o

Registered shareholders – The 15-digit control number is located on the form of proxy or in the email notification you received.

o

Duly appointed proxyholders – Computershare will provide the proxyholder with an invite code after the proxy cut-off has passed.

Name	Number of Common Shares	Percentage of Class
T. Rowe Price Associates, Inc.(1)	9,973,241	11.7%

1.	Presentation of Financial Statements

2.	Election of Directors

Senior Executive Leadership

Other Public Company Board Experience

Risk and Compliance Management

Financing

Financial Expert (for Audit Committee Purposes)

Strategic Planning

M&A

Human Resources / Compensation

Corporate Governance

International Business Operations and Sales and Marketing

Technology / IT Industry

Transportation and Logistics Industry

Jane O’Hagan

✔

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✔

John J. Walker

✔

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Director	Public Company Board Membership
Deepak Chopra	Celestica (TSX:CLS) The North West Company (TSX:NWC) SunLife Financial (TSX:SLF)
Deb Close	Inter Pipeline Ltd. (listed debt securities)
Eric A. Demirian	Enghouse Systems Ltd. (TSX:ENGH) Imax Corporation (NYSE:IMAX)
Sandra Hanington	Extendicare Inc. (TSX:EXE)
Jane O’Hagan	USD Partners LP (NYSE:USDP)
John Walker	SCHULTZE Special Purpose Acquisition Corp II (Nasdaq: SAMUA, SAMA,  SAMAW)

	Year ended January 31, 2023	February 1, 2023 – May 5, 2023	Total
Board	10	3	13
Audit Committee	8	3	11
Compensation Committee	5	2	7
Corporate Governance Committee	6	1	7
Nominating Committee	7	1	8

Director	Board Meetings Attended	Audit Committee Meetings Attended	Compensation Committee Meetings Attended	Corporate Governance Committee Meetings Attended	Nominating Committee Meetings Attended
Deepak Chopra	13 of 131	11 of 11			7 of 8
Deborah Close	13 of 13		7 of 7		8 of 8
Eric A. Demirian	13 of 13	11 of 11		7 of 7
Dennis Maple	13 of 13		7 of 7		8 of 8
Chris Muntwyler	12 of 13		7 of 7	7 of 7
Jane O’Hagan	13 of 13		7 of 7	7 of 7
Edward J. Ryan	13 of 13
John J. Walker	13 of 13	11 of 11		7 of 7
Sandra Hanington	9 of 92
Kelley Irwin	9 of 93

1.

Has a process of rigorous annual director peer evaluations that allow the Chair of the Board (or in the case of the evaluation of the Chair of the Board, the Chair of the Corporate Governance Committee) to have a clear understanding of relative director contribution, skillset and expertise, so that an appropriate level of director turnover can be achieved by having one or more directors not stand for re-election at appropriate times;

2.

Maintains a director skill set and experience matrix to ensure that, in choosing director candidates, it is focused appropriately on skills and experience critical to the Board’s responsibilities, including assessing and providing input on the Corporation’s strategic and operating activities; and

3.

Provides clear disclosure in the Corporation’s management information circular of director tenure and age and an explanation of how the Corporation’s approach ensures diversity of skills, experience, background and gender and an appropriate level of turnover.

Date	Topic	Description	Director Attendance
March 1, 2022	Proxy Advisory Voting Guideline Updates and Emerging Themes in Corporate Governance	The Board received a presentation from the Corporation’s external legal counsel on the topic of key updates to the annual proxy advisory voting guidelines published by the largest proxy advisory firms and also on general developments in the area of corporate governance and ESG.	All directors
March 1, 2022	Data Privacy	The Board received a presentation from the Corporation’s EVP Product Management and its Senior Legal Counsel on the overall data privacy landscape faced by the Corporation in its operations and the approach taken by the Corporation to compliance with its data privacy obligations	All directors
May 31, 2022	Crisis Response Planning	The Board received a presentation from the Corporation’s SVP of Information Security and its General Counsel on the Corporation’s Crisis Response Plan and the key elements of that plan.	All directors
Sept 6, 2022	Director Duties in a Public Company	The Board received a presentation from the Corporation’s external counsel in the United States on the topic of director duties in a public company from an US and Securities and Exchange Commission perspective.	All directors

Dec 6, 2022

Recessionary Risks to the Industry

The Board received a presentation from the Corporation’s EVP Product Management discussing the potential impact of an economic downturn on the transportation and logistics market generally and specifically in the context of potential impact to the demand for the products and services of the Corporation.

All directors

Director	Continuing Education
Deepak Chopra	Participated in several sessions, courses and presentations conducted by both management as well as outside experts as part of board education sessions at public company boards. Areas of focus included cyber security risk oversight, emerging trends in ESG reporting and regulatory requirements, Corporate Governance and Truth and Reconciliation journey with First Nations peoples. Self-study topics included understanding impact of Open-AI, impact of remote work on the viability of Business Districts resulting implications on public transport, municipal tax base, commercial real estate and future of workplaces, understanding impact of macro-economic factors on Transportation & Logistics industries, M&A dynamics in Air-Cargo, and the accelerating stress on the postal services around the world.
Deborah Close	Attended numerous seminars conducted by the Institute of Corporate Directors, National Association of Corporate Directors and various consulting firms on topics related to oversight of cybersecurity risks, developments and trends in executive compensation, strategy development related to diversity and inclusion, and ESG considerations impacting corporate governance. Participated in an ICD one-day course, The Board’s Oversight of Strategy.  Undertook self-study through various publications covering trends pertaining to the role of the board and corporate governance.
Eric A. Demirian	Attended various ongoing continuing education courses provided by outside accounting and consulting firms, including as participant at Audit Committees and Boards of other public companies, in the areas of corporate governance, accounting and financial reporting, cyber-security, human resources and legal matters. In addition, undertook self-study of accounting, and corporate governance topics by reading trade journals and other publications.
Sandra Hanington	Attended various sessions and participated in meetings offered by outside consulting firms and organizations on topics related to strategy, risk, corporate governance and executive compensation.  In addition, undertook self-study through ICD and other publications and resources on trends in corporate governance including ESG, cyber security and executive compensation.

Kelley Irwin	Completed the Chartered Director course and achieved the C. Dir designation through the DeGroote School of Business at McMaster University. This included modules on Accountability and Change, Leadership and Strategy, Oversight and Finance, Governing under Complex Circumstances, and a two-day board simulation. In her role as a Chief Information Officer, owned and directed the cyber security function at a large corporation, and created the digital strategy.
Dennis Maple	In his current role as Chairman and CEO Goddard Systems Inc., Mr. Maple routinely designs and leads ongoing operational reviews, assigns and directs presentations from both internal personnel and external consultants. He also assigns, selects and directs advisors in the areas of leadership and team development, succession planning, managing and developing high performers, integration of performance management plans, and he is leading the corporation's evaluation of compensation programs. Additionally, in his current role, Mr. Maple is leading a major corporate IT platform transformation. Mr. Maple is also leading the development of the strategy for a new supply chain management initiative, development of a new corporate franchise development strategy, corporate growth strategy, and the revamping of several major functions including, marketing, communications, HR, and legal / risk. In 2022, Mr. Maple led the sale of Goddard Systems, Inc. on behalf of Wind River Holdings to Sycamore Partners. He also identified and initiated the development of Goddard’s Proprietary Education Program, leveraging a digital platform that will be the first in the industry. Finally, Mr. Maple is engaged in self-study in a number of areas related to management and corporate governance, including in the areas of “tone from the top,” corporate ethics, and managing in a post covid employer marketplace.
Chris Muntwyler	In his role as CEO of the consulting company Conlogic AG, Mr. Muntwyler  leads and consults in the areas of process and strategy designs in transportation and supply chain management and information technology. As a board member at Austrian Post until April 2023 he was actively involved in the strategic development of that transportation- and supply chain organization in several countries in Europe. He was also actively involved in the remuneration policies and cyber-security strategy of that organization.  He regularly attends further education programs in cyber-security, ESG development, corporate governance and risk management.
Jane O’Hagan	Attended seminars and on-line education in corporate governance matters related to emerging trends, impacts and lessons learned from the pandemic for Canadian and US issuers. Joined the Governance Professionals of Canada and attended virtual and on demand sessions in board oversight and strategy, board effectiveness. committee and director peer assessment and board education. Participated in virtual sessions on cyber-security and privacy governance focusing on risk, threat management and regulatory standards. Attended webinars in ESG to better understand the link between financial and ethical values into strategy, reporting, metrics and disclosure. Undertook a benchmarking review of shareholder engagement best practices among top North American issuers and reviewed board effectiveness and peer review programs to address policy and disclosure. Completed on-line seminars in Compensation best practices, trends in executive compensation and trends in diversity to help develop practices to improve inclusion and understand proxy advisor standards.

John J. Walker

Completed 38 hours of continuing professional education credits conducted by PWC, Deloitte, Marcum, EY and KPMG, in the following areas of study: corporate governance and risk management, accounting & financial reporting; ESG emerging trends, human capital management, tax, SEC updates and hot topics, internal controls, crisis response and crisis management, cyber security, IT data security and data privacy, enterprise wide risk oversight, supply chain and global resilience, and internal audit. In addition, undertook self-study in enterprise-wide risk management and cyber-security risk management, fraud risk, audit committee best practices and hot topics, crisis management, succession planning and talent development and internal audit best practices.

3.	Appointment of Auditors

Fiscal Year Ended	Audit Fees	Audit-Related Fees	Tax Fees	All Other Fees	Total
January 31, 2023	$767,832	$2,430	Nil	Nil	$770,262
January 31, 2022	$681,657	$2,430	Nil	Nil	$684,087

4.	Continuation, Amendment and Restatement of Shareholder Rights Plan

5.	Advisory Vote on Executive Compensation (Say-On-Pay Vote)

6.	Other Matters

Director	Audit	Compensation	Corporate Governance	Nominating
Deepak Chopra	Member			Member
Deborah Close		Chair		Member
Eric A. Demirian	Member		Member
Dennis Maple		Member		Chair
Chris Muntwyler		Member	Member
Jane O’Hagan		Member	Chair
John J. Walker	Chair		Member

•

The Audit Committee conducted seven committee meetings during the year with all members of the committee present at each of the meetings;

•

The Corporation’s independent auditors – KPMG – attend each quarterly meeting of the Committee at which the financial results are reviewed, to report on the results of their quarterly reviews of the interim financial statements and the annual audit of the financial statements and annual audit of internal controls over financial reporting;

•

At each quarterly meeting of the Audit Committee, an in-camera meeting with the independent auditor is conducted without Management present, as well as an in-camera meeting with the head of internal audit without Management present, and an in-camera meeting with the CFO without the other members of Management present; and

•

At each meeting of the Audit Committee including both the regular quarterly meetings and any of the other ad-hoc meetings held, an in-camera meeting of the members of the Audit committee and other Board members in attendance is conducted without Management present.

•

Reviewed and discussed with Management and the independent auditor the audited annual consolidated financial statements prepared by Management, and the notes disclosures and management’s discussion and analysis thereon; and

•

Reviewed and discussed with Management and the independent auditor the results of the audit of the internal control over financial reporting.

•

Reviewed the qualifications, performance and independence of the independent auditor and approved the compensation of the independent auditor;

•

Reviewed the qualifications and experience of the proposed new lead engagement partner of the independent auditor as required under the partner rotation practices of the independent auditor;

•

Approved audit and permitted non-audit services to be performed by the independent auditor;

•

Delegated authority to the Chair of the Audit Committee to approve requests received during the year for audit and permitted non-audit services to be provided by the independent auditor and reviewed and ratified the decisions of the Chair at the next meeting; and

•

Reviewed the overall scope and plan of the annual audit with the independent auditor and Management.

•

Reviewed with Management and the independent auditor prior to publication, and recommended for approval by the Board, the interim quarterly financial statements and the annual consolidated financial statements prepared by Management and the notes and management’s discussion and analysis thereon, and the related earnings press release for each quarter;

•

Reviewed the Corporation’s design plans and testing of internal controls over financial reporting in accordance with the COSO 2013 framework;

•

Reviewed Management’s reports on the effectiveness of internal control over financial reporting and disclosure controls and procedures; and

•

Reviewed the results of the Audit Committee whistle-blower hotline program.

•

Reviewed results of annual risk assessment survey;

•

Reviewed the annual fraud risk assessment prepared by management and the controls and procedures designed to monitor and manage fraud risk;

•

Received regular updates from management and external consultants on approach to cyber-security risk management and mitigation;

•

On a quarterly-basis considered the risk factors discussed by the Corporation with respect to its financial performance including any material climate-related risks; and

•

Reviewed the Corporation’s commercial insurance coverage program.

•

Reviewed the performance of the CFO, the head of internal audit and senior finance and tax staff; and

•

Reviewed Management’s annual proposed budget for the Corporation and related planning initiatives.

•

Received and reviewed quarterly reports from the internal audit function reporting directly to the Chair of the Audit Committee; and

•

Reviewed and approved the annual work plan for internal audit.

•

Reviewed a new amended and restated credit facility for the Corporation that was put in place during fiscal 2023.

•

Reviewed and recommended for Board approval the Corporation’s corporate governance framework;

•

Periodically reviewed the Corporation’s corporate governance activities and reported to the Board on these activities at quarterly Board meetings;

•

Reviewed development of and progress towards ongoing ESG initiatives, and the Corporation’s disclosure relating to those initiatives;

•

Reviewed and recommended for Board approval the statement of corporate governance practices included in this Circular;

•

Reviewed the Corporation’s governing documents including the Corporation’s Board Mandate and each of its committee charters;

•

Reviewed the Code of Conduct and recommended for Board re-approval;

•

Reviewed the Corporation’s disclosure policy;

•

Reviewed the Corporation’s director orientation program;

•

Oversaw the ongoing director education program and the selection of topics for director education sessions;

•

Reviewed the Corporation’s directors’ and officers’ liability insurance program and recommended to Management that certain enhancements to the program be made;

•

Conducted an assessment of the performance of the Board, the individual directors and each Board committee against their respective mandates;

•

Evaluated each director against independence criteria applicable to the Corporation; and

•

Reviewed, together with the Compensation Committee, the CEO’s recommendations for Management succession and development plans.

•

Considers the criteria established by the Board for the selection of new directors, which includes professional experience, personal characteristics and Board diversity, including gender diversity;

•

Maintains a list of desired competencies, expertise, skills, background and personal qualities for potential candidates for the Board;

•

Identifies and recommends to the Board individuals qualified and suitable to become Board members, taking into consideration any perceived gaps in the current Board or committee composition; and

•

Considers the experience and expertise of the independent members of the Board with a view to identification of a suitable potential successor for the Chair of the Board role.

•

Considered the overall size of the Board and recommended an increase in the size of the Board to ten directors;

•

Reviewed the composition of the Board’s committees and recommended to the Board the proposed composition of the Board’s committees having regard to succession planning within those committees in light of changes in Board composition; and

•

Successfully completed a director recruitment process whereby two new directors were added to the Board at the meeting of shareholders on June 16, 2022 adding several areas of key skills, expertise and background to the composition of the Board.

Board Diversity Matrix as of May 5, 2023
Country of Principal Executive Offices	Canada
Foreign Private Issuer	Yes
Disclosure Prohibited under Home Country Laws	No
Total Number of Directors	10

•

Complying with all social, occupational health and safety and environmental legislation applicable to the Company’s services and operations;

•

Encouraging each employee to take personal responsibility for the environmental, health, safety and sustainability matters within his/her/their department;

•

Identifying and eliminating hazards, if practical, and mitigating risks related to environmental, health, safety and sustainability matters;

•

Involving and consulting employees in addressing environmental, health, safety and sustainability risks through committees and representatives;

•

Promoting the minimization of the use of energy and the elimination, reduction, reuse and recycling of waste materials as part of Company-wide initiatives to improve the life cycle environmental effects of the Company’s services and operations;

•

Fostering awareness of sustainability principles amongst the Company’s employees;

•

Promoting the principles of this statement to the Company’s suppliers and partnering with suppliers and organizations that are ethically, socially and environmentally responsible;

•

Engaging with the communities in which the Company operates to meet community needs and to make a positive impact;

•

Continuously seeking ways to improve the Company’s performance in accordance with this statement; and

•

Providing the necessary training and resources to employees to fully implement this statement.

(a)

reducing paper usage by adopting paperless processes where possible;

(b)

adopting electronic signing processes for documents to reduce paper copies and mail/courier usage and by default requiring two-sided printing of paper documents where a paper copy is required;

(c)

adoption of several communication tools to enable remote collaboration between employees and with customers and to reduce travel where possible;

(d)

reducing the number and sizes of corporate offices wherever possible to reduce heating, cooling and electrical consumption; and

(e)

adoption of recycling programs in those jurisdictions and office locations where it is supported.

•

Providing a safe space for employees that is free of harassment, bullying and violence as expressed in the Company’s Workplace Violence and Harassment Policy and Program;

•

Promoting ethical conduct and behaviour by our employees and suppliers through adherence to the Company’s Code of Business Conduct and Ethics;

•

Protecting the privacy of our employees, customers and suppliers and others in accordance with the Company’s various privacy policies and programs including but not limited to the General Privacy Policy, Commercial Relationship Privacy Policy and Recruitment Privacy Policy;

•

Forgoing the use of forced or child labour in compliance with applicable laws and international norms;

•

Ensuring that employees and prospective employees are treated fairly and equally in the recruitment and hiring process;

•

Fostering a diverse and inclusive work environment and providing opportunities for underrepresented employee groups and communities to participate and thrive;

•

Recognizing the right of our employees to join associations of their own choosing or to refrain from joining, and the right to collective bargaining; and

•

Maintaining safe, healthy and respectful working conditions in accordance with the Company’s Environmental, Health, Safety and Sustainability Statement.

•

reviewing and making recommendations to the Board with respect to the appointment, compensation and other terms of employment of the CEO;

•

reviewing and making recommendations to the Board based on the recommendations of the CEO with respect to the appointment, compensation and other terms of employment of the CFO, the President and COO and all other officers appointed by the Board, which includes each of the NEOs (as defined herein);

•

reviewing and approving the quarterly accrual of any variable compensation in the quarterly financial results of the Corporation and confirming same to the Audit Committee for the purposes of its review of the financial results;

•

reviewing and making recommendations to the Board with respect to the Corporation’s compensation principles, policies and plans for Management, including the establishment of performance measures and evaluation processes;

•

reviewing and making recommendations to the Board with respect to the compensation arrangements for members of the Board;

•

reviewing, administering and interpreting equity-based compensation plans and making recommendations to the Board with respect to the grant of compensation thereunder;

•

administering and interpreting the Corporation’s equity ownership and retention policies applicable to members of the Board and senior Management;

•

reviewing the CEO’s recommendations respecting any major changes to the structure, organization and responsibilities of the CEO or senior Management;

•

reviewing the CEO’s recommendations respecting succession planning and executive development for the CEO, CFO, President and COO and senior Management;

•

providing risk oversight of the Corporation’s compensation policies and practices and identifying and mitigating compensation policies and practices that could encourage inappropriate or excessive risk taking by members of senior Management; and

•

reviewing and approving certain compensation disclosures prior to their public release.

Name	Position
Edward J. Ryan	Chief Executive Officer
Allan Brett	Chief Financial Officer
J. Scott Pagan	President & Chief Operating Officer
Andrew Roszko	Chief Commercial Officer
Kenneth Wood	Executive Vice President, Product Management

What we do	What we don’t do
Link executive pay to company performance through our annual and long-term incentive plans	No single-trigger change-in-control provisions
Balance among short- and long-term incentives, cash and equity and fixed and variable pay	No golden-parachute type arrangements
Compare executive compensation and company performance to relevant peer group companies	No hedging or pledging by executives or directors of equity holdings
Require executives to meet minimum stock ownership requirements	No re-pricings of underwater stock options
Maintain a compensation claw-back policy to recapture unearned incentive pay	No tax gross-ups
Provide only limited perquisites	No aspect of our pay policies or practices pose material adverse risk to the Company

1.

Attract and retain highly-qualified executive officers;

2.

Align the interests of executive officers with our shareholders’ interests and with the execution of our business strategy;

3.

Evaluate executive performance based on key financial measurements which we believe closely measure the performance of our business; and

4.

Tie compensation directly to those measurements based on achieving and overachieving predetermined objectives.

1.

Market Competitive Compensation for Attracting and Retaining Highly Qualified Executive Officers

	Revenue (in millions)	Market Capitalization (in millions)
25th Percentile	$ 337	$ 2,124
Median	$ 421	$ 3,297
75th Percentile	$ 631	$ 5,904
Descartes	$ 406	$ 7,068
Percentile Rank	P48	P78

Canadian Peers

US Peers

Enghouse Systems Ltd.	Altair Engineering Inc.	Bottomline Technologies Inc.
Kinaxis Inc	Commvault Systems, Inc.	E2Open Parent Holdings, Inc.
	Ebix, Inc.	EverCommerce Inc.
	Guidewire Software, Inc.	Manhattan Associates Inc.
Australian Peer	Progress Software Corp	Qualys, Inc.
WiseTech Global Limited	SPS Commerce Inc.	Upland Software, Inc.
		.

•

Understand the competitiveness of current pay levels for the Chief Executive Officer position relative to the Comparator Group;

•

Identify and understand any significant differences that may exist between current compensation levels for the Corporation’s CEO and market compensation levels; and

•

Serve as a basis for determining salary adjustments and short- and long-term incentive awards for Compensation Committee consideration.

2.

Aligning the Interests of the NEOs with the Interests of Descartes’ Shareholders and the Execution of our Business Strategy

i.

Base Salary and Benefits

Name	Fiscal 2022 Base Salary ($)	Fiscal 2023 Base Salary ($)	Percentage Change
Edward J. Ryan	$500,000	$550,000	10%
Allan Brett	$350,000	$400,000	14%
J. Scott Pagan	$350,000	$400,000	14%
Andrew Roszko	$300,000	$350,000	17%
Kenneth Wood	$250,000	$265,000	6%

ii.

Short-Term Incentives

Name	Base Salary ($)	On-Target STI Eligibility (% of Base Salary)	On-Target STI Eligibility ($)	Maximum STI Eligibility (% of Base Salary)	Maximum STI Eligibility ($)	Actual STI Awarded in Fiscal 2023
Edward J. Ryan	$550,000	100%	$550,000	150%	$825,000	$550,000
Allan Brett	$400,000	100%	$400,000	150%	$600,000	$400,000
J. Scott Pagan	$400,000	100%	$400,000	150%	$600,000	$400,000
Andrew Roszko	$350,000	100%	$350,000	150%	$525,000	$350,000
Kenneth Wood	$265,000	30%	$79,500	45%	$119,250	$79,500

•

Adjusted EBITDA;

•

Revenue; and

•

Cash generated from operations as a percentage of Adjusted EBITDA.

FY23 Adjusted EBITDA* Target (in millions of USD)	FY23 Adjusted EBITDA* Target Growth (as a % increase from FY22 Actual)	FY23 Adjusted EBITDA Actual (in millions of USD)	FY23 Adjusted EBITDA* Actual Growth (as a % increase from FY22 Actual)
$204.3	10%	$215.2	16%

FY23 Revenue Target (in millions of USD)	FY23 Revenue Target Growth (as a % increase from FY22 Actual)	FY23 Revenue Actual (in millions of USD)	FY22 Revenue Actual Growth (as a % increase from FY22 Actual)
$467.0	10%	$486.0	14%

Actual Cash Flow from Operations (in millions of USD)	Target Cash Flow from Operations (% of Adjusted EBITDA)	Actual Cash Flow From Operations (% of Adjusted EBITDA)*
$192.4	80-90%	89%

iii.

Long-Term Incentives

•

PSU grants which vest at the end of a three-year performance period (weighted 50%);

•

RSU grants which vest over a period of three fiscal years (weighted 25% or 35% depending on role); and

•

stock options that vest over a period of three fiscal years (weighed 15% or 25% depending on role).

RELATIVE PERFORMANCE	ADJUSTMENT FACTOR
Less than the 30th percentile	0
30th percentile	.50
50th percentile	1.00
75th percentile	1.50
90th percentile	2.00

Name	On-Target Total LTI	Value of PSUs at time of grant (and percentage of total LTI)	Value of RSUs at time of grant (and percentage of total LTI)	Value of stock options at the time of grant (and percentage of total LTI)
Edward J. Ryan	$5,400,000	$2,700,000 (50%)	$1,890,000 (35%)	$810,000 (15%)
Allan Brett	$1,907,250	$953,625 (50%)	$667,538 (35%)	$286,088 (15%)
J. Scott Pagan	$2,430,500	$1,215,250 (50%)	$850,675 (35%)	$364,575 (15%)
Andrew Roszko	$1,300,000	$650,000 (50%)	$325,000 (25%)	$325,000 (25%)
Kenneth Wood	$555,500	$277,500 (50%)	$138,750 (25%)	$138,750 (25%)

•

Which NEOs and others are eligible for a grant of options;

•

The number of options to be granted under the plan in general and to each recipient;

•

The exercise price for each stock option granted (which may not be less than fair market value of a Common Share at the date of the grant);

•

The date on which each option is granted (which may not be earlier than the date the grant is approved by the Board);

•

The vesting period;

•

The expiration date; and

•

Other material terms and conditions of each stock option grant.

3.

Evaluating Individual Executive Performance

a)

Contribution to the achievement of the Corporation’s longer-term financial and corporate development plan;

b)

Contribution to the achievement of annual corporate financial targets;

c)

Contribution to the achievement of the Corporation’s corporate development goals in acquiring businesses and integrating acquired businesses;

d)

Contribution to advancing the Corporation’s ESG Initiatives;

e)

Customer service, satisfaction and retention;

f)

Infrastructure development;

g)

Investor communication;

h)

Organizational development;

i)

Succession planning and initiatives;

j)

Strategic planning; and

k)

Other corporate and individual qualitative factors.

4.

Evaluating Overall Corporate Performance

a.

Longer-term Financial and Corporate Development Plan

b.

Annual Corporate Financial Targets

Revenue Minimum Target (millions)	Revenue High-End Target (millions)	Revenue Actual (millions)	Adjusted EBITDA Minimum Target (millions)	Adjusted EBITDA High-End Target (millions)	Adjusted EBITDA Actual (millions)
$467.0	$484.0	$486.0	$204.3	$213.6	$215.2

c.

Common Share Price

Market	January 31, 2022 (closing price)	January 31, 2023 (closing price)	% Increase
TSX	Cdn. $92.48	Cdn. $97.10	5.0%
NASDAQ	$72.77	$73.02	0.3%

	Jan 31, 2018	Jan 31, 2019	Jan 31, 2020	Jan 31, 2021	Jan 31, 2022	Jan 31, 2023
Actual Data
Descartes (DSG) (Cdn.$)	34.80	40.84	59.33	77.98	92.48	97.10
S&P/TSX Composite Index	15951.67	15540.60	17318.49	17337.02	21098.30	20767.38
NASDAQ Composite Index	7411.48	7281.74	9150.94	13070.69	14239.88	11584.55
Software & Services Industry Subgroup	5199.02	6119.32	10075.20	16553.19	15669.94	11211.38
CEO Compensation1	2331340	2651788	3314980	4687068	5926482	6157116
Nominal Data
Descartes (DSG) (Cdn.$)	100	117	170	224	266	279
S&P/TSX Composite Index	100	97	109	109	132	130
NASDAQ Composite Index	100	98	123	176	192	156
Software & Services Industry Subgroup	100	118	194	318	301	216
CEO Compensation1	100	114	142	201	254	264

d.

Shareholder Engagement

Fiscal year ended	Executive Compensation-Related Fees	All Other Fees(2)
January 31, 2023	$59,515	$53,000
January 31, 2022	$77,285	$53,000

(1)

Amounts included in this table have been converted to US dollars at the indicative foreign exchange rate on the last business day of the applicable year as reported by the Bank of Canada, which was 1 US dollar = 1.335 Canadian dollars at January 31, 2023 and 1 US dollar = 1.2719 Canadian dollars at January 31, 2022.

(2)

The Other Fees consist of an annual subscription to global compensation and benefits survey data published by Mercer and subscribed to by the Corporation’s Human Resources department independent of the relationship with Mercer as a compensation consultant to the Compensation Committee.

•

An appropriate balance of fixed and variable compensation, and an appropriate weighting of share-based compensation and short- and long-term compensation;

•

An appropriate equity ownership policy for Management;

•

Quantitative and qualitative Corporation-wide metrics used to form a balanced scorecard to determine the amount of awards to NEOs under the Corporation’s short-term incentive plans;

•

Board and Compensation Committee discretion to adjust the amount, if any, of awards under the Corporation’s short-term incentive programs, to take into account the quality of the results and the level of risk required to achieve results, with awards historically being made only out of the Corporation’s operating profits;

•

A clawback policy under which incentive compensation may be clawed back if there is misconduct of an executive resulting in a restatement of financial results;

•

A mix of equity compensation vehicles in the long-term incentive program, which measure both relative and absolute performance;

•

Periodic share-based compensation awards with overlapping vesting periods to provide ongoing retention incentives to Management and long-term share-based exposure to the risks Management undertakes;

•

Annual incentive awards that have historically been a reasonable percentage of revenues and Adjusted EBITDA to ensure an appropriate sharing of value created between management and shareholders;

•

Annual incentive awards that are not determined until the completion of the audit of the Corporation’s consolidated annual financial statements by the independent auditor;

•

An insider trading policy that prohibits hedging and restricts pledging of the Common Shares and Common Share-based incentives;

•

An organizational culture of prudent risk-taking, which is maintained by a practice of promoting from within the organization;

•

A strong shareholder outreach program designed, in part, to ensure that the Corporation’s compensation programs are aligned with shareholder interests and expectations;

•

A comprehensive Code of Conduct and Whistleblower Policy that encourages reporting of imprudent corporate behavior;

•

A Compensation Committee comprised entirely of independent directors that retains an independent compensation consultant to assist in its review of compensation, compensation governance and incentive programs;

•

A Compensation Committee charter that expressly requires the committee to provide risk oversight of Descartes’ compensation policies and practices and to identify and mitigate compensation policies and practices that could encourage excessive or inappropriate risk taking;

•

A Chair of the Board, Eric Demirian, who attends all meetings of the Compensation Committee as an ‘ex-officio’ member of the Committee and who is also a member of the Audit Committee, which allows him to inform the Compensation Committee with respect to the Corporation’s enterprise risks and financial results when making decisions in respect of compensation; and

•

Compensation Committee members, Deborah Close, Dennis Maple, Chris Muntwyler and Jane O’Hagan, who are also members of either the Corporate Governance Committee or the Nominating Committee, which ensures that compensation governance and compensation related risk are considered from a broader corporate governance perspective.

1.

the Corporation is required to prepare an accounting restatement due to non-compliance with any financial reporting requirement under applicable securities laws (the “Restatement”);

2.

the executive officer engaged in gross negligence, intentional misconduct or fraud that either caused or significantly contributed to the non-compliance resulting in the Restatement; and

3.

the executive officer was over-compensated as a result of the Restatement.

Position	Equity Ownership Level as a Multiple of Annual Base Salary
CEO	6X
President & COO	4X
Chief Financial Officer	4X
Other NEOs	1X

•

Common Shares are included and valued at Market Value;

•

CRSUs and vested RSUs are included and valued at Market Value at the date of measurement.  Any RSUs that are not yet vested are not included in this calculation;

•

Vested PSUs are included and valued at Market Value at the date of measurement. Any PSUs that are subject to a vesting condition or future performance condition are not included in this calculation until fully vested or earned; and

•

Options are given no value under the terms of the policy.

Name	Multiple of Base Salary	Minimum Equity Ownership Level Required ($)	Market Value of Common Shares Held ($)	Market Value of vested Share Units Held (vested RSUs and vested PSUs) ($)	Market Value of cash-settled Share Units Held (cRSUs) ($)	Value of Holdings per Equity Ownership Policies ($)	Minimum Equity Ownership Level Achieved?
Edward J. Ryan	6X	3,300,000	-	41,130,457	-	41,130,457	Yes
Allan Brett	4X	1,600,000	2,705,366	15,019,267	-	17,724,633	Yes
J. Scott Pagan	4X	1,600,000	15,104,370	25,182,632	-	40,287,002	Yes
Andrew Roszko	1X	350,000	270,537	997,585	7,034	1,275,156	Yes
Kenneth Wood	1X	265,000	431,622	452,878	11,904	896,404	Yes

Name	Market Value of Common Shares Held ($)	Market Value of vested RSUs ($)	Market Value of vested PSUs ($)	Market Value of cash-settled Share Units Held (cRSUs) ($)	Value of unexercised in-the-money options1	Total
Edward J. Ryan	-	13,614,176	27,516,281	-	4,782,322	45,912,779
Allan Brett	2,705,366	4,940,927	10,078,340	-	2,572,437	20,297,070
J. Scott Pagan	15,104,370	8,225,473	16,957,159	-	3,698,929	43,985,931
Andrew Roszko	270,537	441,052	556,533	7,034	3,971,378	5,246,534
Kenneth Wood	431,622	203,289	249,589	11,904	1,133,888	2,030,292

•

Mr. Ryan has significant tenure with the Corporation in a senior executive role;

•

During Mr. Ryan’s tenure in a senior executive role, and since his appointment to the role of Chief Executive Officer, the Corporation has achieved superior financial performance and executed on its long-term and corporate development strategy;

•

During the past years of Mr. Ryan’s tenure, the performance of the Common Shares exceeded that of the S&P/TSX Composite Index and the NASDAQ Composite Index and tracked slightly under the S&P/TSX Composite Index “Software &Services” industry subgroup index;

•

Mr. Ryan developed a strong relationship with many of the significant shareholders of the Corporation, and the Board of Directors receives positive feedback regarding Mr. Ryan and his performance through its shareholder engagement process; and

•

Mr. Ryan played an integral role in the steady increase in the Corporation’s revenues and the completion of various acquisitions and financing transactions over the past fiscal year.

•

Mr. Brett has significant experience in the role of a Chief Financial Officer to a publicly traded company with international operations;

•

Mr. Brett has demonstrated his abilities and knowledge in several areas that have added value to the Corporation since his appointment, including in the areas of capital market transactions, merger and acquisition integration, taxation, business planning and overall financial management and financial reporting; and

•

Mr. Brett has played a key role in capital market transactions, including putting in place a restated credit facility that assists the Corporation in executing against its business plan and executing on a public offering of Commons Shares of the Corporation.

•

The scope of Mr. Pagan’s role is broader than comparable roles at peer companies;

•

Mr. Pagan had served in a senior executive role for more than 10 years;

•

During such time, the Corporation has achieved superior financial performance and executed on its long-term and corporate development strategy;

•

During the past five years of Mr. Pagan’s tenure, the performance of the Common Shares exceeded that of the S&P/TSX Composite Index and the NASDAQ Composite Index and tracked slightly under the S&P/TSX Composite Index “Software &Services” industry subgroup index; and

•

Mr. Pagan played an integral role in the steady improvement in the Corporation’s operating performance and the completion of various acquisitions and financing transactions.

Name and Principal Position	Fiscal Year Ended Jan. 31	Salary1	Share- based Awards2	Option- based Awards3	Annual Non-Equity Incentive Plan compensation4	All Other Compensation5	Total Compensation
		($)	($)	($)	($)	($)	($)
Edward J. Ryan Chief Executive Officer	2023 2022 2021	537,500 485,000 440,000	4,302,402 4,097,288 3,305,797	765,214 592,194 499,271	550,000 750,000 440,000	2,000 2,000 2,000	6,157,116 5,926,482 4,687,068
Allan Brett Chief Financial Officer	2023 2022 2021	383,333 333,333 300,000	1,519,612 1,523,671 1,333,664	270,269 220,218 200,307	400,000 367,500 200,000	10,757 9,931 9,474	2,583,971 2,454,653 2,043,445
J. Scott Pagan President & COO	2023 2022 2021	383,333 333,333 300,000	1,936,497 1,882,214 1,706,026	344,411 272,041 255,549	400,000 446,250 252,000	10,757 9,931 9,474	3,074,998 2,943,769 2,523,049
Andrew Roszko Chief Commercial Officer	2023 2022 2021	333,333 283,333 250,000	917,823 739,461 440,650	1,186,0676 197,392 211,949	350,000 450,000 225,000	9,812 7,189 –	2,797,035 1,677,375 1,127,599

Kenneth Wood Executive Vice President, Product Management

2023 2022 2021

261,250 242,500 220,000

391,825 369,762 245,086

131,078 98,705 139,440

79,500 112,500 55,000

2,000 2,000 2,000

865,653 825,467 661,526

Total Compensation of NEOs in Fiscal 2023 as a percentage of the Corporation’s total revenue in Fiscal 2023

3.18%

	Option-based Awards1					Share-based Awards1
Name	Grant Date	Number of securities underlying unexercised options	Option Exercise Price2	Option Expiration Date	Value of unexercised in-the-money options3	Number of shares or units of shares that have not vested4,5	Market or payout value of share-based awards that have not vested5,6	Market or payout value of vested share-based awards not paid out or distributed7
		(#)	($)		($)	(#)	($)	($)
Edward J. Ryan	April 13, 2018	34,135	27.30	April 13, 2025	1,551,033
	April 13, 2019	34,193	37.75	April 13, 2026	1,196,115
	April 12, 2020	33,851	38.64	April 12, 2027	1,154,230
	Dec 7, 2020	11,392	55.18	Dec 7, 2027	199,936
	April 14, 2021	35,596	61.33	April 14, 2028	406,088
	April 14, 2022	42,161	60.30	April 14, 2029	524,249
						136,098	9,937,876	35,404,039
Allan Brett	April 15, 2016	12,205	18.57	April 15, 2023	661,081
	April 13, 2017	12,505	22.40	April 13, 2024	629,465
	April 13, 2018	12,526	27.30	April 13, 2025	569,159
	April 13, 2019	15,122	37.75	April 13, 2026	528,987
	April 12, 2020	14,971	38.64	April 12, 2027	510,472
	Dec 7, 2020	3,625	55.18	Dec 7, 2027	63,621
	April 14, 2021	13,237	61.33	April 14, 2028	151,011
	April 14, 2022	14,891	60.30	April 14, 2029	185,161
						51,035	3,726,576	12,123,511
J. Scott Pagan	April 15, 2016	21,090	18.57	April 15, 2023	1,142,336
	April 13, 2017	20,597	22.40	April 13, 2024	1,036,793
	April 13, 2018	18,790	27.30	April 13, 2025	853,784
	April 13, 2019	20,163	37.75	April 13, 2026	705,327
	April 12, 2020	19,961	38.64	April 12, 2027	680,618
	Dec 7, 2020	4,039	55.18	Dec 7, 2027	70,887
	April 14, 2021	16,352	61.33	April 14, 2028	186,548
	April 14, 2022	18,976	60.30	April 14, 2029	235,956
						64,762	4,728,921	26,038,494
Andrew Roszko	April 13, 2018	2,763	27.30	April 13, 2025	125,546
	April 13, 2019	6,758	37.75	April 13, 2026	236,403
	April 13, 2019	100,000	37.75	April 13, 2026	3,498,127
	April 12, 2020	9,426	38.64	April 12, 2027	321,402
	Dec 7, 2020	8,199	55.18	Dec 7, 2027	143,897
	April 14, 2021	11,865	61.33	April 14, 2028	135,359
	April 14, 2022	16,917	60.30	April 14, 2029	210,354
	June 17, 2022	50,000	57.24	June 17, 2029	774,532
						24,485	1,787,895	430,234
Kenneth Wood	April 13, 2018	9,499	27.30	April 13, 2025	431,617
	April 13, 2019	13,615	37.75	April 13, 2026	476,270
	April 12, 2020	13,479	38.64	April 12, 2027	459,599
	Dec 7, 2020	3,677	55.18	Dec 7, 2027	64,533
	April 14, 2021	5,933	61.33	April 14, 2028	67,685
	April 14, 2022	7,222	60.30	April 14, 2029	89,802
						11,299	825,053	214,606

Name	Option-based awards – Value vested during the year1	Share-based awards – Value vested during the year2	Non-equity incentive plan compensation – Value earned during the year3
	($)	($)	($)
Edward J. Ryan	794,801	5,308,919	550,000
Allan Brett	314,039	2,219,516	400,000
J. Scott Pagan	403,119	2,909,263	400,000
Andrew Roszko	993,937	303,164	350,000
Kenneth Wood	237,953	179,289	79,500

Name	Shares acquired on exercise during the year	Aggregate Value Realized1	Unexercised options at the end of the year2
	(#)	($)	(#)
Edward J. Ryan	Nil	Nil	191,328
Allan Brett	Nil	Nil	99,082
J. Scott Pagan	Nil	Nil	139,968
Andrew Roszko	Nil	Nil	205,928
Kenneth Wood	4,825	183,458	53,425

-

The termination without cause of the NEO;

-

A material adverse change to the NEO’s terms of employment; and/or

-

A change of control of the Corporation.

•

We are required to pay the NEO his base salary and on-target short-term compensation for up to two years.

•

We are required to pay the NEO his base salary for up to one year and an amount equal to his annual average short-term compensation received over the two preceding years.

•

We are required to pay the NEO his base salary for up to one year and an amount equal to his on-target short-term compensation for the then current year.

•

We are required to pay the NEO his base salary for up to one year, subject to a 50% reduction of the unpaid balance of such severance amount from the date the departed NEO finds alternate employment prior to the end of the one-year period.

•

A Change in Control as described in the section below which results in a material change of the NEO’s position, duties, responsibilities, title or office which were in effect immediately prior to such a change in control;

•

A material reduction by the Corporation of the NEO’s salary, benefits or any other form of remuneration payable by the Corporation; or

•

A material breach of the employment agreement between the Corporation and the NEO that is committed by the Corporation.

•

A Corporate Transaction; and

•

The surviving, successor or acquiring entity does not assume the outstanding Share Units;

•

A “Change of Control” includes:

o

A transaction in which any person or group acquires ownership of more than 50% of the Corporation’s Common Shares, on a fully-diluted basis;

o

During any two-year period, directors, including any additional director whose election was approved by a vote of at least a majority of the directors then in office or who were appointed by the directors then in office, cease to constitute a majority of the Board;

o

A transaction which results in more than 50% of the Corporation’s Common Shares, on a fully-diluted basis, being held by any person or group other than the Corporation’s shareholders immediately preceding the transaction; or

o

There is a transaction to sell all or substantially all of the assets of the Corporation;

•

A “Corporate Transaction” is defined as any of the following:

o

A capital reorganization, amalgamation, arrangement, plan of arrangement or other scheme or reorganization;

o

An offer for Common Shares, where the Common Shares subject to the offer, together with the offeror’s Common Shares and Common Shares of any person or company acting jointly or in concert with the offeror, constitute in the aggregate 20% or more of the Common Shares;

o

An acquisition by a person of Common Shares such that the Common Shares acquired, together with the person’s Shares and Shares of any person or company acting jointly or in concert with such person, constitute in the aggregate 20% or more of the Common Shares outstanding immediately after such acquisition, unless another person has previously acquired and continues to hold Common Shares that represent a greater percentage than the first-mentioned person;

o

A sale of all or substantially all of the assets of the Corporation or any subsidiary; or

o

An extraordinary distribution to shareholders, including extraordinary cash dividends, dividends in kind and return of capital.

Name	Event	Salary ($)	Short-term ($)	Stock Options ($)	Share Units ($)	Total ($)
Edward J. Ryan	Termination Without Cause	1,100,000	1,100,000	–	5,289,812	7,489,812
	Termination Without Cause Within 12 Months of Change of Control	1,100,000	1,100,000	484,865	9,937,876	12,622,741
	Solely Upon Change of Control	–	–	–	–	–

Allan Brett	Termination Without Cause	400,000	383,750	–	2,060,868	2,844,618
	Termination Without Cause Within 12 Months of Change of Control	400,000	383,750	173,781	3,726,576	4,684,107
	Solely Upon Change of Control	–	–	–	–	–
J. Scott Pagan	Termination Without Cause	800,000	800,000	–	2,624,801	4,224,801
	Termination Without Cause Within 12 Months of Change of Control	800,000	800,000	219,483	4,728,921	6,548,404
	Solely Upon Change of Control	–	–	–	–	–
Andrew Roszko	Termination Without Cause	350,000	350,000	–	833,183	1,533,183
	Termination Without Cause Within 12 Months of Change of Control	350,000	350,000	–	1,774,313	2,474,313
	Solely Upon Change of Control	–	–	–	–	–
Kenneth Wood	Termination Without Cause	265,000	–	–	384,110	649,110
	Termination Without Cause Within 12 Months of Change of Control	265,000	–	–	802,490	1,067,490
	Solely Upon Change of Control	–	–	–	–	–

Retainer	Fiscal 2022 Amounts	Fiscal 2023 Amounts
Annual Base Retainer – Non-Executive Chair	$135,000	$135,000
Annual Base Retainer – All Other Non-Executive Directors	$60,000	$60,000
Audit Committee Retainer	$28,000 – Chair $14,000 – Member	$28,000 – Chair $14,000 – Member
Compensation Committee Retainer	$14,000 – Chair $7,000 – Member	$14,000 – Chair $7,000 – Member
Corporate Governance Committee Retainer	$14,000 – Chair $5,250 – Member	$14,000 – Chair $5,250 – Member

Nominations Committee Retainer	$7,000 – Chair $3,500 – Member	$7,000 – Chair $3,500 – Member
Annual Equity Grant – Non-Executive Chair	$200,000	$200,000
Annual Equity Grant – All Other Non-Executive Directors	$175,000	$175,000

Name	Fees Earned1 ($)	Share-based Awards2 ($)	Total3 ($)
Deepak Chopra	77,500	175,000	252,500
Deborah Close	80,500	175,000	255,500
Eric A. Demirian - Chair	135,000	200,000	335,000
Sandra Hanington	37,438	175,000	212,438
Kelley Irwin	37,438	175,000	212,438
Dennis Maple	75,500	175,000	250,500
Chris Muntwyler	75,250	175,000	250,250
Jane O’Hagan	84,000	175,000	259,000
John J. Walker	96,250	175,000	271,250

	Share-based Awards
Name	Number of shares or units of shares that have not vested	Market or payout value of share-based awards that have not vested	Market or payout value of vested share-based awards not paid out or distributed1
	(#)	($)	($)
Deepak Chopra	–	–	761,234
Deborah Close	–	–	2,782,719
Eric A. Demirian	–	–	4,752,726
Sandra Hanington	–	–	217,088
Kelley Irwin	–	–	213,145
Dennis Maple	–	–	1,902,901
Chris Muntwyler	–	–	756,487
Jane O’Hagan	–	–	4,092,625
John J. Walker	–	–	5,210,415

Name	Option-based awards – Value vested during the year ($)	Share-based awards – Value vested during the year1 ($)
Deepak Chopra	–	252,500
Deborah Close	–	175,000
Eric A. Demirian	–	200,000
Sandra Hanington	–	193,719
Kelley Irwin	–	175,000
Dennis Maple	–	250,500
Chris Muntwyler	–	250,250
Jane O’Hagan	–	259,000
John J. Walker	–	271,250

Position	Equity Ownership Level as a Multiple of Annual Base Retainer
Non-Management Director	3X

Name	Minimum Equity Ownership Level ($)	Value of Holdings per Equity Ownership Policies(1) ($)	Minimum Equity Ownership Level Achieved?
Deepak Chopra	180,000	845,852	Yes
Deborah Close	180,000	2,945,680	Yes
Eric A. Demirian	405,000	5,804,016	Yes
Sandra Hanington	180,000	372,799	Yes
Kelley Irwin	180,000	225,628	Yes
Dennis Maple	180,000	2,054,223	Yes
Chris Muntwyler	180,000	839,746	Yes
Jane O'Hagan	180,000	4,375,737	Yes
John Walker	180,000	5,984,966	Yes

Plan Category	Plan	As of	(A) Number of Common Shares to be issued upon exercise of outstanding options, warrants and rights(1) (#)	(B) Weighted-average exercise price of outstanding options, warrants and rights(2) ($)	(C) Number of Common Shares remaining available for future issuance under equity compensation plans (excluding securities reflected in column (A))(1) (#)
Equity compensation plans approved by shareholders(3)	1998 Stock Option Plan	January 31, 2023	1,593,433 (1.9%)	Cdn.$59.58	2,703,675 (3.2%)
	PRSU Plan		1,630,704 (1.9%)	N/A	616,128 (0.7%)(5)
	1998 Stock Option Plan	May 5, 2023	1,684,281 (2.0%)	Cdn.$69.42	2,429,216 (2.9%)
	PRSU Plan		1,730,735 (2.0%)	N/A	381,415 (0.4%)

Equity compensation plans not approved by shareholders(4)	January 31, 2023	19,926 (0.0%)	N/A	N/A
	May 5, 2023	19,926 (0.0%)	N/A	N/A
TOTAL	January 31, 2023	3,244,063 (3.8%)	Cdn.$59.58	3,319,803 (3.9%)
	May 5, 2023	3,434,942 (4.0%)	Cdn.$69.42	2,810,631 (3.3%)

	Fiscal 2021	Fiscal 2022	Fiscal 2023
Options Granted during the fiscal period	381,859	271,025	356,014
Weighted average number of Common Shares outstanding for the fiscal period	84,360,284	84,591,234	84,791,155
“Burn Rate”	0.45%	0.32%	0.42%

	Fiscal 2021	Fiscal 2022	Fiscal 2023
RSUs and PSUs Granted during the fiscal period1	228,186	204,981	259,633
Weighted average number of Common Shares outstanding for the fiscal period	84,360,284	84,591,234	84,791,155
“Burn Rate”	0.27%	0.24%	0.31%

(i)

amendments to the number of Common Shares issuable under the PRSU Plan;

(ii)

any amendment expanding the categories of eligible person which would have the potential of permitting the introduction of non-employee members of the Board;

(iii)

any amendment extending the term of a Share Unit or any rights pursuant thereto held by an insider beyond its original expiry date;

(iv)

the addition of any other provision which results in participants receiving Common Shares while no cash consideration is received by the Corporation;

(v)

any amendment that would increase or remove the insider participation limits;

(vi)

amendments which would permit awards to be transferred or assigned other than for normal estate planning purposes; and

(vii)

amendments to the amending provision within the PRSU Plan.

(i)

amendments that are of a “housekeeping” nature;

(ii)

amendments to the terms and conditions of the PRSU Plan necessary to ensure that the PRSU Plan complies with the provisions of applicable law (including, without limitation, the rules, regulations and policies of the TSX);

(iii)

amendments to the provisions of the PRSU Plan respecting administration of the PRSU Plan and eligibility for participation under the PRSU Plan;

(iv)

amendments to the provisions of the PRSU Plan respecting the terms and conditions on which Share Units may be granted to eligible persons pursuant to the PRSU Plan; and

(v)

any other amendments not requiring shareholder approval under the provisions of applicable law (including, without limitation, the rules, regulations and policies of the TSX and NASDAQ).

(i)

a “Permitted Bid Acquisition” means an acquisition of Common Shares made pursuant to a Permitted Bid or a Competing Permitted Bid;

(ii)

an “Exempt Acquisition” means an acquisition of Common Shares in respect of which the Board has waived the application of the Amended Rights Plan, which was made pursuant to a dividend reinvestment plan of the Corporation, which was made pursuant to the receipt or exercise of rights issued by the Corporation to all the holders of Common Shares (other than holders resident in a jurisdiction where such distribution is restricted or impracticable as a result of applicable law) to subscribe for or purchase Common Shares or Convertible Securities (provided that such rights are acquired directly from the Corporation and not from any other Person and provided that the Person does not hereby acquire a greater percentage of Common Shares or Convertible Securities so offered than the Person’s percentage of Common Shares or Convertible Securities Beneficially Owned immediately prior to such acquisition), which was made pursuant to a distribution by the Corporation of Common Shares or Convertible Securities made pursuant to a prospectus (provided that the Person does not thereby acquire a greater percentage of the Common Shares or Convertible Securities so offered than the percentage Beneficially Owned immediately prior to such acquisition), which was made pursuant to a distribution by the Corporation of Common Shares or Convertible Securities by way of a private placement or a securities exchange take-over bid circular or upon the exercise by an individual employee of stock options granted under a stock option plan of the Corporation or rights to purchase securities granted under a share purchase plan of the Corporation, or which is made pursuant to an amalgamation arrangement, merger or other statutory procedure requiring approval of the Corporation’s shareholders;

(iii)

a “Convertible Security Acquisition” means an acquisition of Common Shares upon the exercise of Convertible Securities received by such Person pursuant to a Permitted Bid Acquisition, Exempt Acquisition or a Pro Rata Acquisition; and

(iv)

a “Pro Rata Acquisition” means an acquisition as a result of a stock dividend, a stock split or other event pursuant to which such Person receives or acquires Common  Shares or Convertible Securities on the same pro rata basis as all other holders of Common Shares of the same class.

(i)

the Take-over Bid is made to all holders of record of Common Shares, other than the Offeror;

(ii)

the Take-over Bid contains irrevocable and unqualified conditions that:

A.

no Common Shares shall be taken up or paid for pursuant to the Take-over Bid prior to the close of business on the date that is no earlier than the earlier of (1) the date 105 days following the date of the Take-over Bid and (2) the last day of the initial deposit period that the Offeror must allow securities to be deposited under the Take-over Bid pursuant to National Instrument 62-104;

B.

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

C.

more than 50% of the outstanding Common 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 Common Shares; and

D.

in the event that more than 50% of the then outstanding Common 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 Common Shares 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 Common Shares for not less than 10 Business Days from the date of such public announcement.

(i)

Redemption of Rights on Approval of Holders of Common Shares and Rights. The Board acting in good faith may, after having obtained the prior approval of the holders of Common Shares or Rights, at any time prior to the occurrence of a Flip-in Event, elect to redeem all but not less than all of the then outstanding Rights at a redemption price of $0.000001 per Right, appropriately adjusted for anti-dilution as provided in the Amended Rights Plan Agreement (the “Redemption Price”).

(ii)

Waiver of Inadvertent Acquisition. The Board acting in good faith may waive or agree to waive the application of the Amended Rights Plan in respect of the occurrence of any Flip-in Event if (i) the Board has determined that a Person became an Acquiring Person under the Amended Rights Plan by inadvertence and without any intent or knowledge that it would become an Acquiring Person; and (ii) the Acquiring Person has reduced its Beneficial Ownership of Common Shares such that at the time of waiver the Person is no longer an Acquiring Person.

(iii)

Deemed Redemption. In the event that a Person who has made a Permitted Bid or a Take-over Bid in respect of which the Board has waived or has deemed to have waived the application of the Amended Rights Plan consummates the acquisition of the Common Shares, the Board shall be deemed to have elected to redeem the Rights for the Redemption Price.

(iv)

Discretionary Waiver with Mandatory Waiver of Concurrent Bids. The Board acting in good faith may, prior to the occurrence of a Flip-in Event as to which the Amended Rights Plan has not been waived under the applicable clause, upon prior written notice to the Rights Agent, waive the application of the Amended Rights Plan to a Flip-in Event that may occur by reason of a Take-over Bid made by means of a Take-over Bid circular to all holders of record of Common Shares. However, if the Board waives the application of the Amended Rights Plan, the Board shall be deemed to have waived the application of the Amended Rights Plan in respect of any other Flip-in Event occurring by reason of such a Take-over Bid made prior to the expiry of a bid for which a waiver is, or is deemed to have been, granted.

(v)

Discretionary Waiver respecting Acquisition not by Take-over Bid Circular. The Board acting in good faith may, with the prior consent of the holders of Common Shares, determine, at any time prior to the occurrence of a Flip-in Event as to which the application of the Amended Rights Plan has not been waived, if such Flip-in Event would occur by reason of an acquisition of Common Shares otherwise than pursuant to a Take-over Bid made by means of a Take-over Bid circular to holders of Common Shares and otherwise than by inadvertence when such inadvertent Acquiring Person has then reduced its holdings to below 20%, to waive the application of the Amended Rights Plan to such Flip-in Event. However, if the Board waives the application of the Amended Rights Plan, the Board shall extend the Separation Time to a date subsequent to and not more than 10 Business Days following the meeting of shareholders called to approve such a waiver.

(vi)

Redemption of Rights on Withdrawal or Termination of Bid. Where a Take-over Bid that is not a Permitted Bid is withdrawn or otherwise terminated after the Separation Time and prior to the occurrence of a Flip-in Event, the Board may elect to redeem all the outstanding Rights at the Redemption Price.

(a)

if there is a dividend payable in Common Shares or Convertible Securities (other than pursuant to any optional stock dividend program, divided reinvestment plan or a dividend payable in Common Shares in lieu of a regular periodic cash dividend) on the Common Shares,

(b)

a subdivision or consolidation of the Common Shares,

(c)

an issuance of Common Shares or Convertible Securities in respect of, in lieu of or in exchange for Common Shares in a reclassification, amalgamation, merger, statutory arrangement or consolidation; or

(d)

if the Corporation fixes a record date for the distribution to all holders of Common Shares of certain rights or warrants to acquire Common Shares or Convertible Securities, or for the making of a distribution to all holders of Common Shares of evidences of indebtedness or assets (other than regular periodic cash dividend or a dividend payable in Common Shares) or rights or warrants.

1.

The members of the Board of Directors (the “Board”) have the duty to supervise the management of the business and affairs of The Descartes Systems Group Inc. (the “Company”). The Board, directly and through its committees, the Chair of the Board and Lead Director, as applicable, shall provide direction to senior management, generally through the Chief Executive Officer, to pursue the best interests of the Company.

2.

MEMBERSHIP, ORGANIZATION AND MEETINGS

1.

General - The composition and organization of the Board, including: the number, qualifications and remuneration of directors; the number of Board meetings; residency requirements; quorum requirements; meeting procedures and notices of meetings shall be established in accordance with the Canada Business Corporations Act and the by-laws of the Company.

2.

Independence - The Board shall establish independence standards for the directors in accordance with Applicable Requirements (as defined below), and, at least annually, shall affirmatively determine the independence of each director in accordance with these standards. At least a majority of the directors shall be independent in accordance with these standards.

3.

Access to Management and Outside Advisors - The Board shall have unrestricted access to the Company’s management and employees. The Board shall have the authority to retain external legal counsel, consultants or other advisors to assist it in fulfilling its responsibilities and to set and pay the respective compensation of these advisors without consulting or obtaining the approval of any Company officer. The Company shall provide appropriate funding, as determined by the Board, for the services of these advisors.

4.

Chair of the Board / Lead Director - The Chair of the Board shall facilitate the operations and deliberations of the Board and the satisfaction of the Board’s functions and responsibilities under this mandate. If the Chair of the Board is not

5.

Directors’ Responsibilities - Each director is expected to use their best efforts to attend all meetings of the Board and any committee of which they are a member. Each director is expected to have read and considered the materials sent to them in advance of each meeting and to actively participate in the meeting. Each director shall declare their interest, and abstain from voting on, matters in which the director has an interest.

6.

Secretary and Minutes - The Corporate Secretary, their designate or any other person the Board requests shall act as secretary of Board meetings. Minutes of Board meetings shall be recorded and maintained by the Corporate Secretary and subsequently presented to the Board for approval.

7.

In Camera Sessions - As part of each meeting, the Board shall hold an in camera session, at which management and non-independent directors are not present, and the agenda for each Board meeting shall afford an opportunity for such a session.

3.

FUNCTIONS AND RESPONSIBILITIES

a.

Strategic Plans - At least annually, the Board shall review and, if advisable, approve the Company’s strategic planning process and short- and long-term strategic plan prepared by management. In discharging this responsibility, the Board shall review the plan in light of management’s

b.

Business Plans - The Board shall review and, if advisable, approve the Company’s annual business plans.

c.

Monitoring - At least annually, the Board shall review management’s

a.

General - The Board shall provide regular oversight of the Company’s enterprise risk management practices either directly, or through its committees, which shall report to the Board with respect to risk oversight undertaken in accordance with their respective charters. The Board shall, with the assistance of its committees, oversee management’s assessment, management and monitoring of key risks affecting the Company and the Company’s risk management/monitoring systems.

b.

Review of Controls - The Board shall, with the assistance of the Audit Committee, review the internal, financial, non-financial and business control and information systems that have been established by management.

c.

General - At least annually, the Board shall, with the assistance of the Compensation Committee, review the Company’s approach to human resource management and executive compensation. In considering its approach to executive compensation, the Board, with the assistance of the Compensation Committee, will consider the results of any “say-on-pay” vote from the Company’s most recent annual meeting of shareholders.

d.

Succession Review - At least annually, the Board shall, with the assistance of the Nominating Committee and the Compensation Committee, as applicable, review the Lead Director, Chair of the Board, the Chief Executive Officer and the senior management succession plans of the Company.

a.

General - At least annually, the Board shall, with the assistance of the Corporate Governance Committee, review the Company’s approach to corporate governance.

b.

Governing Documents - At least annually, the Board shall review and assess any comments or recommendations of the Corporate Governance Committee in respect of the adequacy of the Company’s organizing documents and by-laws, and the mandate, charters and role descriptions for the Board, each Board committee, the Chief Executive Officer, the Chair of the Board and their compliance with Applicable Requirements. At least annually, the Board shall review and assess any comments or recommendations of the Audit Committee on the adequacy of the Company’s audit committee charter.

c.

Director Independence - At least annually, the Board shall, with the assistance of the Corporate Governance Committee, evaluate the director independence standards established by the Board and pursuant to Applicable Requirements and the Board’s ability to act independently from management in fulfilling its duties.

d.

Ethics Reporting - At least annually, the Board shall, with the assistance of the Corporate Governance Committee, review reports provided by management relating to compliance with, or material deficiencies of, the Company’s Code of Business Conduct and Ethics.

5.

Environmental and Social Governance - At least annually, the Board shall, with the assistance of the Corporate Governance Committee, review the Company’s approach to environmental and social governance including, but not limited to, the following areas: the Company’s approach to assessing and reducing its own environmental footprint from its operations; the Company’s approach to assessing the environmental benefits to its customers from the products and services of the Company; and the Company’s approach to social initiatives within

a.

General - At least annually, the Board shall, with the assistance of the Audit Committee, review the Company’s internal controls relating to financial information and reports provided by management on material deficiencies in, or material changes to, these controls.

b.

Integrity of Financial Information - The Board shall, with the assistance of the Audit Committee, review the integrity of the Company’s financial information and systems, the effectiveness of internal controls and management’s assertions on internal control and disclosure control procedures.

c.

General - The Board shall adopt and, at least annually, shall review the Company’s overall communications policy, including measures for communicating with and receiving feedback from the Company’s stakeholders.

d.

Disclosure - At least annually, the Board shall review management’s compliance with the Company’s disclosure policies and procedures. The Board shall, if advisable, approve material changes to the Company’s disclosure policies and procedures.

e.

Shareholder Engagement - At least annually, the Board shall review the Company’s approach to shareholder engagement.

f.

Board Committees - The Board has established the following committees of the Board: the Compensation Committee; the Audit Committee; the Corporate Governance Committee; and the Nominating Committee. Subject to applicable law, the Board may establish other Board committees or merge or dispose of any Board committee.

g.

Delegation to Committees - The Board has delegated to each of its committees those responsibilities set out in each Board committee’s mandate.

c.

Consideration of Committee Recommendations - As required, the Board shall consider for approval the specific matters delegated for review to Board committees.

d.

Board/Committee Communication - To facilitate communication between the Board and each Board committee, each committee chair shall provide a report to the Board on material matters considered by the committee at the first Board meeting after each meeting of the committee.

4.

DIRECTOR ORIENTATION, EDUCATION AND EVALUATION

1.

Each director shall participate in the Company’s orientation and ongoing education program.

2.

At least annually, with the assistance of the Corporate Governance Committee, the Board shall evaluate and review the performance of the Board, each of its committees, each of the directors, including the specific performance assessment findings of the Corporate Governance Committee and the adequacy of this mandate.

(US dollars in millions)	Q4FY23	Q3FY23	Q2FY23	Q1FY23
Net income, as reported on Consolidated Statements of Operations	29.8	26.5	22.9	23.1
Adjustments to reconcile to Adjusted EBITDA:
Interest expense	0.3	0.3	0.3	0.3
Investment income	(2.8)	(1.1)	(0.5)	(0.2)
Income tax expense	6.3	9.0	8.8	7.4
Depreciation expense	1.4	1.3	1.3	1.2
Amortization of intangible assets	14.3	14.7	16.1	15.1
Stock-based compensation and related taxes	3.6	3.6	3.8	2.9
Other charges	2.5	0.2	1.3	1.4
Adjusted EBITDA	55.4	54.5	54.0	51.2
Revenues	125.1	121.5	123.0	116.4
Net income as a % of revenues	24%	22%	19%	20%
Adjusted EBITDA as a % of revenues	44%	45%	44%	44%

(US dollars in millions)	FY23
Net income, as reported on Consolidated Statements of Operations	102.2
Adjustments to reconcile to Adjusted EBITDA:
Interest expense	1.2
Investment income	(4.5)
Income tax expense	31.5
Depreciation expense	5.2
Amortization of intangible assets	60.2
Stock-based compensation and related taxes	13.9
Other charges	5.5
Adjusted EBITDA	215.2
Revenues	486.0
Net income as a % of revenues	21%
Adjusted EBITDA as a % of revenues	44%