Document:

SCHWARTZ - RSU Grant Agreement
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Exhibit 10.4
TELESAT CANADA
RESTRICTED SHARE UNIT GRANT AGREEMENT 
This agreement (the “Grant Agreement”), by and among Telesat Canada (the “Corporation”), Michael Schwartz (the “Participant”), and for the purposes of Sections 2, 3, 4, 6, 7 and 9 only, Loral Space & Communications Inc. (“Loral”), and for the purposes of Sections 2 and 3 only, the Public Sector Pension Investment Board (“PSP”), and only for the purposes of Sections 6(b) and 9, 4440480 Canada Inc. (the “Special Purchaser”), evidences the RSUs granted by the Corporation to the Participant pursuant to and subject to the terms of Telesat Canada’s Restricted Share Unit Plan (the “Plan”), which is incorporated herein by reference. Capitalized terms used in this Grant Agreement that are not defined in this Grant Agreement shall have the meanings attributed thereto in the Plan. If there is any express conflict between the terms and conditions of the Plan and this Grant Agreement, the terms and conditions of this Grant Agreement shall govern. 
		1.	Grant of RSUs

The Corporation hereby grants to the Participant on the Date of Grant such number of RSUs as set forth below on the following basis, subject to the terms and conditions of the Plan and this Grant Agreement: 
	DATE OF GRANT: April 20, 2021
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	NUMBER OF RSUS: 355,000
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	VESTING SCHEDULE: One-third (1/3rd) of the RSUs will vest on each of the first three (3) anniversaries of the Date of Grant
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	CHANGE OF CONTROL VESTING: The RSUs will vest, in full, upon a Change of Control
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		2.	Drag-Along Rights in Respect of Shares Issuable Upon Exercise or Settlement of the RSUs

At any time prior to an Initial Public Offering,
		a.	Provided that Loral or PSP and their respective Affiliates and their Permitted Transferees (as defined in the Unanimous Shareholder Agreement) (such shareholders and their respective Affiliates and Permitted Transferees being referred to in this Agreement as the “Relevant Shareholders”) collectively hold a number of Equity Shares of the Corporation which is not less than 25% of the total number of Equity Shares then outstanding on a fully diluted basis, if a Relevant Shareholder proposes to Transfer to any person (the “Drag-Along Transferee”) at arm’s length from such Relevant Shareholder (for purposes of this Section 2(a) only, any such Relevant Shareholder that is proposing such Transfer, a “Selling Shareholder”) some or all of the Equity Shares then held by the Selling Shareholder, in a bona fide transaction (a “Drag-Along Sale”), then the Selling Shareholder(s) may elect (a “Drag-Along Election”) to require the Participant (but provided that all Participants are being similarly required with regard to their fully vested Shares but not necessarily Shares underlying unvested RSUs) to sell to the Drag-Along Transferee that number of Shares issued upon settlement or exercise/surrender of the RSUs equal to the product of (x) a fraction, the numerator of which is the number of Equity Shares (on a fully diluted basis) as is proposed to be sold by the Selling Shareholder(s) and the denominator of which is the aggregate number of Equity Shares (on a fully diluted basis) owned as of the date of the Drag-Along Notice (as defined below) by all Relevant 

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			Shareholder(s), and (y) the number of Shares then owned by the Participant and issued upon the exercise/surrender or settlement, as applicable, plus the number of Shares issuable upon the settlement or exercise/surrender of RSUs held by the Participant whether or not vested, as of the date of the Drag-Along Notice, at the purchase price and upon the other terms and subject to the conditions of the Drag-Along Sale (including the kind and amount of consideration to be paid for such Equity Shares), all of which shall be set forth in the Drag-Along Notice.  To the extent that the number of Shares issued upon settlement or exercise/surrender of any vested portion of the RSUs that are held by the Participant is less than the number calculated pursuant to the preceding sentence, a portion of the RSUs held by the Participant not otherwise vested shall, conditional on the closing of the Drag Along Sale, become vested based on the earliest thereafter vesting tranches being vested before later vesting tranches and the Participant shall be required, conditioned on the closing of the Drag Along Sale, to Transfer the resulting Shares in the manner provided in the previous sentence. The Participant shall be responsible to the Selling Shareholders for the Participant’s pro rata share of a reasonable estimate of the out-of-pocket transactional expenses to be paid by the Selling Shareholders, as determined by the Selling Shareholders, incurred in connection with the Drag-Along Sale. Without limiting the foregoing liability, the Selling Shareholders shall be entitled to agree with the purchaser for the payment of such pro rata share directly, to the Selling Shareholders out of sale proceedings.

		b.	The rights set forth in Section 2(a) shall be exercised by the Selling Shareholder giving written notice by delivery of a true and complete copy of the offer to purchase from the Drag-Along Transferee together with all relevant agreements (the “Drag-Along Notice”) to the Participant which shall specifically identify the identity of the proposed Drag-Along Transferee, the number of Equity Shares proposed to be sold to the Drag-Along Transferee, the purchase price therefor, the material terms and conditions of the proposed Drag-Along Sale and the proposed closing date of the Drag-Along Sale.

		c.	The Selling Shareholders may assign to the Drag-Along Transferee the rights under this Section 2 and Section 4 hereof, and in such event, the Drag-Along Transferee shall be treated as if it is the Selling Shareholder thereafter. 

		d.	This Section 2 shall not apply to sales made in connection with an Initial Public Offering or other sales made into the public market. 

		e.	This Section 2 shall cease to apply immediately following the occurrence of an Initial Public Offering.

For the purposes of this Agreement, a “Loral Transaction” is a transaction whereby the holders of 90% or more of the shares of each class of common stock (the “Common Stock”) of Loral outstanding at the relevant time, sell, transfer, exchange or otherwise dispose of such shares pursuant to a transaction or series of related transactions as a result of which any person or group (as such terms are defined in Section 13(d) or Section 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) or any successor provision to either of the foregoing) of persons (the “Acquiror”), acquires and becomes the beneficial owner (as the term “beneficial owner” is defined under Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act) directly or indirectly, of 90% or more of each class of Common Stock; provided that such Acquiror is not and does not include, or act in concert with, the MHR Fund (as defined in the Unanimous Shareholders Agreement).
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		3.	Tag Along Rights in respect of Shares Issuable Upon Exercise or Settlement of the RSUs 

At any time prior to an Initial Public Offering, 
		a.	No Relevant Shareholder shall sell, offer to sell or agree to sell any Equity Shares (other than (i) sales of Equity Shares by a Relevant Shareholder to any other Relevant Shareholder, (ii) sales made in connection with an Initial Public Offering or other sales made into the public market, (iii) sales of Equity Shares by a Relevant Shareholder(s) to its or their Affiliate, (iv) a sale by PSP (or an Affiliate) of Equity Shares to a shareholder who through such sale acquires a right to nominate directors of the Corporation but not a proportionate share of PSP’s Equity Interest, (v) a transfer to a Permitted Transferee as defined in Section 7.04(1) of the Unanimous Shareholder Agreement, (vi) in a PSP Sell-Down (as defined in the Unanimous Shareholder Agreement), or (vii) sales aggregated with all other Transfers by Relevant Shareholders of less than 5% of Equity Shares collectively owned by all Relevant Shareholders as of the Grant Date), unless the applicable offer is in writing and provides, as a condition precedent to its completion, that the proposed purchaser grants to the Participant the right to require the proposed purchaser to purchase, at the discretion of the Participant (provided that, for purposes of this Section 3, each U.S. Participant shall be deemed to have elected to participate in the Tag-Along Sale (as defined below) to the maximum extent permitted hereunder), some or all of that proportion of the Shares owned by the Participant and issued upon exercise/surrender (for a Non-U.S. Participant) or settlement (for a U.S. Participant) of the RSUs, plus Shares of the Participant issuable upon exercise/surrender or settlement, as applicable, of the RSUs whether or not vested, as is equal to the product of (x) the Tag-Along Percentage, and (y) the number of Shares then owned by the Participant and issued upon the exercise/surrender or settlement, as applicable, of the RSUs plus the number of Shares issuable upon the exercise/surrender or settlement, as applicable, of the RSUs whether or not vested, as of the date of the Tag-Along Notice (as defined herein), at a price per Share, and upon the other terms and subject to the other conditions (including kind and amount of consideration) as is set forth in the offer to the Selling Shareholder(s) (a “Tag-Along Sale”); provided, however, that (without limiting the rights of Loral or PSP under this Grant Agreement) the obligations of each Relevant Shareholder set forth in this Section 2(a) shall cease in the event that, subject to the prior written consent of Loral and PSP, the Participant enters into a separate agreement or arrangement with the proposed purchaser or the Corporation regarding the treatment of the Shares owned by the Participant and issued upon exercise/surrender or settlement, as applicable, of the RSUs in connection with any such sale (or proposed sale) by a Relevant Shareholder. The “Tag-Along Percentage” means a fraction, the numerator of which is the number of Equity Shares as is proposed to be sold by the Relevant Shareholder(s) who are proposing such sale (for purposes of this Section 3 only, such Relevant Shareholder, a “Selling Shareholder”) and the denominator of which is the aggregate number of Equity Shares then owned by all Relevant Shareholders; provided that if the Tag-Along Sale is for all of PSP’s and its Affiliates’ Equity Shares (a “Qualifying Tag-Along Sale”) and is entered into in connection with, or contemporaneously with, a Loral Transaction, then the Tag-Along Percentage shall equal 100%. 

		b.	Notwithstanding Section 3(a) above, in the event of a Qualifying Tag-Along Sale, with respect to the Applicable Percentage of the Participant’s Shares (whether issued or issuable upon exercise/surrender or settlement, as applicable, of his RSUs and whether vested or unvested): (i) the purchase price per Share shall be the Implicit Loral Purchase Price Per Telesat Share, and (ii) the consideration payable by the buyer in the Qualifying Tag-Along Sale shall, except as otherwise consented to by Loral and the Participant, be the same Non-Cash/Mixed Consideration as is paid to the holders of Loral Common Stock in the Loral Transaction; provided that the consent of the Participant shall not be required 

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			where some or all of the Non-Cash/Mixed Consideration is replaced with cash consideration.  “Applicable Percentage” means the number of Equity Shares owned by Loral immediately prior to the Qualifying Tag-Along Sale, divided by the number of Equity Shares outstanding immediately prior to the Qualifying Tag-Along Sale excluding Equity Shares issued or issuable upon the exercise/surrender or settlement, as applicable, of any RSU, such result expressed as a percentage.  “Implicit Loral Purchase Price Per Telesat Share” means the Loral Stake FMV divided by the number of Equity Shares owned by Loral immediately prior to the transaction with respect to which the calculation is being made.  In addition, if the Participant fails to exercise his tag along rights in the event of a Qualifying Tag-Along Sale, the Relevant Shareholders (as applicable) shall have drag-along rights as provided in Section 2 of this Grant Agreement. 

		c.	The Selling Shareholder(s) shall give notice of any proposed sale to the Participant (the “Tag-Along Notice”) and shall permit the Participant to have not less than 20 days to accept such offer in a manner which permits the Participant to specify the number of Shares which the Participant wishes to sell.  To the extent necessary in order to effect the Tag-Along Sale (and only to such extent), and conditional upon the closing of the Tag-Along Sale, any portion of Participant’s RSUs not vested shall become vested (and, with respect to Non-U.S. Participants, exercisable) to the extent that the Shares issuable upon such vesting may be included in the Tag-Along Sale based on the earliest unvested tranches vesting first.  The completion of the sale of such Shares by the Participant shall be subject to completion of the sale of Equity Shares by the Selling Shareholder(s) and vice versa.  If the Participant exercises tag-along rights pursuant to this Section 3, the Participant shall be responsible to the Selling Shareholders for his pro rata share of a reasonable estimate of the transactional expenses of the Selling Shareholders, as determined by the Selling Shareholders, in connection with the Tag-Along Sale, and the Selling Shareholders shall be entitled to agree with the purchaser for the payment of such pro rata share of the reasonable estimate of the transactional expenses, as determined by the Selling Shareholders, to the Selling Shareholders.  

		d.	If any transfer of Equity Shares to a Permitted Transferee or Affiliate is exempt from this Section 3, as set forth above, as a condition of such Transfer, the transferee shall agree that any subsequent Transfer of such Equity Shares shall be subject to this Section 3. 

		e.	In the case of any Initial Public Offering (other than a Roll Up Transaction) in which a Selling Shareholder transfers its Equity Shares, the Participant shall be entitled to the vesting acceleration described in this Section 3 as though such transfer were subject to this Section 3, with regard to the unvested RSUs necessary to be vested and exercised/surrendered or settled, as applicable, to sell the Shares in the initial public offering pursuant to item (4) of Exhibit “A” and Participant shall have no rights to tag along on any public offering under this Section 3 (but shall have the rights under item (4) of Exhibit “A”).

		f.	This Section 3 shall cease to apply immediately following the occurrence of an Initial Public Offering. 

		4.	Sale Procedures 

		a.	In connection with any Drag-Along Sale, or Tag-Along Sale which the Participant agrees (or is deemed to agree) to accept, the Participant shall be obligated, if applicable and if permitted by law, to vote (or consent in writing, as the case may be, in respect of) all Shares held by him in favour of any Drag-Along Sale or Tag-Along Sale being effected by merger, amalgamation, consolidation, plan of arrangement, share sale, asset sale or other type of business combination requiring shareholder approval and the Participant shall in all other respects support the transaction contemplated by the Drag-Along Sale or Tag-Along Sale 

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			and shall be obligated to take all reasonable actions and to reasonably cooperate in the consummation of the transaction contemplated thereby and shall execute all documents, including a sale, purchase, amalgamation, reorganization or merger agreement, reasonably requested by the Selling Shareholder(s) containing the terms and conditions of the Drag-Along Sale or Tag-Along Sale; provided, however, that such terms and conditions shall include the following: (i) any representations and warranties from the Participant and other Participants shall be on a several and not joint basis; and (ii) the maximum liability of the Participant (other than for fraud or intentional misrepresentation as to ownership or the existence of a lien) under such Drag-Along Sale or Tag-Along Sale transaction shall be limited to the purchase price received by the Participant.

		b.	The Participant shall not exercise any rights of appraisal or dissent rights that the Participant may have (whether under applicable law or otherwise) or could potentially have or acquire in connection with any Drag-Along Sale, Tag-Along Sale or any proposal that is necessary or desirable to consummate the Drag-Along Sale or Tag-Along Sale.

		c.	All Transfers of Shares, including Shares issuable upon the vesting and exercise/surrender (for Non-U.S. Participants) or settlement (for U.S. Participants) of RSUs to the Drag-Along Transferee pursuant to Section 2 or Tag-Along Transferee pursuant to Section 3, shall be consummated contemporaneously on the closing date specified in the Drag-Along Notice or Tag-Along Notice, as applicable, and, if the Participant shall not have taken such steps as are necessary to Transfer Shares as provided above in Section 2 or Section 3, as applicable, in order for the Shares to be so Transferred, the Participant shall be deemed to have appointed each Selling Shareholder as his true and lawful attorney in fact to take all such actions and to sign all such documents as are necessary or, in the reasonable view of the Selling Shareholder, desirable in order to effect such Transfer.  In such event, the Selling Shareholder shall hold the purchase price for such Shares in trust for the Participant, pending acknowledgement in writing of the Transfer by the Participant.

		d.	This Section 4 shall cease to apply immediately following the occurrence of an Initial Public Offering. 

		5.	Revised Vesting Period and Forfeiture

		a.	The following provisions will apply upon termination of the Participant’s Employment: 

	i.		Upon termination of the Participant’s Employment by the Employer for Cause at any time, all RSUs, whether vested or unvested, shall immediately as of the Termination Date be forfeited; 

	ii.		Upon termination of the Participant’s Employment by the Employer at any time without Cause, or by the Participant for Good Reason, all RSUs which had vested on or prior to such Termination Date shall remain in effect and all RSUs which had not vested as of such Termination Date of the Participant’s Employment shall immediately become vested, with all such vested RSUs being settled in accordance with the terms of the Plan and this Grant Agreement; and

	iii.		If the Participant’s Employment terminates as a result of death or Disability Termination of the Participant, the portion of the Participant’s unvested RSUs which would vest within one year of the Termination Date shall immediately become vested, with all such vested RSUs being settled in accordance with the terms of the Plan and this Grant Agreement. 

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		6.	Restriction on Call Rights and Purchase

		a.	Notwithstanding Section 4.8 of the Plan, the call rights of the Corporation as set out in Section 4.8 of the Plan generally shall not apply if the Participant is terminated by the Corporation without Cause or the Participant’s Employment is terminated by the Participant for Good Reason (as defined in the Participant’s Employment Agreement); provided, that (a) such call rights shall fully apply to Shares that have become issuable upon the exercise/surrender or settlement, as applicable, of the vested RSUs, that become exercisable solely as a consequence of such termination of employment (on the terms specified in Section 4.8 of the Plan) and (b) such call rights may be exercised in respect of any Shares held by the Participant during the six-month and one day period commencing on the later of: (i) the date the Board, acting in good faith, becomes aware that the Participant has become employed by, or is otherwise providing services to, a Competitor (as defined in Exhibit “A” hereto) with the date of such determination by the Board being treated under Section 4.8 of the Plan as if it was the date of termination of employment (in such case, the call right may be exercised at the Fair Market Value of the Shares on the date of exercise) or (ii) the exercise/surrender date or settlement date, as applicable, of the RSUs.  Notwithstanding Section 4.8 of the Plan, in the event that the Participant’s employment terminates, other than for Cause or voluntarily without Good Reason (as defined in the Participant’s Employment Agreement), the Corporation may not satisfy the purchase price under the call rights by issuing a promissory note to Participant. Upon exercise of the Corporation of its call right, such call right shall immediately be deemed to have been assigned to, and exercised by, the Special Purchaser (as described in Section 6(b)).

		b.	In the event that the call right of the Corporation is available pursuant to Section 6(a) and the Corporation exercises such right pursuant to Section 4.8 of the Plan, the Special Purchaser shall purchase from the Participant all Shares in respect of which such call rights have been exercised pursuant to Section 4.8 of the Plan as provided in Section 4.8 of the Plan, and for the purchase price therein provided. On such date, the Shares shall be purchased by the Special Purchaser, and shall thereafter be transferred, along with the obligation of the Special Purchaser to pay for the Shares, to a subsidiary of the Special Purchaser, which shall be wound up into the Corporation. The Corporation agrees to the acquisition of such subsidiary by the Corporation from the Special Purchaser for nominal consideration and to the winding up of such subsidiary into the Corporation.  The purchase price for the Shares shall be paid by the Corporation within ten (10) business days after completion of the winding-up of such subsidiary into the Corporation, which shall occur promptly after exercising the call right. This Section 6 (and Section 4.8 of the Plan) shall cease to apply upon the occurrence of a Roll Up Transaction.

		7.	Fair Market Value 

		a.	At any time prior to an Initial Public Offering, for the purposes of this Agreement, “Fair Market Value” means (a) with respect to Equity Shares, Fair Market Value as defined in the Plan, and for any purposes, including for any call and for purposes of Sections 2, 3 and 6, shall be determined without any discount for minority interest or illiquidity, (b) with respect to any other asset, means the amount for which a willing buyer and willing seller would purchase and sell the asset in an efficient market, and (c) with respect to any liability means the amount which a willing creditor would accept to discharge such liability and which a willing debtor would pay to discharge such liability in an efficient market.  

		b.	The “Loral Stake FMV” means: (i) the Fair Market Value of the total consideration that is to be paid to the holders of Loral equity in the Loral Transaction, plus (ii) the Fair Market Value immediately prior to closing on the date of the closing of a Loral Transaction of any 

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			indebtedness of Loral incurred to fund cash distributions to the holders of Loral equity, less (iii) the amount, if any, by which the Fair Market Value of Loral’s assets (excluding the Equity Shares) exceeds the Fair Market Value of Loral’s liabilities (other than liabilities included in clause (ii) above). Loral shall cooperate with the Board in its determination of Fair Market Value for purposes of Sections 3, 6 and 9.

		c.	If the Participant or Loral (with respect to Fair Market Value determinations for the purposes of Section 3, 6 and/or 9) does not agree with the Fair Market Value as determined by the Board pursuant to the Plan and this Section 7, the Participant or Loral, as the case may be (the “Objector”) shall notify the Board in writing of such objection within fifteen (15) days of receipt of written notice of such Fair Market Value and shall provide to the Board his own determination of Fair Market Value in writing no later than thirty (30) days of such receipt.  The Board shall submit the determinations of Fair Market Value to an investment banker or valuation service agreed upon in good faith by the Board, Loral and the Participant (an “Appraiser”) to choose one of the determinations as the most appropriate valuation of the Fair Market Value of the Shares.  All fees of the Appraiser shall be paid (a) by the Corporation if the Appraiser chooses an Objector’s determination of Fair Market Value, and (b) by the Objector if the Appraiser chooses the Board’s determination of Fair Market Value.  For the avoidance of doubt, the provisions of this paragraph (c) shall also apply to the determination of the Loral Stake FMV.

		d.	This Section 7 shall cease to apply upon the occurrence of a Roll Up Transaction. 

		8.	Dividends; Other Share Adjustments 

		a.	In the event that the Corporation pays a dividend or makes a return of capital to the holders of its Equity Shares, the Board will grant an additional right to the Participant to acquire such number of additional Shares upon settlement as is equal to the per-share dividend or return of capital payable to holders of Equity Shares multiplied by the number of Shares subject to the Participant’s RSUs on the payment date, and such right shall vest, settle and be exercisable (in the case of a non-U.S. Participant) and be subject to the terms and conditions as the RSUs granted pursuant to this Grant Agreement and the Plan; provided, however, that: (i)  a Participant shall be entitled to elect, in lieu of receiving Shares, to surrender his or her right to acquire Shares to the Corporation in consideration for a payment by the Corporation in cash in an amount equal to the Fair Market Value of the Shares underlying the right (the “Dividend Cash Alternative”); and (ii) any rights granted under this Section 8 shall be considered “RSUs” for purposes determining the number of Accelerated RSUs (as defined in the Plan) in the preamble of Section 4.2 of the Plan.  

		b.	Rights to receive Shares will be subject to the same vesting, settlement and exercise (in the case of a non-U.S. Participant) terms as the RSUs in respect of which such rights are credited provided, however, that a Participant shall be entitled to the Dividend Cash Alternative.   

		c.	On the date and to the extent a portion of the Participant’s RSUs are forfeited, the Participant will forfeit any rights to Shares (or cash in lieu of Shares) granted under this Section 8 and which are attributable to such forfeited portion of the RSUs.   

		9.	Share Repurchasing 

In the event the Corporation repurchases or offers to repurchase its Shares from both Loral or PSP or their respective Affiliates, or their respective permitted transferees, on a substantially pro rata basis, the Corporation shall also offer to repurchase Shares from Participant on the same basis to the extent such offer is legally permitted.  Such pro rata portion shall be based on all Shares issued 

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to Participant and all RSUs outstanding that were granted to Participant, whether vested or unvested.  Participant shall accept such offer within ten (10) business days of its being made or shall be deemed to have rejected such offer and, if accepted, the sale and purchase shall close at the same time as the closing of the stock purchase from Loral and PSP or their respective Affiliates (provided that if a U.S. Participant holds unvested RSUs that would be eligible to vest pursuant to this Section 9, such U.S. Participant shall be deemed to have accepted such offer with respect to such unvested RSUs).  To the extent necessary to permit the sale, additional RSUs shall vest immediately prior to the close of sale and purchase in order of the next vesting tranches. From and after a Roll Up Transaction, for purposes of this Section 9, each reference to “Loral” shall be disregarded.
		10.	Representations of the Participant

		a.	By accepting and executing this Grant Agreement, the Participant represents, warrants and acknowledges:

	i.		that he or she requested and is satisfied that the foregoing be drawn up in the English language. Le soussigné reconnaît qu’il a exigé que ce qui précède soit rédigé et exécuté en anglais et s’en déclare satisfait; 

	ii.		his or her participation in the trade and acceptance of the RSUs is voluntary; 

	iii.		that he or she has not been induced to participate in the Plan by expectation of engagement, appointment, employment, continued engagement, continued appointment or continued employment, as applicable, with the Corporation or its Affiliates; 

	iv.		that he or she has received, or has had the opportunity to receive independent legal advice in connection with the terms and conditions of this Grant Agreement and the Plan (including the consequences of the cession of the Participant’s Employment upon the RSUs); 

	v.		that the grant of the RSUs does not create the right or expectation for any additional grants of RSUs even if the Participant has been repeatedly awarded grants of RSUs; 

	vi.		that RSUs do not form an integral part of the Participant’s compensation from employment, if applicable;

	vii.		he or she has received a copy of the Plan, including the Accession Agreement attached thereto as Schedule B; 

	viii.		the terms and conditions of the Plan are fair and reasonable; 

	ix.		he or she has read and understood the Plan and this Grant Agreement, and agrees to the terms and conditions thereof including, without limitation, those terms, conditions and definitions set out in Section 4.6 [Limitation on Transfer], Section 4.7 [Cessation of Service], Section 4.8 [Call Right], Section 4.9 [Lockup],  Section 4.12 [Unanimous Shareholders Agreement], and Section 4.13 [Roll Up Transaction] of the Plan, and Section 2 [Drag Along Rights], Section 3 [Tag Along Rights], Section 4 [Sale Procedures] and Section 5 [Revised Vesting Period and Forfeiture] of this Grant Agreement; 

	x.		until such time as the Shares or the Common Shares or any other share convertible into Common Shares, or any successor security of the Corporation, regularly 

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			trades in, on or through the facilities of one or more securities exchanges and/or inter-dealer quotation systems in Canada or elsewhere, no settlement or exercise/surrender of RSUs shall be effective and no Shares shall be issued to the Participant in connection therewith until the Participant has executed an Accession Agreement, which Accession Agreement has been reviewed by the Participant; 

	xi.		among other provisions, the Plan contains a “call-right” and agrees that such “call-right” may be exercised by the Corporation or its designee (with the Corporation having the right to enforce the right of the designee).

		b.	For absolute certainty, by accepting and executing this Grant Agreement, the Participant specifically represents, warrants and acknowledges that he or she has read and understood the terms and conditions set out in Section 4.7 of the Plan which (i) state that a Participant shall have no entitlement to damages or other compensation whatsoever arising from, in lieu of, or related to not receiving any RSUs which would have vested or been granted after their Termination Date including but not limited to damages in lieu of notice at common law; and (ii) have the effect that no period of contractual or common law reasonable notice that exceeds the Participant’s minimum statutory notice period under applicable employment standards legislation (if any), shall be used for the purposes of calculating an Participant’s entitlement under the Plan. By accepting and executing this Grant Agreement, the Participant further waives any eligibility to receive damages or payment in lieu of any forfeited RSUs under the Plan that would have vested or accrued during any contractual or common law reasonable notice period that exceeds an Participant’s minimum statutory notice period under the applicable employment standards legislation (if any).

		11.	Transfer of Shares

No Shares issued to the Participant in connection with the settlement or exercise/surrender of RSUs granted under the Plan shall be transferred except subject to the terms set forth in Exhibit A of this Grant Agreement.
		12.	Miscellaneous

This Grant Agreement is governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein. Time is of the essence of this Grant Agreement. This Grant Agreement will enure to the benefit of and will be binding upon the parties and their heirs, attorneys, guardians, estate trustees, executors, trustees and administrators and the successors of the Corporation.
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IN WITNESS WHEREOF the parties have executed this Grant Agreement. 
TELESAT CANADA
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/s/ Chris DiFrancesco
Authorized Signing Officer 
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LORAL SPACE & COMMUNICATIONS INC.
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/s/ Avi Katz
Authorized Signing Officer 
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PUBLIC SECTOR PENSION INVESTMENT BOARD
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/s/ Guthrie Stewart
Authorized Signing Officer 
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/s/ David Morin
Authorized Signing Officer 
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4440480 CANADA INC. 
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/s/ Avi Katz
Authorized Signing Officer 
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Participant’s Acknowledgement
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By signing below, I acknowledge that my execution of the Grant Agreement is done freely and voluntarily, without inducement or duress, having had an opportunity to review, make inquiries, and seek independent legal advice as to the terms and conditions of the Grant Agreement and the Plan.
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Agreed to and accepted this 23rd day of April, 2021.
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/s/ Michael Schwartz
Michael Schwartz 

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Exhibit A To the Grant Agreement
The Participant may not transfer any Shares or other securities received upon the exercise (for a Non-U.S. Participant) or settlement (for a U.S. Participant) of RSUs, or shares resulting from the conversion of the Shares into other Equity Shares, or any interest therein, (in this Exhibit A, “Shares”) to any person except as permitted herein:
	(1)	The Participant may transfer Shares to a Permitted Transferee as defined in Section 4.6(3) of the Plan (with the prior consent of the Board, which consent may be withheld in the Board’s sole discretion), subject to compliance with the conditions precedent set out in Section 4.6(4) of the Plan, modified as need be to contemplate a transfer of Shares, instead of a transfer of an RSU;

	(2)	Prior to the completion by the Corporation of an Initial Public Offering for Equity Shares of the Corporation, there shall be no transfer of Shares except as provided in (1) above, or as otherwise expressly provided in the Grant Agreement.

	(3)	After the completion of an Initial Public Offering for Equity Shares of the Corporation, the Participant shall be entitled to sell without restriction the Selldown Percentage of Shares acquired by the Participant upon vesting of the Award (and Shares subject to the Award which have vested). The “Selldown Percentage” shall equal (a) the percentage of all Equity Shares as shall have been sold by PSP or Loral (and their Permitted Transferees as defined in the Accession Agreement) in the Initial Public Offering or after the Initial Public Offering (other than sales to PSP, Loral or a Permitted Transferee as defined in the Accession Agreement) relative to the number of Equity Shares held by PSP and Loral immediately prior to the Initial Public Offering or (b) 100% if PSP, Loral and their Permitted Transferees (as defined in the Accession Agreement) cease to hold at least 70% of all Equity Shares following the Initial Public Offering.

	(4)	The Participant shall be entitled to participate in any public offering of Common Shares of the Corporation including an initial public offering in the manner provided in Sections 6.03 and 6.04 of the Unanimous Shareholders Agreement, but with the status only of “Included Holder” as defined in Section 6.03, provided that in no event shall the number of shares subject to such participation exceed the Selldown Percentage. 

	(5)	References on this Schedule to PSP or Loral shall also include their respective subsidiaries owning Equity Shares.

	(6)	This Exhibit “A” shall cease to apply upon the occurrence of a Roll Up Transaction. 

	(7)	Definitions: 

		(a)	“Competitor” is any corporation, firm, partnership, proprietorship or other entity which engages in the Satellite Business (as defined below) in any of the same countries, states, provinces or other political subdivisions of countries in which the Corporation or its Subsidiaries are engaged in the Satellite Business as of the Participant’s Termination Date and is a material competitor of the Corporation (or its Subsidiaries) in such countries, states, provinces or other political subdivisions of countries with respect to a material amount of Satellite Business of the Corporation and its Subsidiaries (what is material being determined based on the 5-year business plan in effect for the Corporation and its Subsidiaries as of the Participant’s Termination Date).

		(b)	“Satellite Business” shall mean the business of communication of electronic video, data, voice or other information by transmission by satellite operating in the Fixed Satellite Service frequencies for hire in any of the geographic areas in which the Corporation or its Subsidiaries operate such Fixed Satellite Service frequencies as of the Participant’s Termination Date.

113036035​

​Document

Exhibit 10.3
[Employers Letterhead]

SEPARATION AND RELEASE AGREEMENT

    This Agreement made and entered into this 17th day of March, 2021, by and between Employers Holdings, Inc. (hereinafter referred to as the “Company” or “Employer”) and  Stephen V. Festa  (hereinafter referred to as “Employee”) (and individually referred to as the “Party,” and collectively referred to as the “Parties”).
WITNESSETH:
WHEREAS, Employee has been employed by the Company in the position of Executive Vice President, Chief Operating Officer; and
WHEREAS, Employee and the Company are parties to that certain employment agreement dated June 26, 2017, and effective January 1, 2018 (the “Employment Agreement”), which is incorporated herein by reference; and
WHEREAS, the Employee has notified the Company of his intention to retire; and
WHEREAS, the Company and Employee have mutually agreed that it is in the best interests of the Parties to terminate their employment relationship effective March 17, 2021 (the “Separation Date”); and
WHEREAS, the Company has agreed to treat Employee’s retirement as a termination without Cause (as defined in the Employment Agreement) for purposes of the Employment Agreement, and also, for purposes of the annual bonus program and outstanding equity awards, as a termination without cause, as such terms or equivalent terms are defined in the applicable grant agreements or letter; and 
WHEREAS, pursuant to the terms of the Employment Agreement, the Employee is voluntarily executing this separation and release agreement (this “Agreement”) as a condition of receiving the severance and benefits described in Section 7(a)(i) and 7(a)(ii) of the Employment Agreement; and
    WHEREAS, the Parties wish to resolve any and all disputes, claims, complaints, grievances, charges, actions, petitions and demands that Employee may have against the Company and any of the Releasees as defined below, including, but not limited to, anything arising out of or in any way related to Employee’s employment with or separation from the Company. 
    NOW, THEREFORE, in consideration of the terms, covenants and conditions hereafter set forth, the Parties hereto do now mutually agree as follows:
1.        Employee’s last day of employment is the Separation Date.  
2.      The Parties agree that provided the Company receives an executed original of this Agreement from Employee in accordance with the terms of Sections 24 and 26 of this Agreement Employee shall be entitled to the severance payments and/or benefits to which he would be entitled pursuant to Sections 7(a)(i) and 7(a)(ii) of the Employment Agreement (the “Severance”). Employee acknowledges and agrees that neither the Company nor its counsel has made any representations to Employee regarding the tax consequences of any amounts received by Employee pursuant to this Agreement.  Employee agrees to pay any federal and/or state taxes 

that are required to be paid by Employee with respect to the Severance beyond the amount of any withholding by the Company.
3.     The Company agrees to pay Employee all regular wages, and all accrued and unpaid floating holiday and vacation pay, if any, and to reimburse Employee for all regular and customary work-related expenses, in each case, incurred up through the Separation Date, consistent with its normal practices, regardless of whether Employee has executed this Agreement.  
4.     The payments and benefits under this Agreement are intended to comply with or be exempt from Section 409A of the Internal Revenue Code of 1986, as amended.  
5.     The Parties agree that this Agreement does not terminate any rights that Employee might have pursuant to any grant letter under the annual cash bonus program or any grant agreement issued to Employee pursuant to the terms of the Employers Holdings, Inc. Equity and Incentive Plan (each, a “Grant Agreement”).  Employee expressly agrees that for the purpose of the above referenced Grant Agreement(s), Employee's termination will be considered an “involuntary termination”, an “involuntary termination without cause”, a “termination for any other reason” or a “termination of employment other than by reason of death, retirement or disability” as appropriate to the specific Grant Agreement. 
6.     Employee acknowledges that Employee is not entitled to any compensation other than the compensation expressly set forth in this Agreement, and that other than as set forth herein, the Company has paid or provided all salary, wages, bonuses, accrued vacation/paid time off, premiums, leaves, housing allowances, relocation costs, interest, severance, outplacement costs, fees, reimbursable expenses, commissions, stock, stock options, vesting, and any and all other benefits and compensation due to Employee through the Separation Date.  
7.      Subject to Section 2 above, Employee’s health benefits shall cease on the last day of the month in which the Separation Date occurs, subject to Employee’s right to continue Employee’s health insurance pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), or similar state law.  
8.    Pursuant to Section 7(c)(iii) of the Employment Agreement, Employee hereby reaffirms the covenants contained in the Employment Agreement as if such covenants were set forth herein, including, but not limited to, any and all non-competition, non-solicitation, confidential information, cooperation, anti-assignment and other provisions set forth in Sections 7(b) and (c), 10, 11 and 12 of the Employment Agreement, and (b) all such provisions shall be incorporated herein by reference. 
9.     Employee agrees that Employee will not disparage or discredit any of the Releasees, as defined herein in Section 13, and agrees to refrain from any tortious interference with the contracts and relationships of any of the Releasees. The Company agrees that it will not disparage or discredit Employee and that it will respond to any inquiries about Employee’s employment history with the dates of employment and job title.  
10.    Employee understands that Employee is eligible for employment with Company (including, without limitation, all parents, affiliates, subsidiaries, and divisions) in the future, subject to the employment needs of the Company. 
11.    Employee represents that he has returned any and all equipment, software, data, property and information of any of the Company Affiliates, including documents and records or copies thereof relating in any way to any proprietary information of any of the Company Affiliates whether prepared by Employee or any other person or entity.  In addition, Employee further 

agrees that he will not retain any Company property or proprietary information of any of the Company Affiliates after the Separation Date.  
12.    Employee represents, by executing this Agreement, that Employee has not made, and will not make, any assignment of any claim, cause or right of action, or any right of any kind whatsoever, arising from or associated with the employment of Employee or the matters which are released by this Agreement. 
13.      Employee agrees to and does release the Company, including but not limited to the Company’s predecessors, successors, assigns, parents, subsidiaries, or affiliates, any professional employer organization or co-employer, and the current or former officers, directors, agents, investors, shareholders, and employees of such entities (collectively, the “Releasees”), from any and all liability arising from or associated with Employee’s employment relationship with Company and this Agreement up to and including the date of this Agreement.  This release includes any and all claims or disputes Employee has or believes Employee may have arising under any federal, state, local or foreign statute or regulation, including, without limitation, those relating to unfair or discriminatory employment practices or wage and hour or wage collection laws, including but not limited to, the Age Discrimination in Employment Act of 1967 (ADEA), the Older Workers’ Benefit Protection Act, Title VII of the Civil Rights Act of 1964, the Americans With Disabilities Act,  the Equal Pay Act, the Employee Retirement Income Security Act of 1974, the Consolidated Omnibus Budget Reconciliation Act of 1985, the Internal Revenue Code, the Family and Medical Leave Act, the Workers Adjustment and Retraining Act, federal and state whistleblower laws, and any federal or state law or local ordinance dealing with employment compensation, discrimination, retaliation or wrongful discharge (and any and all amendments to any and all of the foregoing laws or ordinances).  This release also includes claims based on theories of contract or common law, including but not limited to breach of contract, wrongful discharge under any theory, constructive discharge, intentional or negligent infliction of emotional distress, negligent hiring, negligence, misrepresentation, invasion of privacy, defamation, interference with contract and/or prospective economic advantage.  Employee understands that this list is not intended to be exhaustive but merely illustrative; provided, however, that nothing contained herein shall be construed as a waiver or release of (i) the Company's breach of its  obligations under this Agreement; (ii) any vested benefits Employee has in the Company's 401(k) Plan as of the Separation Date; and (iii) any claim or cause of action that cannot legally be waived by private agreement, including without limitation any claim for workers' compensation benefits, unemployment benefits, or state or federal disability benefits.  
14.    If Employee is over the age of forty (40) on the Separation Date, this Agreement extends to all claims of whatsoever type or nature, including but not limited to any possible claim under the Federal Age Discrimination in Employment Act, 29 U.S.C. §§ 621-635 as amended by the Older Workers' Benefit Protection Act (“OWBPA”) (Pub. Law 101-433, 104 Stat. 978), which, among other things, establishes minimum standards for validity of waivers of claims under the ADEA.  With respect to this waiver of any ADEA claim, Employee states:
a. This waiver is knowing and voluntary;
b. This Agreement is clear and understandable, and Employee needs no further time to consider it;
c. Employee understands that this waiver applies only to rights or claims arising on or before the date Employee signs this waiver (set forth below);

d. Employee has been advised in writing to consult with an attorney before signing this waiver through the presentation of this Agreement and has either consulted with an attorney or has voluntarily elected not to seek the advice of any attorney;
e. Employee has been given a period of at least twenty-one (21) calendar days to consider this waiver, although Employee is free to sign it sooner; and
    f. Employee understands that this waiver of any claim under the ADEA may be revoked by Employee at any time within a period of seven (7) calendar days after Employee’s execution of this Agreement, and that Employee’s waiver of any claim under the ADEA will not become effective or enforceable until such revocation period has passed.  To revoke any claim under the ADEA, Employee must send a written notice announcing the revocation, certified mail, return receipt requested, to John Mutschink, EMPLOYERS, 10375 Professional Circle, Reno, Nevada 89521-4802 or via e mail to jmutschink@employers.com. The Parties agree that changes, whether material or immaterial, do not restart the running of the 21-day period.  
15.    Employee acknowledges that Employee has been advised to consult with legal counsel and that Employee is familiar with the principle that a general release does not extend to claims that the releaser does not know or suspect to exist in Employee’s favor at the time of executing the release, which, if known by Employee, must have materially affected Employee’s settlement with the releasee. Employee, being aware of said principle, agrees to expressly waive any rights Employee may have to any claim Employee does not know or suspect to exist in Employee’s favor at the time of executing this Agreement, as well as under any other statute or common law principles of similar effect.
16.    Nothing in this Agreement shall be construed to (a) prohibit Employee from filing a charge or complaint or participating in any investigation or proceeding conducted by the Equal Employment Opportunity Commission, National Labor Relations Board, Securities and Exchange Commission, or any other federal, state or local agency (the “Government Agencies”) charged with the enforcement of any laws, including providing documents or other information; or (b) prevent Employee from exercising Employee’s rights under Section 7 of the National Labor Relations Act to engage in protected, concerted activity with other employees.  Notwithstanding the foregoing, by signing this Agreement, Employee is waiving the right to recover any individual relief (including backpay, frontpay, reinstatement or other legal or equitable relief) in any charge, complaint, lawsuit or other proceeding brought by Employee or on Employee’s behalf by any third party, except for any right Employee may have to receive a payment from a government agency for information provided to the government agency.  Notwithstanding the foregoing, Employee agrees to take all reasonable precautions to prevent any unauthorized use or disclosure of any information that may constitute Confidential Information to any parties other than the Government Agencies. In addition, pursuant to the Defend Trade Secrets Act of 2016, Employee is notified that an individual will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (i) is made in confidence to a federal, state, or local government official (directly or indirectly) or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if (and only if) such filing is made under seal. In addition, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the individual’s attorney and use the trade secret information in the court 

proceeding, if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order.
17.     This Agreement shall not in any way be construed as an admission that the Company has acted wrongfully with respect to Employee or any other person, or that Employee has any rights whatsoever against the Releasees, and the Company specifically disclaims any liability to, or wrongful acts against, Employee or any other person.    
18.      Employee agrees to indemnify and hold Company harmless from and against any and all losses, costs, damages or expenses, including, without limitation, attorneys’ fees incurred arising out of any breach of this Agreement by Employee, or the fact that any representation made by Employee herein was false when made.  In any action to enforce this Agreement, or its terms, unless such action is challenging or seeking a determination in good faith of the validity of the waiver herein under the ADEA, the prevailing party shall be entitled to costs, including reasonable attorney’s fees.
19.      This is the entire Agreement between the Company and Employee and supersedes any and all prior or contemporaneous agreements, representations, negotiations, or assurances unless specifically incorporated herein.
20.      All notices and other communications required or permitted under this Agreement (other than as set forth in Section 14(f)), shall be in writing and sent by registered first class mail, postage pre-paid, by facsimile, or sent by nationally recognized express courier service.  Such notices and other communications shall be effective upon receipt at the following addresses, or such other addresses as a party shall notify to the other party:

    If to the Company:                    If to Employee:    
    Employers Holdings, Inc.                To the address (or 
    Attn:  General Counsel                facsimile number, if any) on
    10375 Professional Circle                 record with the Company
    Reno, NV 89521
    Fax: (775) 886-1818
          
    The parties shall have the right to change their addresses for future notices by way of written notice delivered pursuant to this Section.
21.    Employee represents and agrees that Employee fully understands the right to discuss all aspects of this Agreement with an attorney and that Employee has carefully read and fully understands all of the provisions of this Agreement, and that Employee is voluntarily entering into this Agreement.
22.    Employee represents and acknowledges that in executing this Agreement Employee does not rely and has not relied upon any representation or statement not set forth herein made by Company or by any of Company’s agents, representatives, or attorneys with regard to the subject matter, basis or effect of this Agreement
23.      If any provision of this Agreement is held to be invalid, void, or unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect without being impaired or invalidated in any way.
24.    If Employee is over the age of 40 on the Separation Date, this Agreement shall be null and void if not executed by Employee within twenty-one (21) days of the Separation Date.  Each Party has seven (7) days after that Party signs this Agreement to revoke it.  This Agreement will 

become effective on the eighth (8th) day after Employee has signed this Agreement, so long as it has been signed by the Parties and has not been revoked by either Party before that date (the “Effective Date”).  If Employee is under the age of 40 on the Separation Date, this Agreement shall be null and void if not executed by Employee within seven (7) days of the Separation Date.  This Agreement will become effective on the date it has been signed by both Parties (the “Effective Date”).
25.     This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada.
26.    This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement.  Employee agrees that his electronic signature on this Agreement and any other documents related to this Agreement or his employment has the same validity, enforceability, and admissibility of a handwritten signature, and consents to the electronic delivery of this Agreement and any documents related to this Agreement or his employment, to the extent permitted by applicable law.  If a copy or counterpart of this Agreement is originally executed and such copy or counterpart is thereafter transmitted electronically by facsimile or similar device, such facsimile or equivalent document shall for all purposes be treated as if manually signed by the Party whose facsimile signature appears.

It is so agreed.

/s/ Douglas D. Dirks     3/18/21             s/s Stephen V. Festa        3/17/21
Douglas D. Dirks    Date            Stephen V. Festa        Date
President and Chief Executive Officer    
Employers Holdings, Inc.

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