Mr. Savage was a director of Microcell Inc. when it filed for protection under the CCAA.Mr. Savage was a director of
Sun-Times Media Group, Inc. (Sun Times), formerly Hollinger International Inc. (Hollinger). He served as a director of that company from July, 2003 until November, 2009. On June 1, 2004, the Ontario
Securities Commission issued a permanent management cease trade order (the Ontario Cease Trade Order) against the insiders of Hollinger for failing to file its interim financial statements and interim MD&A for the three-month
period ended March 31, 2004 and its annual financial statements, MD&A and annual information form for the year ended December 31, 2003. In addition, the British Columbia Securities Commission issued a cease trade order against an
insider of Hollinger resident in British Columbia on May 21, 2004, as updated on May 31, 2004 (the BC Cease Trade Order). The Ontario Cease Trade Order was allowed to expire on January 9, 2006 and is no longer in
effect. The BC Cease Trade Order was revoked on February 10, 2006 and is no longer in effect. Sun Times filed for protection under Chapter 11 of the USBC in April 2009.

Mr. Shapiro was a director of Readers Digest Association Inc. (Readers Digest) until August 2009.
Readers Digest filed for protection under Chapter 11 of the USBC in August 2009, after Mr. Shapiros departure from its board.

Penalties or
Sanctions

To the knowledge of the Corporation, no director or executive officer or Shareholder holding a sufficient number of
securities to affect materially the control of Postmedia, has been subject to: (a) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement
agreement with a securities regulatory authority; or (b) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.

Conflicts of Interest

Mr. Shapiro is a
founding partner and portfolio manager at GoldenTree, and is a member of its executive committee. GoldenTree, and certain investment funds for which it serves as investment adviser, own Variable Voting Shares (see Item 7  Major
Shareholders and Related Party Transactions) and a portion of the First-Lien and Second-Lien Notes both as issued by Postmedia Network Inc. GoldenTrees combined debt and equity holdings may give rise to a potential conflict of interest.
GoldenTree is located at 300 Park Avenue, 21st Floor, New York, New York, 10022 USA.



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Nominating Agreement

On July 13, 2010 Postmedia entered into a nominating agreement with GoldenTree, a principal Shareholder. Pursuant to this
agreement, for so long as GoldenTree (or certain investment funds for which GoldenTree serves as investment adviser) beneficially owns or exercises control or direction over a minimum of 10% of the outstanding Shares of Postmedia, GoldenTree has the
right to select one individual, who shall be presented to the Shareholders of Postmedia as part of managements proposed list of nominees to serve as a director on the Board of Postmedia at any Shareholder meeting at which directors of
Postmedia are being elected. The current nominee of GoldenTree on the Board is Mr. Shapiro. Upon termination of the agreement the then current nominee of GoldenTree shall fulfill his or her term as member of the Board and GoldenTree shall cease
to have any nomination rights on a going forward basis.

Consulting Agreement

John Paton, formerly a director of Postmedia, entered into a consulting agreement with Postmedia pursuant to which he assisted with the
implementation of Postmedias digital first strategy, which agreement expired on August 31, 2012. In addition to the standard compensation of directors of the Corporation, Mr. Paton received an additional monthly fee of $12,500,
payable in cash, and 100,000 DSUs granted on July 13, 2010 which vested in three equal installments over three years, in advance of each such year, and may be redeemed only if the Value of a Share, as defined in the DSU plan, is at least a
minimum price at the time of redemption. Mr. Paton resigned on November 4, 2013 and at the time of his resignation the Value of a Share did not meet the minimum price therefore the 100,000 DSUs granted will not be paid out.

B. Compensation.

The following discussion
and analysis examines the compensation earned by the Companys President and Chief Executive Officer (the CEO), the Executive Vice President and Chief Financial Officer (the CFO) and the three other most
highly compensated executive officers (collectively, the Named Executive OfficersorNEOs), who served as executive officers of the Company for the year ended August 31, 2013 (Fiscal
2013). In addition, it describes and explains Postmedias compensation philosophy and objectives and the significant elements of compensation of the Companys NEOs during Fiscal 2013.

The NEOs for Fiscal 2013 were:



| |  |  | Paul Godfrey, President and Chief Executive Officer
| | - |  | ---------------------------------------------------

| |  |  | Douglas Lamb, Executive Vice President and Chief Financial Officer
| | - |  | ------------------------------------------------------------------

| |  |  | Wayne Parrish, Chief Operating Officer
| | - |  | --------------------------------------

| |  |  | Gordon Fisher, President, Pacific Newspaper Group
| | - |  | -------------------------------------------------

| |  |  | Jeffrey Haar, Executive Vice President, Legal and General Counsel
| | - |  | -----------------------------------------------------------------

Executive Compensation Components and Their
Objectives

Postmedias executive compensation program is comprised of the following compensation components:

o   base salary;

o   annual
short-term incentives (annual bonuses);

o   long-term incentives, which include stock options and restricted share units
(RSUs);

o   pension benefits; and

o   perquisites.



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The primary objective of our executive compensation program is to attract and motivate key
executives to carry out business strategies that are aligned with the creation of Shareholder value. The level of compensation paid to each NEO is based on the executives qualifications, experience, responsibility and performance.

(i) Salary

Base salary remunerates
executives for discharging job requirements. The NEOs base salary represents a fixed level of cash compensation and it is reviewed annually by the Compensation and Pension Committee with recommendations to the Board for their approval with the goal
of ensuring that each NEO is paid fairly, taking into consideration the requirements of the position, the executives performance, knowledge, skills, experience and equity with other executives within Postmedia and compared to the external
market for competitiveness. The Companys policy is to target base salary compensation for the NEOs at the median level or just above, based on external market considerations, organizational and individual performance. The NEOs are also
reviewed based upon the comparator group recommended by Hugessen (see Item 6C. Board Practices  Competitive Benchmarking).

(ii) Annual Short-term
Incentive Plan (STIP)

The STIP represents variable cash compensation. Short-term incentive targets for the NEOs
are expressed as a percentage of base salary and are determined based on competitive market practices. The program is designed to attract and motivate executive performance. The Compensation and Pension Committee recommends for approval by the Board
the short-term incentive plan design, performance measures, weightings and targets for each fiscal year.

The Companys policy
is to target short-term incentives at median for the NEOs with the purpose of being externally competitive while incenting for maximum performance to achieve Company goals.

In designing the STIP, the goal is to align the payouts with the business strategy and to motivate plan participants to achieve defined
goals. The CEO is eligible for 100% of base salary at target and the other four NEOs are eligible for 50% of base salary at target. The short-term incentives all have a maximum payout opportunity equal to 150% of target.

For Fiscal 2013, consistent with the prior fiscal year the Board provided the CEO with discretion to recommend an adjustment on
incentive bonus payments under the STIP subject to the performance of pre-defined and pre-approved criteria (the Discretionary Payout). The Discretionary Payout is subject to Board approval and cannot exceed an established fixed
percentage of the overall STIP. The payout is capped at 150% of target (including any Discretionary Payout).

The CEO STIP plan
design for Fiscal 2013 remained the same as the prior fiscal year, with the minimum payout threshold set at 80% of performance target. The payout is capped at 150% when performance reaches 120% of target (payouts are graduated proportionately for
achievements between 80% and 100% and between 100% and 120% of target).

The plan for the other four NEOs remained the same as the
prior fiscal year with the minimum payout threshold set at 85% of performance target. The payout is capped at 150% of target when performance achievement reaches 125% of performance target (payouts are graduated proportionately for achievements
between 85% and 100% and between 100% and 125% of target).



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In October 2013, the Board approved plan payouts for Fiscal 2013 based upon the level of
achievement of targets (established for purposes of the STIP) based on the corporate performance of consolidated operating profit and consolidated digital revenue. The CEO was measured 100% against corporate performance relating to consolidated
operating profit before depreciation, amortization, impairment and restructuring, (the Consolidated Operating Target). The CFO and two of the NEOs were measured 75% against the Consolidated Operating Target and 25% against
consolidated digital revenue. The remaining NEO was measured 15% against the Consolidated Operating Target, 5% against consolidated digital revenue and 80% against similar targets established at individual operating unit levels. The Compensation and
Pension Committee sets the targets for the STIP based on the organizational strategic plan and budget. Targets reflect the challenges facing the publishing industry and align with industry trends.

The Consolidated Operating Target and consolidated digital revenue established for the STIP for Fiscal 2013 were $141 million and $108
million, respectively, whereas the actual achievement was $130 million and $92 million, respectively. As permitted by applicable Canadian securities laws, the Company is not disclosing targets for individual operating units on the basis that such
disclosure would be seriously prejudicial to the Companys competitive market position. The level of difficulty in reaching the undisclosed targets is similar to that in meeting the Consolidated Operating Target and consolidated digital
revenue. The undisclosed targets for individual operating units apply only to one NEO and represents 27% of such NEOs base salary and STIP.

The short-term incentive award targets and the payout achievement of these targets in Fiscal 2013 for the NEOs of the Company are as
follows:



|                 |  |                                                |     |   |                             |  |         |                              |  |  |         | 
|---------------- |  | ---------------------------------------------- | --- | - | --------------------------- |  | ------- | ---------------------------- |  |  | ------- | 
|Participant Name |  | Fiscal 2013Target Payout(as a % of basesalary) |     |   | Fiscal 2013Target Payout($) |  |         | Fiscal 2013Actual Payout ($) | 
|Paul Godfrey     |  |                                                | 100 | % |                             |  | 950,000 |                              |  |  | 579,500 | 
|                 |  |                                                |    
|Douglas Lamb     |  |                                                | 50  | % |                             |  | 225,000 |                              |  |  | 62,437  | 
|                 |  |                                                |    
|Wayne Parrish    |  |                                                | 50  | % |                             |  | 237,500 |                              |  |  | 65,906  | 
|                 |  |                                                |    
|Gordon Fisher    |  |                                                | 50  | % |                             |  | 200,000 |                              |  |  | 71,417  | 
|                 |  |                                                |    
|Jeffrey Haar     |  |                                                | 50  | % |                             |  | 150,000 |                              |  |  | 41,625  | 

(iii)Long-term Incentive Plans

The Company has an Option Plan and an RSU Plan that are intended to, among other things, attract, motivate and retain certain executive
officers and other grantees and align their interests with the interests of Shareholders. The long-term incentive programs are designed to reward performance over a ten year period, and vest over a four year period, and are provided to senior
leaders in value driven roles and key contributors who are critical to the organizations future. (See Option Plan and RSU Plan).



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Pension Plan

Postmedia maintains a defined benefit pension plan (the Pension Plan) for its executives which is the same Pension
Plan offered to a majority of other employees in the Company and does not offer a supplemental executive retirement plan. The benefit formula takes into consideration the members pensionable earnings and credited service in the plan along with
the maximum Canada Pension Plan levels. The formula is: 1.25% multiplied by the final average earnings up to the average yearly maximum pensionable earnings multiplied by the credited service plus 1.75% multiplied by the final average earnings in
excess of the average yearly maximum pensionable earnings multiplied by the credited service. The Pension Plan averages the members best five years of pensionable earnings during the last ten years prior to retirement or termination.

The maximum pension payable under the Pension Plan is as prescribed by the Income Tax Act. The executive officers and all
participants contribute an amount of 2.5% of pensionable earnings to the Pension Plan up to the yearly maximum pensionable earnings and 5% thereafter.

The Pension Plan also provides for an early retirement subsidy for the executive officers and all participants who take early retirement
following the attainment of both age 62 and 10 years of continuous service. A participant retiring after age 55 but before age 62 with 10 or more years of continuous years of service may elect to receive an unreduced deferred retirement income
payable at age 62. For a participant retiring after age 55 but before age 62 with less than 10 years of continuous employment, the pension is reduced by a factor of one-third of 1% for each complete month by which the early retirement date precedes
the normal retirement date.

Messrs. Lamb, Parrish and Haar all participate in the Pension Plan. Mr. Godfrey is not eligible to
participate in the Pension Plan because he has exceeded the maximum age to be eligible to participate in the Pension Plan and Mr. Fisher is in receipt of the pension benefit under the Pension Plan.

Defined Benefit Plan Table as of August 31, 2013



|                  |  |                                  |      |  |                            |  |        |                                                         |  |  |                            |  |  |                                |         |  |                                                          |  |        |  |  |  |         |   |  |  |         | 
|----------------- |  | -------------------------------- | ---- |  | -------------------------- |  | ------ | ------------------------------------------------------- |  |  | -------------------------- |  |  | ------------------------------ | ------- |  | -------------------------------------------------------- |  | ------ |  |  |  | ------- | - |  |  | ------- | 
|                  |  |                                  |      |  |                            | 
|Participant Name  |  | Numberof YearsCreditedService(#) |      |  | Annual BenefitsPayable ($) |  |        | OpeningPresent Valueof
DefinedBenefitObligation ($) (2) |  |  | CompensatoryChange ($) (2) |  |  | Non-CompensatoryChange ($) (2) |         |  | Closing PresentValue ofDefined BenefitObligation ($) (2) | 
|                  |  |                                  |      |  | At YearEnd                 |  |        | At Age 65                                               |  |  |                            |  |  |                                |         |  |                                                          |  |        |  | 
|Douglas Lamb      |  |                                  | 1.7  |  |                            |  | 4,500  |                                                         |  |  | 41,300                     |  |  |                                | 22,500  |  |                                                          |  | 16,400 |  |  |  | 17,100  |   |  |  | 56,000  | 
|                  |  |                                  |      |  |                            |  |       
|Wayne Parrish     |  |                                  | 1.8  |  |                            |  | 4,900  |                                                         |  |  | 24,300                     |  |  |                                | 30,200  |  |                                                          |  | 18,100 |  |  |  | 19,500  |   |  |  | 67,800  | 
|                  |  |                                  |      |  |                            |  |       
|Jeffrey Haar      |  |                                  | 1.3  |  |                            |  | 3,600  |                                                         |  |  | 51,500                     |  |  |                                | 8,800   |  |                                                          |  | 12,700 |  |  |  | 14,300  |   |  |  | 35,800  | 
|                  |  |                                  |      |  |                            |  |       
|Gordon Fisher (1) |  |                                  | 21.3 |  |                            |  | 52,600 |                                                         |  |  | 52,600                     |  |  |                                | 744,700 |  |                                                          |  | -      |  |  |  | (30,500 | ) |  |  | 714,200 | 



Notes:

|(1) | Mr. Fisher is currently receiving annual benefits under this plan of $52,600 based on an election of joint and survivor pension and credited service of
21.3 years at attainment of the pension benefit.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | An actuarial valuation of the Plan was completed as at December 31, 2012 for funding purposes and these results were extrapolated to August 31, 2013
for accounting purposes. The present value of the obligation was determined using the Projected Unit Credit Method pro-rated on service. Calculations are made based upon a discount rate assumption of 4.70%. Compensatory change consists of normal
cost net of employee contributions. Non-compensatory change consists of interest on the present value of the defined benefit obligation and employee contributions. Mr. Fishers non-compensatory change is negative as he is no longer making
contributions to the Plan; rather his change is due to interest on the present value of the defined benefit obligation, changes to the assumptions and pension payments made to Mr. Fisher under this plan.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

Benefits and Perquisites

Although not considered a primary element of the Compensation Program, the Company provides a comprehensive market competitive package
of executive level benefits and perquisites for its NEOs. The executive group benefits program includes health, dental, life insurance, wellness, short-term and long-term disability coverage. Perquisites provided to the NEOs consist of car
allowances and club memberships, with a car lease available to the CEO. The level of benefits and perquisites are determined based on guidelines that have been established under an executive compensation total rewards framework.



39



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##### Table of Contents

Summary Compensation Table

The following table summarizes the annual compensation provided for services rendered to Postmedia by its NEOs for Fiscal 2013, 2012 and
2011.





|                            |  |            |      |  |            |  |         |                            |  |  |                                           |     |                     |                          |         |                              |  |   |                         |  |        |  |  |  |         |      |  |  |           | 
|--------------------------- |  | ---------- | ---- |  | ---------- |  | ------- | -------------------------- |  |  | ----------------------------------------- | --- | ------------------- | ------------------------ | ------- | ---------------------------- |  | - | ----------------------- |  | ------ |  |  |  | ------- | ---- |  |  | --------- | 
|Name and Principal
Position |  | FiscalYear |      |  | Salary ($) |  |         | Option-BasedAwards ($) (6) |  |  | Non-Equity Incentive PlanCompensation ($) |     | PensionValue (1)($) |                          |         | All OtherCompensation (2)($) |  |   | TotalCompensation($)(6) | 
|                            |  |            |      |  |            |  |         |                            |  |  | Annual Short-Term IncentivePlans (7)      |     |                     | Long-TermIncentive Plans |         |                              |  |   |                         |  |        |  | 
|Paul Godfrey                |  |            | 2013 |  |            |  | 950,000 |                            |  |  | -                                         |     |                     |                          | 579,500 |                              |  | - |                         |  | -      |  |  |  | 151,338 | (3)  |  |  | 1,680,838 | 
|President and               |  |            | 2012 |  |            |  | 950,000 |                            |  |  | -                                         |     |                     |                          | -       |                              |  | - |                         |  | -      |  |  |  | 167,832 | (3)  |  |  | 1,117,832 | 
|Chief Executive             |  |            | 2011 |  |            |  | 950,000 |                            |  |  | -                                         |     |                     |                          | 465,500 |                              |  | - |                         |  | -      |  |  |  | 170,525 | (3)  |  |  | 1,586,025 | 
|Officer                     |  |            |      |  |            |  |         |                            |  |  |                                           |     |                     |                          |         |                              |  |   |                         |  |        |  |  |  |         |      |  |  |           | 
|                            |  |            |      |  |            |  |         |                           
|Douglas Lamb                |  |            | 2013 |  |            |  | 450,000 |                            |  |  | -                                         |     |                     |                          | 62,437  |                              |  | - |                         |  | 16,400 |  |  |  | -       |      |  |  | 528,837   | 
|Executive Vice              |  |            | 2012 |  |            |  | 450,000 |                            |  |  | -                                         |     |                     |                          | 75,000  | (5)                          |  | - |                         |  | 8,100  |  |  |  | -       |      |  |  | 533,100   | 
|President and               |  |            | 2011 |  |            |  | 452,207 |                            |  |  | -                                         |     |                     |                          | 131,250 | (5)                          |  | - |                         |  | -      |  |  |  | -       |      |  |  | 583,457   | 
|Chief Financial             |  |            |      |  |            |  |         |                            |  |  |                                           |     |                     |                          |         |                              |  |   |                         |  |        |  |  |  |         |      |  |  |           | 
|Officer                     |  |            |      |  |            |  |         |                            |  |  |                                           |     |                     |                          |         |                              |  |   |                         |  |        |  |  |  |         |      |  |  |           | 
|                            |  |            |      |  |            |  |         |                           
|Wayne Parrish               |  |            | 2013 |  |            |  | 475,000 |                            |  |  |                                           |     |                     |                          | 65,906  |                              |  | - |                         |  | 18,100 |  |  |  | -       |      |  |  | 559,006   | 
|Chief Operating             |  |            | 2012 |  |            |  | 475,000 |                            |  |  | 584,000                                   | (8) |                     |                          | -       |                              |  | - |                         |  | 11,800 |  |  |  | -       |      |  |  | 1,070,800 | 
|Officer                     |  |            | 2011 |  |            |  | 68,510  |                            |  |  | -                                         |     |                     |                          | 7,421   |                              |  | - |                         |  | -      |  |  |  | 286,980 | (11) |  |  | 362,911   | 
|                            |  |            |      |  |            |  |         |                           
|Gordon Fisher               |  |            | 2013 |  |            |  | 400,000 |                            |  |  | -                                         |     |                     |                          | 71,417  |                              |  | - |                         |  | -      |  |  |  | 400,150 | (4)  |  |  | 871,567   | 
|President, Pacific          |  |            | 2012 |  |            |  | 400,000 |                            |  |  | -                                         |     |                     |                          | -       |                              |  | - |                         |  | -      |  |  |  | 98,670  | (4)  |  |  | 498,670   | 
|Newspaper Group             |  |            | 2011 |  |            |  | 400,000 |                            |  |  | -                                         |     |                     |                          | 72,500  |                              |  | - |                         |  | -      |  |  |  | 388,642 | (4)  |  |  | 861,142   | 
|                            |  |            |      |  |            |  |         |                           
|Jeffrey Haar                |  |            | 2013 |  |            |  | 300,000 |                            |  |  |                                           |     |                     |                          | 41,625  |                              |  | - |                         |  | 12,700 |  |  |  | -       |      |  |  | 354,325   | 
|Executive Vice              |  |            | 2012 |  |            |  | 193,270 | (10)                       |  |  | 146,000                                   | (8) |                     |                          | 64,000  | (9)                          |  | - |                         |  | -      |  |  |  | -       |      |  |  | 403,270   | 
|President, Legal            |  |            | 2011 |  |            |  | -       |                            |  |  | -                                         |     |                     |                          | -       |                              |  | - |                         |  | -      |  |  |  | -       |      |  |  | -         | 
|and General                 |  |            |      |  |            |  |         |                            |  |  |                                           |     |                     |                          |         |                              |  |   |                         |  |        |  |  |  |         |      |  |  |           | 
|Counsel                     |  |            |      |  |            |  |         |                            |  |  |                                           |     |                     |                          |         |                              |  |   |                         |  |        |  |  |  |         |      |  |  |           | 



Notes:

|(1) | Refer to the Pension Plan  Defined Benefit Plan Table as of August 31, 2013 for additional details.
|--- | ------------------------------------------------------------------------------------------------------

|(2) | The value of perquisites and benefits for the NEOs, other than Messrs. Godfrey and Fisher, do not exceed either $50,000 or 10% of the NEOs annual salary, and
are therefore not included in All Other Compensation.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | This amount includes entertainment expenses totaling $79,742 (2012 - $107,831) (2011 - $107,474).
|--- | -------------------------------------------------------------------------------------------------

|(4) | This amount includes a discretionary retention bonus of $366,000 (2012 - $75,000) (2011 - $366,000). The Company may consider similar payments in future
years.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | This amount represented a $75,000 discretionary bonus for fiscal 2012. This amount included a $75,000 discretionary bonus for fiscal 2011.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------

|(6) | The total compensation value includes the estimated value of stock options granted during fiscal 2012 as determined using the Black-Scholes option pricing
model as this is an acceptable methodology in accordance with International Financial Reporting Standards and is based on various assumptions described below in note 8. Option-Based Awards only represent an estimated value of the stock options
granted and do not represent cash received by the NEO. This amount is at risk and may be equal to zero. Accordingly, the total compensation value does not represent the true cash compensation earned by the NEO.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | The annual short-term incentive plan compensation in the above table relating to Fiscal 2013 was accrued in Fiscal 2013 and will be paid in fiscal 2014. The
annual short-term incentive plan compensation relating to fiscal 2012 was accrued in fiscal 2012 and paid in Fiscal 2013. The annual short-term incentive plan compensation relating to fiscal 2011 was accrued in fiscal 2011 and paid in fiscal 2012.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | Messrs. Haar and Parrish were granted 50,000 and 200,000 stock options, respectively, on January 26, 2012. The stock options had a grant date fair value
of $2.92 which was determined using the Black-Scholes option pricing model. Key assumptions used in the model were a weighted average exercise price of Shares of $6.43, risk free rate of interest of 1.33% based on the Bank of Canada five year
benchmark bond yield in effect on the date of grant, dividend yield of nil, a volatility factor of 54% based in part on the volatility of the Companys Shares and the volatility of the shares of similar companies in the media and publishing
industry and an expected life of options of 5 years based partly on contractual terms and a published academic study.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(9) | For fiscal 2012 this amount represented a $64,000 contractual bonus.
|--- | --------------------------------------------------------------------

|(10) | Mr. Haar commenced employment with Postmedia on January 9, 2012. Mr. Haars salary on an annualized basis in fiscal 2012 was $300,000.
|---- | --------------------------------------------------------------------------------------------------------------------------------------

|(11) | Mr. Parrish commenced employment with Postmedia on July 11, 2011. Prior to this date he provided executive services to the Company through his
management company, Sport Media Enterprises Inc. Mr. Parrishs compensation recorded as all other compensation for fiscal 2011 consists entirely of amounts paid to Sport Media Enterprises Inc.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Performance Graph

The graph set out below illustrates the cumulative total return over the period from June 14, 2011 (Postmedias listing date
on the TSX) to August 31, 2013, of a $100 investment in the Voting Shares and Variable Voting Shares as compared to the S&P / TSX Composite Index.

The year-end values of each investment are based solely on the change in the underlying Share price as no dividends were paid. The
calculations exclude brokerage fees and any applicable taxes. Total Shareholder returns from each investment may be calculated from the year-end investment values shown below the graph.



LOGO



|      |  |                                                                                                                                                                                                                                                                               
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Note: |  | The data points in the performance graph above reflect the initial investment of $100 on June 14, 2011; the investments performance for the period covering June 14, 2011 to August 31, 2011; and the
investments performance for the years ending August 31, 2012 and 2013.

Pay For Performance

The Corporation evaluates and considers the compensation of the NEOs with a pay for performance perspective. The Compensation and
Pension Committee does not base its compensation decisions on the trading price of the Shares of the Company. The Compensation and Pension Committee believes the trading price of the Shares is affected by external factors over which the Company has
little or no control and certain of these external factors do not necessarily reflect the operating performance of the Company. Compensation payouts are based on key financial targets that reflect the organizational strategic plan and budgets.
Budget targets, set on an annual basis, reflect the significant challenges facing the publishing industry. Compensation plans are working as expected as shown in the Summary Compensation Table, indicated by the differentiation in
payouts based on achievement of targets.



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Further, a portion of the NEOs aggregate compensation, as shown in the
Summary Compensation Table, is composed of option-based awards. Accordingly, long-term compensation for the NEOs is largely dependent on the trading price of the Companys Shares. In this way, the NEOs compensation is linked
to the underlying performance of the Shares and thereby aligned with Shareholder returns.

Incentive Plan Awards

Option Plan

The Option Plan is
intended to assist Postmedia in attracting, motivating and retaining officers and employees by granting the right to purchase Shares (Options), as applicable, under the Option Plan (the Option Plan), in order to
allow them to participate in the long-term success of Postmedia and to promote a greater alignment of their interests with the interests of the Shareholders of Postmedia.

Under the Option Plan, Options may be granted to participants in respect of unissued Shares. Participants are current full-time or
part-time officers, employees or consultants of Postmedia or certain related entities (herein referred to as Participants). The Option Plan is administered by the Board (the Plan Administrator). In administering
the Option Plan, the Plan Administrator may determine, among other things, Participants to whom Options are granted and the amounts, terms and conditions relating to Options, including the exercise price, and the time(s) when and circumstances under
which Options become exercisable.

The maximum number of Shares that may be reserved for issuance at any time for the exercise of
Options under the Option Plan is 3,000,000 Shares representing 7.5% of the total number of Shares issued and outstanding. As of August 31, 2013, 1,808,000 Options, including 600,000 tandem Options/RSUs, or 60.3% of the number of Options that
are reserved for issuance, have been granted under the Option Plan, representing 4.5% of the total number of Shares issued and outstanding. Therefore, there are currently 1,192,000 Options available to be granted under the Option Plan representing
3.0% of the total number of Shares issued and outstanding. All Options will have a fixed exercise price, which shall not be less than the fair market value at the date of grant, being the volume-weighted average closing price of the applicable
Shares on the TSX for the five trading days in which the Shares have actually traded immediately preceding such date, or if the Shares are not listed and posted for trading on any stock exchange, the fair market value of the Shares as determined by
the Board in its sole discretion (Fair Market Value). At the election of a Participant, in lieu of exercising an Option a Participant may instead choose to surrender such Option, in whole or in part, in consideration of
(i) the difference between the Fair Market Value on the date of exercise of the Shares subject to the Option and the exercise price for such Option (the Option Value) in the form of Shares, or (ii) the Option Value in
the form of cash, subject to the consent of Postmedia. The term of any Option shall expire on the tenth anniversary of the date of grant, unless otherwise specified by the Plan Administrator at the time of grant, subject to extension of up to ten
business days in the event the expiration of an Option would otherwise occur during or within two business days after the end of a Blackout Period (as such term is defined in the Option Plan). Options (including the rights attached thereto) are
non-assignable and non-transferable except through devolution by death. The terms and conditions of Options granted under the Option Plan are subject to adjustments in certain circumstances, at the discretion of the Plan Administrator.

The Option Plan limits insider participation such that: (i) the number of Shares issuable pursuant to the exercise of Options
granted to insiders (as such term is used in the TSX Company Manual) of Postmedia under the Option Plan, together with the number of securities issuable to insiders under Postmedias other security-based compensation arrangements (as such term
is used in the TSX Company Manual), at any time, must not exceed 10% of Postmedias issued and outstanding Shares; and (ii) the number of Shares issued to insiders of Postmedia within any one year period pursuant to the exercise of
Options, together with the number of securities issued to insiders pursuant to all of Postmedias other security-based compensation arrangements, shall not exceed 10% of Postmedias issued and outstanding Shares.



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Under the Option Plan, in the case of the death of a Participant, all outstanding unvested
Options granted to such Participant shall immediately and automatically be deemed to be vested and the legal representatives of such Participant shall have the right to exercise part or all of the Participants outstanding and vested Options at
any time up to and including (but not after) the earlier of the last business day on or prior to: (i) the date that is one year following the date of death of such Participant; or (ii) the date on which the exercise period of the
particular Option expires. In the case of Incapacity (as such term is defined in the Option Plan), all outstanding unvested Options granted to such Participant continue to vest and the Participant shall have the right to exercise part or all of the
Participants outstanding and vested Options at any time up to and including the date on which the particular Option expires. In the case of resignation or cessation of office or employment of the Participant with the prior written consent of
Postmedia, all outstanding and unvested Options granted to such Participant immediately and automatically terminate provided that, the Board may, but is not obligated to, allow a portion or all of the unvested Options to have an extended time period
by which such Options may remain in effect and shall not automatically terminate. Such Participant shall have the right to exercise part or all of the Participants outstanding and vested Options at any time up to and including (but not after)
the earlier of the last business day on or prior to: (i) the date on which the exercise period of the particular Option expires; or (ii) the date that is 90 days following the date of resignation. In the case of Retirement (as such term is
defined in the Option Plan) of a Participant, all outstanding unvested Options granted to such Participant shall not terminate but shall continue to vest in accordance with their terms and the Participant shall have the right to exercise part or all
of such Options once vested at any time up to and including (but not after) the earlier of the last business day on or prior to: (i) the date that is three years following the date of Retirement; or (ii) the date on which the exercise
period of the particular Option expires, and the Participant shall have the right to exercise part or all of the Participants outstanding and vested Options as at the date of Retirement at any time up to and including (but not after) the
earlier of the last business day on or prior to: (x) the date that is three years following the date of Retirement; or (y) the date on which the exercise period of the particular Option expires. Where a Participants employment
terminates by reason of termination without Cause (as such term is defined in the Option Plan), unless otherwise determined by the Plan Administrator, all outstanding and unvested Options granted to such Participant will immediately and
automatically terminate provided that, the Board may, but is not obligated to, allow a portion or all of the unvested Options to have an extended time period by which such Options may remain in effect and shall not automatically terminate. The
Participant will have the right to exercise part or all of the Participants outstanding and vested Options at any time up to and including (but not after) the earlier of the last business day on or prior to: (i) the date on which the
exercise period of the particular Option expires; and (ii) the date that is 90 days after the Termination Date (as such term is defined in the Option Plan). Where a Participants employment is terminated by Postmedia or certain related
entities for Cause, then any Options held by such Participant, whether or not exercisable at the Termination Date, immediately expire and are cancelled on such date at a time determined by the Plan Administrator, in its sole discretion.



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If, before the expiry of an Option in accordance with the terms thereof, a Change of
Control (as such term is defined in the Option Plan) occurs and a Participant ceases to be an employee of Postmedia or certain related entities by reason of termination: (i) by Postmedia or related entity or by the entity that has entered into
a valid and binding agreement with Postmedia and/or its affiliates to effect the Change of Control at any time after such agreement is entered into or during the Control Period (as such term is defined in the Option Plan) and such termination was
for any reason other than for Cause; or (ii) by the Participant within sixty days after an act of Constructive Dismissal (as such term is defined in the Option Plan), the Participants Options become fully vested and may be exercised or
surrendered by the Participant at any time within 120 days of the Participants Termination Date. In the event of a Change of Control, all outstanding Options shall be replaced with similar options of the entity resulting from the transaction
on substantially the same terms and conditions as the Options, unless such replacement is not possible, practical or advisable, as the Board may, in its sole discretion, determine. If such determination is made that replacement is not possible,
practical or advisable, the Plan Administrator may, in its sole discretion, accelerate the vesting of any or all outstanding Options to provide that such outstanding Options shall be fully vested and conditionally exercisable upon (or prior to) the
completion of the transaction resulting in the Change of Control. In the event the Plan Administrator accelerates the vesting of any outstanding Options provided at least 10 days notice has been provided to an Optionee (as such term is defined
in the Option Plan), all vested Options, unless exercised prior to or at the time of the Change of Control, will expire and be of no further force or effect upon completion of the Change of Control. If, for any reason, the transaction that would
result in a Change of Control is not completed, the Plan Administrator may cause the acceleration of exercise periods of any Options or acceleration of the time for the fulfillment of any conditions or restrictions on such exercise of Options to be
retracted and the vesting of such Options to revert to the manner provided in the applicable Option grant document, unless such Options have already been exercised.

The Board may amend the Option Plan without Shareholder approval in certain instances, including, without limitation: (i) for the
purpose of making formal, minor or technical modifications to any of the provisions of the Option Plan, including amendments of a housekeeping nature; (ii) to correct any ambiguity, defective provision, error or omission in the
provisions of the Option Plan; (iii) to amend the vesting provisions of Options; (iv) to change the termination provisions of Options or the Option Plan that does not entail an extension beyond the original expiry date; or (v) any
other amendment that does not require Shareholder approval under applicable laws or the applicable rules of the TSX, provided that no such amendment may be made without the consent of each affected Optionee if such amendment would adversely affect
the rights of such affected Optionee for Options previously granted. Shareholder approval will be required for any amendment to the Option Plan to: (a) reduce the exercise price; (b) extend the term of Options (other than as set out in the
Option Plan); (c) increase the maximum number of Shares which may be issued under the Option Plan, subject to certain exceptions in connection with a reorganization or other event affecting the capital of Postmedia; (d) remove or exceed
the insider participation limit; and (e) amend the amendment provisions of the Option Plan.

RSU Plan

The RSU Plan provides for the grant of the right to acquire any number of fully paid and non-assessable Shares, as applicable, in
accordance with the terms of the RSU Plan (RSUs) to Participants, being current part-time or full-time officers, employees or consultants of Postmedia or certain related entities. The maximum aggregate number of Shares issuable
pursuant to RSUs outstanding at any time under the RSU Plan shall not exceed 600,000 Shares. Effective July 13, 2010, Postmedia granted 600,000 RSUs to Mr. Godfrey as part of the tandem Options/RSUs (Tandem Award)
described under  Employment Agreements - President and Chief Executive Officer and, as a result, there are currently no RSUs available to be granted under the RSU Plan.



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The RSU Plan is administered by the Board. In administering the RSU Plan, the Board may
determine, among other things, Participants to whom RSUs are granted and the amounts, terms and vesting dates of RSUs. Each RSU will be settled for one Share, without payment of additional consideration, after such RSU has vested; however, at any
time, a Participant may request in writing, upon exercising vested RSUs, subject to the consent of Postmedia, that Postmedia pay an amount in cash equal to the aggregate current Fair Market Value of the Shares on the date of such exercise in
consideration for the surrender by the Participant to Postmedia of the rights to receive Shares under such RSUs. The Board may in its sole discretion accelerate the vesting date for all or any RSUs for any Participant at any time and from time to
time. RSUs are non-transferable. The terms and conditions of RSUs granted under the RSU Plan will be subject to adjustments in certain circumstances, in the discretion of the Board.

The RSU Plan limits insider participation such that: (i) the number of Shares issuable to insiders (as such term is used in the TSX
Company Manual) at any time, under all security based compensation arrangements (as such term is used in the TSX Company Manual) of Postmedia, shall not exceed 10% of the number of Shares issued and outstanding from time to time; and (ii) the
number of Shares issued to insiders, within any one year period, under all security based compensation arrangements of Postmedia, shall not exceed 10% of the number of Shares issued and outstanding from time to time.

Under the RSU Plan, in the case of the death of a Participant, all outstanding unvested RSUs granted to such Participant shall
immediately and automatically be deemed to be vested and the legal representatives of such Participant shall have the right to exercise part or all of the Participants outstanding and vested RSUs at any time up to and including (but not after)
the last business day on or prior to the date that is one year following the date of death of such Participant. In the case of Incapacity (as such term is defined in the RSU Plan), all outstanding unvested RSUs granted to such Participant continue
to vest and the Participant shall have the right to exercise part or all of the Participants outstanding and vested RSUs at any time. In the case of resignation or cessation of office or employment of the Participant with the prior written
consent of Postmedia, all outstanding and unvested RSUs granted to such Participant will immediately and automatically terminate provided that, the Board may, but is not obligated to, allow a portion or all of the unvested RSUs to have an extended
time period by which such RSUs may remain in effect and shall not automatically terminate. Such Participant shall have the right to exercise part or all of the Participants outstanding and vested RSUs at any time up to and including (but not
after) the last business day on or prior to the date that is 90 days following the date of resignation. In the case of Retirement (as such term is defined in the RSU Plan) of a Participant, all outstanding unvested RSUs granted to such Participant
shall not terminate but shall continue to vest in accordance with their terms and the Participant shall have the right to exercise part or all of such RSUs once vested at any time up to and including (but not after) the last business day on or prior
to the date that is three years following the date of Retirement, and the Participant shall have the right to exercise part or all of the Participants outstanding and vested RSUs as at the date of Retirement at any time up to and including
(but not after) the last Business Day on or prior to the date that is three years following the date of Retirement. Where a Participants employment terminates by reason of termination without Cause (as such term is defined in the RSU Plan),
unless otherwise determined by the Board, all outstanding and unvested RSUs granted to such Participant will immediately and automatically terminate provided that, the Board may, but is not obligated to, allow a portion or all of the unvested RSUs
to have an extended time period by which such RSUs may remain in effect and shall not automatically terminate. The Participant will have the right to exercise part or all of the Participants outstanding and vested RSUs at any time up to and
including (but not after) the date that is 90 days after the Termination Date (as such term is defined in the RSU Plan). Where a Participants employment is terminated by Postmedia or certain related entities for Cause, then any RSUs held by
such Participant, whether or not exercisable at the Termination Date, immediately expire and are cancelled on such date at a time determined by the Plan Administrator, in its sole discretion.



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If, before the expiry of a RSU in accordance with the terms thereof, a Change of Control
(as such term is defined in the RSU Plan) occurs and a Participant ceases to be an employee of Postmedia or certain related entities by reason of termination: (i) by Postmedia or a related entity or by the entity that has entered into a valid
and binding agreement with Postmedia and/or its affiliates to effect the Change of Control at any time after such agreement is entered into or during the Control Period (as such term is defined in the RSU Plan) and such termination was for any
reason other than for Cause; or (ii) by the Participant within sixty days after an act of Constructive Dismissal (as such term is defined in the RSU Plan), the Participants RSUs become fully vested and may be exercised or surrendered by
the Participant at any time within 120 days of the Participants Termination Date. In the event of a Change of Control, all outstanding RSUs shall be replaced with similar restricted share units of the entity resulting from the transaction on
substantially the same terms and conditions as the RSU Plan, unless such replacement is not possible, practical or advisable, as the Board may, in its sole discretion, determine. If such determination is made that replacement is not possible,
practical or advisable, the Board may, in its sole discretion, accelerate the vesting of any or all outstanding RSUs to provide that such outstanding RSUs shall be fully vested and conditionally exercisable upon (or prior to) the completion of the
transaction resulting in the Change of Control. In the event the Board accelerates the vesting of any outstanding RSUs (i) provided at least 10 days notice has been provided to a Participant, all vested RSUs, unless exercised prior to or
at the time of the Change of Control, will expire and be of no further force or effect upon completion of the Change of Control, and (ii) if, for any reason, the transaction that would result in a Change of Control is not completed, the Board
may cause the acceleration of exercise periods of any RSUs or acceleration of the time for the fulfillment of any conditions or restrictions on such exercise of RSUs to be retracted and the vesting of such RSUs to revert to the manner provided in
the applicable RSU agreement, unless such RSUs have already been exercised.

The Board may amend the RSU Plan without Shareholder
approval in certain instances, including, but not limited to: (i) for the purpose of making formal, minor or technical modifications to any of the provisions of the Plan, including amendments of a housekeeping nature; (ii) to
correct any ambiguity, defective provision, error or omission in the provisions of the plan; (iii) to amend the vesting, redemption or payment provisions of the plan or any RSUs; (iv) to change the termination provisions of RSUs or the
plan that does not entail an extension beyond the original expiry date; (v) to facilitate a cash payment; or (vi) any other amendment that does not require Shareholder approval under applicable laws or the applicable rules of the TSX,
provided that no such amendment of the plan may be made without the consent of each affected Participant if such amendment would adversely affect the rights of such affected Participant for RSUs previously granted. Shareholder approval will be
required for any amendment to the RSU Plan to: (a) extend the term of RSUs; (b) increase the maximum number of Shares which may be issued under the plan, subject to certain exceptions in connection with a reorganization or other event
affecting the capital of Postmedia; (c) remove or exceed the insider participation limit; and (d) amend the amendment provisions of the plan.



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Outstanding Share-Based Awards and Option-Based Awards

The table below sets forth information related to Options held by the NEOs as at August 31, 2013 (to which there has been no change
to November 15, 2013):





|              |  |                                                           |         |     |                        |  |      |                   |  |  |                                               |  |  |                                       |   |  |                                                                  |  |         |     |  |  |         |    
|------------- |  | --------------------------------------------------------- | ------- | --- | ---------------------- |  | ---- | ----------------- |  |  | --------------------------------------------- |  |  | ------------------------------------- | - |  | ---------------------------------------------------------------- |  | ------- | --- |  |  | ------- | ---
|              |  | Option-based Awards                                       |         |     | Share-based Awards     | 
|Name          |  | Number ofSecuritiesUnderlyingUnexercisedOptions
(1)(6)(#) |         |     | OptionExercisePrice($) |  |      | Option ExpiryDate |  |  | Value ofUnexercisedIn-the-MoneyOptions
(3)($) |  |  | Number ofSharesthat havenot Vested(#) |   |  | Market orPayout Value ofShare-basedAwards thathave not vested($) | 
|              |  |                                                           |         |     |                        | 
|Paul Godfrey  |  |                                                           | 400,000 | (2) |                        |  | 9.85 |                   |  |  | July 13, 2020                                 |  |  |                                       | - |  |                                                                  |  | 120,000 | (4) |  |  | 177,600 | (5)
|              |  |                                                           |         |     |                        | 
|Douglas Lamb  |  |                                                           | 200,000 |     |                        |  | 9.85 |                   |  |  | July 13, 2020                                 |  |  |                                       | - |  |                                                                  |  | -       |     |  |  | -       |    
|              |  |                                                           |         |     |                        | 
|Wayne Parrish |  |                                                           | 200,000 |     |                        |  | 6.53 |                   |  |  | January 26, 2022                              |  |  |                                       | - |  |                                                                  |  | -       |     |  |  | -       |    
|              |  |                                                           |         |     |                        | 
|Gordon Fisher |  |                                                           | 200,000 |     |                        |  | 9.85 |                   |  |  | July 13, 2020                                 |  |  |                                       | - |  |                                                                  |  | -       |     |  |  | -       |    
|              |  |                                                           |         |     |                        | 
|Jeffrey Haar  |  |                                                           | 50,000  |     |                        |  | 5.68 |                   |  |  | January 26, 2022                              |  |  |                                       | - |  |                                                                  |  | -       |     |  |  | -       |    



Notes:



|(1) | Includes both vested and unvested Options.
|--- | ------------------------------------------

|(2) | Does not include Mr. Godfreys Tandem Award, which has been reflected in the share-based awards column and is described in notes 4 and 5 below.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------

|(3) | This column contains the aggregate value of the in-the-money vested and unvested unexercised Options as of August 31, 2013, computed using the weighted
average share price for the five trading days in which Shares have actually traded immediately preceding August 31, 2013, of $1.48 for the Voting Shares and $1.58 for the Variable Voting Shares. None of the Options issued to the NEOs are
currently in-the-money as the exercise price is currently in excess of the value of both the Voting Shares and Variable Voting Shares. The Options have not been and may never be exercised and the actual gain, if any, on exercise will depend on the
value of the Voting Shares or Variable Voting Shares on the date of such exercise.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | This represents the portion of RSUs under Mr. Godfreys Tandem Award that have not yet vested, with the assumption that Mr. Godfrey would
exercise his RSUs under the Tandem Award. The Tandem Award is further described in Employment Agreements  President and Chief Executive Officer.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | The weighted average for the five trading days in which Shares have actually traded immediately preceding August 31, 2013, of $1.48 for the Voting Shares
was used to value Mr. Godfreys unvested Tandem Award.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | The class of Shares that underlie a particular Option is determined based on the citizenship for the holder of the Option, with holders that are Non-Canadian
receiving a Variable Voting Share upon the exercise of an Option and holders that are not Non-Canadian receiving a Voting Share upon the exercise of an Option. All NEOs hold Options exercisable for Voting Shares, except for Mr. Haar who holds
Options exercisable for Variable Voting Shares.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Value Vested or Earned During the Year

The following table summarizes the value of Share-Based Awards and Option-Based Awards that would have been realized by each NEO during
Fiscal 2013 if the Share-Based Awards and Option-Based Awards that vested in Fiscal 2013 had been exercised on their vesting date:





|              |  |                                                          |   |  |                                                         |  |         |                                                                            |  |  |         | 
|------------- |  | -------------------------------------------------------- | - |  | ------------------------------------------------------- |  | ------- | -------------------------------------------------------------------------- |  |  | ------- | 
|Name          |  | Option-Based Awards -Value Vested During theYear ($) (1) |   |  | Share-Based Awards -Value Vested During theYear ($) (2) |  |         | Non-Equity IncentivePlan Compensation -Value Earned During theYear ($) (3) | 
|Paul Godfrey  |  |                                                          | - |  |                                                         |  | 187,200 |                                                                            |  |  | 579,500 | 
|              |  |                                                          |  
|Douglas Lamb  |  |                                                          | - |  |                                                         |  | -       |                                                                            |  |  | 62,437  | 
|              |  |                                                          |  
|Wayne Parrish |  |                                                          | - |  |                                                         |  | -       |                                                                            |  |  | 65,906  | 
|              |  |                                                          |  
|Gordon Fisher |  |                                                          | - |  |                                                         |  | -       |                                                                            |  |  | 71,417  | 
|              |  |                                                          |  
|Jeffrey Haar  |  |                                                          | - |  |                                                         |  | -       |                                                                            |  |  | 41,625  | 



Notes:

(1)    For Messrs. Godfrey, Lamb and Fisher the value of the Options granted which vested in Fiscal 2013 were computed using the
weighted average share price for the five trading days in which Shares have actually traded immediately preceding the vesting date of July 13, 2013 of $1.56 for the Voting Shares. For Messrs. Parrish and Haar the value of the Options granted
which vested in Fiscal 2013 were computed using the weighted average share price for the five trading days in which Shares have actually traded immediately preceding the vesting date of January 26, 2013 of $2.03 for the Voting Shares and $1.77
for the Variable Voting Shares. None of the Options issued to the NEOs were in-the-money on the vesting dates during Fiscal 2013 as the exercise price was in excess of the value of a Voting Share and Variable Voting Share. The Options have not been
and may never be exercised and actual gain, if any, on exercise will depend on the value of the Voting Shares and Variable Voting Shares on the date of such exercise.

(2)    One-fifth of the Tandem Award granted in 2010, which equals 120,000 RSUs, vested on July 13, 2013. The value of the Tandem
Award which vested in Fiscal 2013 was computed using the weighted average for the five trading days in which Shares have actually traded immediately preceding July 13, 2013 of $1.56 for the Voting Shares. Mr. Godfrey has not yet exercised
either the vested Options or vested RSUs associated with this Tandem Award and for purposes of this disclosure we have assumed Mr. Godfrey will exercise the RSUs. The Options associated with this Tandem Award will expire upon the tenth
anniversary of the exercise date, and the RSUs will not expire. There are no exercise prices for RSUs issued under the RSU Plan.

(3)    These amounts are also shown in the Summary Compensation Table under Non-Equity Incentive Plan Compensation.

Employee Share Purchase Plan

The Employee Share Purchase Plan (ESPP) was adopted in 2011 and has not yet been made available to employees. If
implemented, all union and non-union permanent full time and permanent part-time employees of the Corporation, Postmedia Network Inc. or any affiliated company approved by the Board would be permitted to participate in the ESPP, subject to certain
exclusions (including those employees who have been granted Options and those employees who are resident in the United States).

Under the terms of the ESPP, eligible employees of the Corporation who elect to participate shall contribute at least 1% of their annual
base salary (excluding bonus, commission and overtime pay), up to a maximum on an annual basis equal to the lesser of (i) 5% of the employees annual base salary (excluding bonus, commission and overtime pay) and (ii) $8,000. The
Corporation will match all contributions made by the employee by either contributing cash to be used by the administrative agent of the ESPP to purchase Shares on behalf of the employee or issuing Shares from treasury, in each case having a value
equal to 25% of an employees contribution up to an annual maximum of $2,000 per employee. The Shares issued by, or purchased with contributions from, the Corporation will be issued to the employee within, or be subject to a vesting period of,
12 to 18 months following the employee contribution, respectively. The Corporation may also make additional contributions for any employee or group of employees in the Boards discretion.



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Both employee and employer contributions are used to acquire Shares on behalf of the
employee through either issuances from treasury, open market purchases or a combination of both. Market purchases under the ESPP are made at the market price on the TSX. If employee contributions are used to purchase Shares from treasury, Shares are
issued at the average 30-day closing price on the TSX and the corresponding employer shares are issued at the same price. If employee shares are acquired through open market purchases, corresponding employer shares are issued at the same price.

Employees may withdraw their Shares that are subject to the ESPP, subject to certain employer contribution vesting provisions. An
employees participation in the ESPP terminates if he or she becomes disabled, retires, dies, is no longer eligible for the ESPP or the plan is terminated. On such terminations, all Shares (both vested and unvested) of the employee subject to
the ESPP may be transferred as directed by the employee or sold. An employees participation in the ESPP also terminates if he or she is placed on layoff and all recall rights have been exhausted, or his or her employment is terminated. On such
terminations, or if the employee terminates his or her participation in the plan, only those vested Shares of the employee subject to the ESPP may be transferred as directed by the employee or sold (and the employee will not be entitled to receive
the unvested Shares). The right to participate in the ESPP may not be assigned or transferred.

The maximum number of Shares that
may be issued from treasury under the ESPP is 800,000 Shares. As of the date hereof, no Shares have been issued in respect of the ESPP.

The maximum number of Shares that may be issued from treasury to insiders (as such term is defined in the Securities Act
(Ontario)) within any one year period and issuable at any time under the ESPP and all other security based compensation arrangements is 10% of the total number of outstanding Shares on a fully diluted basis.

The Board reserves the right at any time, subject to any regulatory or stock exchange approval that may be required, to amend the ESPP
without prior notice to or approval by Shareholders provided, however, that no amendment or modification shall adversely affect the rights and interests of a participants Shares allocated to his or her account under the ESPP prior to the date
of such amendment. Examples of circumstances where the Board may make amendments without Shareholder approval include, without limitation, amendments that would: (a) make housekeeping or clerical changes; (b) clarify any provision in the
plan; (c) ensure compliance with applicable laws, regulations or policies of any governmental authority or relevant stock exchange; (d) change the class of participants eligible to participate in the plan; and (e) change the terms and
conditions of any financial assistance which may be provided by the Corporation to the participants to facilitate the purchase of Shares under the ESPP, or adding or removing any provisions providing for such financial assistance. No amendment to
the ESPP requiring the approval of the Shareholders of the Corporation under any applicable securities laws or requirements (including without limitation the TSX rules and policies) shall become effective until such approval is obtained. In addition
to the foregoing, the approval of the holders of a majority of the Shares present and voting in person or by proxy at a meeting of Shareholders shall be required for: (a) any amendment to the provisions of the amendment provision of the ESPP;
(b) a reduction in the price at which Shares are issued under the ESPP that benefits an insider of the Corporation; (c) any amendment to remove or to exceed the insider participation limit; and (d) any increase in the maximum number
of Shares issuable under the ESPP.



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##### Table of Contents

Employment Agreements

President and Chief Executive Officer

On July 13, 2010, Mr. Godfrey entered into an employment agreement with Postmedia Network Inc. with an expiry date of
August 31, 2014, the term of which agreement was extended as of June 7, 2013 to December 31, 2016. The employment agreement for Mr. Godfrey provides him with an annual base salary of $950,000 and an annual cash incentive target
opportunity of 100% of his base salary, based on full achievement of the targets (as discussed in Statement of Executive Compensation  Annual Short-Term Incentive Plan) as fixed by the Board, with enhanced eligibility for up to an
additional 50% of Mr. Godfreys base salary, based on exceeding the plan target fixed by the Board by 20% or more (together with prorated amounts for achieving between 80% and 120% of the targets). Pursuant to the terms of the agreement,
Mr. Godfrey subscribed for $1,000,000 of Voting Shares at a price of $9.26 per share (which shares are currently held in a trust for the benefit of certain members of Mr. Godfreys family). In addition, Mr. Godfrey received
Options (as defined under Option Plan) to acquire 400,000 Voting Shares exercisable at a price of $9.85 per share and a grant of an additional 600,000 tandem Options/RSUs (an RSU defined under RSU Plan). These
tandem Options/RSUs were granted concurrently and, upon the exercise of any or all of such Options, the corresponding number of RSUs will be automatically forfeited by Mr. Godfrey for no consideration and, upon the exercise of any or all of
such RSUs, the corresponding number of Options will be automatically forfeited by Mr. Godfrey for no consideration. Upon the exercise of an Option, Mr. Godfrey will, upon payment of the exercise price, receive one Share in accordance with
the terms of the Option Plan. Upon exercise of an RSU, Mr. Godfrey will receive one Share without payment of additional consideration, however Mr. Godfrey may request in writing upon exercising his vested RSUs, subject to the consent of
Postmedia, to receive the Fair Market Value of the Shares in cash in accordance with the terms of the RSU Plan. In no event will Mr. Godfrey receive more than 600,000 share entitlements (either in the form of Shares or the value of a Share, as
applicable) in respect of the Tandem Award. The Options and RSUs will vest, as to 20% of the Shares subject to each award immediately upon grant and, as to the balance of the Shares subject to each award, equally on each of the first four
anniversaries of the effective date of the employment agreement.

Mr. Godfrey is entitled to receive various employee benefits
and perquisites. The employment agreement provides that if Mr. Godfreys position is terminated without cause by Postmedia Network Inc. or by Mr. Godfrey for good reason, Mr. Godfrey will be paid an amount equal to
the base salary that would have been payable to him until the expiry of the term of his employment agreement as if it had not been terminated. Mr. Godfreys termination clause also provides for an amount equal to the average of annual cash
incentive bonuses paid to Mr. Godfrey for each fiscal year of Postmedia Network Inc. during which Mr. Godfrey was employed with Postmedia Network Inc. prorated for any partial year to the expiry of the term, together with continuation of
benefits, perquisites and allowances to which Mr. Godfrey was entitled at the date of termination for the same period. In the event of a termination of Mr. Godfreys employment by reason of incapacity, Mr. Godfrey is entitled to
the base salary and benefits, perquisites and allowances to which he was entitled at the date of termination to the end of the term. Mr. Godfreys employment agreement also includes non-competition and non-solicitation covenants effective
during the term of employment and post-termination (until the later of 12 months following termination and the entirety of the term of the agreement) in favour of Postmedia Network Inc. The agreement provides that Mr. Godfreys position is
intended to be full-time and exclusive, subject only to the reasonable fulfillment of his responsibilities in connection with his other positions as approved by Postmedia Network Inc. from time to time. Mr. Godfrey is not eligible for any
pension and/or post retirement income from Postmedia Network Inc.



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Other Executive Employment Agreements

The employment agreements for each of Messrs. Lamb, Parrish, Fisher and Haar (each, an Executive) provide each such
Executive with an initial annual base salary ranging from $300,000 to $475,000, subject to annual review by Postmedia Network Inc., and each Executive is eligible for an annual cash incentive target opportunity of 50% of such Executives base
salary, with an opportunity to achieve up to 75% if financial performance is 125% of budget. The awarding of incentives will be based on the financial performance of the Company. See Statement of Executive Compensation  Incentive Plan
Awards

Each of the Executives is eligible to participate in the Option Plan and is entitled to receive various employee
benefits and perquisites. Pursuant to the terms of their respective employment agreements, Messrs. Lamb and Parrish exercised rights to subscribe for $200,000 of Shares and Mr. Fisher exercised his right to subscribe for $500,000 of Shares,
each at a price of $9.26 per share. With the exception of Mr. Lambs employment agreement, the employment agreements provide that, if the Executives position is terminated without cause by Postmedia Network Inc., they will be paid a
lump sum severance payment equivalent to (a) one months base salary for each year of service they have completed on behalf of Postmedia Network Inc. or any predecessor entity (with a minimum of 18 months up to a maximum of 24 months), and
(b) one month of the Executives average annual bonus for each full year of service that they have completed on behalf of Postmedia Network Inc. or any predecessor entity (with a minimum of 18 months up to a maximum of 24 months).
Mr. Lambs employment agreement provides that if his position is terminated without cause by Postmedia Network Inc. or due to a change in control prior to July 13, 2014, he will be paid a lump sum severance payment equivalent to one
and a half times his base salary plus bonus and car allowance, with a minimum payment of $1,034,100. If Mr. Lambs employment is terminated without cause by Postmedia Network Inc., or due to a change in control subsequent to July 13,
2014 and the Company has not made available to him a supplemental pension plan, he will be paid a lump-sum severance payment equivalent to two times his base salary, bonus and car allowance, with a minimum payment of $1,378,800. Mr. Lamb will
also continue to receive benefits for a period of 18 months. The Executives employment agreements also include non-competition and non-solicitation covenants in favor of Postmedia Network Inc. effective during the term of employment and for a
minimum of six months following termination, in the case of the non-competition covenant, and a period of twelve months following termination, in the case of the non-solicitation covenant.



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Termination and Change of Control Benefits

The following table summarizes the estimated incremental payments to each NEO in the event of termination without cause and termination
due to incapacity. The payments are calculated as at August 31, 2013. For additional Information, see Employment Agreements.





|                  |  |                          |  |                                                                  |  |                                                     
|----------------- |  | ------------------------ |  | ---------------------------------------------------------------- |  | ----------------------------------------------------
|Name              |  | Compensation
Component   |  | Estimated Incremental
Payments For Termination Without
Cause ($) |  | Estimated Incremental
Payments Due To Incapacity
($)
|Paul Godfrey (1)  |  | Base Salary              |  | 3,166,667                                                        |  | 3,166,667                                           
|                  |  | STIP                     |  | 1,022,519                                                        |  | -                                                   
|                  |  | Unvested Tandem Award    |  | 177,600                                                          |  | 177,600                                             
|                  |  | Unvested Options         |  | -                                                                |  | -                                                   
|                  |  | Continuation of Benefits |  | 627,830                                                          |  | 627,830                                             
|                  |  |                          |  |                                                                  |  |                                                     
|                  |  |                          |  | 4,994,616                                                        |  | 3,972,097                                           
|                  |  |                          |  |                                                                  |  |                                                     
|Douglas Lamb (2)  |  | Base Salary              |  | 1,034,100                                                        |  | -                                                   
|                  |  | Unvested Options         |  | -                                                                |  | -                                                   
|                  |  | Continuation of Benefits |  | 14,941                                                           |  | -                                                   
|                  |  |                          |  |                                                                  |  |                                                     
|                  |  |                          |  | 1,049,041                                                        |  | -                                                   
|                  |  |                          |  |                                                                  |  |                                                     
|Wayne Parrish (3) |  | Base Salary              |  | 712,500                                                          |  | -                                                   
|                  |  | Unvested Options         |  | -                                                                |  | -                                                   
|                  |  | STIP                     |  | 49,430                                                           |  | -                                                   
|                  |  |                          |  |                                                                  |  |                                                     
|                  |  |                          |  | 761,930                                                          |  | -                                                   
|                  |  |                          |  |                                                                  |  |                                                     
|Gordon Fisher (4) |  | Base Salary              |  | 800,000                                                          |  | -                                                   
|                  |  | Unvested Options         |  | -                                                                |  | -                                                   
|                  |  | STIP                     |  | 71,417                                                           |  | -                                                   
|                  |  |                          |  |                                                                  |  |                                                     
|                  |  |                          |  | 871,417                                                          |  | -                                                   
|                  |  |                          |  |                                                                  |  |                                                     
|Jeffrey Haar (5)  |  | Base Salary              |  | 450,000                                                          |  | -                                                   
|                  |  | Unvested Options         |  | -                                                                |  | -                                                   
|                  |  | STIP                     |  | 79,219                                                           |  | -                                                   
|                  |  |                          |  |                                                                  |  |                                                     
|                  |  |                          |  | 529,219                                                          |  | -                                                   
|                  |  |                          |  |                                                                  |  |                                                     



Notes:

|(1) | In the event of the resignation by Mr. Godfrey of his employment due to good reason (as defined in his employment contract), Mr. Godfrey
will be entitled to the same payments as he would be entitled to receive in respect of a termination without cause as described above. Mr. Godfrey will not be entitled to any additional Options or RSUs after his termination date, but all
existing Options and his Tandem Award will continue to vest in accordance with the provisions of the relevant plan. The Company has calculated the value of the unvested Tandem Award, based on the assumption Mr. Godfrey would exercise RSUs. The
unvested RSUs as at August 31, 2013 totalled 120,000. For purposes of computing the value of the Tandem Award and the Options under the Option Plan, the weighted average for the five trading days in which Shares have actually traded immediately
preceding August 31, 2013 of $1.48 for the Voting Shares was used. Using a value for a Voting Share of $1.48, the value of Mr. Godfreys vested Tandem Award (which amount is not reflected in the above table) would be $710,400. Under
the Option Plan, all of Mr. Godfreys vested Options will continue to be available to be exercised upon termination of his employment contract. Using a value for a Voting Share of $1.48, the value of Mr. Godfreys vested Options
(which amount is not reflected in the above table), if exercised, would be nil. If Mr. Godfreys employment contract is terminated due to incapacity, his unvested Options under the Option Plan will continue to vest. The value of these
unvested Options (which amount is reflected in the table), using a value of $1.48, would be nil.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | In the event of the resignation by Mr. Lamb of his employment due to a change in control (as defined in his employment contract), Mr. Lamb will be
entitled to the same payments as he would be entitled to receive in respect of a termination without cause as described above. Under the Option Plan, all of Mr. Lambs vested Options will continue to be available to be exercised upon
termination of his employment contract. Using a value of a Voting Share of $1.48 at August 31, 2013, the value of the vested Options (which amount is not reflected in the above table), if exercised, would be nil. If Mr. Lambs
employment contract is terminated due to incapacity, his unvested Options under the Option Plan will continue to vest. The value of these unvested Options (which amount is reflected in the table), using a value of $1.48, would be nil. If
Mr. Lamb is terminated subsequent to July 13, 2014 and the Company has not made available to him a supplemental pension plan, he will receive an increase with respect to the base salary component of his estimated incremental payments for
termination without cause of $344,700.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|(3) | Under the Option Plan, all of Mr. Parrishs vested Options will continue to be available to be exercised upon termination of his employment
contract. Using a value of a Voting Share of $1.48 at August 31, 2013, the value of the vested Options (which amount is not reflected in the above table), if exercised, would be nil. If Mr. Parrishs employment contract is terminated
due to incapacity, his unvested Options under the Option Plan will continue to vest. The value of these unvested Options (which amount is reflected in the table), using a value of $1.48, would be nil. Subsequent to August 31, 2013,
Mr. Parrishs employment agreement was amended to revise his without cause termination clause from a minimum of 18 months to 24 months and to provide for continuation of benefits for 24 months. These changes will result in an
increase of $273,897 to his estimated incremental payments for termination without cause.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Under the Option Plan, all of Mr. Fishers vested Options will continue to be available to be exercised upon termination of his employment contract.
Using a value of a Voting Share of $1.48 at August 31, 2013, the value of the vested Options (which amount is not reflected in the above table), if exercised, would be nil. If Mr. Fishers employment contract is terminated due to
incapacity, his unvested Options under the Option Plan will continue to vest. The value of these unvested Options (which amount is reflected in the above table), using a value of $1.48, would be nil.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Under the Option Plan, all of Mr. Haars vested Options will continue to be available to be exercised upon termination of his employment contract.
Using a value of a Variable Voting Share of $1.58 at August 31, 2013, the value of the vested Options (which amount is not reflected in the above table), if exercised, would be nil. If Mr. Haars employment contract is terminated due
to incapacity, his unvested Options under the Option Plan will continue to vest. The value of these unvested Options (which amount is reflected in the table), using a value of $1.58, would be nil. Subsequent to August 31, 2013,
Mr. Haars employment agreement was amended to provide for continuation of benefits for a minimum of 18 months to a maximum of 24 months. This change will result in an increase of $14,940 to his estimated incremental payments for
termination without cause.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Except for those payments to Mr. Godfrey described in note 1 to the table above,
no incremental payments to the NEOs are triggered upon the event of resignation for good reason.

Except for those
payments to Mr. Lamb described in note 2 to the table above and the ability of the Board, at its discretion, to accelerate the vesting of unvested Options and unvested RSUs, no incremental payments to the NEOs are triggered upon a change in
control of the Company.

Director Compensation

Annual Fees

The compensation of any director of Postmedia (other than any members of management who receive no compensation for serving
on the Board or as described in this section) has been structured so that at least one-half of such compensation is equity-based. As executive Interim Chairman Mr. Godfrey receives no compensation for serving on the Board, however a
non-executive Chairman of the Board is entitled to receive an annual fee of $270,000. A director who serves as the chair of the Audit Committee or the Compensation and Pension Committee receives an annual fee of $170,000 and a director who serves as
the chair of any other committee receives an annual fee of $150,000. Each director who is not the Chairman of the Board or the chair of a committee of the Board is entitled to be paid an annual fee of $120,000, and each director who is not the
Chairman of the Board receives an additional fee of $10,000 in respect of each Board committee on which the director serves but does not chair. The Lead Director, if any, is not entitled to any additional compensation as a result of assuming the
Lead Director role. Directors do not receive a fee for each meeting attended unless it is determined by the Board that an extraordinary number of meetings are being held. With the exception of fees paid to Ms. Peverett in Fiscal 2013, annual
fees for all of the directors are paid 50% (or at the election of a particular director, a greater percentage) in the form of a grant of DSUs (as defined below) and the balance in cash. To avoid a disproportionate number of DSUs being granted to
Ms. Peverett relative to the Initial Directors (as defined below) as a result of the significant change in the value of DSUs issued to the Initial Directors, the annual fees paid to Ms. Peverett for the period on which she served on the
Board in Fiscal 2013 were paid solely in cash.

For any director who was appointed prior to, or within 90 days following, the
acquisition date of July 13, 2010, and Hugh F. Dow (the Initial Directors), the first three years of DSUs, representing 50% of the annual fees, were granted as of July 13, 2010 and vested in three equal installments over
three years in advance of each such year. Due to the extensive work that was required to be performed by the Initial Directors in Postmedias first fiscal year, these directors received one years additional remuneration in the form of
DSUs, which vested in three equal installments over three years, in advance of each such year, and are subject to a performance threshold based on Postmedia achieving an EBITDA (as that term is defined in the applicable Board resolution) of $201.8
million in any one fiscal year. On January 11, 2012, the threshold was adjusted from $220.0 million to reflect the impact of the divestiture of the Victoria Times Colonist, Lower Mainland Publishing Group and Vancouver Island Newspaper Group



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##### Table of Contents

on Postmedias consolidated operating profit before amortization, depreciation, impairment and restructuring. The performance threshold has not been met as of August 31, 2013.

DSUs totaling 385,627 are outstanding and fully vested as at August 31, 2013 under the DSU Plan, with the Value of a Share (as such
term is defined in the DSU Plan) used to determine the number of DSUs granted. Value of a Share means the five-day weighted average closing price of the Voting Shares or Variable Voting Shares, as applicable for the five trading days in
which the applicable Shares have actually traded, or, if the applicable Shares are not trading on the TSX, on the relevant day, the Value of a Share on such stock exchange on which such Shares are listed and posted for trading as may be selected for
such purpose by the Board; however, in the event that the applicable Shares are not listed and posted for trading on any stock exchange, the value of a Share shall be the fair market value thereof as determined by the Board in its sole discretion.
During Fiscal 2013, the Company paid $707,429 in cash payments to its directors and issued no DSUs as compensation (as described in the Director Compensation Table below) to its directors. During Fiscal 2013 the Company settled
Mr. Emersons 21,320 DSUs for cash consideration of $43,247 and settled Mr. Osbornes 41,117 DSUs for cash consideration of $75,260 upon the cessation of their respective directorships. Further, Mr. Emersons 14,213
DSUs subject to performance criteria and Mr. Osbornes 27,411 DSUs subject to performance criteria were cancelled upon the cessation of their respective directorships as such performance criteria was not satisfied.

Director Compensation Table

The following table describes the compensation that was paid by the Corporation to its non-employee directors during the year ended
August 31, 2013. During Fiscal 2013, Ms. Peverett did not receive any DSUs as she received 100% of her annual fees in cash (see Director Compensation  Annual Fees)and no other director elected to receive more than
50% of their annual fees in DSUs (for more detail on this election see Director Compensation  DSU Plan). Mr. Godfrey does not receive any compensation for serving as a director of the Corporation. His compensation for
serving as President and CEO is included under the Summary Compensation Table. The total compensation received by the Corporations non-employee directors in Fiscal 2013 was approximately $0.7 million.



|                     |  |                     |  |                          |  |                            |  |          
|-------------------- |  | ------------------- |  | ------------------------ |  | -------------------------- |  | ---------
|Name                 |  | Fees Earned (1) ($) |  | Fees Granted
in DSUs ($) |  | All Other
Compensation ($) |  | Total
($)
|Ronald W. Osborne(2) |  | 82,174              |  | -                        |  | -                          |  | 82,174   
|                     |  |                     |  |                         
|Charlotte Burke      |  | 70,000              |  | -                        |  | -                          |  | 70,000   
|                     |  |                     |  |                         
|Hugh F. Dow          |  | 70,000              |  | -                        |  | -                          |  | 70,000   
|                     |  |                     |  |                         
|Jane Peverett (4)    |  | 54,783              |  | -                        |  | -                          |  | 54,783   
|                     |  |                     |  |                         
|David Emerson(3)     |  | 25,472              |  | -                        |  | -                          |  | 25,472   
|                     |  |                     |  |                         
|John Paton           |  | 80,000              |  | -                        |  | -                          |  | 80,000   
|                     |  |                     |  |                         
|Graham Savage        |  | 90,000              |  | -                        |  | -                          |  | 90,000   
|                     |  |                     |  |                         
|Steven Shapiro       |  | 65,000              |  | -                        |  | -                          |  | 65,000   
|                     |  |                     |  |                         
|Peter Sharpe         |  | 80,000              |  | -                        |  | -                          |  | 80,000   
|                     |  |                     |  |                         
|Robert Steacy        |  | 90,000              |  | -                        |  | -                          |  | 90,000   
|                    
|Total                |  | 707,429             |  | -                        |  | -                          |  | 707,429  
|                    



Notes:

|(1) | Except with respect to Ms. Peverett, fees earned consist only of those fees paid in cash for the year ended August 31, 2013 which represent 50% of the annual fees and 50% of the annual fees paid to directors
were paid in the form of DSUs. See Director Compensation  Annual Fees and DSU Plan.For more information on Ms. Peveretts compensation, please see note (4) of this table.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Ronald Osborne ceased to be a director of the Company effective April 9, 2013. Upon cessation of his directorship, payment was made in respect of Mr. Osbornes DSUs that were not subject to performance
criteria (see Director Compensation  Annual Fees).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | David Emerson ceased to be a director of the Company effective January 10, 2013. Upon cessation of his directorship, Mr. Emerson received payment for DSUs that were not subject to performance criteria (see
Director Compensation  Annual Fees).
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Jane Peverett commenced directorship with the Company effective April 10, 2013. Ms. Peveretts fees earned on an annual basis are $140,000.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------

|(5) | John Paton ceased to be a director of the Company effective November 4, 2013. On November 19, 2013, Mr. Paton received payment for DSUs that were not subject to either market criteria or performance
criteria.(see Director Compensation  DSU Plan).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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DSU Plan

Postmedia has adopted the DSU Plan for the benefit of its non-employee directors. Under the DSU Plan, except as otherwise specified by
the Board, non-employee directors of Postmedia are required to elect to receive at least 50% (and may elect to receive up to 100%) of their annual fees satisfied in the form of DSUs, and may receive additional grants of DSUs under the DSU Plan from
time to time in accordance with the terms of the DSU Plan. The number of DSUs to be credited to a director will be calculated on the date that fees are payable to such director, by dividing the dollar amount elected by such director in respect of
such fees by the Value of a Share (as such term is defined in the DSU Plan) on such date. The vesting conditions (which may include time restrictions, performance conditions or a combination of both) of each DSU granted under the DSU Plan, will be
determined by the Board, and on redemption (which would occur after the holder of the DSUs ceases to serve as a director and is not otherwise employed by Postmedia) DSUs will be paid out in cash. The DSUs are generally non-transferrable. Whenever
cash dividends or distributions are paid on the Shares, additional DSUs will be credited to directors. The Board may discontinue the DSU Plan at any time or, subject to certain exceptions set out in the DSU Plan, may amend the DSU Plan at any time.



55



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##### Table of Contents

The table below sets forth information related to DSUs held by Postmedias directors
as at August 31, 2013, based on the year of grant:



|                                        |  |                   |                 |  |                       |                                                                        |                  |  |                               |                                    |   |  |                                      |  |         |                                                   |                            |  |                                                    |  |                               |  |  |  |                               | 
|--------------------------------------- |  | ----------------- | --------------- |  | --------------------- | ---------------------------------------------------------------------- | ---------------- |  | ----------------------------- | ---------------------------------- | - |  | ------------------------------------ |  | ------- | ------------------------------------------------- | -------------------------- |  | -------------------------------------------------- |  | ----------------------------- |  |  |  | ----------------------------- | 
|Director (5)                            |  | FiscalYearGranted |                 |  | Vestingconditions
(1) |                                                                        | # of
DSUsgranted |  |                               | # of DSUsthatvestedduring
the year |   |  | Value ofDSUsvestedduring theyear ($) |  |         | # of DSUsthat
werevested as of theend of
the year |                            |  | Value
ofDSUsvested as of theend of
the year ($)(4) | 
|                                        |  |                   |                 |  |                       |                                                                        |                  |  |                               |                                    |   |  |                                      |  |         |                                                   |                            |  |                                                    |  |                               |  |  |  |                               | 
|Charlotte Burke                         |  |                   | 2011            |  |                       | No criteriaPerformance                                                 |                  |  | 21,32014,213                  |                                    |   |  | -    -                               |  |         |                                                   | -    -                     |  |                                                    |  | 21,32014,213                  |  |  |  | 31,55421,035                  | 
|                                        |  |                   |                 |  |                       |                                                                        |                  |  |                               |                                    |   |  |                                      |  |         |                                                   |                            |  |                                                    |  |                               |  |  |  |                               | 
|Hugh F. Dow                             |  |                   | 2011            |  |                       | No criteriaPerformance                                                 |                  |  | 21,32014,213                  |                                    |   |  | -    -                               |  |         |                                                   | -    -                     |  |                                                    |  | 21,32014,213                  |  |  |  | 31,55421,035                  | 
|                                        |  |                   |                 |  |                       |                                                                        |                  |  |                               |                                    |   |  |                                      |  |         |                                                   |                            |  |                                                    |  |                               |  |  |  |                               | 
|John Paton (2)                          |  |                   | 2010            |  |                       | No criteriaMarketPerformance                                           |                  |  | 19,796100,00013,198           |                                    |   |  | -    -    -                          |  |         |                                                   | -    -    -                |  |                                                    |  | 19,796100,00013,198           |  |  |  | 29,298148,00019,533           | 
|                                        |  |                   |                 |  |                       |                                                                        |                  |  |                               |                                    |   |  |                                      |  |         |                                                   |                            |  |                                                    |  |                               |  |  |  |                               | 
|Graham Savage                           |  |                   | 2010            |  |                       | No criteriaPerformance                                                 |                  |  | 27,41118,274                  |                                    |   |  | -    -                               |  |         |                                                   | -    -                     |  |                                                    |  | 27,41118,274                  |  |  |  | 40,56727,046                  | 
|                                        |  |                   |                 |  |                       |                                                                        |                  |  |                               |                                    |   |  |                                      |  |         |                                                   |                            |  |                                                    |  |                               |  |  |  |                               | 
|Steven Shapiro                          |  |                   | 2012
2011 
2010 |  |                       | No criteriaPerformance
 No criteriaPerformance 
No criteriaPerformance |                  |  | 2,489-
 4,949
- 
19,79713,198 |                                    |   |  | -    - 
-    - 
-    -               |  |         |                                                   | -    - 
-    - 
-    -     |  |                                                    |  | 2,489-
 4,949
- 
19,79713,198 |  |  |  | 3,684-
 7,325
- 
29,30019,533 | 
|                                        |  |                   |                 |  |                       |                                                                        |                  |  |                               |                                    |   |  |                                      |  |         |                                                   |                            |  |                                                    |  |                               |  |  |  |                               | 
|Peter Sharpe                            |  |                   | 2012
2011 
2010 |  |                       | No criteria Performance
No criteriaPerformance 
No criteriaPerformance |                  |  | 3,063-
 6,091
- 
24,36616,244 |                                    |   |  | -     -    
-    - 
-    -           |  |         |                                                   | -     -    
-    - 
-    - |  |                                                    |  | 3,063-
 6,091
- 
24,36616,244 |  |  |  | 4,533-
 9,015
- 
36,06224,041 | 
|                                        |  |                   |                 |  |                       |                                                                        |                  |  |                               |                                    |   |  |                                      |  |         |                                                   |                            |  |                                                    |  |                               |  |  |  |                               | 
|Robert Steacy                           |  |                   | 2010            |  |                       | No criteriaPerformance                                                 |                  |  | 27,41118,274                  |                                    |   |  | -    -                               |  |         |                                                   | -    -                     |  |                                                    |  | 27,41118,274                  |  |  |  | 40,56727,046                  | 
|                                        |  |                   |                 |  |                       |                                                                        |                  |  |                               |                                    |   |  |                                      |  |         |                                                   |                            |  |                                                    |  |                               |  |  |  |                               | 
|Summary                                 |  |                   |                 |  |                       |                                                                        |                  |  |                               |                                    |   |  |                                      |  |         |                                                   |                            |  |                                                    |  |                               |  |  |  |                               | 
|Total - No Criteria                     |  |                   | 178,013         |  |                       |                                                                        | -                |  |                               |                                    | - |  |                                      |  | 178,013 |                                                   |                            |  | 263,459                                            | 
|Total - Subject to Market Criteria      |  |                   | 100,000         |  |                       |                                                                        | -                |  |                               |                                    | - |  |                                      |  | 100,000 |                                                   |                            |  | 148,000                                            | 
|Total - Subject to Performance Criteria |  |                   | 107,614         |  |                       |                                                                        | -                |  |                               |                                    | - |  |                                      |  | 107,614 |                                                   |                            |  | 159,269                                            | 
|                                        | 
|Total Outstanding                       |  |                   |                 |  |                       |                                                                        |                  |  | 385,627                       |                                    |   |  | -                                    |  |         |                                                   | -                          |  |                                                    |  | 385,627                       |  |  |  | 570,728                       | 
|                                        | 



Notes:

|(1) | Certain of the DSUs noted in this column as Performance, are subject to performance criteria requiring Postmedia to achieve a specified EBITDA threshold as defined in Director Compensation 
Annual Fees. As noted earlier, the performance threshold has not been met as of August 31, 2013.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|(2) | Market DSUs were issued to Mr. Paton on July 13, 2010 in recognition of his enhanced director role and are subject to the achievement of market criteria whereby the Fair Market Value of a Voting Share must be
equal to, or greater than, $9.85. Based on the criteria for the Market DSUs, Mr. Paton would not have been able to exercise his Market DSUs as at August 31, 2013, even though they are fully vested, as the Fair Market Value of a Voting
Share was not equal to or greater than $9.85. Mr. Paton resigned his position as director effective November 4, 2013. On November 19, 2013, the Company settled Mr. Patons 19,796 DSUs for cash consideration of $29,056.
Further Mr. Patons 13,198 DSUs subject to performance criteria and 100,000 DSUs subject to market criteria were cancelled as such performance criteria and market criteria were not satisfied.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Based on the vesting criteria as per the DSU Plan.
|--- | ----------------------------------------------------

|(4) | The value of the DSUs vested as of the end of the year, are computed using the weighted average for the five trading days in which Shares have actually traded immediately preceding August 31, 2013 of $1.48 for the
Voting Shares.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | As noted under Director CompensationAnnual fees, fees paid to Ms. Peverett for the period on which she served on the Board in Fiscal 2013 were paid solely in cash.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

Securities Authorized for Issuance under Equity Compensation Plans

The following table provides a summary of securities issued and issuable under all equity compensation plans of Postmedia as at
November 15, 2013:



|                                         |  |                                                            |  |                                                      |  |                                                                                 |           |    
|---------------------------------------- |  | ---------------------------------------------------------- |  | ---------------------------------------------------- |  | ------------------------------------------------------------------------------- | --------- | ---
|                                         |  | # of Shares to beissued upon exerciseof outstandingOptions |  | Weighted-averageexercise price ofoutstanding Options |  | # of Sharesremaining availablefor future issuanceunder equitycompensation plans |          
|Option Plan approved by Shareholders (3) |  | 1,800,000(1)                                               |  | $8.71                                                |  |                                                                                 | 1,200,000 | (4)
|RSU Plan approved by Shareholders (3)    |  | 600,000(2)                                                 |  | -                                                    |  |                                                                                 | -         |    
|ESPP Plan approved by Shareholders (3)   |  | -                                                          |  | -                                                    |  |                                                                                 | 800,000   | (5)



Notes:

|(1) | Includes 600,000 of Tandem Options issued to Mr. Godfrey. In the event that Mr. Godfrey exercises the Options the corresponding number of RSUs will be automatically forfeited by Mr. Godfrey for no
consideration.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Includes 600,000 of Tandem RSUs issued to Mr. Godfrey. In the event that Mr. Godfrey exercises the RSUs, the corresponding number of Tandem Options will be automatically forfeited by Mr. Godfrey for no
consideration.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | See Option Plan, RSU Plan and Employee Share Purchase Plan for a description of the Option Plan, RSU Plan, and ESPP, respectively.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------

|(4) | This amount is based on there being a maximum of 3,000,000 Shares authorized for issuance under the Option Plan.
|--- | ----------------------------------------------------------------------------------------------------------------

|(5) | The maximum number of Shares that may be issued from treasury under the ESPP is 800,000 Shares. As of the date hereof, no Shares have been issued in respect of the ESPP.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

C. Board Practices.

Postmedia is required
to have a minimum of three directors and a maximum of 15 directors.

The Board has adopted a majority voting policy in director
elections that will apply at any meeting of Shareholders where an uncontested election of directors is held. Pursuant to this policy, if the number of proxy votes withheld for a particular director nominee is greater than the votes for such
director, the director nominee will be required to submit his or her resignation to the Chair of the Board promptly following the applicable Shareholders meeting. Following receipt of resignation, the Corporate Governance and Nominating
Committee will consider whether or not to accept the offer of resignation and make a recommendation to the Board. Within 90 days following the applicable Shareholders meeting, the Board shall publicly disclose their decision whether to accept
the applicable directors resignation or not, including the reasons for rejecting the resignation, if applicable. A director who tenders his or her resignation pursuant to this policy will not be permitted to participate in any meeting of the
Board or the Corporate Governance and Nominating Committee at which the resignation is considered. A copy of the majority voting policy may be found on the Postmedia website at www.postmedia.com.



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The table set forth below identifies the names and residences of the persons proposed to be
nominated for election by Shareholders as directors, their current positions with Postmedia, the date when they first became a director of Postmedia and their principal occupations. Mr. Osborne ceased being a director of the Corporation
upon his passing on April 9, 2013. On April 18, 2013, Mr. Godfrey was appointed Interim Chairman of the Board. On October 24, 2013, Mr. Sharpe was appointed Lead Director of the Board. On November 4, 2013,
Mr. Paton resigned his position as Director. All of the nominees are currently directors of Postmedia and have been elected for a term ending on the date of the Meeting, or until the election of his or her successor, unless he or she resigns or
his or her office becomes vacant by reasons of his or her death, removal or other cause. Each director elected will hold office for a term expiring at the close of the next annual meeting.



|                                                  |  |                                  
|------------------------------------------------- |  | ---------------------------------
|Director                                          |  | Director / Executive OfficerSince
|Paul Godfrey
Toronto, Ontario, Canada             |  | April 26, 2010                   
|                                                  | 
|Charlotte Burke
Toronto, Ontario, Canada          |  | September 20, 2010               
|                                                  | 
|Hugh F. Dow
Toronto, Ontario, Canada              |  | January 6, 2011                  
|                                                  | 
|Jane Peverett
Vancouver, British Columbia,
Canada |  | April 10, 2013                   
|                                                  | 
|Graham Savage
Toronto, Ontario, Canada            |  | July 12, 2010                    
|                                                  | 
|Steven Shapiro
New York, New York, United
States  |  | July 12, 2010                    
|                                                  | 
|Peter Sharpe
Toronto, Ontario, Canada             |  | June 17, 2010                    
|                                                  | 
|Robert Steacy
Toronto, Ontario, Canada            |  | July 14, 2010                    

None of the directors listed above are party to a service contract with the Company providing for
benefits upon termination of employment.



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Details relating to the Companys Audit Committee

Audit Committee Charter

The text of the
Audit Committees charter as at October 24, 2013 is attached hereto as Exhibit 1.3. The Audit Committees charter was revised on October 24, 2013 to make minor administrative changes, remove redundancies, replace references to
generally accepted accounting principles with references to the International Accounting Standards issued by the International Accounting Standards Board to be consistent with the Corporations practices and more clearly define the obligations
of the Audit Committee in respect of the review of certain documents which include financial information.

Composition of the Audit Committee

The members of the Corporations Audit Committee are:



|                            |  |                |  |                        
|--------------------------- |  | -------------- |  | -----------------------
|Robert Steacy (Chairperson) |  | Independent(1) |  | Financially literate(2)
|Charlotte Burke             |  | Independent(1) |  | Financially literate(2)
|Jane Peverett               |  | Independent(1) |  | Financially literate(2)
|Graham Savage               |  | Independent(1) |  | Financially literate(2)



Notes:

|(1) | Pursuant to Canadian Law, a member of an audit committee is Independent if the member has no direct or indirect material relationship with the Corporation, which could, in the view of the Board, reasonably interfere
with the exercise of a members independent judgment.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | An individual is financially literate if he or she has the ability to read and understand a set of financial statements that present a breadth of complexity of accounting issues that are generally comparable to the
breadth and complexity of the issues that can reasonably be expected to be raised by the Corporations financial statements.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Relevant
Education and Experience

In addition to each members general business experience, the education and experience of each
member of the Audit Committee that is relevant to the performance of their responsibilities as a member of the Audit Committee are set forth below:



| |  |  | Robert Steacy (Chair)  Prior to his retirement in 2005, Mr. Steacy was the Executive Vice President and Chief Financial Officer of
Torstar Corporation and had been its senior financial officer for 16 years. In that capacity, he was responsible for overseeing all financial functions of that corporation (including all financial reporting, budgeting, tax, treasury functions and
internal audit). Mr. Steacy has been a Chartered Professional Accountant since 1976 (Institute of Chartered Professional Accountants of Ontario) and currently sits on the Boards of Directors of Cineplex Inc. and Domtar Corporation. He also
currently serves as chair of the audit committees for each of Cineplex Inc. and Domtar Corporation. Mr. Steacy has previously served as chair of the audit committees for each of Domtar Inc. and Somerset Entertainment Income Fund and sat on the
audit committee of Canadian Imperial Bank of Commerce and Alliance Atlantis Communications Inc. He earned his B.Comm from Queens University in 1973.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | Charlotte Burke  Ms. Burke holds a Master of Business Administration from Harvard Business School and a Bachelor of Business
Administration in Accounting from Acadia University.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Jane Peverett - Ms. Peverett was President and Chief Executive Officer of the British Columbia Transmission Corporation (BCTC) having previously
served as its Chief Financial Officer. Ms. Peverett was also President and Chief Executive Officer of Union Gas Limited having previously served as its Chief Financial Officer. Ms. Peverett currently sits on the audit committee of Canadian
Imperial Bank of Commerce and acts as chair of the Encana Corporation audit committee. Ms. Peverett holds a Bachelor of Commerce degree from McMaster University and a Master of Business Administration degree from Queens University. She is
a Certified Management Accountant and a fellow of the Society of Management Accountants.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Graham Savage  Mr. Savage has 38 years of experience in the finance and investment industry, including seven years as Chief
Financial Officer of a major public company. He has been a member of many board audit committees, many of which he chaired. Mr. Savage holds an undergraduate degree and an M.B.A. from Queens University.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Audit Committee assists the Board in, among other things, its oversight and evaluation of:



| |  |  | the quality and integrity of the financial statements of Postmedia;
| | - |  | -------------------------------------------------------------------



| |  |  | the compliance by Postmedia with legal and regulatory requirements in respect of financial disclosure;
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | the qualification, independence and performance of the independent auditor;
| | - |  | ---------------------------------------------------------------------------



| |  |  | the assessment, monitoring and management of the financial, reporting and compliance risks involved with Postmedias business;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------



| |  |  | the enterprise risk management process; and
| | - |  | -------------------------------------------



| |  |  | the performance of the Executive Vice-President & Chief Financial Officer.
| | - |  | --------------------------------------------------------------------------

In addition, the Audit Committee provides an avenue for communication between the independent auditor, the Executive Vice
President & Chief Financial Officer and other financial senior management, other employees and the Board concerning accounting, auditing and risk management matters.

All members of the Audit Committee are independent and financially literate as contemplated by the rules of the Canadian
Securities Administrators. When considering criteria for determinations of financial literacy, Audit Committee members must be able to read and understand financial statements of a breadth and level of complexity of accounting issues generally
comparable to the issues expected to be raised by our consolidated financial statements.



60



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The Audit Committee is directly responsible for the recommendation of the appointment and
retention (and termination) and for the compensation and the oversight of the work of the independent auditor (including oversight of the resolution of any disagreements between senior management and the independent auditor regarding financial
reporting) for the purposes of preparing audit reports and performing other audit, review or attest services. The Audit Committee has the authority to approve significant non-audit relationships with the independent auditor and the terms of and fees
for audit and non-audit engagements. The Audit Committee assesses the independence of the independent auditor and the independent auditors other relationships with Postmedia and reviews the scope and planning of the external audit, the form of
audit report and any correspondence from or comment by the independent auditor regarding financial reporting and internal controls.

We have adopted a policy requiring Audit Committee pre-approval of audit and non-audit services. Specifically, the Audit Committee is
required to pre-approve all audit and non-audit services (including any internal control-related services) provided by the independent auditor (subject to any restrictions on such non-audit services imposed by applicable legislation, regulatory
requirements and policies), with such responsibility delegated to the Chairman of the Audit Committee to pre-approve up to $250,000 of audit fees beyond the approved annual audit fee if approval of such fees is required between meetings of the Audit
Committee.

Please see Item 16.C Principal Accountant Fees and Services for the fees billed by the Corporations external
auditors for fiscal 2013 and fiscal 2012 for audit, non-audit related services and tax services provided to the Corporation.

The
Audit Committee has unrestricted access to our personnel and documents and to the independent auditor. The Audit Committee has primary oversight responsibility for our financial reporting and internal controls. It meets to review and discuss the
annual and quarterly financial statements and accompanying managements discussion and analysis and recommend their approval to the Board. However, it is not the responsibility of the Audit Committee to determine that our financial statements
are complete and accurate and in accordance with IFRS, which is the responsibility of senior management, or to plan and conduct audits of the financial statements, which is the responsibility of the independent auditor.

The Audit Committee reviews significant accounting policies and principles and is updated regularly about current accounting issues and
developments. The Audit Committee reviews the competence of key partners and managers of the independent auditor.

The Audit
Committee oversees an employee complaint procedure, pursuant to which our directors, officers and employees and those of our subsidiaries will be encouraged to talk to supervisors, managers or other appropriate personnel about observed illegal or
unethical behaviour and when in doubt about the best course of action in a particular situation. Confidential complaint procedures have been established to facilitate the submission of complaints relating to any questionable accounting, internal
accounting controls or auditing matters.

The Audit Committee charter provides that the Audit Committee is to meet at least
quarterly and is to meet separately with senior management periodically, and with the independent auditor as appropriate. The Audit Committee will also meet in-camera at each of its meetings.

None of the members of the Audit Committee may serve on the audit committee of more than three public companies in addition to Postmedia
without the prior approval of the Audit Committee, the Corporate Governance and Nominating Committee and the Board. None of the members of the Audit Committee serves on the audit committee of more than three other public companies.



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Role of the Compensation and Pension Committee

The members of the Compensation and Pension Committee are Messrs. Savage (Chair), Dow, Sharpe and Steacy. The Compensation and Pension
Committee is composed entirely of independent directors. Members of the Compensation and Pension Committee have gained relevant skills and experience with respect to their responsibilities for executive compensation through holding a variety of
senior executive management roles, including, for certain members, as CEO of a business with the Human Resources and Finance functions reporting directly to them. In connection with their past roles, most Compensation and Pension Committee members
have managed and implemented a variety of compensation policies and programs. The Compensation and Pension Committee regularly reports to the Board in carrying out its responsibilities and duties relating to compensation matters of the Company. The
Compensation and Pension Committee holds in-camerasessions exclusive of management including directors who are members of management and consults with independent advisors in respect of compensation matters (see Compensation
Governance  Role of the Independent Consultant).

The Compensation and Pension Committee, through meetings,
presentations and reports, understands the key drivers and issues affecting the Company and regularly meets with senior management.

Consistent with the Compensation and Pension Committees charter and based on input from management and the Compensation and
Pension Committees independent advisor (see Role of the Independent Consultant), the Compensation and Pension Committee reviews executive compensation and awards for each of the NEOs.

As part of the executive compensation review, the Compensation and Pension Committee makes recommendations to the Board on compensation
levels and incentive plan awards for each of the NEOs based on the guiding principles described below, with particular reference to performance measures. The following outlines the principal responsibilities of the Committee with respect to
compensation matters:



| |  |  | Review and make recommendations to the Board of Directors in consultation with the CEO or Lead Director, as applicable, at least annually, the long-term
goals and objectives of the Company which are relevant to the CEOs compensation, evaluate the CEOs performance in light of those goals and objectives, determine and recommend to the independent directors for approval the CEOs
compensation based on that evaluation, and report to the Board of Directors thereon. In determining the CEOs compensation, the Compensation and Pension Committee shall consider the Companys performance, the value of similar incentive
awards to chief executive officers at comparable companies, the CEOs existing employment contract and the awards given to the CEO in past years, with a view to maintaining a compensation program for the CEO at a fair and competitive level,
consistent with the best interests of the Company.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Review and make recommendations to the Board of Directors at least annually (and upon appointment), in consultation with the CEO, on the compensation of
those members of senior management that report directly to the CEO (including incentive-compensation plans, equity based plans, the terms of any employment agreements, severance arrangements, and change in control arrangements or provisions, and any
special or supplemental benefits), with a view to maintaining a compensation program for the senior management at a fair and competitive level, consistent with the best interests of the Company.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Review all executive compensation packages with annual cash compensation in excess of $300,000;
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | Review and make recommendations to the Board of Directors at least annually with respect to compensation of directors, the Chairman and those acting as
committee chairs to, among other things, ensure their compensation appropriately reflects the responsibilities they are assuming;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

| |  |  | Fix and determine (and, as it determines to be appropriate, delegate the authority to fix and determine) awards (and the vesting criteria thereof) to
employees of stock or stock options or other awards pursuant to any of the Companys equity-based plans now or from time to time in effect or otherwise as permitted by applicable legislation, regulatory requirements and policies and exercise
such other power and authority as may be permitted or required under those plans;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Review the efficacy of incentive compensation programs (including short-term and long-term incentive plans), and equity-based compensation programs for the
Companys directors, officers and employees, including share ownership guidelines and, when necessary, make recommendations to the Board of Directors regarding, the role and design thereof;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Review the financial implications of the Companys senior compensation plans, including post-retirement benefits and supplemental employee retirement
plan and funding thereto, if any;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Review the potential results of its senior compensation programs under a wide variety of scenarios to ensure the Committee has an understanding of the
linkage between Shareholder interests and senior management payouts;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Review and approve annually any adjustments and guidelines made in respect of the Companys compensation plans.
| | - |  | ---------------------------------------------------------------------------------------------------------------



| |  |  | Oversee in co-operation with the Companys senior management the human resources policies and programs which are of strategic significance to the
Company and make recommendations thereon, as required, to the Board of Directors.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

With respect to the
Corporations pension plans, the Compensation and Pension Committees principal duties are to oversee and monitor the management and overall governance of the pension and retirement plans sponsored and administered by the Corporation.

Risk Mitigation

The
Compensation and Pension Committee follows corporate governance rules and principles in reviewing and determining the executive compensation policies and programs. The Compensation and Pension Committee recognizes that the business and competitive
environment in which the Company operates requires a balanced level of risk-taking to promote growth and achieve the expected financial performance required to provide Shareholders with good returns. The Compensation and Pension Committee is aware
that compensation programs, policies and practices should not encourage senior executives to take excessive and unnecessary risks. The Compensation and Pension Committee monitors this on an ongoing basis by reviewing compensation arrangements to
ensure that executives do not make short-term decisions that could be detrimental to long-term Shareholder returns. The Compensation and Pension Committee reviews the performance-based compensation for senior executives and in doing so, reviews the
compensation mix of base salary to short-term and long-term incentives. The Company promotes acceptable risk taking through the use of performance targets for its short-term incentive plan which has predefined payout thresholds. Risk is mitigated
under long-term incentives through the grant of stock options that have vesting provisions. Long-term incentives reward executives for taking a balanced focus on long-term performance and the achievement of long-term goals over a ten year period.
The Compensation and Pension Committee is satisfied that current programs, policies and practices, combined with the risk compliance reviews of the organization, promote acceptable risk taking with appropriate and reasonable incentive compensation
and has not identified any risks that are reasonably likely to have a material adverse effect on the Company.



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Hedging Policy

The Company has a policy of prohibiting its employees from purchasing financial instruments, including, for greater certainty, prepaid
variable forward contracts, equity swaps, collars, or units of exchange traded funds, that are designed to hedge or offset a decrease in market value of securities of Postmedia held, directly or indirectly, by such employees, including equity
securities granted as compensation. Such policy is contained in the Companys Timely Disclosure and Confidentiality Policy.

Role of the Independent
Consultant

The Compensation and Pension Committee engaged Hugessen Consulting Inc. (Hugessen) on
November 5, 2010 to act as its independent advisor to provide advice and guidance on compensation issues. All work undertaken by Hugessen is pre-approved by the Chair of the Compensation and Pension Committee. Hugessen provides no other
services to Postmedia. Hugessen is directly retained and instructed by and reports to the Compensation and Pension Committee. The decisions made by the Compensation and Pension Committee are the responsibility of the Compensation and Pension
Committee and may reflect other factors and considerations in addition to the information and recommendations from Hugessen.

Fees
paid to Hugessen in Fiscal 2013 and Fiscal 2012 pertaining to professional consulting services on NEO benchmarking, total compensation performance metrics and analysis of short-term and long-term incentive plans were as follows:



|            |  |                                                    |         |  |                |  |        | 
|----------- |  | -------------------------------------------------- | ------- |  | -------------- |  | ------ | 
|Year        |  | Executive        Compensation        
Related Fees |         |  | All Other Fees | 
|Fiscal 2013 |  |                                                    | 139,907 |  |                |  | 10,706 | 
|            |  |                                                   
|Fiscal 2012 |  |                                                    | 85,125  |  |                |  | -      | 

Executive Compensation Guiding Principles

The executive compensation philosophy is based on the following guiding principles:



| |  |  | Creating compensation programs with appropriate levels of pay for performance (pay at risk) to inspire behaviors that drive Postmedias business
strategy and generate financial results that align with Shareholder interests;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Creating a total compensation package that is attractive to leaders, proportional to the executives contribution, and fair to stakeholders within the context
of financial and non-financial total rewards;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Creating compensation programs that are consistent with market practices both in terms of value and design, while considering internal value and fit;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Delivering compensation and performance management programs that focus on building line of sight between rewards and the desired/expected behaviors, actions
and results that drive a strong return on investment at the organization level, and striving for clarity and transparency of these programs with the goal of simplifying them where possible; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | Ensuring good governance by developing compensation programs that do not encourage excessive risk taking with accountability for design and administration
held by appropriate internal stakeholders (including input from external experts) and appropriate oversight by the Compensation and Pension Committee and the Board.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

From the guiding principles, the following design principles are followed:



| |  |  | Performance is a key driver of compensation levels, both on short-term and long-term incentives;
| | - |  | ------------------------------------------------------------------------------------------------



| |  |  | Sound performance management processes have been developed to provide for effectiveness and consistency in defining expected performance outcomes (as
embedded in accountabilities and related goals) and assessing their achievement; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Pay at risk, as represented by short-term and long-term incentive compensation, will be proportional to the jobs level of influence on overall business
results. The Company continues to review and refine its programs, and recognizes the importance of long-term performance and therefore emphasizes rewards that align to an increase in Shareholder value.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Competitive Benchmarking

In July 2013, the
Compensation and Pension Committee requested that Hugessen assist the Committee by reviewing the competitiveness of the compensation levels for the NEOs, using a comparator group of publicly listed companies.

Hugessen assessed the NEOs compensation levels competitiveness by using the comparator group of companies developed and approved
by the Compensation and Pension Committee in October 2012. This comparator group of companies was selected, generally using the following four screening criteria:



|                          |  |                                                                                  
|------------------------- |  | ---------------------------------------------------------------------------------
|Comparator Group Criteria |  |                                                                                  
|Primary Listing           |  | Toronto Stock Exchange                                                           
|Geographic Location       |  | Headquartered in Canada                                                          
|Industry Classification   |  | Media                                                                            
|Financial Criteria        |  | Latest Total Enterprise Value between approximately $400 million and $2.5 billion

The screening identified the following ten companies:



| |  |  | AIMIA
| | - |  | -----

| |  |  | Astral Media Inc.
| | - |  | -----------------

| |  |  | Cineplex Inc.
| | - |  | -------------

| |  |  | Cogeco Cable Inc.
| | - |  | -----------------

| |  |  | Corus Entertainment Inc.
| | - |  | ------------------------

| |  |  | Glacier Media Inc.
| | - |  | ------------------

| |  |  | Mood Media Corporation
| | - |  | ----------------------

| |  |  | Torstar Corporation
| | - |  | -------------------

| |  |  | TVA GROUP Inc.
| | - |  | --------------

| |  |  | Yellow Media Limited
| | - |  | --------------------



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The compensation review focused on the total direct compensation (TDC)
composed of base salary, short-term incentives and long-term incentives received by the NEOs. For benchmarking purposes, Hugessen matched the CEO and CFO positions with the counterparts of the comparator companies. For the other NEO positions,
Hugessen matched these positions based on their TDC ranking. Following a review of the benchmarking report, the Committee decided to leave the compensation levels of the CEO, CFO and the other NEOs unchanged.

D. Employees

As of August 31, 2013,
the Corporation employed 3,291 full time equivalent employees. Approximately 36% of the Corporations employees are unionized under 26 separate collective bargaining agreements as of August 31, 2013. In general, the Corporations
collective bargaining agreements cover operations at individual locations, rather than multiple locations. The Corporation is currently in negotiations with four bargaining units, covering the equivalent of 217 full-time employees, regarding expired
agreements and one bargaining unit with respect to a first collective bargaining agreement for a newly certified bargaining unit. In addition, the Corporation has 14 collective bargaining agreements that cover approximately 400 full-time
employees that will expire on December 31, 2013. The Corporations remaining agreements will expire in 2014 and 2015, with the exception of one agreement that will expire in 2017.



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E. Share Ownership

The table set forth below identifies the name and residence of those individuals who are directors and NEOs of the Corporation, their
current positions or offices with the Corporation, and the number of Shares, Options, DSUs and RSUs beneficially owned, directly or indirectly, or under their direction or control as of November 15, 2013:



|                                      |  |                                                                   |  |                                                                                                                                     |  |                                                                                    |  |                                                                 
|------------------------------------- |  | ----------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------- |  | ----------------------------------------------------------------
|Name and Residence                    |  | Position with theCorporation                                      |  | Number of
Sharesbeneficially owned, directlyor indirectly (#)                                                                       |  | Number of Options, (13) DSUs and RSUsbeneficially
owned,directly or indirectly (#) |  | Percentage of
Shares Owned inRespect of
Particular Class (%)(12)
|Paul GodfreyToronto, Ontario, Canada  |  | Interim Chairman, Director, President and Chief Executive Officer |  | 108,000 Voting Shares(8)plus 800,000 Voting Shares that underlie the Options and RSUs that have vested to date.                     |  | 400,000 Options plus 600,000 Tandem Options / RSUs (1)(10)                         |  | 40.65%                                                          
|                                      |  |                                                                   |  |                                                                                                                                    
|Charlotte Burke(2)(5)(6)              |  | Director                                                          |  | -                                                                                                                                   |  | 35,533 DSUs(11)                                                                    |  | **                                                              
|Toronto, Ontario, Canada              |  |                                                                   |  |                                                                                                                                     |  |                                                                                    |  |                                                                 
|                                      |  |                                                                   |  |                                                                                                                                    
|Hugh F. Dow(3)(5)(6)                  |  | Director                                                          |  | -                                                                                                                                   |  | 35,533 DSUs(11)                                                                    |  | **                                                              
|Toronto, Ontario, Canada              |  |                                                                   |  |                                                                                                                                     |  |                                                                                    |  |                                                                 
|                                      |  |                                                                   |  |                                                                                                                                    
|Jane Peverett (2)(4)(6)               |  | Director                                                          |  | -                                                                                                                                   |  | -           DSUs(14)                                                               |  | **                                                              
|Vancouver, British Columbia,          |  |                                                                   |  |                                                                                                                                     |  |                                                                                    |  |                                                                 
|Canada                                |  |                                                                   |  |                                                                                                                                     |  |                                                                                    |  |                                                                 
|                                      |  |                                                                   |  |                                                                                                                                    
|Graham Savage(2)(3)(6)                |  | Director                                                          |  | -                                                                                                                                   |  | 45,685 DSUs(11)                                                                    |  | **                                                              
|Toronto, Ontario, Canada              |  |                                                                   |  |                                                                                                                                     |  |                                                                                    |  |                                                                 
|                                      |  |                                                                   |  |                                                                                                                                    
|Steven Shapiro(4)(7)                  |  | Director                                                          |  | -                                                                                                                                   |  | 40,433 DSUs(11)                                                                    |  | **                                                              
|New York, New York, United            |  |                                                                   |  |                                                                                                                                     |  |                                                                                    |  |                                                                 
|States                                |  |                                                                   |  |                                                                                                                                     |  |                                                                                    |  |                                                                 
|                                      |  |                                                                   |  |                                                                                                                                    
|Peter Sharpe(3)(4)(6)                 |  | Lead Director                                                     |  | 25,000 Voting Shares                                                                                                                |  | 49,764 DSUs(11)                                                                    |  | 1.12%                                                           
|Toronto, Ontario, Canada              |  |                                                                   |  |                                                                                                                                     |  |                                                                                    |  |                                                                 
|                                      |  |                                                                   |  |                                                                                                                                    
|Robert Steacy(2)(3)(6)                |  | Director                                                          |  | -                                                                                                                                   |  | 45,685 DSUs(11)                                                                    |  | **                                                              
|Toronto, Ontario, Canada              |  |                                                                   |  |                                                                                                                                     |  |                                                                                    |  |                                                                 
|                                      |  |                                                                   |  |                                                                                                                                    
|Douglas LambToronto, Ontario, Canada  |  | Executive Vice President and Chief Financial Officer              |  | 21,600 Voting Shares plus 160,000 Voting Shares that underlie the Options that have vested to date                                  |  | 200,000 Options                                                                    |  | 8.13%                                                           
|                                      |  |                                                                   |  |                                                                                                                                    
|Wayne ParrishToronto, Ontario, Canada |  | Chief Operating Officer                                           |  | 21,600 Voting Shares plus 80,000 Voting Shares that underlie the Options that have vested to date                                   |  | 200,000 Options                                                                    |  | 4.55%                                                           
|                                      |  |                                                                   |  |                                                                                                                                    
|Gordon FisherToronto, Ontario, Canada |  | President, Pacific Newspaper Group                                |  | 4,632 Voting Shares plus 160,000 Voting Shares that underlie the Options that have vested to date. 70,453 Variable Voting Shares(9) |  | 200,000 Options                                                                    |  | 7.37%                                                           
|                                      |  |                                                                   |  |                                                                                                                                    
|Jeffrey HaarToronto, Ontario, Canada  |  | Executive Vice President, Legal and General Counsel               |  | 20,000 Variable Voting Shares that underlie the Options that have vested to date                                                    |  | 50,000 Options                                                                     |  | **                                                              

** denotes a percentage of Share ownership less than 1%



Notes:

|(1) | Mr. Godfrey received a grant of 600,000 tandem Options/RSUs. These tandem Options/RSUs were granted concurrently and, upon the exercise of any or all of
such Options, the corresponding number of RSUs will be automatically forfeited by Mr. Godfrey for no consideration and, upon the exercise of any or all of such RSUs, the corresponding number of Options will be automatically forfeited by
Mr. Godfrey for no consideration. 480,000 of the tandem Options/RSUs have vested. The Options and RSUs have and will vest, as to 20% of the Shares subject to each award immediately upon grant and, as to the balance of the Shares subject to each
award, equally on each of the first four anniversaries of the effective date of Mr. Godfreys employment agreement. See Item 6.B Compensation  Employment AgreementsPresident and Chief Executive Officer.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Members of the Audit Committee.
|--- | -------------------------------

|(3) | Members of the Compensation and Pension Committee.
|--- | --------------------------------------------------

|(4) | Members of the Corporate Governance and Nominating Committee.
|--- | -------------------------------------------------------------

|(5) | Members of the Digital Oversight Committee.
|--- | -------------------------------------------

|(6) | Independent member of the Board.
|--- | --------------------------------

|(7) | Mr. Shapiro is a founding partner and portfolio manager at GoldenTree, and is a member of its executive committee. Certain investment funds for which
GoldenTree serves as investment advisor beneficially own or exercise control and direction over 13,732,337 Variable Voting Shares of the Corporation as at November 15, 2013 (see Item 7  Major Shareholders and Related Party
Transactions). Steve Tananbaum is the Chief Investment Officer of Goldentree Asset Management LP.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | These Voting Shares are held by the Paul and Gina Godfrey Sons Family Trust, of which Mr. Godfrey is a trustee.
|--- | ---------------------------------------------------------------------------------------------------------------

|(9) | 54,000 of these Variable Voting Shares are held by the Gordon Fisher Family Trust, of which Mr. Fisher is a trustee.
|--- | --------------------------------------------------------------------------------------------------------------------



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|(10) | 600,000 Voting Shares, in the aggregate, are reserved for issuance under both the Option Plan and RSU Plan in respect of these tandem options/RSUs.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------

|(11) | Except as specified by the Board, 50% of the annual fees paid to directors are paid in the form of DSUs. For all directors, with the exception of
Ms. Peverett, the first three years of DSUs, representing 50% of the annual fees for those first three years, vested in three equal installments over three years in advance of each such year. In anticipation of the extensive work that was
performed by the Initial Directors in Postmedias first fiscal year, these directors have received one years additional remuneration in the form of DSUs, which vested in three equal installments over three years, in advance of each such
year, and are subject to a performance threshold. See Item 6.B Compensation  Director CompensationAnnual Fees. In addition, to the extent a director has elected to receive in excess of 50% of his or her annual fees in the form of
DSUs, such excess DSUs vest on the date of grant.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(12) | The total number of outstanding Shares used to calculate this percentage includes those Shares underlying the Options and RSUs that have vested as of
November 15, 2013.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(13) | The class of Shares in which a particular Option is exercisable has been determined based on the citizenship of the holder of the Option, with holders that
are Non-Canadian receiving a Variable Voting Share upon the exercise of their Option and holders that are not Non-Canadian receiving a Voting Share upon the exercise of their Option. All Options in respect of the CEO, CFO and NEOs are exercisable
for Voting Shares, with the exception of Mr. Haar whose options are exercisable for Variable Voting Shares.
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(14) | As previously noted, Ms. Peverett has not been granted any DSUs as all of her fees in respect of Fiscal 2013 were paid solely in cash.
|---- | --------------------------------------------------------------------------------------------------------------------------------------

Share Ownership Guidelines

The Board has adopted share ownership guidelines for directors. Each director is required to acquire Shares having a value of three
times the base annual director fees, which at this time amounts to $360,000. Directors are expected to achieve this level of ownership within five years from the date they became directors. Directors may apply DSUs towards this minimum equity
ownership requirement, but only to the extent that such DSUs have vested. Directors who are nominated by a Shareholder pursuant to a nominating agreement with the Company may apply Shares held by such nominating Shareholder and its affiliates
towards this minimum share ownership requirement. To determine whether a director has met this minimum share ownership level, Shares and DSUs will be valued at the greater of: (a) their value at the time of acquisition or grant; and
(b) the current market price of the applicable Shares.

ITEM 7.  MAJOR SHAREHOLDERS AND RELATED
PARTY TRANSACTIONS

A. Major Shareholders.

The following table shows, as of November 15, 2013, the persons or companies who, to the actual knowledge of the Corporation,
beneficially own, or control or direct, directly or indirectly, Shares of the Corporation carrying 5% or more of the Shares in each class.



|                                            |  |                                                         |  |                           
|------------------------------------------- |  | ------------------------------------------------------- |  | --------------------------
|Variable Voting Shares                      |  |                                                         |  |                           
|Name                                        |  | Number and Class of
Shares Owned,Controlled or Directed |  | Percentage of Shares Owned
|GoldenTree Asset Management LP              |  | 13,732,337 Variable Voting Shares                       |  | 35.01%                    
|Silver Point Capital L.P.                   |  | 7,448,530 Variable Voting Shares                        |  | 18.99%                    
|Invesco Canada Ltd.                         |  | 3,526,531 Variable Voting Shares                        |  | 8.99%                     
|Citibank Canada                             |  | 3,500,000 Variable Voting Shares                        |  | 8.92%                     
|Voting Shares                               |  |                                                         |  |                           
|Name                                        |  | Number and Class ofShares Owned,
Controlled or Directed |  | Percentage of Shares Owned
|Electronic Rights Defence Committee         |  | 189,479 Voting Shares                                   |  | 19.30%                    
|The Paul And Gina Godfrey Sons Family Trust |  | 108,000 Voting Shares                                   |  | 11.00%                    

In addition to the 13,732,337 Variable Voting Shares referenced above, GoldenTree acquired an additional
1,600,000 Variable Voting Shares on November 20, 2013, increasing their Shares held to 15,332,337 Variable Voting Shares representing 39.1% of the outstanding Variable Voting Shares.



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The Voting Shares held by Electronic Rights Defence Committee, are held on behalf of its
unnamed and widely dispersed members and are related to a former Canadian class action lawsuit which had asserted claims against Canwest LP.

B. Related Party
Transactions

Consulting Agreement

John Paton, formerly a director of Postmedia, entered into a consulting agreement with Postmedia pursuant to which he assisted with the
implementation of Postmedias digital first strategy, which agreement expired on August 31, 2012. In addition to the standard compensation of directors of the Corporation, Mr. Paton received an additional monthly fee of $12,500,
payable solely in cash, and 100,000 DSUs granted on July 13, 2010 which vested in three equal installments over three years, in advance of each such year, and may be redeemed only if the Value of a Share, as defined in the DSU plan, is at least
a minimum price at the time of redemption. Mr. Paton resigned on November 4, 2013 and at the time of his resignation the value of a share did not meet the minimum price therefore the 100,000 DSUs granted will not be paid out.

On July 13, 2010, Postmedia entered into a registration rights agreement and a nominating agreement with GoldenTree, a principal
Shareholder of Postmedia. See Item 10.C  Material Contracts.

Other than as disclosed in this annual report, to the
knowledge of the directors and executive officers of Postmedia, no informed person or any associate or affiliate of any informed person, has had any material interest, direct or indirect, by way of beneficial ownership of securities or
otherwise, in any material transaction with us since September 1, 2011 or has any such interest in any proposed transaction that has materially affected or would materially affect Postmedia or our subsidiaries.

C. Interests of experts and counsel

Not
applicable.

ITEM 8.  FINANCIAL INFORMATION

A. Consolidated Statements and Other Financial Information.

Please refer to the Companys audited consolidated financial statements for the years ended August 31, 2013, 2012 and 2011,
attached hereto as Exhibit 15.1.

Legal Proceedings

The Corporation is involved in various legal claims arising in the ordinary course of its newspaper and digital media and online
businesses. The majority of these claims are brought pursuant to defamation legislation in the province of publication. The Corporation maintains a multi-media liability insurance policy in respect of defamation claims. Subject to the terms and
conditions of that policy, and the insurers coverage position in respect of individual claims, the resolution of these matters is not expected to have a material adverse effect on the Corporations consolidated financial position, results
of operations or cash flows.



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B. Significant Changes.

Not applicable.

ITEM 9.  THE OFFER AND LISTING

A. Offer and listing details.

The outstanding Voting Shares and Variable Voting Shares of the Corporation trade on the TSX under the symbols PNC.A and
PNC.B, respectively. The following table sets forth the reported high and low prices and the trading volume for the periods indicated:

PNC.A



|               |      |                        |     |       |        |      
|-------------- | ---- | ---------------------- | --- | ----- | ------ | -----
|Month          |      | Toronto Stock Exchange
|               | High |                        | Low |       | Volume
|September 2012 |      | $1.68                  |     | $1.40 |        | 170  
|October 2012   |      | $2.38                  |     | $1.65 |        | 4,960
|November 2012  |      | $2.31                  |     | $2.00 |        | 100  
|December 2012  |      | $2.05                  |     | $1.99 |        | 2,700
|January 2013   |      | $2.05                  |     | $2.05 |        | -    
|February 2013  |      | $2.05                  |     | $1.75 |        | 7,900
|March 2013     |      | $1.75                  |     | $1.30 |        | 1,395
|April 2013     |      | $1.30                  |     | $1.30 |        | -    
|May 2013       |      | $1.50                  |     | $1.30 |        | 523  
|June 2013      |      | $1.50                  |     | $1.50 |        | 1,300
|July 2013      |      | $1.50                  |     | $1.50 |        | -    
|August 2013    |      | $1.50                  |     | $1.50 |        | 6,213

PNC.B



|               |      |                        |     |       |        |          
|-------------- | ---- | ---------------------- | --- | ----- | ------ | ---------
|Month          |      | Toronto Stock Exchange
|               | High |                        | Low |       | Volume
|September 2012 |      | $1.75                  |     | $1.15 |        | 14,514   
|October 2012   |      | $2.40                  |     | $1.50 |        | 14,110   
|November 2012  |      | $2.00                  |     | $1.46 |        | 62,700   
|December 2012  |      | $2.06                  |     | $1.90 |        | 3,622,702
|January 2013   |      | $2.05                  |     | $1.75 |        | 341,854  
|February 2013  |      | $1.90                  |     | $1.65 |        | 1,184,365
|March 2013     |      | $1.80                  |     | $1.60 |        | 941,214  
|April 2013     |      | $2.03                  |     | $1.66 |        | 98,250   



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|            |      |                        |     |       |        |       
|----------- | ---- | ---------------------- | --- | ----- | ------ | ------
|Month       |      | Toronto Stock Exchange
|            | High |                        | Low |       | Volume
|May 2013    |      | $2.03                  |     | $1.80 |        | 11,160
|June 2013   |      | $1.80                  |     | $1.55 |        | 92,338
|July 2013   |      | $1.70                  |     | $1.70 |        | -     
|August 2013 |      | $1.80                  |     | $1.75 |        | 11,200

B. Plan of Distribution.

Not applicable.

C. Markets.

The Companys Voting Shares and Variable Voting Shares trade on the TSX.

D. Dilution.

Not
applicable.

E. Expenses of the issue.

Not applicable.

ITEM 10.  ADDITIONAL INFORMATION

A. Share Capital.

Not applicable.

B. Memorandum
and Articles of Association.

The articles of incorporation and articles of amendment (collectively, the
Articles) of the Company are incorporated by reference to the information in our registration statement on Form F-4 filed with the Securities and Exchange Commission, in Washington, D.C. on June 8, 2011 to which our Articles
of Incorporation and Articles of Amendment were filed as exhibits.

No further changes have been made to the Companys
Articles. The Companys Articles do not place any restrictions on the business that the Company may carry on.

On
October 24, 2013, the Board approved the adoption of By-Law No.3, amending Postmedias By-Law No. 1 (the By-Law Amendment) to require advance notice to the Company in circumstances where nominations of persons for
election to the Board are made by Shareholders other than pursuant to: (a) a requisition of a meeting made pursuant to the provisions of the CBCA; or (b) a Shareholder proposal made pursuant to the provisions of the CBCA. Among other
things, the By-Law Amendment fixes a deadline by which holders of record of Shares must submit director nominations to the Company prior to any annual or special meeting of Shareholders and sets forth the information that a Shareholder must include
in the notice to the Company. In the case of an annual meeting of Shareholders, notice to the Company must be provided not less than 30 days and not more than 65 days prior to the date of the annual meeting. In the case of a special meeting of
Shareholders (which is not also an annual meeting), notice to the Company must be provided no later than the close of business on the 15th day following the day on which the first public announcement of the date of the special meeting was made.



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A copy of the By-Law Amendment was filed as Exhibit 99.1 to the Registrants Form 6-K
filed on October 25, 2013. Pursuant to the provisions of the CBCA, the By-Law Amendment will cease to be effective unless ratified and confirmed by a resolution passed by a simple majority of the votes cast by Shareholders at the upcoming
annual and special meeting of Shareholders to be held on January 9, 2014.

Certain Powers of Directors

The Canada Business Corporations Act(the CBCA) requires that every director who is a party to a
material contract or transaction or a proposed material contract or transaction with a corporation, or who is a director or officer of, or has a material interest in, any person who is a party to a material contract or transaction or a proposed
material contract or transaction with the corporation, shall disclose in writing to the corporation or request to have entered in the minutes of the meetings of directors the nature and extent of his or her interest, and shall refrain from voting in
respect of the material contract or transaction or proposed material contract or transaction unless the contract or transaction is: (a) one relating primarily to his or her remuneration as a director, officer, employee or agent of the
corporation or an affiliate; (b) one for indemnity of or insurance for directors as contemplated under the CBCA; or (c) one with an affiliate. However, a director who is prohibited by the CBCA from voting on a material contract or proposed
material contract may be counted in determining whether a quorum is present for the purpose of the resolution, if the director disclosed his or her interest in accordance with the CBCA, the directors approved the contract or transaction, and the
contract or transaction was reasonable and fair to the corporation at the time it was approved. The Companys by-laws provide that the directors shall from time to time determine by resolution the remuneration to be paid to the directors, which
shall be in addition to the salary paid to any officer or employee of the Company who is also a director.

The directors may also by resolution
award special remuneration to any director in undertaking any special services on the Companys behalf other than the normal work ordinarily required of a director of the Company. The by-laws provide that confirmation of any such resolution by
the Companys Shareholders is not required.

The CBCA provides that, unless otherwise provided in the Companys articles
or by-laws, the directors may: (a) borrow money on the credit of the Company; (b) issue, reissue, sell, pledge or hypothecate debt obligations of the Company; (c) give a guarantee on behalf of the Company to secure performance of an
obligation of any person; and (d) mortgage, hypothecate, pledge or otherwise create a security interest in all or any property of the Company, owned or subsequently acquired, to secure any obligation of the Company.

The directors may, by resolution, make, amend or repeal any by-laws that regulate the business or affairs of the Company. The CBCA
requires the directors to submit any such amendment or repeal to the Companys Shareholders at the next meeting of Shareholders, and the Shareholders may confirm, reject or amend the by-law, amendment or repeal.



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Meetings of Shareholders

The CBCA requires the Company to call an annual Shareholders meeting not later than 15 months after holding the last preceding
annual meeting but no later than six months after the end of the Companys preceding financial year and permits the Company to call a special Shareholders meeting at any time. In addition, in accordance with the CBCA, the holders of not
less than 5% of the Companys shares carrying the right to vote at a meeting sought to be held may requisition the directors to call a Shareholders meeting for the purposes stated in the requisition. The Company is required to mail a
notice of meeting and management information circular to registered Shareholders not less than 21 days and not more than 60 days prior to the date of any annual or special Shareholders meeting. These materials also are filed with Canadian
securities regulatory authorities and the SEC. The Companys by-laws provide that a quorum of two Shareholders in person or represented by proxy holding or representing by proxy not less than 10% of the Companys issued shares carrying the
right to vote at the meeting is required to transact business at a Shareholders meeting. Shareholders, and their duly appointed proxies and corporate representatives, as well as the Companys auditors, are entitled to be admitted to the
Companys annual and special Shareholders meetings.

Disclosure of Share Ownership

The Securities Act(Ontario) provides that a person or company that beneficially owns, directly or indirectly, voting
securities of an issuer or that exercises control or direction over voting securities of an issuer or a combination of both, carrying more than 10% of the voting rights attached to all the issuers outstanding voting securities (a
reporting insider) must, within 10 days of becoming a reporting insider, file a report in the required form disclosing the reporting insiders (i) beneficial ownership of, or control or direction over, whether direct or
indirect, securities of the issuer and (ii) any interest in, or right or obligation associated with, a related financial instrument involving a security of the issuer. The Securities Act(Ontario) also provides for the filing
of a report by a reporting insider of a reporting issuer in respect of a change in the reporting insiders (i) beneficial ownership of, or control or direction over, whether direct or indirect, securities of the reporting issuer or
(ii) interest in, or right or obligation associated with, a related financial instrument involving a security of the reporting issuer. This report must be filed within 5 days after the date on which the change occurs. The Securities
Act(Ontario) also provides that a person or company that acquires beneficial ownership of, or the power to exercise control or direction over, voting or equity securities of any class or securities convertible into voting or equity
securities of any class of a reporting issuer that, together with previously held securities brings the total holdings of such holder to 10% or more of the outstanding securities of that class, must (a) promptly issue and file a news release
containing the prescribed information and (b) file a report within two business days from the date of the acquisition containing the same information set out in the news release. The acquiring person or company must also issue a press release
and file a report each time it acquires an additional 2% or more of the outstanding securities of the same class and every time there is a material change to the contents of the news release and report previously issued and filed.

Dividends

The Corporation
has not paid dividends and its current intention is not to declare dividends for the foreseeable future. Any future determination to pay cash dividends is at the discretion of the Board and will depend on Postmedias financial condition,
results of operations, capital requirements and such other factors as the Board deems relevant. Pursuant to the CBCA, the Corporation may not declare or pay a dividend if there are reasonable grounds for believing that: (i) the Corporation is,
or would after the payment be, unable to pay its liabilities as they become due; or (ii) the realizable value of its assets would thereby be less than the aggregate of its liabilities and stated capital of all classes. There are also certain
restrictions in the agreements relating to the ABL Facility, the First-Lien Notes and the Second-Lien Notes which limit the ability of the Corporation to pay dividends.



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Authorized Capital - General

The Corporations authorized capital consists of two classes: Voting Shares and Variable Voting Shares. The Corporation is
authorized to issue an unlimited number of Voting Shares and Variable Voting Shares. As of November 15, 2013, there were 981,861 Voting Shares and 39,227,758 Variable Voting Shares issued and outstanding. A summary of the rights attaching to
the Voting Shares and Variable Voting Shares are set forth below.

Rights upon Liquidation, Dissolution or Winding-Up

Subject to the rights, privileges, restrictions and conditions attaching to any future shares of the Corporation ranking senior to the
Voting Shares, upon liquidation, dissolution or winding up of the Corporation or other distribution of the Corporations assets among its Shareholders for the purpose of winding up its affairs, the holders of the Voting Shares and Variable
Voting Shares shall be entitled to share equally, share for share, in all distributions of such assets.

Voting Shares

Voting rights

Holders of
the Voting Shares shall be entitled to receive notice of, and to attend and vote at, all meetings of the Shareholders of the Corporation (except where the holders of a specified class are entitled to vote separately as a class as provided in the
CBCA), and each Voting Share shall confer the right to one vote in person or by proxy at all meetings of Shareholders of the Corporation.

Dividends

Subject to the
rights, privileges, restrictions and conditions attaching to the shares of the Corporation of any future class ranking senior to the Voting Shares, the holders of the Voting Shares shall, at the discretion of the directors, be entitled to receive,
out of monies, assets or property of the Corporation properly applicable to the payment of dividends, any dividends declared and payable by the Corporation on the Voting Shares. The Voting Shares shall rank equally as to dividends on a
share-for-share basis with the Variable Voting Shares and all dividends declared in any fiscal year of the Corporation shall be declared in equal or equivalent amounts per share on all Voting Shares and Variable Voting Shares at the time
outstanding, without preference or distinction.

Subdivision or consolidation

No subdivision or consolidation of the Voting Shares or the Variable Voting Shares shall occur unless, simultaneously, the shares of the
other class are subdivided or consolidated in the same manner, so as to maintain and preserve the relative rights of the holders of the shares of each of the said classes.

Conversion

An issued and
outstanding Voting Share shall be converted into one Variable Voting Share, automatically and without any further act of the Corporation or the holder, if such Voting Share becomes held or beneficially owned or controlled, directly or indirectly,
otherwise than by way of security only, by one or more persons who are citizens or subjects of a country other than Canada or are controlled by one or more citizens or subjects of a country other than Canada (each a Non-Canadian).
In addition to the automatic conversion feature, a holder of Voting Shares shall have the option at any time to convert some or all of such shares into Variable Voting Shares on a one-for-one basis and to convert those shares back to Voting Shares
on a one-for-one basis.



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Constraints on ownership of shares

The Voting Shares may only be beneficially owned and controlled, directly or indirectly, by persons that are not Non-Canadian.

Variable Voting Shares

General

The Variable Voting Shares have identical terms as the Voting Shares and rank equally with respect to voting, dividends and rights upon
liquidation, distribution and winding up, except that Variable Voting Shares shall not carry one vote per Variable Voting Share if:



| | (a) | the number of issued and outstanding Variable Voting Shares exceeds 49.9% of the total number of all issued and outstanding Shares; or
| | --- | --------------------------------------------------------------------------------------------------------------------------------------



| | (b) | the total number of votes that may be cast by or on behalf of holders of Variable Voting Shares present at any meeting of holders of Shares exceeds 49.9% of
the total number of votes that may be cast by all holders of Shares present and entitled to vote at such meeting.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

If either of the above-noted thresholds is surpassed at any time, the vote attached to each Variable Voting Share will decrease
automatically and without further act or formality, to equal the maximum permitted vote per Variable Voting Share as indicated below. Under the circumstance described in subparagraph (a) above, the Variable Voting Shares as a class cannot carry
more than 49.9% of the aggregate votes. Under the circumstance described in subparagraph (b) above, the Variable Voting Shares as a class cannot, for the applicable Shareholders meeting, carry more than 49.9% of the total number of votes
that can be cast at the meeting.

Conversion

An issued and outstanding Variable Voting Share shall be converted into one Voting Share, automatically and without any further act of
the Corporation or the holder, if (a) such Variable Voting Share is not or ceases to be beneficially owned or controlled, directly or indirectly, otherwise than by way of security only, by one or more Non-Canadians, unless such Variable Voting
Share resulted from the exercise of a voluntary election to convert a Voting Share into a Variable Voting Share, or (b)(i) the foreign ownership restrictions of the Tax Act are repealed and not replaced with other similar restrictions in the
Tax Act or other applicable legislation and (ii) there is no Canadian federal or provincial law applicable to the Corporation prescribed for the purposes of subsection 46(1) or paragraph 174(1)(c) of the CBCA or any other similar provision in
the CBCA or the CBCA Regulations.

Coattail Provision

In the event that an offer is made to purchase Voting Shares or Variable Voting Shares and the offer is one which must, pursuant to
applicable securities legislation or the rules of a stock exchange on which the Shares are then listed, be made to all or substantially all the holders of the Shares of such class, and a concurrent offer at an equal price and with identical terms
(subject to certain exceptions) is not made to purchase the Shares of such other class, each Variable Voting Share or Voting Share, as the case may be, shall become convertible at the option of the holder into one Share of the other class that shall
be subject to the offer at any time while the offer is in effect. The conversion right may only be exercised in respect of Shares for the purpose of depositing the resulting Shares in response to the offer and a Canadian trustee designated by the
Corporation shall deposit the resulting Shares on behalf of the Shareholder.



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If the Shares resulting from the conversion and deposited pursuant to the offer are
withdrawn from the offer or are not taken up by the offeror or if the offer is abandoned or withdrawn, the Shares resulting from the conversion shall be reconverted back into the original class automatically and without further act from the
Corporation or the holder.

Declaration as to Canadian Status

Under the Corporations articles of incorporation, the directors may, prior to the issuance of any Shares or the registration or
transfer of any Shares, require that there be submitted to the Corporation and/or its transfer agent, a declaration setting forth the name of the person who beneficially will own or control such Shares and whether or not such person is a
Non-Canadian, as well as such other information as the Board considers relevant for purposes of determining whether that person is in compliance with the restrictions on issue or transfer of the Shares.

In order to ensure it complies with its share ownership restrictions, Postmedia has in place special operating procedures for monitoring
share ownership that are designed to ensure that the share register of each of the Voting Shares and Variable Voting Shares remains accurate. These procedures establish that Computershare Investor Services Inc., the Corporations transfer
agent, will make periodic inquiries of intermediaries holding Voting Shares for non-registered holders to ensure compliance with shareholding ownership requirements.

Shareholder Rights Plan

The
Postmedia Rights Plan was entered into on November 8, 2010 and was ratified by Shareholders at the annual and special meeting of the Corporation on February 24, 2011. Shareholders will be asked to consider and, if deemed advisable,
reconfirm the Postmedia Rights Plan at the annual and special meeting of the Corporation to be held on January 9, 2014, which reconfirmation would extend the Postmedia Rights Plan through to the annual Shareholders meeting to be held in
2017.

The following is a summary of the key features of the Postmedia Rights Plan. This summary does not purport to be complete and
is subject to, and qualified in its entirety by reference to, the provisions of the Postmedia Rights Plan, the full text of which is available on the SEDAR website at www.sedar.com. on the EDGAR website at www.sec.gov. (Capitalized terms used in
this section not otherwise defined herein have the meaning attributed to them in the Postmedia Rights Plan).

Issuance of Rights

One Right has been issued by Postmedia in respect of each Voting Share and Variable Voting Share outstanding at the Effective Time and
will continue to be issued in respect of each Voting Share and Variable Voting Share issued thereafter and prior to the earlier of the Separation Time (defined below) and the Expiration Time. Under the Postmedia Rights Plan, the Rights are confirmed
and Postmedia confirms its authorization to continue the issuance of new Rights for each Voting Share and Variable Voting Share issued. Each Right entitles the registered holder thereof to purchase from Postmedia one Voting Share or Variable Voting
Share, as the case may be. The exercise price under the Postmedia Rights Plan is an amount equal to three times the market price, from time to time, per Voting Share or Variable Voting Share, as the case may be. The Rights are not exercisable until
the Separation Time. If a Flip-In Event (defined below) occurs, each Right will entitle the registered holder to receive, upon payment of the Exercise Price, the number of Voting Shares or Variable Voting Shares, as applicable, having an aggregate
Market Price on the date of consummation or occurrence of such Flip-in Event equal to ten times the relevant Exercise Price for an amount in cash equal to the relevant Exercise Price.



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Under the Postmedia Rights Plan, Postmedia is not required to issue or deliver Rights, or
securities issuable upon the exercise of Rights, outside of Canada, where such issuance or delivery would be unlawful without registration of the relevant Persons or securities. If the Postmedia Rights Plan would require compliance with securities
laws or comparable legislation of a jurisdiction outside of Canada, Postmedia may establish procedures for the issuance to a Canadian resident fiduciary of such securities, to hold such Rights or other securities in trust for the Persons
beneficially entitled to them, to sell such securities, and to remit the proceeds to such Persons.

Trading of Rights

Until the Separation Time (or the earlier termination or expiration of the Rights), the Rights will be evidenced by the certificates
representing Voting Shares or Variable Voting Shares, as the case may be, and will be transferable only together with such associated shares. From and after the Separation Time and prior to the Expiration Time, separate certificates evidencing the
Rights (Rights Certificates), together with a disclosure statement prepared by Postmedia describing the Rights, will be mailed to holders of record of Voting Shares and Variable Voting Shares (other than an Acquiring Person) as of
the Separation Time. Rights Certificates will also be issued in respect of Voting Share and Variable Voting Share issued prior to the Expiration Time, to each holder (other than an Acquiring Person) converting, after the Separation Time, securities
(Convertible Securities) convertible into or exchangeable for Voting Shares or Variable Voting Shares. The Rights will trade separately from the Voting Shares and Variable Voting Shares, as the case may be, after the Separation
Time.

Separation Time

The Separation Time is the close of business on the tenth Business Day after the earlier of (i) the Share Acquisition Date, which
is generally the first date of public announcement of facts indicating that a Person has become an Acquiring Person; and (ii) the date of the commencement of, or first public announcement of the intent of any Person (other than Postmedia or any
Subsidiary of Postmedia) to commence a Take-over Bid (other than a Permitted Bid or a Competing Permitted Bid, so long as such bid continues to satisfy the requirements of a Permitted Bid or Competing Permitted Bid). In either case, the Separation
Time can be such later date as may be determined by the Board acting in good faith. If a Take-over Bid expires, is cancelled, terminated or otherwise withdrawn prior to the Separation Time, it will be deemed never to have been made.

Acquiring Person

In
general, an Acquiring Person is a Person who is the Beneficial Owner of 20% or more of the outstanding Voting Shares or Variable Voting Shares. Excluded from the definition of Acquiring Person are Postmedia and its
Subsidiaries, and any Person who becomes the Beneficial Owner of 20% or more of the outstanding Voting Shares or Variable Voting Shares as a result of one or more or any combination of an acquisition or redemption by Postmedia of Shares, a Permitted
Bid Acquisition, an Exempt Acquisition, a Convertible Security Acquisition and a Pro Rata Acquisition.

The definitions of
Permitted Bid Acquisition, Exempt Acquisition, Convertible Security Acquisition and Pro Rata Acquisition are set out in the Postmedia Rights Plan. However, in general:



| | (a) | a Permitted Bid Acquisition means an acquisition of Voting Shares or Variable Voting Shares made pursuant to a Permitted Bid or a Competing
Permitted Bid;
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| | (b) | a Share Reduction means an acquisition or redemption by Postmedia or a Subsidiary of Postmedia of Voting Shares or Variable Voting Shares or the
automatic or optional conversion of Variable Voting Shares into Voting Shares or vice versa (other than, for greater certainty, the automatic or optional conversion of shares Beneficially Owned by such Person) pursuant to the Constating Documents
and the share provisions contained therein that, by reducing the number of Voting Shares or Variable Voting Shares outstanding, increases the percentage of outstanding Voting Shares or Variable Voting Shares Beneficially Owned by such Person to 20%
or more of the Voting Shares or Variable Voting Shares, as the case may be, then outstanding;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | an Exempt Acquisition means a Voting Share or Variable Voting Share acquisition: (A) in respect of which the Board has waived the
application of the Postmedia Rights Plan pursuant to certain provisions of the Postmedia Rights Plan; (B) pursuant to a dividend reinvestment plan of Postmedia; (C) pursuant to the receipt or exercise of rights issued by Postmedia to all
holders of Voting Shares or Variable Voting Shares (other than holders resident in a jurisdiction where such dividend is restricted or impracticable as a result of applicable law) to subscribe for or purchase Voting Shares, Variable Voting Shares or
Convertible Securities, provided that such rights are acquired directly from Postmedia and not from any other person and provided that the Person does not thereby acquire a greater percentage of Voting Shares, Variable Voting Shares or Convertible
Securities so offered than the Persons percentage of Voting Shares, Variable Voting Shares or Convertible Securities beneficially owned immediately prior to such acquisition; (D) pursuant to a distribution by Postmedia of Voting Shares,
Variable Voting Shares or Convertible Securities by way of prospectus or private placement by Postmedia, provided that the Person does not thereby acquire (or is deemed to Beneficially Own) a greater percentage of Voting Shares or Variable Voting
Shares so offered than the Persons percentage of Voting Shares or Variable Voting Shares Beneficially Owned immediately prior to such acquisition; or (E) pursuant to the exercise of awards granted under a deferred share unit plan of
Postmedia, options granted under a share option plan of Postmedia or rights to purchase securities granted under a share purchase plan of Postmedia;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | a Pro Rata Acquisition means an acquisition of Voting Shares, Variable Voting Shares or Convertible Securities: (i) as a result of a stock
dividend, a stock split or other event pursuant to which such Person receives or acquires Voting Shares, Variable Voting Shares or Convertible Securities on the same pro rata basis as all other holders of securities of the same class or series of
Postmedia; (ii) pursuant to a regular dividend reinvestment or other plan of Postmedia made available by Postmedia to all holders of Voting Shares and Variable Voting Shares (other than holders resident in any jurisdiction where participation
in any such plan is restricted or impractical as a result of applicable law), where such plan permits the holder to direct that the dividends paid in respect of such Voting Shares and Variable Voting Shares be applied to the purchase from Postmedia
of Voting Shares, Variable Voting Shares or Convertible Securities; or (iii) pursuant to the receipt and/or exercise of rights (other than the Postmedia Rights) issued by Postmedia to all of the holders of a series or class of Voting Shares and
Variable Voting Shares (other than holders resident in any jurisdiction where participation in any such plan is restricted or impractical as a result of applicable law) on a pro rata basis to subscribe for or purchase Voting Shares, Variable Voting
Shares or Convertible Securities, provided, however, that such Person does not thereby acquire a greater percentage of Voting Shares or Variable Voting Shares, as applicable, than the percentage of Voting Shares or Variable Voting Shares
Beneficially Owned by that Person immediately prior to such acquisition;
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| | (e) | a Convertible Security Acquisition means an acquisition of Voting Shares or Variable Voting Shares upon the exercise, conversion or exchange of
Convertible Securities received by such Person pursuant to a Permitted Bid Acquisition, Exempt Acquisition or a Pro Rata Acquisition; and
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (f) | a Grandfather Person means a Person who is the Beneficial Owner of 20% or more of the outstanding Voting Shares or Variable Voting Shares
determined as at the Record Time, provided, however, that this exception shall not be, and shall cease to be, applicable to a Grandfathered Person in the event that such Grandfathered Person shall, after the Record Time, become the Beneficial Owner
of any additional Voting Shares or Variable Voting Shares, other than through one or any combination of a Permitted Bid Acquisition, an Exempt Acquisition, a Share Reduction, a Pro Rata Acquisition or a Convertible Security Acquisition.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Also excluded from the definition of Acquiring Person is an underwriter or member of a banking or
selling group that becomes the Beneficial Owner of 20% or more of Voting Shares or Variable Voting Shares in connection with a distribution of securities by way of prospectus or private placement.

Beneficial Ownership

In
general, a Person is deemed to Beneficially Own Voting Shares or Variable Voting Shares actually held by others in circumstances where those holdings are or should be grouped together for purposes of the Postmedia Rights Plan. Included are holdings
by the Persons Affiliates (generally, a person that controls, is controlled by, or is under common control with another person) and Associates (generally, relatives sharing the same residence). Also included are securities which the Person or
any of the Persons Affiliates or Associates has the right to acquire within 60 days (other than (i) customary agreements with and between underwriters and/or banking group and/or selling group members with respect to a public offering or
private placement of securities; or (ii) pursuant to a pledge of securities in the ordinary course of the pledgees business), including Voting Shares into which Variable Voting Shares held by a citizen or subject of Canada are convertible
pursuant to the Corporations Constating Documents and the share provisions contained therein; provided, however, that a Non-Canadian who holds Variable Voting Shares will not be deemed to be the Beneficial Owner of, have
Beneficial Ownership of or Beneficially Own any Voting Shares into which the Variable Voting Shares owned by such Person are convertible.

A Person is also deemed to Beneficially Own any securities that are Beneficially Owned (as described above) by any other
Person with which the Person is acting jointly or in concert (a Joint Actor). A Person is a Joint Actor with any Person who is a party to any agreement, arrangement or understanding with the first Person or an Associate or
Affiliate thereof for the purpose of acquiring or offering to acquire Shares.



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Institutional Shareholder Exemptions from Beneficial Ownership

The definition of Beneficial Ownership contains several exclusions whereby a Person is not considered to Beneficially
Own a security. There are exemptions from the deemed Beneficial Ownership provisions for institutional investors acting in the ordinary course of business. These exemptions apply to: (i) an investment manager
(Investment Manager) which holds securities in the ordinary course of business in the performance of its duties for the account of any other Person (a Client), including the acquisition or holding of securities
for non-discretionary accounts held on behalf of a Client by a broker or dealer registered under applicable securities law, provided, however, that for greater certainty, Investment Manager does not include a hedge fund, a private equity fund or
similar fund or entity or any Person who manages any of the foregoing; (ii) a licensed trust company (Trust Company) acting as trustee or administrator or in a similar capacity in relation to the estates of deceased or
incompetent persons (each an Estate Account) or in relation to other accounts (each an Other Account) and which holds such security in the ordinary course of its duties for such accounts; (iii) the
administrator or the trustee (a Plan Trustee) of one or more pension funds or plans (a Pension Fund or Plan) registered under applicable law; (iv) a Person who is a Pension Fund or Plan or is a Person
established by statute (the Statutory Body), and its ordinary business or activity includes the management of investment funds for employee benefit plans, pension plans, insurance plans or various public bodies; or (v) a
Crown agent or agency. The foregoing exemptions only apply so long as the Investment Manager, the Trust Company, the Plan Trustee, the Pension Fund or Plan, the Statutory Body or the Crown agent or agency is not then making or has not then announced
an intention to make a Take-over Bid alone or acting jointly or in concert with any other Person, other than an Offer to Acquire Voting Shares or Variable Voting Shares or other securities pursuant to a distribution by Postmedia or by means of
ordinary market transactions.

A Person will not be deemed to Beneficially Own a security because (i) the Person is
a Client of the same Investment Manager, an Estate Account or an Other Account of the same Trust Company, or Pension Fund or Plan with the same Plan Trustee as another Person or Pension Fund or Plan on whose account the Investment Manager, Trust
Company or Plan Trustee, as the case may be, holds such security; or (ii) the Person is a Client of an Investment Manager, Estate Account, Other Account or Pension Fund or Plan, and the security is owned at law or in equity by the Investment
Manager, Trust Company or Plan Trustee, as the case may be.

Flip-In Event

A Flip-In Event occurs when any Person becomes an Acquiring Person. In the event that, prior to the Expiration Time, a Flip-In Event
which has not been waived by the Board (whether before or after the occurrence of such Flip-In Event) occurs (see Waiver of Flip-In Events below), each Right (except for Rights Beneficially Owned or which may thereafter be Beneficially
Owned by an Acquiring Person or a transferee of such a Person, which Rights will become null and void) will constitute the right to purchase from Postmedia, upon exercise thereof in accordance with the terms of the Postmedia Rights Plan, that number
of Voting Shares or Variable Voting Shares, as applicable, having an aggregate Market Price on the date of the Flip-In Event equal to ten times the Exercise Price, for the Exercise Price (such Right being subject to anti-dilution adjustments).

Permitted Bid and Competing Permitted Bid

A Permitted Bid is a Take-over Bid made by way of a Take-over Bid circular and which complies with the following additional provisions:



| | (a) | the Take-over Bid is made for all of the Voting Shares and Variable Voting Shares and is made to all holders of record of Voting Shares and Variable Voting
Shares, other than the Offeror, its Affiliates, Associates and Joint Actors;
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| | (b) | the Take-over Bid contains irrevocable and unqualified conditions that:
| | --- | -----------------------------------------------------------------------



| | A. | no security will be taken up or paid for pursuant to the Take-over Bid prior to the close of business on a date which is not less than 60 days following the
date of the Take-over Bid and the provisions for the take-up and payment for Voting Shares and Variable Voting Shares tendered or deposited thereunder will be subject to such irrevocable and unqualified condition;
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | unless the Take-over Bid is withdrawn, securities may be deposited pursuant to the Take-over Bid at any time prior to the close of business on the date of
first take-up or payment for securities and securities deposited pursuant to the Take-over Bid may be withdrawn at any time prior to the close of business on such date;
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | not less than 50% of each of the outstanding Voting Shares and Variable Voting Shares held by Independent Shareholders must be deposited to the Take-over Bid
and not withdrawn at the close of business on the date of first take-up or payment for securities; and
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | D. | in the event that not less than 50% of each of the outstanding Voting Shares and Variable Voting Shares held by Independent Shareholders have been deposited
to the Take-over Bid and not withdrawn as at the date of first take-up or payment for securities under the Take-over Bid, the Offeror will make a public announcement of that fact and the Take-over Bid will remain open for deposits and tenders of
securities for not less than 10 Business Days from the date of such public announcement.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

A Competing Permitted
Bid is a Take-over Bid that is made after a Permitted Bid or another Competing Permitted Bid has been made but prior to its expiry, satisfies all the requirements of a Permitted Bid as described above, except that a Competing Permitted Bid is not
required to remain open for 60 days so long as it is open until the later of (i) the earliest date on which securities may be taken-up or paid for under any earlier Permitted Bid or Competing Permitted Bid that is in existence; and (ii) 35
days (or such other minimum period of days as may be prescribed by applicable law in Ontario) after the date of the Take-over Bid constituting the Competing Permitted Bid.

Redemption and Termination of Rights



| | (a) | Redemption of Rights on Approval of Holders of Shares and Rights. The Board may, at any time prior to the occurrence of a Flip-in Event, elect to
redeem all but not less than all of the outstanding Rights at a redemption price of $0.000001 per Right, appropriately adjusted for anti-dilution as provided in the Postmedia Rights Plan (the Redemption Price).
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | Deemed Redemption. Where a Person acquires, pursuant to a Permitted Bid or a Competing Permitted Bid, outstanding Voting Shares or Convertible
Securities, the Board shall be deemed to have elected to redeem the Rights at the Redemption Price
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| | (c) | Redemption of Rights on Withdrawal or Termination of Bid. Where a Take-over Bid that is not a Permitted Bid or a Competing Permitted Bid expires, is
terminated or is otherwise withdrawn after the Separation Time and prior to the occurrence of a Flip-In Event, the Board may elect to redeem all of the outstanding Rights at the Redemption Price. In such event, all the provisions of the Postmedia
Rights Plan shall continue to apply as if the Separation Time had not occurred and Rights Certificates representing the number of Rights held by each holder of record of Voting Shares and Variable Voting Shares as of the Separation Time had not been
mailed to each such holder and, for all purposes of the Postmedia Rights Plan, the Separation Time shall be deemed not to have occurred and Rights shall remain attached to the outstanding Voting Shares and Variable Voting Shares.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

If the Board is deemed to have elected or elects to redeem the Rights as described above, the right to exercise
the Rights will thereupon, without further action and without notice, terminate and the only right thereafter of the holders of Rights will be to receive the Redemption Price. Within 10 Business Days of any such election or deemed election to redeem
the Rights, Postmedia will notify the holders of the Shares or, after the Separation Time, the holders of the Rights.

Waiver of Flip-In Events

The Board may waive the application of the events that occur under a Flip-in Event (see Shareholder Rights Plan 
Flip-In Event above) to any Flip-in Event by written notice delivered to the Rights Agent and in the event of such waiver, the Flip-in Event shall be deemed never to have occurred and, if such waiver is provided after the Separation Time, all
the provisions of Postmedia Rights Plan shall continue to apply as if the Separation Time had not occurred and Rights Certificates representing the number of Rights held by each holder of record of Voting Shares and Variable Voting Shares as of the
Separation Time had not been mailed to each such holder, and the Separation Time shall be deemed not to have occurred and Rights shall remain attached to the outstanding Voting Shares and Variable Voting Shares.

Anti-Dilution Adjustments

The Exercise Price of a Right, the number and kind of securities subject to purchase upon exercise of a Right, and the number of Rights
outstanding, will be adjusted in certain events, including, without limitation:



| | (i) | if there is: (A) a declaration of a dividend on its Voting Shares or Variable Voting Shares payable in Voting Shares or Variable Voting Shares (or
Convertible Securities) other than pursuant to any mandatory or optional share dividend reinvestment program, (B) a subdivision or change of the then outstanding Voting Shares or Variable Voting Shares into a greater number of shares,
(C) a combination or change of the then outstanding Voting Shares or Variable Voting Shares into a smaller number of shares, or (D) an issuance of Voting Shares or Variable Voting Shares (or Convertible Securities) in lieu of or in
exchange for existing shares; or
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| | (ii) | if Postmedia fixes a record date for a distribution to all holders of Voting Shares and Variable Voting Shares of certain rights or warrants to acquire
Voting Shares or Variable Voting Shares or Convertible Securities, or for the making of a distribution to all holders of Voting Shares or Variable Voting Shares of evidences of indebtedness or assets (other than regular periodic cash dividends or a
distribution payable in Voting Shares or Variable Voting Shares, but including any distribution payable in securities other than Voting Shares or Variable Voting Shares).
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Supplements and Amendments

Postmedia may at any time, amend, supplement, vary or delete any of the provision of the Postmedia Rights Plan.

Any such amendment, supplement, variation or deletion shall be effective from the date of the resolution of the Board adopting such
amendment, supplement, variation or deletion or such earlier or later date as the Board may otherwise determine. The implementation of any such amendment, supplement, variation or deletion will be subject to receipt of any necessary regulatory
approval including that of any securities regulatory authority or stock exchange.

Expiration

The Postmedia Rights Plan was approved by the Shareholders at the annual and special meeting of Shareholders on February 24, 2011,
and will remain in force until the earlier of the Termination Time (the time at which the right to exercise Rights will terminate pursuant to the Postmedia Rights Plan) and the termination of the annual meeting of Postmedia Shareholders in the year
2014 unless at or prior to such meeting the Independent Shareholders ratify the continued existence of the Postmedia Rights Plan. As such, Shareholders will be asked to consider and, if deemed advisable, reconfirm the Postmedia Rights Plan at the
annual and special meeting of the Corporation to be held on January 9, 2014.

C. Material Contracts

First-Lien Notes Indenture

On August 16, 2012, Postmedia Network Inc. issued $250 million in aggregate principal amount of First-Lien Notes. The First-Lien
Notes were issued under an indenture dated as of August 16, 2012 with Computershare Trust Company of Canada, as trustee and as collateral agent and Postmedia Network Canada Corp. as guarantor. The First-Lien Notes are secured on a
first-priority basis by substantially all of the assets of Postmedia Network Inc. (other than the ABL Collateral then owned or thereafter acquired by Postmedia Network Inc. and the guarantors thereunder) (the First-Lien Notes
Collateral) and on a second-priority basis by the ABL Collateral. The First-Lien Notes indenture contains covenants that, among other things, restrict the issuers ability to incur additional indebtedness, pay dividends or make other
distributions or repurchase or redeem certain indebtedness or capital stock, make loans and investments, sell assets, incur certain liens, enter into certain transactions with affiliates, alter the businesses it conducts, enter into agreements
restricting its subsidiaries ability to pay dividends and consolidate, merge or sell all or substantially all of its assets. The proceeds from the issuance of the First-Lien Notes were used to repay amounts then outstanding under the
Corporations previous Term Loan Facility of $238.3 million (US$240.0 million).

Second-Lien Notes Indenture

On July 13, 2010, Postmedia Network Inc. issued US$275 million in aggregate principal amount of Second-Lien Notes. The Second-Lien
Notes were issued with original issue discount resulting in gross proceeds of 97.55%. The Second-Lien Notes were issued under an indenture dated as of July 13, 2010 with The Bank of New York Mellon, as trustee, Postmedia Network Canada Corp. as
guarantor and BNY Trust Company of Canada, as collateral agent. The Second-Lien Notes are secured on a second-priority basis by the First-Lien Notes Collateral and on a third-priority basis by the ABL Collateral. The covenants contained in the
Second-Lien Notes indenture are substantially similar to the covenants contained in the First-Lien Notes indenture described above.



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ABL Facility

On July 13, 2010, Postmedia entered into a four year senior secured asset-based revolving credit facility in the aggregate amount
of $60 million (such revolving credit facility, together with a $10 million letter of credit sub-facility,the ABL Facility), pursuant to the terms and conditions of a revolving credit agreement (the ABL Credit
Agreement) among Morgan Stanley Senior Funding, Inc. as administrative agent, collateral agent, joint collateral agent, co-syndication agent and paying agent, JPMorgan Chase Bank N.A. as co-syndication agent, Wells Fargo Capital Finance
Corporation of Canada, as joint collateral agent and co-documentation agent, Royal Bank of Canada as co-documentation agent, Postmedia Network Canada Corp. as guarantor and certain lenders party thereto. The Corporation has the option of two
interest rates for borrowings under the ABL Facility with such rates being the Canadian prime rate plus a margin of 2.75% per annum (such margin may be reduced to 2.50% in certain events when the average availability under the ABL Facility is
greater than $30 million at the end of the relevant fiscal quarter) and a CDOR rate plus a margin of 3.75% per annum (such margin may be reduced to 3.50% in certain events when the average availability under the ABL Facility is greater than $30
million at the end of the relevant fiscal quarter). The maximum amount that Postmedia may borrow under the ABL Facility is the Borrowing Base.

The ABL Facility is secured on a third-priority basis by the First-Lien Notes Collateral (as defined below) and on a first-priority
basis by the ABL Collateral. The proceeds of the loans under the ABL Facility are permitted to be used to finance the working capital needs and general corporate purposes of Postmedia Network Inc. and any subsidiaries. As at August 31, 2013, no
amounts were drawn under the ABL Facility.

On August 8, 2012, Postmedia entered into a first amendment of its ABL Credit
Agreement in order to clarify certain provisions with respect to the First-Lien Notes and amend the provision entitled Sale and Leaseback Transactions.

The ABL Facility terminates on July 13, 2014. There can be no assurance that Postmedia will be able to refinance the ABL Facility
on attractive terms, or at all. See Risk Factors - We may not be able to refinance our ABL Facility on attractive terms, or at all in the Corporations MD&A, attached hereto as Exhibit 15.2.

The Registration Rights Agreement

On July 13, 2010, Postmedia entered into a registration rights agreement with GoldenTree. Under the agreement, GoldenTree was
granted demand registration rights pursuant to which GoldenTree may require Postmedia to file a prospectus with the Canadian securities administrators qualifying the Shares owned by GoldenTree for sale in Canada. The agreement also grants piggyback
registration rights to GoldenTree in the event that Postmedia proposes to distribute Shares by way of a prospectus, which rights allow GoldenTree to require Postmedia in certain circumstances to include Shares owned by GoldenTree in such prospectus
distribution.

The Nominating Agreement

Please refer to Item 6.A Directors and Senior Management  Nominating Agreement.

The Asset Purchase Agreements dated as of October 18, 2011, in respect of the Glacier Transaction

Please refer to Item 4.A History and Development of the Corporation.



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D. Exchange Controls.

There are no governmental laws, decrees or regulations in Canada relating to restrictions on the export or import of capital, or
affecting the remittance of interest, dividends or other payments to non-resident holders of the Companys common shares other than withholding tax requirements. (E.g., Remittances of dividends to United States residents are generally subject
to a 15% withholding tax (5% if the Shareholder is a company beneficially owning at least 10% of the common shares of the Company) pursuant to Article X of the reciprocal treaty between Canada and the United States.

As described in greater detail in Item 10.B, the Voting Shares may only be beneficially owned and controlled, directly or
indirectly, by persons that are not Non-Canadian. Except for the restrictions on ownership described under Item 10.B Memorandum and Articles of Association and except as provided in the Investment Canada Act (the ICA), there
are no provisions under the laws of Canada or in the Articles of the Company restricting the right of foreigners to hold or vote the common shares of the Company.

Under the ICA, certain transactions involving the acquisition of control of a Canadian business by a non-Canadian that exceed prescribed
monetary thresholds are subject to review and cannot be implemented unless the applicable Minister responsible for the ICA is satisfied that the acquisition is likely to be of net benefit to Canada. The Minister of Canadian Heritage (for cultural
businesses) and the Minister of Industry (for all other activities) are the two Ministers who are responsible for reviewing transactions. Where a transaction is subject to the review requirement (a Reviewable Transaction), an
application for review must be filed with the applicable Director of Investments appointed by the responsible Minister prior to the implementation of the Reviewable Transaction. The responsible Minister is then required to determine whether the
Reviewable Transaction is likely to be of net benefit to Canada, taking into account the application for review, any written undertakings from the investor and the prescribed factors of assessment set out in the ICA.

The monetary threshold for the review of Canadian businesses carrying on a cultural business within the meaning of the ICA
is $5 million. The Company carries on a cultural business within the meaning of the ICA. An acquisition of control of the Company by a non-Canadian would be a Reviewable Transaction if the value of the assets of the Company equalled or
exceeded $5 million. The transaction would also be a Reviewable Transaction even if the Companys assets were less than $5 million if the Governor in Council (the Canadian federal cabinet) elected to review the transaction. In this latter case,
the transaction could be implemented prior to such determination.

The ICA sets out rules to determine, inter alia, who is a non-Canadian and
whether there has been an acquisition of control of a Canadian business. Notwithstanding these rules, under the ICA, where a transaction involves a Canadian business which carries on a cultural business, the Minister of Canadian Heritage
has discretion to make a determination that an investor which may qualify as a Canadian under the rules is in fact a non-Canadian and that there has been in fact an acquisition of control of the Canadian business notwithstanding that there may not
have been an acquisition of control under the other provisions of the ICA.



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E. Taxation.

Material Canadian Federal Income Tax Consequences for United States Residents

The following summarizes the material Canadian federal income tax consequences generally applicable to the holding and disposition of
our shares by a holder (in this summary, a U.S. holder), who, (a) for the purposes of the Income Tax Act (Canada) (the Tax Act), and at all relevant times, is not resident in Canada, deals at arms
length with us, is not affiliated with us, holds our shares as capital property and does not use or hold and is not deemed to use or hold our shares in the course of carrying on, or otherwise in connection with, a business in Canada, and
(b) for the purposes of the Canada-United States Income Tax Convention, 1980 (the Treaty), and at all relevant times, is a resident of the U.S. and is a qualifying person for purposes of the Treaty. This summary
does not apply to traders or dealers in securities, limited liability companies, tax-exempt entities, insurers, financial institutions (including those to which the mark-to-market provisions of the Tax Act apply), or any other holder in special
circumstances. This summary is based on the current provisions of the Tax Act including all regulations thereunder, the Treaty, all proposed amendments to the Tax Act, the regulations and the Treaty publicly announced by the Government of Canada to
the date hereof, and our understanding of the current administrative practices and assessing policies of the Canada Revenue Agency. It has been assumed that all currently proposed amendments will be enacted as proposed and that there will be no
other relevant change in any governing law or administrative practice, although no assurances can be given in these respects. The summary does not take into account Canadian provincial, U.S. federal, state or other foreign income tax law or
practice. The tax consequences to any particular U.S. holder will vary according to the status of that holder as an individual, trust, corporation, partnership or other entity, the jurisdictions in which that holder is subject to taxation, and
generally according to that holders particular circumstances. Accordingly, this summary is not, and is not to be construed as, Canadian tax advice to any particular U.S. holder. All U.S. holders are advised to consult with their own tax
advisors regarding their particular circumstances. The discussion below is qualified accordingly.

Dividends

Dividends paid or credited, or deemed to be paid or credited, to a U.S. holder by us will be subject to Canadian withholding tax under
the Tax Act at the rate of 25% of the gross amount of the dividends, unless reduced under an applicable tax treaty. Under the Treaty, the rate of withholding tax on dividends paid to a U.S. holder that is the beneficial owner of such dividends is
generally limited to 15% of the gross amount of the dividends (or 5% if the U.S. holder is a company which beneficially owns at least 10% of our voting shares). We will be required to withhold the applicable withholding tax from any dividend and
remit it to the Canadian government for the U.S. holders account.

Disposition

For purposes of the following discussion, we have assumed that our shares will remain listed on the TSX. A U.S. holder is not subject to
tax under the Tax Act in respect of a capital gain realized on the disposition of our shares in the open market unless the shares constitute taxable Canadian property to the holder thereof and the U.S. holder is not entitled to relief
under the Treaty. Our shares will constitute taxable Canadian property to a U.S. holder if, at any time during the 60 month period preceding the disposition, the U.S. holder or persons with whom the U.S. holder did not deal at arms length
alone or together owned 25% or more of the issued shares of any class or series of our capital stock, and more than 50% of the fair market value of such shares was derived, directly or indirectly, from any one or a combination of (i) real or
immovable property situated in Canada, (ii) Canadian resource properties, (iii) timber resource properties, and (iv) options in respect of, or interests in, or for civil rights law rights in, property described in any of (i) to
(iii), whether or not that property exists. Notwithstanding the foregoing, in other specific circumstances, including where shares were acquired for other securities in a tax-deferred transaction, our shares could be deemed to be taxable Canadian
property.



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If our shares constitute taxable Canadian property to the U.S. holder, the U.S. holder will
(unless relieved under the Treaty) be subject to Canadian income tax on any gain realized. The taxpayers capital gain (or loss) from a disposition of the shares is the amount, if any, by which the proceeds of disposition exceed (or are
exceeded by) the aggregate of the adjusted cost base of the shares and reasonable expenses of disposition. One-half of the capital gain is included in income. Under the Treaty, the U.S. holder will generally be exempt from Canadian tax on any
capital gain realized on a disposition of our shares provided that, at the time of the disposition, the shares do not derive their value principally from real property situated in Canada.

F. Dividends and paying agents.

Not
applicable.

G. Statements by experts.

Not applicable.

H. Documents on
display.

We filed a registration statement on Form F-4 with the SEC in Washington, D.C. (Registration No. 333-174780) on
June 8, 2011, which became effective on June 13, 2011. The Registration Statement contains exhibits and schedules. Material contracts and publicly available corporate records may be viewed at our registered and records office located at
1450 Don Mills Road, Toronto, Ontario Canada.

The Company files annual reports and furnishes other information with the SEC. You
may read and copy any document that we file at the SECs Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549 or by accessing the Commissions website (http://www.sec.gov). The Company also files its annual reports and other
information with the Canadian Securities Administrators via SEDAR (http://www.sedar.com).

I. Subsidiary Information.

We hold a 100% interest in our only subsidiary, Postmedia Network Inc., a company incorporated under the laws of Canada.

ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Please refer to Financial Instruments and Financial Instruments Risk Management in the MD&A, attached hereto as Exhibit
15.2.

ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

A. Debt Securities.

Not
applicable.

B. Warrants and Rights.

Not applicable.

C. Other
Securities.

Not applicable.



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D. American Depository Shares.

Not applicable.

PART II

ITEM 13.  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

Not applicable.

ITEM 14.  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Not applicable.

ITEM 15.  CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As required by Rule 15d-15 under the U.S. Securities Exchange Act of 1934, or the Exchange Act, management has evaluated, with the
participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Disclosure controls and procedures refer to controls and other
procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC.
Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in our reports that we file or submit under the Exchange Act is accumulated and communicated
to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding our required disclosure. Based on the foregoing evaluation, our Chief Executive Officer and Chief Financial Officer
have concluded that, as of August 31, 2013, the end of the period covered by this report, our disclosure controls and procedures were effective at a reasonable assurance level.

Managements Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting.

Internal controls over financial reporting have been designed by management, under the supervision of and with the participation of the
Corporations Chief Executive Officer and Chief Financial Officer, to provide reasonable assurance regarding the reliability of the Corporations financial reporting and the preparation of financial statements for external purposes in
accordance with IFRS. Our internal control over financial reporting includes those policies and procedures that:



| |  |  | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with applicable IFRS, and that receipts and expenditures are being made only in
accordance with authorizations of management and the Board of Directors; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a
material effect on the financial statements.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

To evaluate the effectiveness of the Corporations internal
control over financial reporting, management has used the Internal Control - Integrated Framework, which is a suitable, recognized control framework established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Management has assessed the effectiveness of the Corporations internal control over financial reporting and concluded that such internal control over financial reporting is effective as of August 31, 2013.

Limitations on the Effectiveness of Controls

The Corporations management, including the Chief Executive Officer and Chief Financial Officer, does not expect that our
disclosure controls or our internal controls will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of
controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Corporation have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of
controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, control may
become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur
and not be detected. However, these inherent limitations are known features of the financial reporting process, and it is possible to design safeguards into the process to reduce, though not eliminate, this risk.

Attestation Report of the Registered Accounting Firm

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over
financial reporting. Managements report was not subject to attestation by our independent registered public accounting firm pursuant to the rules of the SEC that permit us to provide only managements report in this annual report.

Changes in Internal Control Over Financial Reporting

During the fiscal year ended August 31, 2013, there were no changes in the Companys internal control over financial reporting
that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.

ITEM 15T.  CONTROLS AND PROCEDURES

Not applicable.



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ITEM 16.  [RESERVED]

ITEM 16A.  AUDIT COMMITTEE FINANCIAL EXPERT

Postmedias board of directors has determined that it has at least one audit committee financial expert serving on its Audit
Committee. Each of Mr. Steacy, Ms. Burke, Ms. Peverett and Mr. Savage has been determined to by the board to be an audit committee financial expert. Each of Mr. Steacy, Ms. Burke, Ms. Peverett and Mr. Savage
are independent under Canadian securities law.

Under SEC rules, the designation of persons as audit committee financial
experts does not make them experts for any other purpose, impose any duties, obligations or liability on them that are greater than those imposed on members of their committee and the Board of Directors who do not carry this designation
or affect the duties, obligations or liability of any other member of their committee.

ITEM 16B.  CODE
OF ETHICS

Postmedia has adopted a Code of Business Conduct and Ethics which applies to all directors, officers and employees of
our Company, its subsidiaries and affiliates and other persons in similar relationships with those entities. The Code of Business Conduct and Ethics is provided to all directors, officers and employees and is further available on SEDAR at
www.sedar.com. The Code of Business Conduct and Ethics addresses such matters as compliance with laws, conflicts of interest, confidential information, protection and proper use of Postmedia assets and the reporting of illegal and unethical
behaviour.

We encourage personnel who become aware of a conflict or potential conflict or departures from the Code of Business
Conduct and Ethics to bring it to the attention of a supervisor or department head. We have also established additional procedures for confidential and anonymous reporting of complaints concerning accounting, internal accounting controls, auditing
matters and breaches of the Code of Business Conduct and Ethics. The Board requires every director and executive officer to disclose any direct or indirect conflict of interest that he or she has, and obtains formal confirmation of compliance with
the Code of Business Conduct and Ethics annually from directors, officers and a group of senior managers from across the Company that includes employees at the vice president level or above.

Any waivers of the Code of Business Conduct and Ethics for directors or members of senior management may only be granted by the Board
(or a Committee to whom that authority has been delegated), while any waiver for all other employees may only be made by the President and CEO.

In order to help ensure that directors exercise independent judgement in considering any transaction or agreement in which a director or
executive officer has a material interest, any director or executive officer with such an interest is expected to declare the interest and would generally not be present for any discussion or vote regarding the matter.

The Code of Business Conduct and Ethics was filed as exhibit 99.2 to the Companys form 6-K, filed with the SEC on October 25,
2013.



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ITEM 16C.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

The fees billed by the Corporations external auditors for Fiscal 2013 and Fiscal 2012 for audit and non-audit related services
provided to the Corporation and its subsidiaries are as follows:



|            |  |            |         |  |                   |             |          |       
|----------- |  | ---------- | ------- |  | ----------------- | ----------- | -------- | ------
|Year        |  | Audit Fees |         |  | Audit RelatedFees |             | Tax Fees
|Fiscal 2013 |  | $          | 714,000 |  |                   | $78,460(1)  |          | $7,000
|Fiscal 2012 |  | $          | 715,000 |  |                   | $316,990(2) |          | $ -   





Notes:

|(1) | Includes fees incurred in connection with the audit of the Corporations pension plan financial statements, fees incurred with respect to specified
procedures on internal controls, fees incurred in connection with matters pertaining to the Ontario Securities Commission and Canadian Public Accountability Board fees.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Includes fees incurred in connection with the offering memorandum for the Companys First-Lien Notes which was completed August 16, 2012, fees
incurred in connection with the Companys transition to International Financial Reporting Standards, fees incurred in connection with the audit of the Pension Plan financial statements and fees incurred with respect to specified procedures on
internal controls.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

There were no other fees billed by the Corporations external auditors for the years
ended August 31, 2013 and 2012 that do not fit into the categories presented in the table above.

For information regarding the
Corporations policy of Audit Committee pre-approval of audit and non-audit services, please refer to Item 6 C. Board Practices  Details relating to the Companys Audit Committee.

ITEM 16D.  EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

ITEM 16E.  PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Not applicable.

ITEM 16F.  CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT

Not applicable.

ITEM 16G.  CORPORATE GOVERNANCE

Not applicable.

ITEM 16H.  MINE SAFETY DISCLOSURE

Not applicable.

PART III

ITEM 17.  FINANCIAL STATEMENTS

Not applicable.



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ITEM 18.  FINANCIAL STATEMENTS

Not applicable.

ITEM 19.  EXHIBITS

The following items are specifically incorporated by reference in, and form an integral part of, this filing on Form 20-F.



|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                               
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description of Exhibit                                                                                                                                                                                                                                                                                                                                                                                                        
|1.1.1       |  | (i) Certificate and Articles of Incorporation and Amendment of Postmedia Network Inc., previously filed as Exhibit 2.1.1 to the Registrants Registration Statement on Form F-4 filed on June 8, 2011 and incorporated by reference
herein.                                                                                                                                                                                   
|            | 
|1.1.2       |  | (ii) By-laws of Postmedia Network Inc., previously filed as Exhibit 2.1.2 to the Registrants Registration Statement on Form F-4 filed on June 8, 2011 and incorporated by reference herein.                                                                                                                                                                                                                                  
|            | 
|1.2.1       |  | (i) Certificate and Articles of Incorporation and Amendment of Postmedia Network Canada Corp., previously filed as Exhibit 2.2.1 to the Registrants Registration Statement on Form F-4 filed on June 8, 2011 and incorporated by
reference herein.                                                                                                                                                                           
|            | 
|1.2.2       |  | (ii) By-laws of Postmedia Network Canada Corp., previously filed as Exhibit 2.2.2 to the Registrants Registration Statement on Form F-4 filed on June 8, 2011 and incorporated by reference herein.                                                                                                                                                                                                                          
|            | 
|1.3.1       |  | By-law No. 3 of the by-laws of Postmedia Network Canada Corp., previously filed as Exhibit 99.1 to the Registrants Form 6-K filed on October 25, 2013 and incorporated by reference herein.                                                                                                                                                                                                                                  
|            | 
|1.3        |  | Charter of the Audit Committee of Postmedia Network Canada Corp., dated as of October 24, 2013.                                                                                                                                                                                                                                                                                                                               
|            | 
|2.1         |  | Senior Secured Notes Indenture, dated as of July 13, 2010, relating to the 12.50% Senior Secured Notes due 2018, among Postmedia Network Inc., Postmedia Network Canada Corp., The Bank of New York Mellon as Trustee and BNY Trust
Company of Canada, as Collateral Agent, previously filed as Exhibit 4.1 to the Registrants Registration Statement on Form F-4 filed on June 8, 2011 and incorporated by reference herein.
|            | 
|2.2         |  | Form of 12.50% Senior Secured Initial Note (included as Exhibit A-1 to Exhibit 2.1)                                                                                                                                                                                                                                                                                                                                           
|            | 
|2.3         |  | Intercreditor Agreement, dated as of July 13, 2010, among Morgan Stanley Senior Funding, Inc., as ABL collateral agent, JPMorgan Chase Bank, N.A., as term loan collateral agent and BNY Trust Company of Canada as notes collateral
agent, previously filed as Exhibit 4.4 to the Registrants Registration Statement on Form F-4 filed on June 8, 2011 and incorporated by reference herein.                                



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|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.4  |  | Intercreditor Agreement, dated as of July 13, 2010, among JPMorgan Chase Bank, N.A. as term loan collateral agent and BNY Trust Company of Canada, as notes collateral agent, previously filed as Exhibit 4.5 to the
Registrants Registration Statement on Form F-4 filed on June 8, 2011 and incorporated by reference herein.                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     | 
|2.5  |  | Pledge and Security Agreement, dated as of July 13, 2010, among Postmedia Network Inc., the grantors named thereto, The Bank of New York Mellon as trustee and BNY Trust Company of Canada as collateral agent, previously filed as
Exhibit 4.6 to the Registrants Registration Statement on Form F-4 filed on June 8, 2011 and incorporated by reference herein.                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | 
|2.6  |  | Grant of Security Interest in Trademarks Rights, dated as of July 13, 2010 among Postmedia Network Inc. and BNY Trust Company of Canada as collateral agent, previously filed as Exhibit 4.7 to the Registrants Registration
Statement on Form F-4 filed on June 8, 2011 and incorporated by reference herein.                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     | 
|2.7  |  | Shareholder Rights Plan Agreement, dated as of November 8, 2010, between Postmedia Network Canada Corp. and Computershare Investor Services Inc. as Rights Agent, previously filed as Exhibit 4.8 to the Registrants Registration
Statement on Form F-4 filed on June 8, 2011 and incorporated by reference herein.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     | 
|2.8* |  | Senior Secured Notes Indenture, dated as of August 16, 2012, among Postmedia Network Inc., as Issuer, Postmedia Network Canada Corp., as Guarantor, Computershare Trust Company of Canada, as Trustee and Computershare Trust Company of
Canada, as Collateral Agent.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     | 
|2.9* |  | Form of 8.25% Senior Secured Initial Note (included as Exhibit A-1 to Exhibit 2.9)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | 
|4.1  |  | Revolving Credit Agreement, dated as of July 13, 2010, among Postmedia Network Inc., Postmedia Network Canada Corp., Morgan Stanley Senior Funding, Inc., as administrative agent, collateral agent, co-syndication agent, joint
collateral agent and paying agent, JPMorgan Chase Bank, N.A., as co-syndication agent, Wells Fargo Capital Finance Corporation Canada, as joint collateral agent and co-documentation agent, Royal Bank of Canada, as co-documentation agent, and the
lenders party thereto, with Morgan Stanley Senior Funding, Inc. and J.P. Morgan Securities Inc. as joint lead arrangers and joint bookrunners, previously filed as Exhibit 10.4 to the Registrants Registration Statement on Form F-4 filed on June
8, 2011 and incorporated by reference herein.
|     | 
|4.2  |  | Pledge and Security Agreement, dated as of July 13, 2010, among Postmedia Network Inc., the grantors party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, previously filed as Exhibit
10.5 to the Registrants Registration Statement on Form F-4 filed on June 8, 2011 and incorporated by reference herein.                                                                                                                                                                                                                                                                                                                                                                                                                            
|     | 
|4.3  |  | Grant of Security Interest in Trademark Rights, dated as of July 13, 2010, between Postmedia Network Inc. and Morgan Stanley Senior Funding, Inc., previously filed as Exhibit 10.6 to the Registrants Registration Statement on
Form F-4 filed on June 8, 2011 and incorporated by reference herein.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|     | 
|4.4  |  | Nominating Agreement, dated as of July 13, 2010, between Postmedia Network Canada Corp. and GoldenTree Asset Management LP., previously filed as Exhibit 10.9 to the Registrants Registration Statement on Form F-4 filed on June
8, 2011 and incorporated by reference herein.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     | 
|4.5  |  | Registration Rights Agreement, dated as of July 13, 2010 between Postmedia Network Canada Corp. and GoldenTree Asset Management LP., previously filed as Exhibit 10.10 to the Registrants Registration Statement on Form F-4 filed
on June 8, 2011 and incorporated by reference herein.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                



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|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.6   |  | Agreement among Postmedia Network Inc., Sport Media Enterprises Inc. and Wayne Parrish, dated July 21, 2010, previously filed as Exhibit 10.12 to the Registrants Registration Statement on Form F-4 filed on June 8,
2011 and incorporated by reference herein.                                                                                                                                                                                                           
|      | 
|4.7   |  | Asset Purchase Agreement, dated October 18, 2011, among Postmedia Network Inc., LMP Publication Limited Partnership and GVIC Communications Corp., previously filed as Exhibit 4.12 to the Registrants Annual Report on Form 20-F
filed on November 28, 2011 and incorporated by reference herein.                                                                                                                                                                         
|      | 
|4.8   |  | Asset Purchase Agreement, dated October 18, 2011, among Postmedia Network Inc., TC Publication Limited Partnership and GVIC Communications Corp., previously filed as Exhibit 4.13 to the Registrants Annual Report on Form 20-F
filed on November 28, 2011 and incorporated by reference herein.                                                                                                                                                                          
|      | 
|4.9   |  | First Amendment to Revolving Credit Agreement, dated as of August 8, 2012, among Postmedia Network Inc., Postmedia Network Canada Corp., Morgan Stanley Senior Funding, Inc., as administrative agent, collateral agent, co-syndication
agent, joint collateral agent and paying agent and the other lenders party thereto; previously filed as Exhibit 4.10 to the Registrants Annual Report on Form 20-F filed on November 23, 2012 and incorporated by reference herein.
|      | 
|4.10* |  | Pledge and Security Agreement, dated as of August 16, 2012, among Postmedia Network Inc., Postmedia Network Canada Corp. and Computershare Trust Company of Canada.                                                                                                                                                                                                                                                                                                         
|      | 
|4.11* |  | Acknowledgement, Confirmation of and Accession to Intercreditor Agreement, dated as of August 16, 2012, among Morgan Stanley Senior Funding, Inc. as ABL Collateral Agent, Computershare Trust Company of Canada, as Term Loan
Collateral Agent, BNY Trust Company of Canada, as Notes Collateral Agent, Postmedia Network Inc. and Postmedia Network Canada Corp.                                                                                                          
|      | 
|4.12* |  | Acknowledgement, Confirmation of and Accession to Intercreditor Agreement, dated as of August 16, 2012, among Computershare Trust Company of Canada, as Term Loan Collateral Agent, BNY Trust Company of Canada, as Notes Collateral
Agent, Postmedia Network Inc. and Postmedia Network Canada Corp.                                                                                                                                                                       
|      | 
|8.1   |  | Subsidiaries of the Registrants, previously filed as Exhibit 21.1 to the Registrants Registration Statement on Form F-4 filed on June 8, 2011 and incorporated by reference herein.                                                                                                                                                                                                                                                                                        
|      | 
|9.1   |  | Code of Business Conduct and Ethics of Postmedia Network Canada Corp., previously filed as Exhibit 99.2 to the Registrants Form 6-K filed on October 25, 2013 and incorporated by reference herein.                                                                                                                                                                                                                                                                        
|      | 
|12.1 |  | Certification pursuant to Title 18, United States code, Section 1350 as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (Paul Godfrey)                                                                                                                                                                                                                                                                                                                    
|      | 
|12.2 |  | Certification pursuant to Title 18, United States code, Section 1350 as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (Douglas Lamb)                                                                                                                                                                                                                                                                                                                    
|      | 
|13.1 |  | Certification pursuant to Title 18, United States code, Section 1350 as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (Paul Godfrey)                                                                                                                                                                                                                                                                                                                    
|      | 
|13.2 |  | Certification pursuant to Title 18, United States code, Section 1350 as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (Douglas Lamb)                                                                                                                                                                                                                                                                                                                    
|      | 
|15.1 |  | Consolidated financial statements of the registrant for the years ended August 31, 2013, 2012 and 2011.                                                                                                                                                                                                                                                                                                                                                                     



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##### Table of Contents

|      |  |                                                                                                           
|----- |  | ----------------------------------------------------------------------------------------------------------
|      | 
|15.2 |  | Managements Discussion and Analysis of the registrant for the years ended August 31, 2013, 2012 and 2011.



| | Filed herewith.
|- | ---------------

|* | Incorporated by reference to the Registrants Form 6-K filed on August 20, 2012.
|- | --------------------------------------------------------------------------------

SIGNATURE PAGE

The Registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized
the undersigned to sign this annual report on its behalf.



|                         |  |  |  |                                           |  |                                      
|------------------------ |  |  |  | ----------------------------------------- |  | -------------------------------------
|                         |  |  |  | Postmedia Network Canada Corp.
REGISTRANT
|                         |  |  | 
|                         |  |  |  | By:                                       |  | /s/ Paul Godfrey                     
|                         |  |  |  |                                           |  | Paul Godfrey                         
|                         |  |  | 
|Dated: November 27, 2013 |  |  |  |                                           |  | President and Chief Executive Officer



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