UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934 (Amendment No. ___)
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Check the appropriate box:
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[ ]Soliciting]Soliciting Material Pursuant to §240.14a-12
VISTA GOLD CORP.
(Name of Registrant As Specified In Its Charter)
NOT APPLICABLE
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x]No fee required.
[ ]Fee]Fee paid previously with preliminary materials.
[ ]Fee computed on table belowin exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.0-11
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VISTA GOLD CORP.
NOTICE OF MEETING
AND
MANAGEMENT INFORMATION
AND PROXY CIRCULAR
for the
Annual General and Special Meeting of Shareholders
to be held on
April 26, 201827, 2023
The attached Notice of Meeting, Management Information and Proxy Circular and formForm of proxyProxy and notes thereto for the Meetingannual general and special meeting of Vista Gold Corp. (the “Corporation”) are first being made available to shareholders of the Corporation on or about March 16, 2018.17, 2023.
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March 16, 201817, 2023
Dear shareholder:Shareholder:
It is my pleasure to invite you to attend the 2018 annual general2023 Annual General and special meetingSpecial Meeting of shareholders of Vista Gold Corp. (the “Meeting”) to be held on April 26, 201827, 2023 at 10:00 a.m., Vancouver time,PDT, at the offices of Borden Ladner Gervais LLP, Suite 1200, 200 Burrard Street, Vancouver, British Columbia, Canada.Columbia. If you are unable to attend this meetingthe Meeting in person, please complete, date, sign and returndeliver the enclosed formForm of proxyProxy by the date and time set out in the Notice of Meeting to ensure that your vote is counted.
The Notice of Meeting, Management Information and Proxy Circular and formForm of proxyProxy and notes thereto for the meetingMeeting are enclosed. These documents contain important information and I encourage you to read them carefully.
Yours truly,
/s/ Frederick H. Earnest
FREDERICK H. EARNEST
President and Chief Executive Officer
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VISTA GOLD CORP.
CORP.
NOTICE OF MEETING
NOTICE IS HEREBY GIVEN THAT the 20182023 annual general and special meeting (the “Meeting”“Meeting”) of the shareholders (the “Shareholders”) of Vista Gold Corp. (the “Corporation”“Corporation”) will be held at the offices of Borden Ladner Gervais LLP, Suite 1200, 200 Burrard Street, Vancouver, British Columbia Canada on April 26, 201827, 2023 at 10:00 a.m., Vancouver time,PDT, for the following purposes:
1.to receive the annual report to shareholders and the consolidated financial statements of the Corporation, together with the auditor’s report thereon, for the fiscal year ended December 31, 2017;
2.to elect directors to hold office until the next annual general meeting;
3.to appoint EKS&H LLLP as auditor to hold office until the next annual general meeting and at a remuneration to be fixed by the Corporation’s Board of Directors (the “Board”) through the Audit Committee;
4. to conduct an advisory vote on executive compensation;
5. to consider and, if thought appropriate, approve, an ordinary resolution approving all unallocated options under the Corporation’s Stock Option Plan, as more particularly described in the accompanying management information and proxy circular (the “Information Circular”), the full text of which ordinary resolution is set out in Part I to Appendix “C” to the Information Circular as the “Unallocated Options Under the Stock Option Plan Resolution”;
6.to consider and, if thought appropriate, approve, an ordinary resolution approving all unallocated awards under the Corporation’s Long-Term Equity Incentive Plan, as more particularly described in the accompanying Information Circular, the full text of which ordinary resolution is set out in Part II to Appendix “C” to the Information Circular as the “Unallocated Awards Under the LTIP Resolution”;
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2. | to elect directors to hold office until the next annual general meeting; |
3. | to appoint Plante & Moran, PLLC as auditor to hold office until the next annual general meeting; |
4. | to conduct an advisory vote on executive compensation; |
5. | to conduct an advisory vote to determine the frequency of conducting future advisory votes on executive compensation; |
6. | to consider and, if thought appropriate, approve, an ordinary resolution approving amendments to the |
7. | to transact such other business as may properly come before the Meeting or any adjournment or postponement thereof. |
8.to transact such other business as may properly come before the Meeting or any adjournment or postponement thereof.
Being made available along with this Notice of Meeting are (i)(1) the Information Circular; (ii)(2) a formForm of proxyProxy and notes thereto; and (iii)(3) the Corporation’s annual report to shareholders.Annual Report on Form 10-K.
The Board has fixed March 1, 2018,10, 2023, as the record date for the Meeting.
If you are a registered shareholderShareholder of the Corporation and are unable to attend the Meeting in person, please date and execute the accompanying formForm of proxyProxy for the Meeting and deposit it with Broadridge by mail at 51 Mercedes Way, Edgewood, NY 11717, Attention: Processing, or vote by telephone at 1-800-690-6903 or online at www.proxyvote.com or by smartphone by scanning the QR code on the form of proxy before 10:00 a.m., Vancouver time,PDT, on April 24, 2018,25, 2023, or no later than 48 hours (excluding Saturdays, Sundays and holidays) before any adjournment or postponement of the Meeting. We encourage Shareholders currently planning to participate in the Meeting to submit their votes or Form of Proxy in advance to ensure their votes will be counted.
If you are a non-registered shareholderShareholder of the Corporation and receive these materials through your broker or another intermediary, please complete and return the materials in accordance with the instructions provided to you by your broker or such other intermediary.
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This Notice of Meeting, the Information Circular, the formForm of proxyProxy and notes thereto for the Meeting, are first being made available to shareholdersShareholders of the Corporation on or about March 16, 2018.17, 2023.
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DATED at Littleton, Colorado, this 1617thday of March, 2018.2023.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Frederick H. Earnest
President and Chief Executive Officer
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TABLE OF CONTENTS
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Letter to Shareholders | i |
Notice of Meeting | ii |
Management Information and Proxy Circular | 1 |
Particulars of Matters to be Acted Upon | 2 |
Information About Proxies |
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Voting by Beneficial Shareholders |
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Securities Entitled to Vote |
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Quorum | 13 |
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Ownership of the Corporation’s Common Shares |
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Change |
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Corporate Governance |
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Executive Officers |
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Executive Compensation |
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Compensation of Directors |
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Securities Authorized For Issuance Under Equity Compensation Plans |
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Exchange Controls |
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Certain Canadian Federal Income Tax Considerations for U.S. Residents |
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Indebtedness of Directors and Executive Officers |
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Orders, Penalties and Settlement Agreements |
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Interest of Certain Persons in Matters to be Acted Upon |
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Interest of Informed Persons in Material Transactions |
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Review, Approval or Ratification of Transactions with Related Parties |
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Management Contracts |
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Shareholder Proposals |
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Other Matters |
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Dissenters’ Rights of Appraisal |
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Multiple Shareholders Sharing the Same Address |
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Board of Directors Approval |
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Appendix “A” – Form of Proxy | A-1 |
Appendix “B” | B-1 |
Appendix “C” – Text of Ordinary | C-1 |
Appendix “D” – | D-1 |
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MANAGEMENT INFORMATION AND PROXY CIRCULAR
This Management Information and Proxy Circular (“Information Circular”) is furnished in connection with the solicitation by the management and the Board of Directors (the “Board”) of Vista Gold Corp. (the “Corporation”) of proxies to be voted at the annual general and special meeting (the “Meeting”) of the shareholders of the Corporation (“Shareholders”) to be held at the offices of Borden Ladner Gervais, LLP, Suite 1200, 200 Burrard Street, Vancouver, British Columbia Canada on April 26, 201827, 2023 at 10:00 a.m., Vancouver time,PDT, for the purposes set forth in the accompanying Notice of Meeting.
It is anticipated that this Information Circular and the accompanying formForm of proxyProxy will be first made available to Shareholders on or about March 16, 2018.17, 2023. Unless otherwise stated, the information contained in this Information Circular is given as at March 9, 2018.10, 2023.
The executive office of the Corporation is located at 7961 Shaffer Parkway, Suite 5, Littleton, Colorado, USA, 80127 and its telephone number is (720) 981-1185. The registered and records office of the Corporation is located at 1200-200 Burrard Street, Vancouver, British Columbia, Canada, V6C 3L6.
All references to currency in this Information Circular are in United States dollars, unless otherwise indicated. References to “C$” refer to Canadian dollars.
Information regarding the proxies solicited by management and the Board in connection with the Meeting is set out in the section below under the heading “Information About Proxies”.
Important Notice Regarding the Availability of Proxy Materials for the Meeting to be Held on April 26, 201827, 2023
Under rules adopted by the United States Securities and Exchange Commission (the “SEC”“SEC”) and applicable Canadian securities commissions, we are now furnishing proxy materials on the Internetinternet pursuant to the “notice and accessaccess” rules.” Instructions on how to access and review the proxy materials, which include this Information Circular, our Annual Report to Shareholderson Form 10-K and the accompanying formForm of proxy, on the InternetProxy, can be found on the notice ofand access card sent to Shareholders by the Corporation or in the voting instructions form you receive from your intermediary. These materials, can also be accessed on the Internet at http://vistagold.investorroom.com/index.php?s=62. Directionsas well as directions for attending and voting at the Meeting, can also be foundaccessed on the Internet at this website.
www.proxyvote.com.
The Corporation will provide to any Shareholder, upon request, one copy of any of the following documents:
(1) | the Corporation’s Annual Report on Form 10-K (or annual information form), together with any document, or the pertinent pages of any document, incorporated therein by reference; |
(2) | the comparative consolidated financial statements and management’s discussion and analysis of the Corporation for the most recently completed fiscal year in respect of which such financial statements have been issued, together with the report of the auditor thereon, and any interim financial statements and management’s discussion and analysis of the Corporation subsequent to the financial statements for the most recently completed fiscal year; and |
(3) | this Information Circular. |
(a)Requests for paper copies can be made by (1) visiting www.proxyvote.com and completing instructions to request such documents, (2) calling 1-800-579-1639 or (3) sending an email to sendmaterial@proxyvote.com. You will need the Corporation’s Annual Reportcontrol number indicated on your notice of access card to Shareholders, which includes its latest Annual Report on Form 10-K (or annual information form), together with any document, or the pertinent pages of any document, incorporated therein by reference;request these documents.
(b)the comparative financial statements and management’s discussion and analysis of the Corporation for the Corporation’s most recently completed financial year in respect of which such financial statements have been issued, together with the report of the auditor thereon, and any interim financial statements and management’s discussion and analysis of the Corporation subsequent to the financial statements for the Corporation’s most recently completed financial year; and
(c)this Information Circular.
Copies of the foregoing documents are also available on the Corporation’s website at http:https://vistagold.investorroom.com/index.php?s=62and copies of the above documentsvistagold.com/investors/agm or will be provided by the Corporate Secretary,Corporation, upon request, by mail at 7961 Shaffer Parkway, Suite 5, Littleton, Colorado 80127; by phone at (720) 981-1185 or (866) 981-1185; or by email at ir@vistagold.com, free of charge to Shareholders. The Corporation may require the payment of a reasonable charge from any person or corporation who is not a Shareholder and who requests a copy of any such document. Financial information relating to the Corporation is provided in the Corporation’s comparative consolidated financial statements
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and management’s discussion and analysis for its most recently completed financial
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year.fiscal year which are contained in its Annual Report on Form 10-K. Additional information relating to the Corporation is available electronically on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.shtml.edgar.shtml.
Particulars of Matters to be Acted Upon
The directors of the Corporation are elected at each annual general meeting and hold office until the next annual general meeting or until their successors are duly elected or appointed, unless their office is earlier vacated in accordance with the Business Corporations Act (British Columbia). Mr. Michael Richings, Chair of the Board and Mr. Thomas Ogryzlo, director have announced their intent to retire as of the date of the Meeting and will not be standing for election at the Meeting. The following areCorporation wishes to thank Mr. Richings and Mr. Ogryzlo for their dedication and guidance to Vista. Effective as of the Corporation’s six currentconclusion of the Meeting, the Board has resolved to set the number of directors of the Corporation at five directors. The Board proposes to nominate each of its currentthe following five incumbent directors for election as a director of the Corporation.
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Name, Position, Residence | | Principal Occupation, Business or Employment | | Director Since |
John M. Clark, Director Toronto, Ontario, Canada Age - | | Chartered Professional Accountant; Chartered Accountant; President of Investment and Technical Management Corp. since February 1999; | | May 18, 2001 |
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Frederick H. Earnest, Parker, Colorado, USA Age - | | Chief Executive Officer of the Corporation since January 2012; President of the Corporation since August | | November 6, 2007 |
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W. Durand Eppler, Director Denver, Colorado, USA Age - | | Businessman; Chair, director and Interim Chief Executive Officer of Plata Latina Minerals Corporation and director of Golden Minerals Company; Former Managing Director of Capstone Partners (formerly Headwaters | | October 13, 2004 |
Deborah J. Friedman, Director Denver, Colorado, USA Age – 70 (1, 2) | | Director of Golden Minerals Company since December 2021; Senior of Counsel, Davis Graham & Stubbs LLP since January 2017; Partner, Davis Graham & Stubbs LLP from August 2000 to December 2016 and of counsel from May 1999 to August 2000; Senior Vice President, General Counsel and Corporate Secretary of Apex Silver Mines Corporation and its successor Golden Minerals Company from July 2007 to December 2015. | | March 13, 2019 |
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(1)Member of the Corporation’s Audit Committee (the “Audit Committee”).
(2)Member of the Corporation’s Corporate Governance and Nominating Committee (the “Corporate Governance and Nominating Committee”).
(3)Member of the Corporation’s Compensation Committee (the “Compensation Committee”).
(4)Member of the Corporation’s Health, Safety, Environmental and Social Responsibility Committee (the “Health, Safety, Environmental and Social Responsibility Committee”).
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Tracy A. Stevenson, Director Sandy, Utah, USA Age - | | Accountant; Businessman; Former director of Uranium Resources Inc. from December 2013 to July 2017; former director of Quaterra Resources from July 2007 to May 2014, including Non-Executive | | November 6, 2007 |
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(1)MemberThe following current directors of Audit Committee.the Corporation will not stand for re-election at the Meeting:
(2)Member of Corporate Governance and Nominating Committee.
(1) | Member of the Corporation’s Audit Committee (the “Audit Committee”). |
Member of the Corporation’s Corporate Governance and Nominating Committee (the “Corporate Governance and Nominating Committee”). |
Member of the Corporation’s Compensation Committee (the “Compensation Committee”). |
(4) | Member of the Corporation’s Health, Safety, Environment and Social Responsibility Committee (the “Health, Safety, Environment and Social Responsibility Committee”). |
(3)Member of Compensation Committee.
(4)Member of Health, Safety, Environmental and Social Responsibility Committee.
The information as to the residence and principal occupation of the nominees listed in the above table is not within the knowledge of the management of the Corporation and has been furnished by the individual nominees as of March 9, 2018.10, 2023.
The following are brief biographies of the Corporation’s nominees for election to the Board:
John M. Clark, B.Com., CPA, CA, Director. In addition to the roles outlined in the charttable above, Mr. Clark is the ChairmanChair of the auditcorporate governance committee for Russel Metals Inc. Mr. Clark earned a Bachelor of Commerce Degree from the University of Witwatersrand in South Africa in 1977, and he received a Higher Diploma in Accountancy from the University of Witwatersrand in 1979. Mr. Clark is currently Chair of the Corporation’s Compensation Committee and a member of the Corporation’s Audit Committee and Corporate Governance and Nominating Committee. He has been a director of the Corporation since May 18, 2001.
Mr. Clark had a solid background as a chartered accountant before becoming an accomplished entrepreneur involved in investment banking and in investment and management of natural resource companies in Canada. Mr. Clark’s understanding of accounting procedures and controls, coupled with his knowledge of the Corporation’s projects and their financial requirements qualifies him to serve effectively as a member of the Audit Committee and to contribute to the financial management of the Corporation. Mr. Clark’s board experience provides him with expertise and awareness of industry compensation practices to effectively serve as the Compensation Committee’s Chair. His general knowledge of the natural resources industry allows him to participate effectively and provide guidance with regards to matters brought before the Board. As the Corporation executes its business strategy focused on the developmentrealization of greater value from the Corporation’s current propertiesMt Todd gold project and develops new projects,other corporate development activities, we expect that his contributions to financial planning and controls will be invaluable. Furthermore, he has
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demonstrated both integrity and high ethical standards in his business dealings and
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personal affairs to date, qualities which a person must possess under the Mandate of the Board (attached as Appendix “B” to this Information Circular) in order to be considered for nomination and election to the Board. Accordingly, the Board believes that Mr. Clark should once again serve on the Board.
Frederick H. Earnest, B.Sc., President, Chief Executive Officer and Director. For a full list of recent positions held by Mr. Earnest, please refer to the charttable above. In addition, Mr. Earnest earned a Bachelor of Science Degree in Mining Engineering from the Colorado School of Mines in 1987. Mr. Earnest is a member of the Health, Safety, Environmental and Social Responsibility Committee. Mr. Earnest has been a director of the Corporation since November 6, 2007.
Management believes that the leadership skills and dynamic nature that Mr. Earnest possesses makes him an invaluable member of management. He understands the technical, economic, and social aspects of the Corporation’s coreMt Todd gold project and has contributed significantly to the advancement of the Mt Todd gold project. In addition, Mr. Earnest has considerable international executive and senior management experience in the development and operation of gold mines. He is fluent in Spanish. Mr. Earnest relates well to government and stakeholder leaders in all jurisdictionsthe jurisdiction where our projects arecore project is located. Management believes that his continued involvement in the execution of the Corporation’s business plan and strategies to realize greater value from Mt Todd will lead to increased Shareholder value.Furthermore, Mr. Earnest has demonstrated both integrity and high ethical standards in his business dealings and personal affairs to date, qualities which a person must possess under the Mandate of the Board (attached as Appendix “B” to this Information Circular) in order to be considered for nomination and election to the Board. Accordingly, the Board believes that Mr. Earnest should once again serve on the Board.
W. Durand Eppler, B.A., M.S., Director. In addition to the roles outlined in the charttable above, Mr. Eppler is a member of the audit committee for Golden Minerals Company and Plata Latina Minerals Corporation.Corporation where he also serves as Chair, director, and Interim Chief Executive Officer. Mr. Eppler isserved as Managing Director of Capstone Partners (formerly Headwaters MB, LLC) from December 2016 until December 2021 and Senior Advisor until December 2022. He was former Partner of Sierra Partners, LLC from August 2004 to June 2016. Mr. Eppler also a memberserved as director of the Society ofFrontier Mining Engineers of the American Institute of Mining, MetallurgicalLimited from November 2010 to March 2015 and Petroleum Engineers A.I.M.E., and he was a member of the Global Leadership Council for the College of Business at Colorado State UniversityAugusta Resource Corporation from 2001-2014.June 2007 to August 2014. Mr. Eppler graduated from Middlebury College in 1975 with a Bachelor of Arts Degree in Geography and Religion, and he received his Master of Science Degree in Mineral Economics from the Colorado School of Mines in 1977. Mr. Eppler is currently Chair of the Corporate Governance and Nominating Committee, a member of the Compensation Committee and a member of the Health, Safety, Environmental and Social Responsibility Committee. He has been a director of the Corporation since October 13, 2004.
Given the international reputation and wealth of experience that Mr. Eppler has in the commercial and investment banking aspects of the global resource sector, management believes that he should once again serve on the Board to help further develop the business and success of the Corporation. Mr. Eppler’s commercial and investment banking experience are important to the Corporation. The Corporation does not have any producing assets and ensuringbelieves that the Corporation is adequately financed is an ongoing management responsibility. Management expects to rely heavily on Mr. Eppler’s experience and expertise will be valuable as we move beyond technical evaluations and preparefocus on strategies to advance development strategies forrealize greater value from the Mt Todd gold project and other corporate development activities.Furthermore, Mr. Eppler has demonstrated both integrity and high ethical standards in his business dealings and personal affairs to date, qualities which a person must possess under the Mandate of the Board (attached as Appendix “B” to this Information Circular) in order to be considered for nomination and election to the Board.
Deborah J. Friedman, B.A., J.D., Director. In addition to the roles outlined in the table above, Ms. Friedman served as the head of Davis Graham & Stubbs’ Corporate Department and on the firm’s Executive Committee for a number of years. Ms. Friedman held various positions in the law department of Cyprus Amax Minerals Company from 1982 through 1994, including General Counsel and Associate General Counsel, and served as Vice President and General Counsel of AMAX Gold Inc. from 1994 to 1998. Ms. Friedman graduated from the University of Illinois in 1974 with a Bachelor of Arts Degree in History and received her Juris Doctor degree from the University of Michigan in 1977. Ms. Friedman is a member of the Audit Committee and Chair of the Corporate Governance and Nominating Committee. She has been a director of the Corporation since March 13, 2019.
Ms. Friedman has extensive experience in domestic and international mine development projects, including complex development and operations joint ventures, and corporate and project finance matters. Her international experience includes South and Central America, the Pacific Rim including Australia, and Africa. Ms. Friedman has over 30 years of experience being the lead counsel responsible for SEC reporting, public offerings, public merger and acquisition transactions and other capital related matters for a number of publicly traded mining companies, including 15 years
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of experience with several companies trading both in the United States and Canada. Management expects that Ms. Friedman’s expertise will be valuable as we evaluate and execute strategies to realize greater value from the Mt Todd project and other corporate development activities. Furthermore, Ms. Friedman has demonstrated both integrity and high ethical standards in her business dealings and personal affairs to date, qualities which a person must possess under the Mandate of the Board (attached as Appendix “B” to this Information Circular) in order to be considered for nomination and election to the Board. Accordingly, the Board believes that Mr. Eppler should once again serve on the Board.
C. Thomas Ogryzlo, B.Mech.Eng., P.Eng, Director. Currently, Mr. Ogryzlo spends about half of his time as Managing Director, Business Development of Franco-Nevada (Barbados) Corp. Mr. Ogryzlo also presently acts part time as President, Interim CEO and Chairman of Camrova Resources Inc. (formerly Baja Mining Corp.). He also serves as a board member of Polaris Infrastructure Inc. He earned his Bachelor of Mechanical Engineering Degree from McGill University in 1961, and his designation as a Professional Engineer from the Professional Engineers of Ontario in 1966. Mr. Ogryzlo is currently the Chair of the Health, Safety, Environmental and Social Responsibility Committee and a member of the Corporate Governance and Nominating Committee. Mr. Ogryzlo has served on the board of more than 20 listed companies and has been a director of the Corporation since May 1, 1995.
Mr. Ogryzlo brings a perspective to the Corporation that has been built on a solid foundation and in-depth knowledge not only of Canada’s mining sector, but also those in many other parts of the world. The Corporation has projects in Australia, Mexico, and the United States of America. Mr. Ogryzlo’s experience in numerous foreign projects allows him to contribute in a manner which helps bring clarity and direction to many of the challenges
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which arise from the geographical diversity of the Corporation’s projects. Mr. Ogryzlo is also fluent in Spanish. Mr. Ogryzlo’s experience with the construction of varied projects has been beneficial in the preliminary economic and technical evaluations of several of the Corporation’s projects. We expect that Mr. Ogryzlo’s continued participation will contribute to the advancement of the Corporation’s core project. Furthermore, he has demonstrated both integrity and high ethical standards in his business dealings and personal affairs to date, qualities which a person must possess under the Mandate of the Board (attached as Appendix “B” to this Information Circular) in order to be considered for nomination and election to the Board. As such, the Board believes that Mr. Ogryzlo should once again serve on the Board.
Michael B. Richings, M.Sc., Chairman and Director. For a full list of recent positions held by Mr. Richings, please refer to the chart above. In addition, Mr. Richings was awarded an Associateship of the Camborne School of Mines in 1969, and he earned his Master of Science Degree from Queen’s University in 1971. Mr. Richings is a member of the Corporate Governance and Nominating Committee and the Audit Committee. Mr. Richings has been a director of the Corporation since May 1, 1995.
Mr. Richings has been with the Corporation for over twenty years and, given his leadership skills, enterprising nature and knowledge of the mining industry, he is a valued member of the Board. His knowledge of the Corporation’s properties and his key role in the development and implementation of business strategies which have created shareholder value are important to the Corporation. Mr. Richings has participated in the management and development of several new projects and management believes that this experience is important to the success of the Corporation’s current business plan.Furthermore, he has demonstrated both integrity and high ethical standards in his business dealings and personal affairs to date, qualities which a person must possess under the Mandate of the Board (attached as Appendix “B” to this Information Circular) in order to be considered for nomination and election to the Board. Accordingly, the Board believes that Mr. Richings should once again serve on the Board.
Tracy A. Stevenson, B.S., CPA, Director. For a full list of recent positions held by Mr. Stevenson, please refer to the charttable above. In addition, Mr. Stevenson graduated Magna Cum Laude with a Bachelor of Science Degree in Accounting from the University of Utah in 1977, and he earned his designation as a Certified Public Accountant in the State of Utah in 1978. Mr. Stevenson is currently the Chair of the Audit Committee and is a member of the Compensation Committee. He has been a director of the Corporation since November 6, 2007.
Mr. Stevenson began his career in public accounting before moving to senior financial, information technology and management positions in two of the world’s largest mining companies. Mr. Stevenson’s interest in efficient development of the Corporation’s projects and his keen analytical abilities have contributed to the Corporation’s evaluation of business opportunities and to the development of the Corporation’s business strategy. His past experience as a chief financial officer has been beneficial in many matters specifically related to the Audit Committee.Corporation. We expect that Mr. Stevenson’s future participation on the Board will be an asset to the Corporation through sound planning, strategy development, and the appropriate application of the Corporation’s resources.resources to execute the Corporation’s business plans. Furthermore, he has demonstrated both integrity and high ethical standards in his business dealings and personal affairs to date, qualities which a person must possess under the Mandate of the Board (attached as Appendix “B” to this Information Circular) in order to be considered for nomination and election to the Board. As such, the Board believes that Mr. Stevenson should once again serve on the Board.
The Board recommends a vote “FOR” each of the nominees for director. Where no choice is so specified with respect to any resolution or in the absence of certain instructions, the proxies given pursuant to this solicitation will be voted “FOR” the nominees listed above.
ConflictsThe following are brief biographies of Interestthe Corporation’s directors who are not standing for re-election to the Board:
C. Thomas Ogryzlo, B.Mech.Eng., P.Eng, Director. Mr. Ogryzlo serves as Non-Executive Chair of Golden Sun Resources, an emerging gold producer in Central America. Mr. Ogryzlo served as Interim CEO, Chair, and director of Camrova Resources Inc. from 2012 until January 2022, CEO, and director of Polaris Geothermal Inc. from 2004 to 2009 and director of its successor company, Polaris Infrastructure Inc., from 2016 to 2019; and former director of Aura Minerals from 2008 to 2016. For many years he has served as a director, employee and advisor to Franco Nevada Corp. and its international subsidiary Franco-Nevada (Barbados) Corporation. He earned his Bachelor of Mechanical Engineering Degree from McGill University in 1961 and his designation as a Professional Engineer from the Professional Engineers of Ontario in 1966. Mr. Ogryzlo is currently the Chair of the Health, Safety, Environmental and Social Responsibility Committee and a member of the Corporate Governance and Nominating Committee. Mr. Ogryzlo has served on the board of more than 20 NYSE and TSX listed companies and has been a director of the Corporation since May 1, 1995.
Mr. Ogryzlo brings a perspective to the Corporation that has been built on a solid foundation and in-depth knowledge not only of Canada’s mining sector, but also those in many other parts of the world. The Corporation’s core project is in Australia. Mr. Ogryzlo’s experience with numerous foreign projects allows him to contribute in a manner which helps bring clarity and direction to many of the challenges which arise from the geographical location of the Corporation’s Mt Todd gold project. Mr. Ogryzlo is fluent in Spanish, Portuguese, and French. Mr. Ogryzlo’s experience with the construction of varied projects has been beneficial in the preliminary economic and technical evaluations of the Corporation’s core project. Mr. Ogryzlo has announced his intent to retire as of the date of the Meeting and will not be standing for re-election at the Meeting.
Michael B. Richings, M.Sc., Chairman and Director. For a full list of recent positions held by Mr. Richings, please refer to the table above. In addition, Mr. Richings was awarded an Associateship of the Camborne School of Mines in 1969, and he earned his Master of Science Degree from Queen’s University in 1971. Mr. Richings is a member of the Health, Safety, Environment and Social Responsibility Committee. Mr. Richings has been a director of the Corporation since May 1, 1995.
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Mr. Richings has been with the Corporation for over twenty-five years and, given his leadership skills, enterprising nature, and knowledge of the mining industry, he is a valued member of the Board. His knowledge of the Corporation’s core project and his key role in the development and implementation of business strategies which have created Shareholder value are important to the Corporation. Prior to joining the Corporation, Mr. Richings held senior executive-level positions in the mining industry and was responsible for evaluation and development of several new projects and operations of existing mines and management. Mr. Richings has announced his intent to retire as of the date of the Meeting and will not be standing for re-election at the Meeting.
Arrangements and Relationships between Officers and Directors
There are no family relationships among any directors, executive officers or persons nominated to be directors of the Corporation. None of the nominees for directors has entered into any arrangement or understanding with any other person pursuant to which he or she was, or is to be, elected as a director of the Corporation or a nominee of any other person.
Other Directorships
No directors of the Corporation are also directors of issuers with a class of securities registered under Section 12 of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”“Exchange Act”) (or which otherwise are required to file periodic reports under the Exchange Act) except for W. Durand Eppler who is a director of Golden Minerals Company and Plata Latina Minerals Corporation.
None of the above directors has entered into any arrangement or understanding with any other person pursuant to which he was, orCorporation and Deborah Friedman who is to be, elected as a director of the Corporation or a nominee of any other person. Golden Minerals Company.
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Legal Matters
No director or executive officer of the Corporation is a party adverse to the Corporation or any of its subsidiaries or has a material interest adverse to the Corporation or any of its subsidiaries. During the past ten years, no director or executive officer of the Corporation has:
(1) | filed or has had filed against such person, a petition under the U.S. federal bankruptcy laws or any state insolvency law, nor has a receiver, fiscal agent or similar officer been appointed by a court for the business or property of such person, or any partnership in which such person was a general partner, at or within two years before the time of filing, or any corporation or business association of which such person was an executive officer, at or within two years before such filings; |
(2) | been convicted or pleaded guilty or nolo contendere in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offences); |
(3) | been the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting such person’s activities in any type of business, securities, trading, commodity or banking activities; |
(4) | been the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any U.S. federal or state authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any type of business, securities, trading, commodity or banking activities, or to be associated with persons engaged in any such activity; |
(5) | been found by a court of competent jurisdiction in a civil action or by the SEC, or by the U.S. Commodity Futures Trading Commission to have violated a U.S. federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated; |
(6) | been the subject of, or a party to, any U.S. federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: (i) any U.S. federal or state securities or commodities law or regulation; or (ii) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money |
(a)filed or has had filed against such person, a petition under the U.S. federal bankruptcy laws or any state insolvency law, nor has a receiver, fiscal agent or similar officer been appointed by a court for the business or property of such person, or any partnership in which such person was a general partner, at or within two years before the time of filing, or any corporation or business association of which such person was an executive officer, at or within two years before such filings;- 6 -
(b)been convicted or pleaded guilty or nolo contendere in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offences);
(c)been the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting such person’s activities in any type of business, securities, trading, commodity or banking activities;
(d)been the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any U.S. federal or state authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any type of business, securities, trading, commodity or banking activities, or to be associated with persons engaged in any such activity;
(e)been found by a court of competent jurisdiction in a civil action or by the SEC, or by the U.S. Commodity Futures Trading Commission to have violated a U.S. federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;
(f)been the subject of, or a party to, any U.S. federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: (i) any U.S. federal or state securities or commodities law or regulation; or (ii) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
(g)been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C.78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the U.S. Commodity Exchange Act (7 U.S.C.1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
(7) | been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C.78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the U.S. Commodity Exchange Act (7 U.S.C.1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
Additional information regarding the various committees of the Board, and the attendance of each director at meetings of the Board and its committees held during 2017,2022, is set out in the section below under “Corporate Governance”. Information regarding executive officers is provided below under “Executive Officers”.
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Voting Procedures for the Election of Directors
Cumulative voting (i.e., a form of voting where shareholdersShareholders are permitted to cast all of their aggregate votes for a single nominee) will not be permitted. The directors must be elected by an affirmative vote of a simple majority of the votes cast for each director, either in person or by proxy, at the Meeting on this matter.
The Corporation has adopted a majority voting policy where any nominee proposed for election as a director is required to tender his or her resignation if the director receives more “WITHHELD”“withheld” votes than “FOR”“for” votes (i.e., a majority of withheld votes) at any meeting where Shareholders vote on the uncontested election of directors. An “uncontested election” means the number of director nominees for election is the same as the number of directors to be elected to the Board. The Corporate Governance and Nominating Committee will then submit to the Board a recommendation regarding whether or not to accept the resignation to the Board. resignation. In the absence of exceptional circumstances, the Board shall accept such resignation. Within 90 days after the Meeting, the Board will issue a press release either announcing the resignation of the director or explaining the reasons justifying its decision not to accept the resignation. A director who tenders a resignation pursuant to this policy will not participate in any meeting of the Board or the Corporate Governance and Nominating Committee at which the resignation is considered.
Appointment of Auditor
The CorporationAudit Committee has proposed the appointment of EKS&H LLLPPlante & Moran, PLLC (“EKS&H”Plante Moran”) of Denver, Colorado, as the auditor of the Corporation to hold office until the close of the next annual general meeting of the Corporation or until a successor is appointed. It is proposed that theThe remuneration to be paid to the auditor will be fixed by the Board through the Audit Committee. EKS&HPlante Moran was appointed as the auditor of the Corporation on June 20,October 1, 2018, following the combination of EKS&H LLLP (“EKS&H”), the Corporation’s former auditor, with Plante Moran. Prior to the combination, EKS&H served as the Corporation’s auditor since 2014.
Representatives of EKS&HPlante Moran are expected to be present at the Meeting and to be available to respond to appropriate questions from persons present at the Meeting. If representatives of EKS&HPlante Moran are present at the Meeting, the ChairmanChair of the Meeting will provide such representatives with the opportunity to make a statement if they so desire.
TheAppointment of the auditors must be appointed and the approval of the proposal that the auditor’s remuneration be fixed by the Board through the Audit Committee must be passed by an affirmative vote of a simple majority of the votes cast, either in person or by proxy, at the Meeting on this matter.matter.
The Board recommends a vote “FOR” (i) the appointment of EKS&HPlante Moran of Denver, Colorado as the auditor of the Corporation and (ii) the proposal that the auditor’s remuneration be fixed by the Board through the Audit Committee.Corporation. Where no choice is so specified with respect to any resolution or in the absence of certain instructions, the proxies given pursuant to this solicitation will be voted “FOR” (i) the appointment of EKS&HPlante Moran of Denver, Colorado and (ii) the proposal that the auditor’s remuneration be fixed by the Board through the Audit Committee.Colorado.
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Fees Paid to Auditor and their Independence from the Corporation
The Corporation retained EKS&HPlante Moran to provide services which were paid for the yearyears ended December 31, 20172022 and 20162021 in the following categories and amounts:
|
|
|
|
| ||||
|
| 2017 |
| 2016 | ||||
| | | | | ||||
| | Plante Moran 2022 | | Plante Moran 2021 | ||||
Audit Fees (1) | $ | 147,006 | $ | 151,444 | $ | 159,900 | $ | 173,400 |
Audit Related Fees (2) |
| - |
| - | | – | | – |
Tax Fees (3) |
| 35,000 |
| 37,700 | | 26,000 | | 26,000 |
All Other Fees (4) |
| 22,958 |
| 33,680 | | – | | – |
Totals | $ | 204,964 | $ | 222,824 | $ | 185,900 | $ | 199,400 |
(1) |
|
(2) | “Audit Related Fees” represent fees for assistance with the application of accounting and financial reporting standards and regulatory filings. |
(3) | “Tax Fees” represent fees for tax compliance, tax consulting and tax planning. |
(4) | “All Other Fees” represents legal compliance and business practice reviews, financial information systems design and implementation, internal audit co-sourcing services or other matters not covered by Audit Fees, Audit Related Fees, or Tax Fees. |
Policy on Pre-Approval by Audit Committee of Services Performed by Independent Auditors
The charter of the Corporation’s consolidated annual financial statements, review of the Corporation’s interim financial statements and review in connection with regulatory financial filings.
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(2) “Audit Related Fees” represent fees for assistance with the application of accounting and financial reporting standards and regulatory filings.
(3) “Tax Fees” represent fees for tax compliance, tax consulting and tax planning.
(4) “All Other Fees” represents legal compliance and business practice reviews, financial information systems design and implementation, internal audit co-sourcing services or other matters not covered by Audit Fees, Audit Related Fees or Tax Fees.
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The Audit Committee charter(the “Audit Committee Charter”) requires the Audit Committee to approve in advance all particularpre-approve audit and non-audit services provided by the Corporation’s independent auditor. Consistent with applicable laws and the procedures adopted by the Audit Committee, limited amountspre-approval of audit and permitted non-audit services other than audit, review or attestation services, may be approved byhas been delegated to one or more members of the Audit Committee pursuant to authority delegated by the Audit Committee, provided that the Audit Committee is informed of each particular service.any pre-approved services at its next scheduled meeting. All of the engagements and fees for 2017 were pre-approved by the Audit Committee.Corporation’s independent auditor for 2022 were pre-approved. The Audit Committee reviews with the auditor whether the non-audit services to be provided are compatible with maintaining the auditor’s independence. The Board has determined that fees paid to the independent auditors for non-audit services in any year will not exceed the fees paid for audit services during the year. Permissible non-audit services will be limited to fees for tax services, accounting assistance or audits in connection with acquisitions, and other services specifically related to accounting or audit matters such as audits of employee benefit plans.
Advisory Vote on the Approval of Executive Compensation
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) was enacted on July 21, 2010. The Dodd-Frank Act requiresSEC’s proxy rules require that the Corporation provide its Shareholders with the opportunity to vote to approve, on an advisory (non-binding) basis, the compensation of the Corporation’s named executive officers as disclosed in this Information Circular in accordance with applicable SEC rules.
As described in greater detail below under the heading “Executive Compensation -– Compensation Discussion and AnalysisAnalysis”,” the Corporation’s goal for its executive compensation program is to attract, motivate and retain a talented team of executives who will provide leadership for its success, and thereby increase Shareholder value. The Corporation believes that its executive compensation program satisfies this goal and is strongly aligned with the long-term interests of its Shareholders. Please see the section “Executive Compensation” and the related compensation tables below for additional details about the Corporation’s executive compensation programs, including information about the fiscal 20172022 compensation of the Corporation’s named executive officers.
At our annual general and special meeting of Shareholders held April 27, 2017,28, 2022, the Shareholders approved the compensation of the Corporation’s named executive officers for the fiscal year 20162021 (“Say-on-Pay Vote”Vote”). Additionally, at our annual general meeting of Shareholders held April 27, 2017, the Shareholders recommended a frequency for Say-on-Pay votes of every year. Subsequently, the Board adopted the Shareholders’ recommendation of holding Say-on-Pay votes every year. Accordingly, Shareholders are being asked to vote on executive compensation again at this Meeting.
The Corporation is asking its Shareholders to indicate their support for its named executive officer compensation as described in this Information Circular. This proposal, commonly known as a “say-on-pay” proposal, gives Shareholders the opportunity to express their views on the Corporation’s named executive officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of the Corporation’s named executive officers and the philosophy, policies and practices described in
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this Information Circular. Accordingly, the Corporation is asking Shareholders to vote “FOR” the following resolution at the Meeting:
“BE IT RESOLVED, that the compensation paid to the Corporation’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion is hereby approved.approved, as included in the Corporation’s Information Circular.”
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This say-on-pay vote is advisory, and therefore, is not binding on the Corporation, the Compensation Committee or the Board. The Board and the Compensation Committee value the opinions of the Shareholders, and to the extent there is any significant vote against named executive officers’ compensation as disclosed in this Information Circular, the Corporation, the Board and the Compensation Committee will consider the results of the vote in future compensation deliberations.
The approval, on an advisory, non-binding basis, of the Shareholder resolution regarding the compensation of the Corporation’s named executive officers as described in this Information Circular will be approvedgranted if passed by an affirmative vote of a simple majority of the votes cast, either in person or by proxy, at the Meeting on this matter.
The Board recommends that the Shareholders vote “FOR” the resolution approving the compensation of our named executive officers as disclosed in this Information Circular.
Where no choice is so specified with respect to any resolution or in the absence of certain instructions, the proxies given pursuant to this solicitation will be voted “FOR” the resolution approving the compensation of our named executive officers as disclosed in this Information Circular. Under the rules of the New York Stock Exchange (the “NYSE”), brokers are prohibited from giving proxies to vote on executive compensation matters unless the beneficial owner of such shares has given voting instructions on the matter. This means that if your broker is the record holder of your common shares in the capital of the Corporation (“Common Shares”), you must give voting instructions to your broker with respect to this proposal if you want your broker to vote your Common Shares on the matter.
The Board recommends that the Shareholders vote “FOR” the resolution approving the compensation of our named executive officers as disclosed in this Information Circular.
Advisory Vote on the Frequency of an Advisory Vote on Executive Compensation
Under the Dodd-Frank Act, public companies are generally required to include in their proxy solicitations at least once every six years an advisory, non-binding vote on whether an advisory vote on executive compensation (such as the say-on-pay proposal that is included above) should occur every one, two or three years. The Corporation previously held an advisory vote on the frequency of an advisory vote on executive compensation at its annual general meeting on April 27, 2017. Therefore, the Corporation is required to hold another advisory vote on frequency again this year.
At the last annual general meeting on April 27, 2017 where this matter was considered, Shareholders voted to hold an advisory vote every year and the Board adopted this frequency in light of the advisory vote of the Shareholders. It is the Board’s belief, and the Board’s recommendation, that the advisory vote should continue to occur every year.
The Corporation believes it has effective executive compensation practices, as described in more detail elsewhere in this Information Circular. The Board believes that continuing to provide the Corporation’s Shareholders with an advisory vote on executive compensation every year will encourage accountability to Shareholders in coordination with a long-term approach to evaluating the Corporation’s executive compensation policies and practices, consistent with the Compensation Committee’s long-term philosophy on executive compensation.
For the above reasons, the Board recommends that Shareholders vote to hold an advisory vote on executive compensation every year.
You may cast your vote on your preferred voting frequency by choosing the option of three years, two years, one year, when you vote in response to the resolution set forth below.
“BE IT RESOLVED that the option of once every three years, two years, or one year, that receives the highest number of votes cast for this resolution will be determined to be the Shareholders’ preferred frequency with
which Vista Gold Corp. is to hold a Shareholder advisory vote regarding the executive compensation of the Corporation’s named executive officers, as disclosed pursuant to the SEC’s compensation disclosure rules.”
The option of three years, two years or one year that receives the highest number of votes cast by Shareholders will be the frequency for the advisory vote on the compensation of our named executive officers that has been selected by Shareholders. The vote on this proposal is only advisory in nature and is not binding on the Board or the Corporation. The Board and the Compensation Committee will take into account the outcome of the vote; however, the Board may decide that it is in the best interests of the Corporation’s Shareholders and the Corporation to hold an advisory vote on the compensation of the Corporation’s named executive officers more or less frequently than the option approved by Shareholders.
Unless otherwise instructed, the proxies given pursuant to this solicitation will be voted to hold an advisory vote on the compensation of our named executive officers every year. Under the rules of the NYSE,”), brokers are prohibited from giving proxies to vote on executive compensation matters unless the beneficial owner of such shares has given voting instructions on the matter. This means that if your broker is the record holder of your shares, you must give voting instructions to your broker with respect to this proposal if you want your broker to vote your shares on the matter.
The Board of Directors recommends that Shareholders vote to hold an advisory vote on the compensation of our named executive officers every year.
Approval of Unallocated Options under the Corporation’s Stock Option Plan
The rules of the TSX require that all unallocated options, rights or other entitlements under a listed corporation’s security based compensation arrangement, which does not have a fixed maximum aggregate number of securities issuable, be approved every three years by a majority of both the listed corporation’s directors and by its shareholders. The Corporation’s Stock Option Plan (the “Stock Option Plan”) is a “rolling” stock option plan and provides that the maximum number of Common Shares (as defined below) that may be issuable pursuantAmendments to options to purchase Common Shares (“Options”) granted under the Stock Option Plan, together with all other security based compensation arrangements of the Corporation, which includes the Corporation’s Long Term Equity Incentive Plan
On October 22, 2022, the United States Securities and Exchange Commission adopted rules that direct U.S. stock exchanges to adopt listing standards requiring all listed companies to adopt and comply with a written clawback policy. In general, such clawback policy must require that any incentive compensation (including both cash and equity compensation) paid to any current or former executive officer is subject to recoupment if (a) the incentive compensation was calculated based on financial statements that were required to be restated due to material noncompliance with financial reporting requirements, without regard to any fault or misconduct and (b) that noncompliance resulted in overpayment of the incentive compensation within the three fiscal years preceding the date the restatement was required.
Compliance with the new clawback policy listings rules by the Corporation remains subject to adoption of the new listing rules by the NYSE American and compliance deadlines thereafter. The Corporation does not currently have a clawback policy, and the Corporation anticipates waiting for the NYSE American to adopt its new clawback policy listing rules before adopting a compliant clawback policy. However, as the clawback policy will likely require the Corporation to seek recoupment of awards granted under the Corporation’s Long Term Equity Incentive Plan (“LTIP”(the “LTIP”), is a variable number equal to 10% of the total number of Common Shares issued pursuant to the vesting and outstanding assettlement of such Awards and any monetary amounts received upon the vesting of such Awards or the sale of such Common Shares issued pursuant to such Awards, the Compensation Committee of the dateBoard has recommended and the Board has approved an amendment to the LTIP to add a provision to the LTIP making awards granted under the LTIP (“Awards”) subject to recoupment in accordance with any then existing clawback policy adopted by the Board, whether in compliance with applicable listing rules of any applicable stock exchange, as may be required by applicable law or as otherwise may be adopted by the Board.
In addition to the amendment to comply with the new clawback policy, the Board is proposing to amend the LTIP to provide that the Board is permitted to amend the LTIP, without Shareholder approval or advance notice, if such amendment is required to comply with applicable laws (including, without limitation, the regulations, rules and policies of the grant on a non- diluted basis. Accordingly,NYSE MKT and the unallocated Options underTSX), or necessary or desirable for any advantages or other purposes of any tax law (including, without limitation, the Stock Option Plan must be approved by a majorityrules, regulations, and policies of both the Corporation’s directorsCanada Revenue Agency, the Internal Revenue Service or any taxation authority). Currently, amendments to the LTIP that, in the Board’s opinion, would prejudicial to the rights and by its shareholders.interests of participants in the LTIP require Shareholder approval, even when they are mandatory to comply with any changes in applicable law. The Board unanimously approved all unallocated Options underproposed amendment will make the Stock Option Plan on March 4, 2018. Atamendment provisions of the Meeting, Shareholders will be asked to approve all unallocated Options under the Stock Option Plan until April 26, 2021.
As of March 16, 2018, there were 1,964,500 Common Shares issuable upon the exercise of outstanding Options granted underLTIP more consistent with the Stock Option Plan and 1,647,907 Common Shares issuable uponeliminate the vesting of outstanding Awards (as defined below) granted underneed for Shareholder approval for amendments that are required by law (such as the LTIP. Accordingly, 3,612,407 Common Shares (or 3.6%introduction of the total number of issued and outstanding Common Shares) are issuable under the foregoing Options or Awards. 6,341,588 Common Shares (or 6.4% of the total number of issued and outstanding Common Shares) in aggregate remain available for future grants under the Stock Option Plan and the LTIP.clawback policy).
Currently outstanding Options will be unaffected if this resolution is not approved. However, currently outstanding Options which have been terminated will not be available for re-grant and the Board will not be able to grant new Options if the unallocated Options are not approved. If the unallocated Options are approved at the Meeting then the unallocated Options will have to be re-approved by the Shareholders at the Corporation’s annual general meeting in 2021. The Board has not granted any Options that are conditional on the approval of this resolution and it cannot currently be determined the amount of such Options that may be granted in the future to any individual participant, all executive officers as a group, all directors as a group, any nominee for election as a director, any associate of an executive officer, director or nominee, any employee of the Corporation or all employees as a group.
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The text of the ordinary resolution to approve all unallocated Options under the Stock Option Plan is set out in Part Iamendments to Appendix “C”. Additional information on the Stock Option Plan is set out below under the heading “Executive Compensation - Compensation Discussion and Analysis - Elements of the Corporation’s Compensation Program for Fiscal Year 2017 - Stock Incentive Awards - Stock Option Plan”.
The Board recommends that the Shareholders vote “FOR” the resolution approving all unallocated Options under the Stock Option Plan. Where no choice is so specified with respect to any resolution or in the absence of certain instructions, the proxies given pursuant to this solicitation will be voted “FOR” the resolution to approve of all unallocated Options under the Stock Option Plan as disclosed in this Information Circular.
Approval of Unallocated Awards under the Corporation’s Long Term Equity Incentive Plan
As stated above, the rules of the TSX require that all unallocated options, rights or other entitlements under a listed corporation’s security based compensation arrangement, which does not have a fixed maximum aggregate number of securities issuable, be approved every three years by a majority of both the listed corporation’s directors and by its shareholders. The LTIP provides that the maximum number of Common Shares available for issuance pursuant to Awards under the LTIP, together with all other security based compensation arrangements of the Corporation, which includes the Stock Option Plan, is 10% of the issued and outstanding Common Shares on a non-diluted basis. Accordingly, the unallocated Awards under the LTIP must be approved by a majority of both the Corporation’s directors and by the Shareholders. The Board unanimously approved all unallocated Awards under the LTIP on March 4, 2018. At the Meeting, Shareholders will be asked to approve all unallocated Awards under the LTIP until April 26, 2021.
For a discussion of outstanding options and awards and available shares for grant under the Corporation’s equity compensation plans see the discussion under “Approval of Unallocated Options under the Corporation’s Stock Option Plan”.
Currently outstanding Awards will be unaffected if this resolution is not approved. However, currently outstanding Awards which have been terminated will not be available for re-grant and the Board will not be able to grant new Awards if the unallocated Awards are not approved. If the unallocated Awards are approved at the Meeting, then the unallocated Awards will have to be re-approved by the Shareholders at the Corporation’s annual general meeting in 2021. The Board has not granted any Awards that are conditional on the approval of this resolution and it cannot currently be determined the amount of such Awards that may be granted in the future to any individual participant, all executive officers as a group, all directors as a group, any nominee for election as a director, any associate of an executive officer, director or nominee, any employee of the Corporation or all employees as a group.
The text of the ordinary resolution to approve all unallocated Awards under the LTIP is set out in Part III to Appendix “C”. Additional information on the LTIP is set out below under the heading “Executive Compensation -– Compensation Discussion and Analysis -– Elements of the Corporation’s Compensation Program for Fiscal Year 2017 -2022 – Stock Incentive Awards -– Long Term Equity Incentive Plan”.
The approval of the resolution to approve the amendments to the LTIP will be granted if passed by an affirmative vote of a simple majority of the votes cast, either in person or by proxy, at the Meeting on this matter.
The Board recommends that the Shareholders vote “FOR” the resolution approving all unallocated Awards underthe amendments to the LTIP. Where no choice is so specified with respect to any resolution or in the absence of certain instructions, the proxies given pursuant to this solicitation will be voted “FOR” the resolution to approve of all unallocated Awards underthe amendments to the LTIP as disclosed in this Information Circular.
Approval of Deferred Share Unit Plan
At the Meeting, the Shareholders of the Corporation will be asked to consider and, if thought appropriate, approve a resolution to approve the adoption of a Deferred Share Unit Plan of the Corporation (the “DSU Plan”). On March 4, 2018, the Board approved the DSU Plan, subject to Shareholder approval.
The following is a brief summary of the material terms of the DSU Plan. This summary is qualified in its entirety by the full text of the DSU Plan which is set out in Appendix “D”.
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Description of the DSU Plan
Purpose of the DSU Plan and Eligibility
The purpose of the DSU Plan is to assist the Corporation in attracting, retaining and motivating directors of the Corporation and to more closely align the personal interests of such persons with Shareholders, thereby advancing the interests of the Corporation and its Shareholders and increasing the long-term value of the Corporation. Any individual who is a director of the Corporation (an “Eligible Director”) is eligible to participate in the DSU Plan.
Grants of DSUs
The DSU Plan will be administered by the Board, which, from time to time in its sole discretion, will cause the Corporation to enter into agreements (“DSUs”) with Eligible Directors (“Participants”), pursuant to which the Corporation will agree to pay, and the Participant will have the right to receive, Common Shares (the “PaymentShares”). In respect of each grant of DSUs, the Board will determine, among other things, the number of DSUs allocated to the Participant and such other terms and conditions of the DSUs applicable to each grant.
Vesting and Term
Deferred Share Units will be fully vested upon being granted and credited to an account maintained by the Corporation for each Participant by means of a book-keeping entry (“Account”).
The term during which a DSU may be outstanding will, subject to the provisions of the DSU Plan (which require or permit the acceleration or the extension of the term), be such period as may be determined from time to time by the Board, but subject toUnder the rules of any stock exchange or other regulatory body having jurisdiction over the Corporation.
LimitsNYSE, brokers are prohibited from giving proxies to vote on Issuances
Notwithstanding any other provisioncompensation matters unless the beneficial owner of such shares has given voting instructions on this matter. This means that if your broker is the DSU Plan, the maximum numberrecord holder of your Common Shares, issuableyou must give voting instructions to any one individual pursuantyour broker with respect to outstanding DSUs at any time shall be limitedthis proposal if you want your broker to 5% of the aggregate number of issued and outstandingvote your Common Shares on a non-diluted basis, provided that the maximum number of Common Shares available for issuance pursuant to outstanding DSUs under the DSU Plan, together with all other security based compensation arrangements, which include the Stock Option Plan and the LTIP, may not exceed 10% of the Common Shares outstanding from time to time, on a non-diluted basis.this matter.
In addition, the number of Common Shares issuable to insiders of the Corporation, at any time, and issued to insiders of the Corporation within any one-year period pursuant to DSUs together with any other security based compensation arrangements, may not exceed 10% of the issued and outstanding Common Shares on a non-diluted basis. The number of Common Shares issued to Eligible Directors shall not exceed the lesser of; (i) 1% of the issued and outstanding Common Shares; and (ii) an annual DSU value of $150,000 per Eligible Director.
DSUs that are cancelled, terminated or expire shall result in the Common Shares that were reserved for issuance thereunder being available for a subsequent grant of DSUs pursuant to the DSU Plan to the extent of any Common Shares issuable thereunder that are not issued under such cancelled, terminated or expired DSUs.
Any increase in the issued and outstanding Common Shares (whether as a result of the issue of Common Shares pursuant to DSUs or otherwise) will result in an increase in the number of Common Shares that may be issued pursuant to DSUs outstanding at any time. Further, if the acquisition of Common Shares by the Corporation for cancellation should result in the above tests no longer being met, this will not constitute non-compliance with the above limitations for any awards outstanding prior to such purchase of Common Shares for cancellation.
Election by Participant and Payment
A Participant will have the right to receive Payment Shares on one of the following dates (the “Distribution Date”): (i) the Separation Date (as defined in the DSU Plan), if (A) the Participant has resigned at the end of their term on the Board, or (B) upon death of the Participant; (ii) 60 days after the Separation Date, if the Participant resigns or is
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removed from the Board prior to the end of their term on the Board, for any reason; or (iii) such later date as the Participant may elect by written notice delivered to the Chief Financial Officer of the Corporation prior to the Separation Date, provided that in no event will a Participant be permitted to elect a date which is later than December 1 of the calendar year following the calendar year in which the Separation Date occurs.
Notwithstanding the above, if the Participant is a U.S. citizen, permanent resident or otherwise subject to U.S. taxation (a “U.S. Participant”), then no later than the end of the calendar year prior to the year DSUs are first granted under the DSU Plan, or if later, within thirty (30) days following the date a U.S. Participant first becomes an Eligible Director of the Plan, but in all cases prior to the date of grant of any DSUs, such U.S. Participant must elect the Distribution Date for their full DSU account for all current and future grants of DSUs under the DSU Plan by way of a written notice delivered to the Chief Financial Officer of the Corporation, provided that in no event will a Participant be permitted to elect a date which is later than December 1 of the calendar year following the calendar year in which the Separation Date occurs. If no such election is timely made, the Distribution Date shall be the Separation Date, provided that if the U.S. Participant is considered a “specified employee” for purposes of Section 409A of the Code, then the Distribution Date shall be no earlier than six (6) months following the Separation Date. In addition, if a payment to a U.S. Participant would comply with Section 409A of the Code but would violate the Canadian tax rules, then notwithstanding any other term of the DSU Plan, unless the Compensation Committee of the Board determines that payment may be made in some other manner and at some other time in compliance with Section 409A of the Code without violating the Canadian tax rules, then such payment shall be made to a trustee for the benefit of the U.S. Participant that causes the payment to be included in such U.S. Participant’s taxable income for U.S. purposes, but does not violate the Canadian tax rules, and amounts shall be thereafter paid out in a manner compliant with the Canadian tax rules. No provision or amendment to the DSU Plan shall permit the acceleration of payments to U.S. Participants in a manner that would violate Section 409A of the Code.
The Corporation will issue Common Shares within 10 business days after the Distribution Date by issuing to the Participant a number of Common Shares from treasury equal to the number of DSUs in the Participant’s Account that became payable on the Distribution Date.
If the Corporation pays dividends on the Common Shares, a Participant’s Account may be credited with additional DSUs. The number of such additional DSUs, if any, will be calculated by dividing (a) the total amount of the dividends that would have been paid to the Participant if the DSUs in the Participant’s account on the dividend record date had been outstanding Common Shares (and the Participant held no other Common Shares), by (b) the Fair Market Value (as defined below) per Common Share two trading days prior to the dividend record date.
For the purposes of the DSU Plan, “Fair Market Value” with respect to a Common Share, as at any date, means the volume weighted average trading prices of the Common Shares on the TSX or the NYSE American (to be determined by where the majority of the trading volume and value of the Common Shares occurs) for the five (5) trading days immediately preceding the day on which the Fair Market Value is to be determined. In the event that the Common Shares are not listed and posted for trading on any stock exchange, the Fair Market Value shall be the fair market value of the Common Shares as determined by the Board in its sole discretion, acting reasonably and in good faith.
Black Out Periods
If any Common Shares may not be issued pursuant to a DSU in any period during which the holder of the DSU is not permitted to trade Common Shares pursuant to the policies of the Corporation (a “Black Out Period”), such Common Shares will be issued seven business days following the end of the Black-Out Period.
Death of Participant
Upon the death of a Participant prior to the distribution of the DSUs credited to the Account of such Participant under the DSU Plan, Payment Shares shall be issued or paid to the estate of such Participant on or about the thirtieth (30th) day after the Corporation is notified of the death of the Participant or on a later date elected by the Participant's estate in the form prescribed for such purposes by the Corporation and delivered to the Chief Financial Officer of the Corporation not later than twenty (20) days after the Corporation is notified of the death of the Participant, provided that such elected date is no later than the last business day of the calendar year following the calendar year in which the Participant dies so that payment can be made on or before such last business day.
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Notwithstanding the above, upon the death of a U.S. Participant, the Account shall be distributed to the estate of such U.S. Participant on the first business day following ninety (90) days after the U.S. Participant’s date of death.
Adjustments to DSUs
In the event: (a) of any change in the Common Shares through share dividend, subdivision, consolidation, reclassification, amalgamation, merger or otherwise; or (b) that any rights are granted to all or substantially all Shareholders to purchase Common Shares at prices substantially below Fair Market Value as of the date of grant (other than the payment of dividends in respect of the Common Shares as contemplated by the DSU Plan); or (c) that, as a result of any recapitalization, merger, consolidation or other transaction, the Common Shares are converted into or exchangeable for any other securities or property, then the Board may make such adjustments to the DSU Plan, the Account of each Participant, the agreements in respect of the DSUs and the DSUs outstanding under the DSU Plan as the Board may, in its sole discretion, consider appropriate in the circumstances to prevent dilution or enlargement of the rights granted to Participants hereunder and\or to provide for the Participants to receive and accept such other securities or property in lieu of Common Shares, and the Participants shall be bound by any such determination.
Amendment of the DSU Plan
Subject to the rules, regulations and policies of the TSX, the NYSE American and applicable law, the Board may, without notice or Shareholder approval, at any time or from time to time, make certain amendments to the DSU Plan or a specific DSU for the purposes of: (i) altering, extending or accelerating the terms of vesting applicable to any grant of DSUs or group of DSU grants under the DSU Plan; (ii) making any amendments to the general vesting provisions of DSUs granted under the DSU Plan; (iii) changing the termination provisions of DSUs granted under the DSU Plan or the DSU Plan itself; (iv) making any amendments to add covenants of the Corporation for the protection of Participants, provided that the Board shall be of the good faith opinion that such additions will not be prejudicial to the rights or interests of the Participants; (v) making any amendments not inconsistent with the DSU Plan as may be necessary or desirable with respect to matters or questions which, in the good faith opinion of the Board, having in mind the best interests of the Participants, it may be expedient to make, including amendments that are desirable as a result of changes in law in any jurisdiction where a Participant resides, provided that the Board shall be of the opinion that such amendments will not be prejudicial to the rights or interests of the Participants; (vi) making such changes or corrections which, on the advice of counsel to the Corporation, are required for the purpose of curing or correcting any ambiguity or defect or inconsistent provision or clerical omission or mistake or manifest error, provided that the Board shall be of the opinion that such changes or corrections will not be prejudicial to the rights or interests of the Participants; (vii) making any amendments to the definitions of the DSU Plan; (viii) effecting amendments with respect to the administration of the DSU Plan; and (ix) making amendments of a “housekeeping” or ministerial nature.
None of the following amendments under the DSU Plan may be made unless Shareholder approval is obtained: (i) to increase the maximum number of Common Shares issuable under the DSU Plan; (ii) to permit the assignment or transfer of a DSU other than as provided for in the DSU Plan; (iii) to add categories of persons eligible to participate in the DSU Plan; (iv) to remove or amend the limits on DSU grants to insiders of the Corporation; (v) to increase the number of Common Shares issuable to Eligible Directors except as provided for in the DSU Plan; (vi) to remove or amend the amendment provisions in the DSU Plan; (vii) to add any form of financial assistance to a Participant; or (viii) where approval is required by the Exchanges (whether it be Exchange or shareholder approval).
Amendments to the DSU Plan for the following require disinterested Shareholder approval amendments that: (i) could result in the number of Common Shares issuable to insiders of the Corporation exceeding 10% of the issued and outstanding Common Shares; (ii) extend the term of any grant of DSUs held by insiders of the Corporation, other than an extension during a Black Out Period; and (iii) require disinterested Shareholder approval under applicable law (including rules of the Exchanges).
Without limitation of the above, the Board may correct any defect or supply any omission or reconcile any inconsistency in the DSU Plan in the manner and to the extent deemed necessary or desirable, may establish, amend, and rescind any rules and regulations relating to the DSU Plan, and may make such determinations as it deems necessary or desirable for the administration of the DSU Plan.
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Termination or Suspension of the DSU Plan
If the Board terminates or suspends the DSU Plan, previously credited DSUs may, at the Board’s election, be distributed to Participants or may remain outstanding and in effect in accordance with the terms of the DSU Plan. The Board will not require the consent of any affected Participant in connection with a termination of the DSU Plan in which Payment Shares are issued to the Participant in respect of all such DSUs.
Transferability
Except as required by law, the rights of a Participant under the DSU Plan are not capable of being assigned, transferred, alienated, sold, encumbered, pledged, mortgaged or charged and are not capable of being subject to attachment or legal process for the payment of any debts or obligations of the Participant.
Securities Outstanding under Equity Based Compensation Plans
For a discussion of outstanding options and awards and available shares for grant under the Corporation’s equity compensation plans see the discussion under “Approval of Unallocated Options under the Corporation’s Stock Option Plan”.If the DSU Plan is approved, Common Shares could also be allocated for issuance pursuant to DSUs. However, the adoption of the DSU Plan would not affect the maximum number of Common Shares that may be issued pursuant to securities based compensation arrangements. The Board has not granted any DSUs that are conditional on the approval of this resolution and it cannot currently be determined the amount of such DSUs that may be granted in the future to any individual participant, all directors as a group, or any nominee for election as a director.
Approval Required
At the Meeting, shareholders will be asked to consider and, if thought appropriate, approve, an ordinary resolution approving the DSU Plan. Shareholder approval of the proposed DSU Plan is required pursuant to the policies of the TSX and the NYSE American. The ordinary resolution must be approved by a majority vote of the Shareholders.
The text of the ordinary resolution to approve the DSU Plan is set out in Part III to Appendix “C”. The full text of the DSU Plan is set out in Appendix “D”.
The Board recommends that the Shareholders vote “FOR” the resolution approving the adoption of the DSU Plan. Where no choice is so specified with respect to any resolution or in the absence of certain instructions, the proxies given pursuant to this solicitation will be voted “FOR” the resolution to approve the adoption of the DSU Plan as disclosed in this Information Circular.
Certain United States Federal Income Tax Consequences
The following is a brief summary of certain United States federal income tax consequences with respect to the issuance and exercise of options granted under the Stock Option Plan and the grant of awards under the LTIP or the DSU Plan. This summary does not describe all federal tax consequences, including the consequences of owning and selling the Common Shares, nor does it describe state, local or foreign tax consequences.
Scope of This Disclosure
This summary does not address the U.S. federal income tax consequences of participation in the Stock Option Plan, the DSU Plan or the LTIP by a non-U.S. Participant. For purposes of this summary, a “U.S. Participant” is a participant in the Stock Option Plan or LTIP who is either a citizen of the U.S. or a resident alien of the U.S. for purposes of the Internal Revenue Code of 1986, as amended (the “Code”), and the Canada-U.S. Tax Convention. For purposes of this summary, a “non-U.S. Participant” is a participant in the Stock Option Plan or LTIP who is not a U.S. Participant.
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Tax Consequences With Respect to Options
The following is a summary of certain anticipated material U.S. federal income tax consequences with respect to options granted pursuant to the Stock Option Plan. This summary is based on the Code, Treasury Regulations, published IRS rulings, published administrative positions of the IRS. The options granted under the Stock Option Plan are not intended to qualify as "incentive stock options" under Section 422 of the Code. Accordingly, the options should be treated as “non-qualified stock options”. In general, the following tax consequences will apply to U.S. Participants:
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Tax Consequences With Respect to Awards of Restricted Shares or Restricted Stock Units under the LTIP
There are no tax consequences to a U.S. Participant or the Corporation by reason of the grant of restricted stock or restricted stock units under the LTIP. If an award is payable in Common Shares that are subject to a substantial risk of forfeiture, unless a special election is made by the holder of the award under section 83(b) of the Code, the holder must recognize ordinary income equal to the fair market value of the Common Shares received (determined as of the first time the Common Shares become transferable or not subject to substantial risk of forfeiture, whichever occurs earlier). The holder’s basis for the Common Shares acquired under the LTIP will be the amount of ordinary income recognized either when the Common Shares are received (for restricted stock units) or when the Common Shares are vested (for restricted stock awards, subject to earlier recognition if a section 83(b) election is made). The Corporation will generally be entitled at that time to a U.S. income tax deduction for the same amount, subject to the rules of Section 162(m) of the Code.
Tax Consequences With Respect to Awards of DSUs under the DSU Plan
The following description applies to DSUs granted to directors who are U.S. Participants under the DSU Plan. The grant of DSUs and the crediting of DSUs to a director’s DSU Account should not result in taxable income to the director at the time of grant. When DSUs are paid out, the director will recognize ordinary income equal to the fair market value of the Common Shares and any cash received in settlement of the DSUs, and the Company will be entitled at that time to a corporate income tax deduction (for U.S. federal income tax purposes) for the same amount, subject to the general rules concerning deductibility of compensation. A director’s basis in any Common Shares received will equal the fair market value of the Common Shares at the time the director recognized ordinary income. If, as usually is the case, the Common Shares are a capital asset in the director’s hands, any additional gain or loss
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recognized on a subsequent sale or exchange of the Common Shares will not be ordinary income but will qualify as capital gain or loss. To the extent that a director’s DSUs are subject to U.S. federal income tax and to taxation under the Income Tax Act (Canada), DSUs awarded under the Plan are intended to comply with Section 409A of the Internal Revenue Code and to avoid adverse tax consequences under paragraph 6801(d) of the regulations under the Income Tax Act (Canada), The DSU Plan contains certain forfeiture provisions that could apply to DSUs awarded under the Plan in limited circumstances.
Solicitation of Proxies
The solicitation of proxies by management and the Board will be made primarily by notice and access but solicitation may be made by telephone or in person with the cost of such solicitation to be borne by the Corporation. While no arrangements have been made to date, the Corporation may contract for the solicitation of proxies for the Meeting. Such arrangements would include customary fees, which would be borne by the Corporation.
The persons named in the enclosed formForm of proxyProxy for the Meeting are officers of the Corporation and nominees of management and the Board. A Shareholder has the right to appoint some other person, who need not be a Shareholder, to represent such Shareholder at the Meeting by inserting that other person’s name in the blank space provided on the formForm of proxy,Proxy, which formForm of proxyProxy is set out in Appendix “A”. If a Shareholder appoints one of the persons designated in the accompanying formForm of proxyProxy as a nominee and does not direct the said nominee to vote either “FOR” or “WITHHOLD” from voting on a matter or matters, or where instructions on the formForm of proxyProxy are uncertain with respect to which an opportunity to specify how the common shares of the Corporation (“Common Shares”)Shares registered in the name of such registered Shareholder shall be voted, the proxy shall be voted “FOR” the resolution.resolutions identified in this Information Circular.
The instrument appointing a proxyholder must be in writing and signed by the registered Shareholder, or such registered Shareholder’s attorney authorized in writing, or if the registered Shareholder is a corporation, by the authorized representative or a duly authorized person on behalf of such corporation. A proxy must be dated. In order for a proxy to be valid, a registered Shareholder must:
(a)sign his or her name on the lines specified for such purpose at the bottom of the form of proxy; and
(b)return the properly executed and completed form of proxy:
(i)by mailing it or delivering it by hand in the appropriate enclosed return envelope addressed to Vote Processing, c/o Broadridge. to be received by 10:00 a.m., Vancouver time, on April 24, 2018, or no later than 48 hours before any adjournment or postponement of the Meeting., or
(ii) by depositing it with the Chair of the Meeting prior to commencement of the Meeting.
(1) | sign his or her name on the lines specified for such purpose at the bottom of the Form of Proxy; and |
(2) | return the properly executed and completed Form of Proxy by mailing it or delivering it by hand in the appropriate enclosed return envelope addressed to Vote Processing, c/o Broadridge at 51 Mercedes Way, Edgewood, NY 11717 to be received by 10:00 a.m., PDT, on April 25, 2023, or no later than 48 hours before any adjournment or postponement of the Meeting. |
A registered Shareholder may revoke a proxy by delivering an instrument in writing executed by such registered Shareholder or(or by the registered Shareholder’s legal representative or trustee in bankruptcy or, where the registered Shareholder is a corporation, by a duly authorized person on behalf of the corporation or by the authorized
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representative appointed for the corporation,corporation) either to the registered office of the Corporation at 1200-200 Burrard Street, Vancouver, British Columbia, Canada, V6C 3L6 attention: James Cantwell or to 7961 Shaffer Parkway, Suite 5, Littleton, Colorado, USA, 80127 attention: Pamela Solly at any time up to and including the two business days preceding the day10:00 a.m., PDT, on April 25, 2023, or no later than 48 hours before any adjournment or postponement of the Meeting or any adjournment or postponement thereof, withto the Chair of the Meeting prior to commencement of the Meeting or any adjournment or postponement thereof orthereof. A registered Shareholder may also revoke a proxy in any other manner permitted by law.
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law including by attending the meeting and voting in person or delivering a new Form of Proxy to the registered office of the Corporation or the transfer agent in accordance with the instructions and within the deadline set out in the Notice of Meeting.
A registered Shareholder may direct the manner in which his or her Common Shares are to be voted or withheld from voting in accordance with the instructions of the registered Shareholder by marking the formForm of proxyProxy accordingly. The management nominees designated in the enclosed formForm of proxyProxy will vote the Common Shares represented by proxy in accordance with the instructions of the registered Shareholder on any resolution that may be called for and if the registered Shareholder specifies a choice with respect to any matter to be acted upon, the Common Shares will be voted accordingly. Where no choice is so specified with respect to any resolution or in the absence of certain instructions, the Common Shares represented by a proxy given to management will be voted “FOR” the resolution.election of nominees to the Board and the resolutions identified in this Information Circular. If more than one direction is made with respect to any resolution, such Common Shares will similarly be voted “FOR” the resolution.
Exercise of Discretion by Proxyholders
The enclosed formForm of proxyProxy when properly completed and delivered and not revoked, confers discretionary authority upon the proxyholders named therein with respect to amendments or variations of matters identified in the accompanying Notice of Meeting, and other matters not so identified which may properly be brought before the Meeting. At the date of this Information Circular, management of the Corporation knows of no such amendments, variations, or other matters to come before the Meeting. If any amendment or variation or other matter comes before the Meeting, the persons named in the proxy will vote in accordance with their best judgement on such amendment, variation or matter, subject to any limitations imposed by applicable law.
Voting by Beneficial Shareholders
The information set out in this section is important to many Shareholders as a substantial number of Shareholders do not hold their Common Shares in their own name.
Persons who hold Common Shares through their brokers, agents, trustees or other intermediaries (such persons, “Beneficial Shareholders”“Beneficial Shareholders”) should note that only proxies deposited by registered Shareholders whose names appear on the share register of the Corporation may be recognized and acted upon at the Meeting. If Common Shares are shown on an account statement provided by a broker, then in almost all cases the name of such Beneficial Shareholder will not appear on the share register of the Corporation. Such Common Shares will most likely be registered in the name of the broker or an agent of the broker. In Canada, the vast majority of such shares will be registered in the name of “CDS & Co.”, the registration name of CDS Clearing and Depositary Services Inc., and in the United States, the vast majority will be registered in the name of “Cede & Co.”, the registration name of the Depository Trust Company, which entities act as nominees for many brokerage firms. Common Shares held by brokers, agents, trustees or other intermediaries can only be voted by those brokers, agents, trustees or other intermediaries in accordance with instructions received from Beneficial Shareholders. As a result, Beneficial Shareholders should carefully review the voting instructions provided by their intermediary with this Information Circular and ensure they communicate how they would like their Common Shares voted.
Beneficial Shareholders who have not objected to their intermediary disclosing certain ownership information about themselves to the Corporation are referred to as “NOBOs”“NOBOs”. Those Beneficial Shareholders who have objected to their intermediary disclosing ownership information about themselves to the Corporation are referred to as “OBOs”“OBOs”. In accordance with the requirements of National Instrument 54-101 – Communication with Beneficial Owners of Securities of a Reporting Issuer of the Canadian Securities Administrators and Rule 14a-13 under the Exchange Act,
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the Corporation has elected notice and accessnotice-and-access for delivery of the Notice of Meeting, this Information Circular and the formForm of proxyProxy (collectively, the “Meeting Materials”“Meeting Materials”) indirectly through intermediaries to all of the Beneficial Shareholders. The intermediaries (or their service companies) are responsible for forwarding the Meeting Materials to each Beneficial Shareholder, unless the Beneficial Shareholder has waived the right to receive them. The Corporation will pay for intermediaries to forward the Meeting Materials to OBO’s.
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OBOs.
Intermediaries will frequently use service companies to forward the Meeting Materials to Beneficial Shareholders. Generally, a Beneficial Shareholder who has not waived the right to receive Meeting Materials will either:
(a)be given a form of proxy which (i) has already been signed by the intermediary (typically by a facsimile, stamped signature), (ii) is restricted as to the number of shares beneficially owned by the Beneficial Shareholder, and (iii) must be completed, but not signed, by the Beneficial Shareholder and deposited with Computershare Investor Services Inc.; or
(b)more typically, be given a voting instruction form (“VIF”) which (i) is not signed by the intermediary, and (ii) when properly completed and signed by the Beneficial Shareholder and returned to the intermediary or its service company, will constitute voting instructions which the intermediary must follow.
(1) | be given a Form of Proxy which (i) has already been signed by the intermediary (typically by a facsimile, stamped signature), (ii) is restricted as to the number of shares beneficially owned by the Beneficial Shareholder, and (iii) must be completed, but not signed, by the Beneficial Shareholder and deposited with Broadridge; or |
(2) | more typically, be given a voting instruction form (“VIF”) which (i) is not signed by the intermediary, and (ii) when properly completed and signed by the Beneficial Shareholder and returned to the intermediary or its service company, will constitute voting instructions which the intermediary must follow. |
VIFs should be completed and returned in accordance with the specific instructions noted on the VIF. The purpose of this procedure is to permit Beneficial Shareholders to direct the voting of the Common Shares which they beneficially own.
Please return your voting instructions as specified in the VIF. Beneficial Shareholders should carefully follow the instructions set out in the VIF, including those regarding when and where the VIF is to be delivered.
Although Beneficial Shareholders may not be recognized directly at the Meeting for the purpose of voting Common Shares registered in the name of their broker, agent, trustee or other intermediary, a Beneficial Shareholder may attend the Meeting as a proxyholder for a Shareholder and vote Common Shares in that capacity. Beneficial Shareholders who wish to attend the Meeting or have someone else attend on their behalf, and indirectly vote their Common Shares as proxyholder for the registered Shareholder should contact their broker, agent, trustee, or other intermediary well in advance of the Meeting to determine the steps necessary to permit them to indirectly vote their Common Shares as a proxyholder.
As of March 9, 2018, the authorized share capital of the Corporation consists of no maximum number of Common Shares, without par value of which 99,539,949Common Shares are issued and outstanding. Every Shareholder who is present in person, by proxy or by authorized representative and entitled to vote at the Meeting shall on a show of hands have one vote and every Shareholder entitled to vote at the Meeting shall on a ballot have one vote for each Common Share they hold.
The Board of Directors has fixed the close of business on March 1, 201810, 2023 as the record date for the purpose of determining the Shareholders entitled to receive notice of and to vote at the Meeting, but the failure of any Shareholder to receive notice of the Meeting does not deprive such Shareholder of the entitlement to vote at the Meeting.
Brokers and other intermediaries, holdingAs of March 10, 2023, the authorized share capital of the Corporation consists of no maximum number of Common Shares, without par value of which 119,402,475 Common Shares are issued and outstanding. Every registered Shareholder who is present in street name for their customers, are requiredperson, by proxy or by authorized representative and entitled to vote the shares in the manner directed by their customers. Under the rules of the NYSE, brokers are prohibited from giving proxies to vote on non-routine matters (including, but not limited to, non-contested director elections and advisory votes on executive compensation and the frequency of such votes) unless the beneficial owner of such Common Shares has given voting instructions on the matter.
The absence of a vote on a matter where the broker has not received written voting instructions from a Beneficial Shareholder is referred to as a “broker non-vote”. Any Common Shares represented at the Meeting but not voted (whether by abstention, broker non-vote or otherwise) willshall have no impact on any mattersone vote and every Shareholder entitled to be acted uponvote at the Meeting.
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Ownership of the Corporation’s Common Shares
The following table sets forth certain information regarding beneficial ownership, control or direction, directly or indirectly, of the Common Shares, as of March 9, 2018, by (i) each of the Corporation’s executive officers and directors individually and (ii) the Corporation’s executive officers and directors, asMeeting shall on a group.
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Name and Position (1) |
| Common Shares Beneficially Owned |
| Percentage of Class (2) |
JOHN M. CLARK: Director |
| 215,600 (3) |
| * |
W. DURAND EPPLER: Director |
| 422,011(4) |
| * |
C. THOMAS OGRYZLO: Director |
| 266,907(5) |
| * |
TRACY A. STEVENSON: Director |
| 356,731(6) |
| * |
MICHAEL B. RICHINGS: Chairman and Director |
| 381,724(7) |
| * |
FREDERICK H. EARNEST: President Chief Executive Officer, Director |
| 1,240,991(8) |
| 1.2% |
JOHN F. ENGELE: Senior Vice President and Chief Financial Officer |
| 523,688(9) |
| * |
JOHN W. ROZELLE: Senior Vice President |
| 470,132(10) |
| * |
All executive officers and directors as a group (8 persons) |
| 3,877,784 |
| 3.9% |
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Ownership by Principal Shareholders
The following table sets forth certain information regarding the ownership of the Common Shares as at March 9, 2018 by each Shareholder known to the Corporation to beneficially own or control or direct, directly or indirectly, more than five percent of the outstanding Common Shares based on such person’s most recently available Schedule 13G filed with the SEC.
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Name and Address |
| Common Shares Beneficially Owned (1) |
| Percentage of Class (1) |
Sun Valley Gold LLC (“Sun Valley”) (2) |
| 19,872,544 (2) |
| 19.7% |
620 Sun Valley Road |
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Sun Valley, ID 83353 |
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Global Strategic Management, Inc.(“GSM”) (3) |
| 7,146,780 |
| 7.2% |
PO Box 6643 |
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Annapolis, MD 21401 |
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(1)In accordance with Rule 13d-3(d)(1) under the Exchange Act the applicable percentage of ownership of each Shareholder is based on 99,539,949 Common Shares outstanding as of March 9, 2018, plus any securities held by such Shareholder exercisable for or convertible into Common Shares within 60 days after the date of this Information Circular.
(2)Sun Valley exercises control and direction over 18,622,544 Common Shares (representing 18.7% of the outstanding Common Shares as of March 9, 2018 on an undiluted basis) and 1,250,000 Common Share purchase warrants. If the 1,250,000 warrants are exercised, Sun Valley will exercise control and direction over 19.7% of the issued and outstanding Common Shares (after giving effect to the exercise of such warrants, but not the exercise of any other convertible securities of the Corporation. they hold.
(3) GSM exercises control and direction over 7,146,780 Common Shares (representing 7.2% of the outstanding Common Shares as of March 9, 2018).
Change in Control
The Corporation has no charter or by-law provisions that would delay, defer or prevent a change in control of the Corporation.
The Corporation is not aware of any arrangement that might result in a change in control in the future. To the Corporation’s knowledge there are no arrangements, including any pledge by any person of the Corporation’s securities, the operation of which may at a subsequent date result in a change in the Corporation’s control.
Under the Articles of the Corporation, the quorum for the transaction of business at the Meeting is two or more Shareholders entitled to vote at the Meeting represented in person or by proxy.
Abstentions will be counted as present for purposes of determining the presence of a quorum at the Meeting but will not be counted as votes cast. Broker non-votes (shares held by a broker or nominee as to which the broker or nominee does not have the authority to vote on a particular matter)matter without instructions, see below “Broker Non-Votes”) will not be counted as votes cast for the particular matter. For broker non-votes if the Common Shares not voted on a particular matter pursuant to a broker non-vote are voted on other matters at the Meeting at which a broker or nominee
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have authority to vote without instruction (e.g. the appointment of auditors), then those Common Shares will be counted as present for purposes of determining the presence of a quorum for purposes at the Meeting and will not be voted. Meeting.
Accordingly,Except as described below, neither abstentions nor broker non-votes will have any effect on the outcome of the votes on the matters to be acted upon at the Meeting.
Votes withheld in relation to the election of directors and appointment of the auditors will be counted as present for purposes of determining the presence of a quorum at the Meeting and will have the same effect as a vote against the appointment of the auditors. In relation to the election of directors, pursuant to the Corporation’s majority voting policy, if the number of votes withheld in relation to a nominee exceeds the number of votes for such nominee, such nominee will be required to submit their resignation for consideration by the Board, see above “Majority Voting Policy”.
Broker Non-Votes
Brokers and other intermediaries, holding Common Shares in street name for their customers, are required to vote the Common Shares in the manner directed by their customers. Under the rules of the NYSE, brokers are prohibited from giving proxies to vote on non-routine matters (including, but not limited to, non-contested director elections, advisory votes on executive compensation, advisory votes on the frequency of advisory votes on executive compensation and the amendment of compensation plans) unless the beneficial owner of such Common Shares has given voting instructions on the matter.
The absence of a vote on a matter where the broker has not received written voting instructions from a Beneficial Shareholder is referred to as a “broker non-vote”. Any Common Shares represented at the Meeting but not voted (whether by abstention or broker non-vote) will have no impact on any matters to be acted upon at the Meeting.
Ownership of the Corporation’s Common Shares
The Corporation believes that it is in the best interest of the Corporation and its Shareholders to align the financial interests of the directors and executive officers with the interests of the Shareholders of the Corporation.
The Corporation adopted an Equity Ownership Policy on February 23, 2021 that requires its directors and executive officers to own Common Shares, restricted share units (“RSUs”), or deferred share units (“DSUs”) of Vista Gold Corp., having a fair market value equal to a multiple of the base annual salary (or in the case of a director, the annual cash retainer paid to the director or executive officer by the Corporation, as follows:
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Directors | Three (3) times annual cash retainer |
CEO | Three (3) times annual base salary |
CFO and COO | Two (2) times annual base salary |
Vice Presidents | One (1) times annual base salary |
Directors are required to achieve this ownership threshold within three years, and executive officers are required to achieve this ownership threshold within five years, from the later of the date this policy is adopted by the Board and the date the individual became a director or executive officer of the Corporation.
The following may be used in determining Common Share ownership: (a) Common Shares owned directly (including through open market purchases or acquired and held upon vesting of equity awards); (b) RSUs (whether vested or not vested); and (c) DSUs. Unexercised options to purchase Common Shares (“Options”) granted under the Corporation’s Stock Option Plan (the “Stock Option Plan”) (whether vested or unvested) do not count toward the minimum equity ownership requirements.
If the annual base salary of an executive officer, or the annual cash retainer of a director, is increased, such executive officer or director will be required to achieve the required minimum equity ownership level within two years of the effective date of the increase in base salary or retainer.
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Each individual director and executive officer is required to maintain his or her minimum ownership level throughout his or her term as an officer or director of the Corporation and securities may not be the object of specific monetization or other hedging arrangements to reduce or offset exposure to the market value of these holdings.
The value held shall be calculated as the greater of cost, grant date value or market value as of December 31st of each year.
Compliance with Equity Ownership Policy
The following table sets forth certain information regarding the equity ownership requirements for directors and executive officers of the Corporation. The policy was adopted on February 23, 2021 and the table presents compliance information as of December 31, 2022.
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Name and Position | Required Minimum Equity Holding Value | Compliant with Equity Ownership Policy |
Michael B. Richings, Chair and Director (2) | 156,000 | Y |
Tracy A. Stevenson, Director | 117,000 | Y |
John M. Clark, Director | 108,000 | Y |
W. Durand Eppler, Director | 105,000 | Y |
C. Thomas Ogryzlo, Director (2) | 105,000 | Y |
Deborah J. Friedman, Director | 98,250 | Y |
Frederick H. Earnest, President Chief Executive Officer, and Director | 1,050,000 | Y |
Douglas L. Tobler, Chief Financial Officer | 550,000 | Y (1) |
John W. Rozelle, Sr Vice President | 240,000 | Y |
Pamela A. Solly, Vice President Investor Relations | 180,000 | Y |
(1) | Mr. Tobler joined the Corporation on July 1, 2019. The Corporation believes it is reasonable that Mr. Tobler will be in compliance with the Equity Ownership Policy prior to five years from the date of adoption of the policy. |
(2) | Mr. Richings and Mr. Ogryzlo have announced their intent to retire and will not be standing for election at the Meeting. |
Ownership by Management
The following table sets forth certain information regarding beneficial ownership, control or direction, directly or indirectly, of the Common Shares, as of March 10, 2023, by (i) each of the Corporation’s executive officers and directors individually; and (ii) the Corporation’s executive officers and directors, as a group.
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Name and Position (1) | | Common Shares Beneficially Owned | | Percentage of Class (2) |
John M. Clark: Director | | 431,068(3) | | * |
W. Durand Eppler: Director | | 679,479(4) | | * |
Deborah J. Friedman: Director | | 341,000(5) | | * |
C. Thomas Ogryzlo: Director (13) | | 519,375(6) | | * |
Tracy A. Stevenson: Director | | 690,199(7) | | * |
Michael B. Richings: Chair and Director (13) | | 591,692(8) | | * |
Frederick H. Earnest: President Chief Executive Officer, Director | | 2,000,700(9) | | 1.7% |
Douglas L. Tobler: Chief Financial Officer | | 425,588 (10) | | * |
John W. Rozelle: Senior Vice President | | 509,616 (11) | | * |
Pamela A. Solly: Vice President of Investor Relations | | 290,830 (12) | | * |
All executive officers and directors as a group (10 persons) | | 6,485,847 | | 5.4% |
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* | Represents less than 1% of the outstanding Common Shares. |
(1) | The address of each of the persons listed is c/o Vista Gold Corp., 7961 Shaffer Parkway, Suite 5, Littleton, Colorado 80127. |
(2) | In accordance with Rule 13d-3(d)(1) under the Exchange Act, the applicable percentage of ownership for each person is based on 119,402,475 Common Shares outstanding as of March10, 2023, plus any securities held by such person exercisable for or convertible into Common Shares within 60 days after March 10, 2022. |
(3) | Includes 189,068 Common Shares currently owned and 242,000 Common Shares upon the settlement of DSUs. |
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(4) | Includes 438,479 Common Shares currently owned and 241,000 Common Shares upon the settlement of DSUs. |
(5) | Includes nil Common Shares currently owned, 100,000 Common Shares which may be acquired upon the exercise of immediately exercisable Options, and 241,000 Common Shares upon the settlement of DSUs. |
(6) | Includes 278,375 Common Shares currently owned and 241,000 Common Shares upon the settlement of DSUs. |
(7) | Includes 423,199 Common Shares currently owned, 242,000 Common Shares upon the settlement of DSUs, and 25,000 Common Shares which may be acquired upon the exercise of immediately exercisable Warrants. |
(8) | Includes 347,692 Common Shares currently owned and 244,000 Common Shares upon the settlement of DSUs. |
(9) | Includes 1,860,000 Common Shares currently owned and 147,000 Common Shares which may be acquired upon the exercise of immediately exercisable Options. |
(10) | Includes 270,588 Common Shares currently owned, 150,000 Common Shares which may be acquired upon the exercise of immediately exercisable Options, and 5,000 Common Shares which may be acquired upon the exercise of immediately exercisable Warrants. |
(11) | Includes 496,616 Common Shares currently owned and 13,000 Common Shares which may be acquired upon the exercise of immediately exercisable Options. |
Includes 190,830 Common Shares currently owned and 100,000 Common Shares which may be acquired upon the exercise of immediately exercisable Options. | |
(13) | Mr. Richings and Mr. Ogryzlo have announced their intent to retire and will not be standing for election at the Meeting. |
Ownership by Principal Shareholders
The following table sets forth certain information regarding the ownership of the Common Shares as at March 10, 2023 by each Shareholder known to the Corporation to beneficially own or control or direct, directly or indirectly, more than five percent of the outstanding Common Shares based on such person’s most recently available Schedule 13G filed with the SEC.
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Name and Address | | Common Shares Beneficially Owned(1) | | Percentage of Class (1) |
Sun Valley Gold LLC (“Sun Valley”) | | | 17.1% | |
620 Sun Valley Road | | | | |
Sun Valley, ID 83353 | | | | |
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(1) | In accordance with Rule 13d-3(d)(1) under the Exchange Act, the applicable percentage of ownership of each Shareholder is based on 119,402,475 Common Shares outstanding as of March 10, 2023, plus any securities held by such Shareholder exercisable for or convertible into Common Shares within 60 days after the date of this Information Circular. |
(2) | Sun Valley exercises control and direction over 19,922,544 Common Shares (representing 16.7% of the outstanding Common Shares as of March 10, 2023 on an undiluted basis) and 650,000 Common Share purchase warrants. If the 650,000 warrants are exercised, Sun Valley will exercise control and direction over 17.1% of the issued and outstanding Common Shares (after giving effect to the exercise of such warrants, but not the exercise of any other convertible securities of the Corporation). |
Change in Control
The Corporation has no charter provisions that would delay, defer, or prevent a change in control of the Corporation.
The Corporation is not aware of any arrangement that might result in a change in control in the future. To the Corporation’s knowledge there are no arrangements, including any pledge by any person of the Corporation’s securities, the operation of which may at a subsequent date result in a change in the Corporation’s control.
The Board and executive officers consider good corporate governance to be an important factor in the efficient and effective operation of the Corporation. The Canadian Securities Administrators implemented National Policy 58-201 - – Corporate Governance Guidelines and National Instrument 58-101 - – Disclosure of Corporate Governance Practices (“NI 58‑101”58-101”) in each of the provinces and territories of Canada. The NYSE American, (“NYSE American”LLC (the “NYSE American”) has also established rules for corporate governance as detailed in the NYSE American’s Company Guide (the “NYSE“NYSE American Company Guide”Guide”). The Board is of the view that the Corporation’s system of corporate governance meets or exceeds the majority of each of these sets of guidelines and requirements.
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The present Board consists of sixseven directors, fivesix of whom are viewed as being “independent” within the meaning of NI 58-101 and fivesix of whom qualify as unrelated directors who are viewed as being “independent” within the meaning of Section 803A of the NYSE American Company Guide. John M. Clark, W. Durand Eppler, Deborah J. Friedman, Michael B. Richings, C. Thomas Ogryzlo and Tracy A. Stevenson are considered to be independent members of the Board. Mr. Richings and Mr. Ogryzlo have announced their intent to retire and will not be standing for election at the Meeting. If the nominated directors are elected, after the AGM the Board will consist of Directors. five directors, four of whom will be independent.
Frederick H. Earnest is not an independent director because of his management position with the Corporation.
Board Leadership Structure
Michael B. Richings is the ChairmanChair of the Board and is considered under securities laws to be an independent director. Following the Meeting and retirement of Mr. Richings, the Board will appoint a new Chair. All of the members of the Corporate Governance and Nominating Committee, the Audit Committee and the Compensation Committee are independent directors and each of such committees meets regularly without management present. The Board has reviewed the Corporation’s current Board leadership structure in light of the composition of the Board, the Corporation’s size, the nature of the Corporation’s business, the regulatory framework under which the Corporation operates, the Corporation’s share base, the Corporation’s peer groupPeer Group (as defined below) and other relevant factors, and has determined that having a non-executive ChairmanChair of the Board with the valuable experience and knowledge of the Corporation that Mr. Richings possesses (as a former executive of the Corporation) is currently the most appropriate leadership structure for the Corporation.
The Board believes that adequate structures and processes are in place to facilitate the functioning of the Board independently of the Corporation’s management. The independent directors met together ninewithout management present six times during 2017.2022. The regularly scheduled committee meetings give the independent directors the opportunity for open and frank discussions on all matters they consider relevant, including an assessment of their own performance. In addition, the BoardAudit Committee meets periodicallyregularly with the Corporation’s auditor without management present. Accordingly, the Board believes that there is adequate leadership ofby the independent directors.
A number of directors of the Corporation hold directorships with other issuers. Details of those other directorships can be found above in the table under the heading “Particular“Particulars of Matters to be Acted Upon - Election of Directors”.
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NoneThe following table sets forth director attendance at Board and committee meetings for the year ended December 31, 2022. Two of the incumbent directors of the Corporation attended fewer than 80%100% of the Board meetings in 2017.
2022. The President and Chief Executive Officer of the Corporation is required to attend annual general meetings. Attendance by other directors is discretionary.All of the independent directors and Frederick Earnest, President, Chief Executive Officer and Director attended the 20172022 annual general meeting. and special meeting in person.
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Director | | Board Meetings (Attended/Held) | | Audit Committee Meetings (Attended/Held) | | Corporate Governance and Nominating Committee Meetings (Attended/Held) | | Compensation Committee Meetings (Attended/Held) | | HSE&SR Committee Meetings (Attended/Held) |
John M. Clark (1) | | 13/13 | | 5/5 | | 3/3 | | 5/5 | | N/A |
Frederick H. Earnest | | 13/13 | | N/A | | N/A | | N/A | | 4/4 |
| 13/13 | | N/A | | N/A | | 5/5 | | 4/4 | |
Deborah J. Friedman | | 12/13 | | 5/5 | | 4/4 | | N/A | | N/A |
C. Thomas Ogryzlo (2) | | 13/13 | | N/A | | 4/4 | | N/A | | 4/4 |
Michael B. Richings (1) (2) | | 13/13 | | N/A | | 1/1 | | N/A | | 4/4 |
Tracy A. Stevenson | | 12/13 | | 5/5 | | N/A | | 5/5 | | N/A |
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(1) | Effective April 21, 2022, Mr. Richings resigned from the Corporate Governance and Nominating Committee and effective April 28, 2022, Mr. Clark was appointed in his place. |
(2) | Mr. Richings and Mr. Ogryzlo have announced their intent to retire and will not be standing for election at the Meeting. |
Mandate of the Board of Directors
Pursuant to the British Columbia Business Corporations Act (British Columbia), the Board is required to manage or supervise the management of the affairs and business of the Corporation. The Board has adopted a written mandate (the “Mandate”), which defines its stewardship responsibilities in light of this statutory obligation. Under this mandate,Mandate, the Board is responsible for (i) the stewardship of the business and affairs of the Corporation; (ii) supervising the management of the business and affairs of the Corporation; (iii) providing leadership to the Corporation by practicing responsible, sustainable and ethical decision making; (iv) ensuring that all major issues affecting the Corporation are given proper consideration, including the identification and management of risks relating to the business and affairs of the Corporation and (v) directing management to ensure that legal, regulatory and stock exchange requirements applicable to the Corporation have been met. In addition, the Board is also responsible for succession planning and assuring the integrity of the Corporation’s disclosure controls and procedures, internal controls over financial reporting and management information systems. In carrying out these responsibilities, the Board is entitled to place reasonable reliance on management. The mandateMandate and responsibilities of the Board are to be carried out in a manner consistent with the fundamental objective of protecting and enhancing the value of the Corporation and providing ongoing benefit to the Shareholders. See Appendix “B” for the Mandate of the Board.
Position Descriptions
The Boardhas developed written position descriptions for the Chair of the Board and the, Chief Executive Officer, and Chief Financial Officer.
The Chair’s primary responsibilities include providing leadership to foster effectiveness of the Board Chairing, chairing all Board meetings and managing the affairs of the Board and shareholders,Shareholders, and ensuring that the Board is organized properly, functions effectively and meets its obligations and responsibilities. The Chair also acts as the primary spokesperson for the Board and ensures that there is effective communication with shareholders,Shareholders, and between the Board and senior management. The Chair also acts in an advisory capacity to the CEO in all matters concerning the interests of the Board and works with the CEO in developing and monitoring the progress of strategic plans and in monitoring policy implementation.
The Chair of each committee of the BoardBoard is identified below under the heading “Corporate Governance - Board of Directors - Committees of the Board of Directors”. The Corporation has not developed written position descriptions for the Chair of each committee. The roles and responsibilities of each Chair are delineated by the Board. Each Chair provides leadership to its respective committee to assist that committee with operating effectively.
Orientation and Continuing Education
New Board members receive comprehensive orientation regarding the role of the Board, of Directors, its committees, and the directors, as well as the nature and operations of the Corporation’s business. As well,From time to time, presentations are given from time to time, to the Board of Directors on legal and other matters applicable to the Corporation and directors’ duties.
Ethical Business Conduct
On December 19, 2003, the Board adopted a Code of Business Conduct and Ethics (the “Code“Code of Ethics”Ethics”), which is based on the fundamental principles of honesty, loyalty, fairness, forthrightness and use of common sense in general. The Code of Ethics is periodically reviewed and amended from time to timeas necessary to reflect changes in the Corporation’s practices and good governance. The Code of Ethics was mostly recently amended in August 2020. An integral part of the Code of Ethics is the policy that the Corporation will be managed with full transparency, and in the best interests of the shareholdersShareholders and other stakeholders of the Corporation. The Code of Ethics (as amended) is available on the Corporation’s website at www.vistagold.com. The Code of Ethics applies to all directors, officers and employees of the Corporation, including the Corporation’s Chief Executive Officer and Chief Financial Officer. The Board, through the Corporate Governance and Nominating Committee, is responsible for monitoring compliance with the Code of
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Ethics. Anonymous reports of Code of Ethics violations go to the Chair of the Audit Committee and are investigated by that committee. Non-anonymous reports of Code of Ethics violations are investigated by the Corporate Governance and Nominating Committee. The Corporate Governance and Nominating Committee reviews with management any issues with respect to compliance with the Code of Ethics. The Corporation intends to disclose on its website any amendments to the Code of Ethics and if any waiver or implied waiver from a provision of its Code of Ethics is granted to a director or officer of the Corporation on its website.Corporation. No waivers or implied waivers were
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granted from the requirements of the Corporation’s Code of Ethics during the year ended December 31, 2017,2022, or during the subsequent period through to the date of this Information Circular.
The Board ensures, through the Corporate Governance and Nominating Committee, that the directors exercise independent judgement in considering transactions and agreements in respect of which a director or executive officer has a material interest.Furthermore, the Board adopted the Statement of Policy with respect to Related Party Transactions on March 2, 2009, which was amended on March 5, 2013 and March 5, 2017 for all interested transactions with related parties. The Code of Ethics sets out the procedures with respect to reporting conflicts of interest. Actual or potential conflicts of interests are reported to the Chair of the Corporate Governance and Nominating Committee. Members of the Corporate Governance and Nominating Committee are required to be particularly vigilant in reviewing and approving conflicts of interests.
Hedging Policy
The Corporation’s insider trading policy prohibits its directors, officers, family members of the directors and officers and any other entities in which such persons have a substantial beneficial interest, serves as trustee or is otherwise owned or controlled by such persons, from engaging in any form of hedging or monetization transactions, such as zero-cost collars and forward sale contracts in the Common Shares of the Corporation.
On March 13, 2019, the Board unanimously adopted a diversity policy (the “Diversity Policy”), designed to assist the Corporation in achieving various objectives focused on recruiting and managing key talent while promoting diversity and inclusion, including in regard to the representation of women on the Board and in senior executive officer positions. The Diversity Policy was updated in July 2020. The Diversity Policy sets out the Corporation’s diversity objectives which include, to: (i) consider, recruit, manage and promote individuals who are highly qualified, based on their talents, experience, functional expertise, skills, character, and qualities, and in light of the Corporation’s current and future plans and objectives as well as anticipated regulatory and market developments and other appropriate factors; (ii) consider criteria that promote diversity, including on the basis of age, race, gender, ethnicity, geographic knowledge, industry experience, Board tenure and culture; and (iii) consider the level of diverse representation on the Board and in senior executive officer positions along with other markers of diversity when making recommendations for nominees to the Board or for appointment as senior executive officers and in general with regard to succession planning for the Board and executive officers.
In January 2019, the Corporation had no women on the Board or in executive officer positions. In March 2019, the Board appointed one woman director who is a current member of the Board and in April 2019, the Board appointed one woman executive officer who is a current member of the management team. Pursuant to the Diversity Policy, management periodically reports to the Board regarding the efficacy of steps taken to achieve compliance with this policy. The Board continues to seek more diversity on the Board and in senior executive positions. The Corporation’s Diversity Policy is available on the Corporation’s website at www.vistagold.com.
Women Board Members and Executive Officers
Pursuant to the charter of the Corporate Governance and Nominating Committee Charter,(the “Corporate Governance and Nominating Committee Charter”), at least annually the Corporate Governance and Nominating Committee performs a review and evaluation of the proportion of femalewomen employees at the Corporation, in executive positions and on the Board and reports to the Board on the results of this review and evaluation. As at March 9, 2018, there are no female directors or executive officers of the Corporation. Diversity of the
The Board and the executive officers of the Corporation on the basis of age, race, gender, ethnicity, geographic knowledge, industry experience, board tenure and culture, is a factor considered in the selection of candidates as potential directors or executive officers. At this time the Corporation has not adopted a target regardingtargets for the representationnumber of women on the Board or in executive officer positions.positions, as it believes that any director nominee or executive officer should not be chosen or excluded solely or largely on the basis of gender. In identifying and nominating candidates for election or re-election to the Board, the Corporate Governance and Nominating Committee gives consideration to the level of representation of women on the Board, and focuses on the skills, expertise and background that would complement the existing Board and anticipated contributions the chosen candidate will make to the Board. Similarly, the Board will consider the level of representation of women in
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executive officer positions, and make hiring decisions based on skills, abilities and suitability. The Corporation does not adopt targets becauseBoard believes that this approach fosters decisions regarding the composition of the Board and senior management team based on the best interests of the Corporation and its Shareholders.
Currently, there is one woman director (representing 14.3% of the view thattotal number of directors) and one woman executive officer of the Corporation (representing 25.0% of the total number of executive officers). This represents the same number in such offices for 2022 and an increase in representation of women of 14.3% at the Board level and 25% at the executive level since January 2019. With the retirement of Mr. Richings and Mr. Ogryzlo and if all of management’s nominees for election as directors of the Corporation are elected at the Meeting, the Board will increase its current practicelevel of considering diversityrepresentation of women to 20%. On March 13, 2019, Deborah J. Friedman was appointed to the Board as a factor in selecting candidates as potential directors or executive officers permitsdirector of the Corporation to balanceand effective April 1, 2019, Pamela A. Solly was appointed as the benefitCorporation’s Vice President of diversity with other relevant considerations.Investor Relations.
Committees of the Board of Directors
During 2017,2022, there were four standing committees of the Board: the Audit Committee; the Corporate Governance and Nominating Committee; the Compensation Committee; and the Health, Safety, EnvironmentalEnvironment and Social Responsibility Committee, each described below. Between regularly scheduled meetings, the Board sometimes acts on recommendations of the Board, certain of its powers may be exercised by these standing committees and these committees, as well as the Board of Directors, sometimes act by unanimous written consent. All of the directors on each committee, except the Health, Safety, EnvironmentalEnvironment and Social Responsibility Committee, are “independent” within the meaning of Section 803A of the NYSE American Company Guide and within the meaning of National Instrument 52-110 – Audit Committees (“NI 52-110”52-110”). The Board assesses the effectiveness of its committees at least annually.
The effectiveness of the Board and its committees is considered periodically. Each committee of the Board evaluates its own effectiveness annually and, at least annually, the Board evaluates the performance of each of its committees. In addition, at least annually, the Corporate Governance and Nominating Committee evaluates the effectiveness of the Board as a whole, considering the size, composition, diversity, operation, practice, tenure policies and adequacy and quality of information provided by management of the Corporation for Board meetings. As well as the foregoing periodic evaluations, in 2017,periodically each director completedcompletes a confidential evaluation of the Board and its committees. The results of these confidential evaluations were summarized by legal counsel and presented to the Board. committees. The results of these confidential evaluations wereare summarized by legal counsel and presented to the Board.
Audit Committee
The Corporation has a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit Committee is Chaired by Tracy A. Stevenson. Its other members as of the date of this Information Circular are Michael B. RichingsDeborah J. Friedman and John M. Clark. Each member of the Audit Committee is “independent” within the meaning of Rule 10A-3 of the Exchange Act, Section 803(B)(2) of the NYSE American Company Guide and is “independent” and “financially literate” within the respective meaning of such terms in NI 52-110. In accordance with Section 407 of the United States Sarbanes-Oxley Act of 2002 and Item
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407(d)(5)(ii) and (iii) of Regulation S-K, the Board has identified Tracy A. Stevenson as the “Audit Committee Financial Expert” and has confirmed that Tracy A. Stevenson is “financially sophisticated” within the meaning of NYSE American Company Guide Section 803(B)(2). No member of the Audit Committee has participated in the preparationpreparing of the financial statements of the Corporation or any current subsidiary of the Corporation at any time during the past three years. The Audit Committee, under the guidance of the Audit Committee Charter approved by the Board, monitors and assists the Board in fulfilling its responsibilities in monitoring (i) the Corporation’s accounting and financial reporting processes; (ii) the integrity of the financial statements of the Corporation; (iii) compliance by the Corporation with legal and regulatory requirements; (iv) the independent auditor’s qualifications, independence and performance; (v) the Corporation’s policies and procedures for the identification, assessment and management of business risksrisks; and (vi) business practices and ethical standards of the Corporation. A copy of the Audit Committee Charter is available on the Corporation’s website at www.vistagold.com.www.vistagold.com. The Audit Committee met five times during the fiscal year ended December 31, 2017.2022. Additional information about the Audit Committee is contained below under the heading “Corporate Governance - Audit Committee Report”.
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Corporate Governance and Nominating Committee
The Corporate Governance and Nominating Committee is Chaired by W. Durand Eppler.Deborah J. Friedman. Its other members as of the date of this Information Circular are John Clark, and C. Thomas Ogryzlo. Mr. Ogryzlo intends to retire and Michael B. Richings.will not be standing for election at the Meeting. Following the Meeting and retirement of Mr. Ogryzlo, the Board will appoint an incumbent independent director of the Board to the Corporate Governance and Nominating Committee. The Corporate Governance and Nominating Committee’s functions are toto: (i) identify individuals qualified to become members of the Board and to recommend to the Board candidates for election or re-election as directors; (ii) recommend to the Board director nominees for each Board committee; (iii) consider issues and report to the Board with respect to corporate governance matters; and (iv) review and assess the Corporation’s governance policies. In addition, the Corporate Governance and Nominating Committee reviews related party transactions involving the Corporation. The Corporate Governance and Nominating Committee met twicefour times during the fiscal year ended December 31, 2017. 2022.
The Corporate Governance and Nominating Committee believes candidates for the Board should have the ability to exercise objectivity and independence in making informed business decisions; extensive knowledge, experience and judgment; the highest integrity; loyalty to the interests of the Corporation and its Shareholders; a willingness to devote the extensive time necessary to fulfill a director’s duties; the ability to contribute to the diversity of perspectives present in board deliberations; and an appreciation of the role of the Corporation in society. The Corporate Governance and Nominating Committee considers candidates meeting these criteria who are suggested by directors, management, Shareholders, and search firms hired to identify and evaluate qualified candidates. FromIn connection with its assessments of candidates and other governance matters including the size and composition of the Board, the Corporation and Corporate Governance and Nominating Committee consider a number of factors and conditions, including the views of Shareholders. This is a continual process and may result in changes to the size and composition of the Board prior to the Corporation’s next annual general meeting. As such, from time to time the Corporate Governance and Nominating Committee recommendsmay recommend qualified candidates who are considered to enhance the strength, independence, and effectiveness of the Board. Shareholders may submit recommendations in writing by letter addressed to the Chief Executive Officer of the Corporation or the ChairmanChair of the Corporate Governance and Nominating Committee. In addition, subject to the advance notice requirements contained in the Corporation’s Articles, Shareholders may nominate directors at an annual general meeting.
The Corporate Governance and Nominating Committee oversees the evaluation of the Board composition and members. Annually,Periodically, and as may be considered appropriate at other times, the Corporate Governance and Nominating Committee reviews and makes recommendations regarding the size, composition, operation, practice and tenure policies of the Board, with a view to facilitate effective decision making. The Corporate Governance and Nominating Committee believes it is in the best interests of the Corporation when selecting candidates to serve on the Board to consider the diversity of the Board in accordance with the objectives of the Diversity Policy and reviewto consider candidates who possess a rangeon the basis of their talents, experience, functional expertise, skills, expertise, personality, education, personal backgroundcharacter, and qualities, and in light of the Corporation’s current and future plans and objectives as well as anticipated regulatory and market developments and other qualities for nomination. The Corporate Governance and Nominating Committee assesses the effectiveness of this approach as part of its annual review of its charter.
The Corporate Governance and Nominating Committee utilizes a skills matrix to identify and track areas of strength that the Board believes are important for overseeing the Corporation’s business, management and future growth effectively. The following table reflects the diverse skills and competencies of each individual director nominee in various areas of experience.
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The Corporate Governance and Nominating Committee utilizes a skills matrix to identify and track areas of strength that the Board believes are important for overseeing the Corporation’s business, management and future growth effectively. The following table reflects the diverse skills and competencies of each individual director nominee in various areas of experience. | | | ||||||
| Clark | Earnest | Eppler |
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(1) | Mr. Richings and Mr. Ogryzlo have announced their intent to retire and will not be standing for election at the Meeting. |
The Corporate Governance and Nominating Committee reviews the size of the Board at least annually. A board must have enough directors to carry out its duties efficiently, while presenting a diversity of views and experience. The Board believes that its present size effectively fulfils this goal. The Corporate Governance and Nominating Committee recommended the nominees in this Information Circular for directors.
Our policy with regard to the consideration of diversity in identifying director nominees and relating to the identification and nomination of women directors is in our Corporate Governance and Nominating Charter. Diversity is considered as one of the factors when the Committee makes recommendations for the director nominations. The Corporation has not adopted term limits for the directors on the Board. The Corporation has not adopted a stand‑alone diversity policy or term limits because itBoard is of the view that such policiesterm limits are not necessary at this time because pursuant to the Corporate Governance and Nominating Committee Charter,diversity of the Board and tenure are factors is a factor that the Corporate Governance and Nominating Committee already considers in making its recommendations.
The Corporation’s Corporate Governance and Nominating Committee Charter isand Diversity Policy are available on the Corporation’s website at www.vistagold.com.
Compensation Committee
The Compensation Committee is Chaired by John M. Clark. Its other members as of the date of this Information Circular are W. Durand Eppler and Tracy A. Stevenson and W. Durand Eppler.Stevenson. Each member of the Compensation Committee is “independent” within the meaning of Section 803A and Section 805(c)(1) of the NYSE American Company Guide.
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The Compensation Committee’s functions are to review and recommend to the Board compensation policies and programs of the Corporation, as well as salary and benefit levels for its executives. Except for delegation by the Compensation Committee of its responsibilities to a sub-committee of the Compensation Committee, the Compensation Committee does not and cannot delegate its authority to determine director and executive officer compensation. For further discussion of the Compensation Committee’s process for the recommendation of the Corporation’s compensation policies and programs, as well as salary and benefit levels of individual executives, including a discussion of the role of compensation consultants in advising the Compensation Committee, please see the section below under the heading “Executive Compensation – Compensation Discussion and Analysis.”
The Compensation Committee meets at regularly scheduled times between meetings of the Board, and sometimes acts by unanimous written consent. The Compensation Committee met fourfive times during the fiscal year ended December
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31, 2017.2022.The duties of the Compensation Committee are described in its charter, which is available on the Corporation’s website at www.vistagold.com and is reviewed by the Board annually.
Health, Safety, EnvironmentalEnvironment and Social Responsibility Committee
The Health, Safety, EnvironmentalEnvironment and Social Responsibility Committee is Chaired by C. Thomas Ogryzlo. Its other members are Frederick H. Earnest, and W. Durand Eppler.Eppler, and Mike Richings. Mr. Richings and Mr. Ogryzlo intend to retire and will not be standing for election at the Meeting. Following the Meeting and retirement of Mr. Richings and Mr. Ogryzlo, the Board may appoint an additional director to the Health, Safety, Environment and Social Responsibility Committee. The primary purpose of the Health, Safety, Environment and Social Responsibility Committee is to assist the Board in its oversight of: (i) health, safety, environmentalenvironment and community risks; (ii) the Corporation’s compliance with applicable legal and regulatory requirements; (iii) the Corporation’s performance in relation to health, safety, environmentalenvironment and social responsibility matters; (iv) the performance and leadership of the health, safety, environmentalenvironment and social responsibility functions of the Corporation; and (v) the Corporation’s external reporting with respect to health, safety, environmentalenvironment and social responsibility matters.
The Health, Safety, Environment and Social Responsibility Committee met four times during the fiscal year ended December 31, 2017.2022. The duties of the Health, Safety, Environment and Social Responsibility Committee are described in its charter, which is available on the Corporation’s website at www.vistagold.com and is reviewed by the Board annually.
Communications with the Board of Directors
Shareholders may send communications by letter to the Board, the ChairmanChair or one or more of the non-management directors or the Chief Executive Officer of the Corporation at 7961 Shaffer Parkway, Suite 5, Littleton, CO 80127 or by contacting the Chief Executive Officer at (720) 981‑1185.981-1185. The receipt of concerns about the Corporation’s accounting, internal controls, auditing matters or business practices will be reported to the Audit Committee. The receipt of other concerns will be reported to the Board or appropriate Committee(s)committee(s) of the Board.
Board’s Role in Risk Oversight
The Board considers the understanding, identification, and management of risk as essential elements for the successful management of the Corporation. The Corporation faces a variety of risks, including credit risk, liquidity risk and operational risk. The Board believes an effective risk management system will: (i) timely identify the material risks that the Corporation faces; (ii) communicate necessary information with respect to material risks to senior executives and, as appropriate, to the Board or relevant committees of the Board; (iii) implement appropriate and responsive risk management strategies consistent with the Corporation’s risk profile; and (iv) integrate risk management into the Corporation’s decision-making.
Risk oversight is undertaken on a regular basis by the Board of Directors and the Audit Committee. The Audit Committee periodically reviews and discusses with management their policies and procedures for the identification, assessment and management of business risks. The Audit Committee also has oversight responsibility with respect to the integrity of the Corporation’s financial reporting process and systems of internal control regarding finance and accounting, as well as its financial statements. The Audit Committee makes periodic reports to the Board regarding briefings provided by management and advisors as well as on the committee’s own analysis and conclusions regarding the adequacy of the Corporation’s risk management processes.
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At the management level, regular internal risk reviews provide reliable and timely information to the Board and management regarding the Corporation’s effectiveness in identifying and appropriately controlling risks.
The Corporation also has a comprehensive internal risk framework, which facilitates performance of risk oversight by the Board and the Audit Committee. OurThe risk management framework is designed to:
| provide that risks are identified, monitored, reported, and quantified properly; |
| define and communicate the types and amount of risk the Corporation is willing to take; |
| communicate to the appropriate management level the type and amount of risk taken; |
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| maintain |
| promote a strong risk management culture that encourages a focus on risk-aware performance. |
In addition to the formal compliance program, the Board encourages management to promote a corporate culture that incorporates risk management into the Corporation’s corporate strategy and day-to-day business operations. The Board also continually works, with the input of the Corporation’s executive officers, to assess and analyze the most likely areas of future risk for the Corporation.
Audit Committee Report
The Audit Committee of the Board is responsible for providing independent, objective oversight of the Corporation’s accounting functions and internal controls. The Audit Committee acts under a written charter first adopted and approved by the Board in 2007, and most recently amended in 2016,October 2020, which is reviewed by the Board annually. Each member of the Audit Committee is “independent” within the meaning of Rule 10A-3 of the Exchange Act and Section 803(B)(2) the NYSE American Company Guide and “independent” and “financially literate” within the meaning of such terms in NI 52-110. In accordance with Section 407 of the United States Sarbanes-Oxley Act of 2002 and Item 407(d)(5)(ii) and (iii) of Regulation S-K, the Board of Directors has identified Tracy A. Stevenson as the “Audit Committee Financial Expert.” A copy of the Audit Committee Charter is available on the Corporation’s website at www.vistagold.com.
The responsibilities of the Audit Committee include recommending toappointing and retaining the Board an accounting firm to be nominated for Shareholder approvalthat serves as the Corporation’s independent auditor.auditor, which reports to the Audit Committee. The Board recommends to Shareholders the approval of the accounting firm appointed by the Audit Committee. The Audit Committee is responsible for recommending to the Board that the Corporation’s financial statements and the related management’s discussion and analysis be included in its Annual Report.Report on Form 10-K. The Audit Committee took a number of steps in making this recommendation for fiscal year 2017.2022.
First, the Audit Committee discussed with EKS&HPlante Moran those matters required to be discussed by Statement on Auditing Standards No. 61, as superseded by Statementthe applicable requirements of Auditing Standards 114 – the Auditor’s Communication with Those Charged with Governance,Public Company Accounting Oversight Board, including information regarding the scope and results of the audit. These communications and discussions are intended to assist the Audit Committee in overseeing the financial reporting and disclosure process.
Second, the Audit Committee discussed with EKS&HPlante Moran the independence of EKS&HPlante Moran and received from EKS&HPlante Moran the letter required by applicable standards of the Public Company Accounting Oversight Board for independent auditor communications with Audit Committees concerning independenceaudit committees, as may be modified or supplemented, concerning its independence as required under applicable independence standards for auditors of public companies. This discussion and disclosure assisted the Audit Committee in evaluating such independence.
Finally, the Audit Committee reviewed and discussed, with the Corporation’s management and EKS&H,Plante Moran, the Corporation’s audited consolidated balance sheets as at December 31, 2017,2022, and consolidated statements of income,income/(loss), cash flows and shareholders’ equity for the fiscal year ended December 31, 20172022 and the related managementmanagement’s discussion and analysis to be included in the Corporation’s Annual Report on Form 10-K.
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Based on the discussions with EKS&HPlante Moran concerning the audit, thetheir independence, the financial statement review, and such other matters deemed relevant and appropriate by the Audit Committee, the Audit Committee recommended to the Board that the Corporation’s financial statements and the related management’s discussion and analysis be included in the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017.2022.
Submitted on behalf of the Audit Committee
Tracy A. Stevenson (Chairman)
Michael B. Richings
(Chair)
John M. Clark
Deborah J. Friedman
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* | The information contained in this Audit Committee Report shall not be deemed to be “soliciting material” or “filed” or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that the Corporation specifically requests that the information be treated as soliciting material or specifically incorporates it by reference into a document filed under the Securities Act of 1933, as amended or the Exchange Act. |
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Executive Officers
As of March 9, 2018,10, 2023, the executive officers of the Corporation, their ages and their business experience and principal occupation during the past five years were as follows:
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Name, Position and Age | | Held Office Since | | Business Experience During Past Five Years |
Frederick H. Earnest, President, Chief Executive Officer and Director Age - | | August 1, 2007 – January 1, 2012 (President, Chief Operating Officer and Director) January 1, 2012 - present (President, Chief Executive Officer and Director) | | Chief Executive Officer of the Corporation since January 2012; President of the Corporation since August 2007; |
Chief Financial Officer Age - 64 | |
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| August 1, 2012 | | Senior Vice President of the Corporation since August 2012; Vice President of Technical Services of the Corporation from May 2011 to August 2012. Manager of the Mineral Resource Division of Tetra Tech from September 2007 to May 2011. Mr. Rozelle has more than |
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Pamela A. Solly Vice President of Investor Relations Age - 58 | | April 1, 2019 | | Vice President of Investor Relations of the Corporation since April 1, 2019; Ms. Solly has more than has 30 years of public company experience strategically developing, coordinating, and executing investor relations and corporate communications programs. Prior to joining Vista, Ms. Solly was Vice President of Investor Relations of Lydian International from December 2016 to March 2019. Ms. Solly was Director of Investor Relations at Thompson Creek Metals Company from May 2010 to November 2016. Ms. Solly holds a Bachelor of Science degree in Business Administration from Regis University and a Master of International Management degree from the University of Denver. She is a Director of the Denver Gold Group. |
To our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which the officer was selected to serve as an officer.
Executive Compensation
Compensation Discussion and Analysis
Compensation Program Objectives
The Corporation’s compensation programs and policies are designed to be competitive with similar mining companies and to recognize and reward executive performance consistent with the successachievement of the Corporation’s business.objectives. The programs and policies are intended to provide the Corporation with the means to attract and retain capable and experienced people.executive talent. The Compensation Committee’s role and philosophy is to ensure that the Corporation’s compensation practices, as applied to the actual compensation paid to the Corporation’s executive officers, are aligned with the Corporation’s overall business objectives and with Shareholder interests.
The Compensation Committee considers a variety of factors when determining compensation policies and programs and individual compensation levels. These factors include the long-range interests of the Corporation and its Shareholders, overall technical, professional and experience needs of the Corporation, the competitive requirements to attract and retain key employees, and the Compensation Committee’s assessment of the position requirements for each executive’s role in the Corporation. The Compensation Committee does not weigh any of these factors more heavily than others and does not use any formula to assess these factors, but rather considers each factor in its judgment and discretion.
The Compensation Committee has the authority to engage and compensate, at the expense of the Corporation, any outside advisor that it determines to be necessary to permit it to carry out its duties, including compensation consultants and advisors.duties. In the year ended December 31, 2017,2021, the Compensation Committee did not retain the services ofengaged Hugessen Consulting Inc. (“Hugessen”), an independent compensation advisor, to review director and executive officer compensation. Fees billed to the Corporation by Hugessen during 2021 in connection with the review of director and executive officer compensation were C$34,000. The Corporation did not pay any fees or engage or any compensation consultant for any services in 2019, 2020, or 2022. During 2021, the Compensation Committee was assisted by managementHugessen in determining appropriate levels of compensation for the Corporation’s directors and executive officers. ManagementHugessen compiled data from publicly available information for all categories of compensation (directors’ fees, executive base salaries, stockshare-based incentives, and short termshort-term incentives) from a peer group of companies in the mining sector. TheHugessen’s peer group of companies was developed using one or more of the following selection criteria:
| ● | Canadian and/or U.S. listed; |
| ● | market capitalization substantially similar to the |
| ● | gold, diversified metals and mining, or precious metals/minerals industry; and/or |
| ● | stage of development, complexity of operation/business strategy similar to the |
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Based upon considerations of the selection criteria, the following peer group of companies were selected,was used by Hugessen for its compensation review (collectively, the “Peer Group”“Peer Group”).
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Gabriel Resources Ltd. | Troilus Gold Corp. |
Golden Minerals Company | Sabina Gold & Silver Corp. |
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In 2013, consistent with the principle of aligning corporate compensation with corporate objectives and with Shareholders’ interests, all members of senior management, in consultation with the Compensation Committee, accepted a 20% reduction to base compensation together with the elimination of discretionary incentive payments under the Corporation’s Short Term Incentive Plan (“STIP”). These changes to management compensation took effect August 1, 2013. In July 2015 with an effective date of August 1, 2015, the Board restored one-half of these compensation reductions, resulting in all members of senior management remaining at a 10% reduction to base compensation. In addition, at the same time, the Board of Directors authorized a one-time payment to each member of senior management, equal to 10% of each respective senior manager’s base salary, to be paid in cash or the equivalent value in restricted share units (“RSU”) or a combination thereof, at the recipient’s option. Similarly, in 2016, the Board authorized a one-time payment to each member of senior management, equal to 10% of each respective senior manager’s base salary, to be paid in cash or the equivalent value in RSUs or a combination thereof, at the recipient’s option. In July 2017, with an effective date of August 1, 2017, the Board restored the remaining 10% reduction to base compensation. In addition, a one-time payment equal to 7/10 of 10% of each respective manager’s base salary was paid in cash to each member of senior management. No annual incentive award has been granted since 2012. The Board will determinedetermines when it is appropriate to restoregrant annual discretionary incentive awards. No annual cash incentive awards were granted in years 2012-2017. Based on the achievement of goals and objectives in 2017 and 2020, cash incentive awards were paid in March 2018, June 2021, and March 2022. No cash incentive awards were paid in 2019 or 2020.
Role of Executive Officers in Determining Compensation
The Compensation Committee reviews and recommends to the Board the compensation policies and programs of the Corporation, as well as salary and benefit levels for individual executives. The President and Chief Executive Officer of the Corporation may not be present during meetings of the Compensation Committee or the Board when his compensation is being discussed. The executive officers prepare and present to the Compensation Committee such surveys, analyses, reports, and recommendations, as the Compensation Committee may request, including independent industry surveys. The Board makes the final determination regarding the Corporation’s compensation programs and practices.
Elements of the Corporation’s Compensation Program for Fiscal Year 20172022
The 20172022 compensation plan for executive officers iswas comprised of the following components: base salary, cash-based awards under the Corporation’s Short Term Incentive Program (the “STIP”) and stockshare-based awards under the Corporation’s Stock Option Plan and Long Term Incentive Plan (“LTIP”). Directors are eligible to receive share-based awards under the Stock Option Plan and/orand the LTIP.Corporation’s Deferred Share Unit Plan (the “DSU Plan”).
There is no set policy or target regarding allocation between cash and non-cash elements of the Corporation’s compensation program. The Compensation Committee reviews annually the total compensation package of each of the Corporation’s executives on an individual basis, against the backdrop of the compensation goals and objectives and the industry compensation data described above and makes recommendations to the Board concerning each of the individual components of compensation.
Base Salary
As a general rule for establishing base salaries, the Compensation Committee periodically reviews competitive market data for each executive position and determines placement of the employee at an appropriate level in a range. Compensation levels are typically negotiated with the candidate for the position prior to his or her final selection as an executive officer. Salaries for the Corporation’s executive officers are reviewed at least annually to reflect external factors such as market and inflation as well as overall corporate performance and the results of internal performance reviews.
Short Term Incentive Plan
The STIP is intended to allow executive officers and management personnel to earn discretionary incentive payments based on a percentage of base salary. All executive officers and management personnel participate in the STIP. The discretionary incentive payment for Mr. Earnest, the President, and Chief Executive Officer of the Corporation, is entitled to earn a discretionary incentive payment in an amount determined annually by the Board. However, theThe performance of the President and Chief Executive Officer is, however, generally evaluated using the same performance objectives as are applied to other executive officers and management personnel.
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The Compensation Committee determines executive incentive compensation considering three primary factors: (1) corporate liquidity; (2) achievement of overall corporate goals, which are typically established early inevaluated following the conclusion of each year; and (3) individual performance.
The following table summarizesUnder the criteriaSTIP, the Board, acting at its sole discretion, may grant cash awards. In 2020, 2021, and weighting used to evaluate2022 the performance of the executive officers. It summarizes the target and maximum discretionary incentive payments contemplatedCorporation granted awards under the STIP. Even though the goals and objectives were essentially achieved, no payments were made in 2017.
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| Performance Objectives and Relative Importance |
| Target Bonus as a |
| Maximum Bonus as a |
| Bonus paid in 2017 as a | ||||||||
| Corp. Performance |
| Financial |
| Project Advance |
| Compliance |
| Leadership Succession |
| percentage of salary |
| percentage of salary |
| percentage of salary |
Frederick H. Earnest, President and Chief Executive Officer | High |
| High |
| High |
| High |
| High |
| 50% |
| 100% |
| 0% |
John F. Engele, Senior Vice President and Chief Financial Officer | High |
| High |
| Medium |
| High |
| Medium |
| 50% |
| 75% |
| 0% |
John W. Rozelle, Senior Vice President | High |
| Medium |
| High |
| High |
| Medium |
| 50% |
| 75% |
| 0% |
No annual discretionary incentive award under the STIP has been granted since 2012. In recent years, RSUs (defined below) have been granted to incentivize and reward the achievement of corporate goals and objectives. RSU awards were granted in 2020, 2021, and 2022 and cash awards were granted in 2021 and 2022. In 2020, the Corporation did not grant cash awards under the STIP.
The Board will determine when it is appropriate to fully restorefollowing tables summarize the annual discretionary incentive awards. Further, if and when it is restored, the Compensation Committee, in its discretion, will reassess corporate goalsCorporate Objectives for 2022 and the assessment of those goals in relationscores for key executives relative to the awardingachievement of an annual discretionary bonus, if any, ineach objective as well as the best interestsrelative weighting for each objective.
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2022 Corporate Objectives | Fred Earnest | Doug Tobler | John Rozelle |
Health, Safety, Environment, Social & Governance Performance | 15/15 | 15/15 | 15/15 |
- conduct business consistent with established corporate policies and guidelines | 6/6 | 7/7 | 10/10 |
- target no lost time accidents and no environmental non-compliance | 5/5 | 4/4 | 5/5 |
- advance social initiatives in coordination with the Jawoyn Association Aboriginal Corporation (“Jawoyn”) | 4/4 | 4/4 | 0/0 |
Shareholder Returns | 20/35 | 20/30 | 15/30 |
- significantly increase share price relative to our peers | 10/10 | 10/10 | 10/10 |
- target a share price that more appropriately reflects a valuation of Mt Todd comparable to similar undeveloped gold projects | 0/15 | 0/10 | 0/15 |
- cultivate institutional and retail investor interest through Shareholder outreach programs, seminars, increased analyst coverage and social media | 10/10 | 10/10 | 5/5 |
Delivery on Project Milestones | 25.5/35 | 25/35 | 32.5/40 |
- add material value at Mt Todd | 8/8 | 8/8 | 10/10 |
- improve project value through communication of technical and exploration program results and opportunities | 8.75/7 | 7/7 | 10/8 |
- evaluate a broad range of partners, structures, and transactions to maximize Shareholder value | 3.75/5 | 5/5 | 3.75/5 |
- execute strategies and transactions that realize Shareholder value comparable to similar undeveloped gold projects and in line with the intrinsic value of Mt Todd | 0/10 | 0/10 | 0/10 |
- advance studies and agreements that provide clarity for project development | 5/5 | 5/5 | 8.75/7 |
Budget and Treasury Management | 15/15 | 16.25/15 | 17.5/15 |
- execute the Corporation’s plans with expenditures in line with Board-approved budgets | 5/5 | 6.25/5 | 12.5/10 |
- ensure a strong treasury is maintained to allow for planning one year beyond the end of the year | 10/10 | 10/10 | 5/5 |
Total | 75.5% | 76.25% | 80% |
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| , | , | , | |||
2022 Corporate Objectives | Frederick H. Earnest, President & CEO | Douglas L. Tobler, CFO | John Rozelle, Senior VP | |||
Health, Safety, Environment, Social & Governance Performance | 15% | 15% | 15% | |||
Shareholder Returns | 35% | 35% | 30% | |||
Delivery on Key Milestones | 35% | 35% | 40% | |||
Budget and Treasury Management | 15% | 15% | 15% | |||
Total | 100% | 100% | 100% |
The following tables summarize the Corporate Objectives for 2023 and the weighting that will be used to assess the achievement of these objectives for each executive.
Health, Safety, Environment, Social & Governance Performance – conduct business consistent with established corporate policies and guidelines - target no lost time accidents and no environmental non-compliance - advance social initiatives in coordination with the Jawoyn |
Shareholder Returns – significantly increase share price relative to our peers - with CIBC, continue to evaluate a broad range of transactions with the aim of concluding a transaction to maximize Shareholder value - efficiently cultivate institutional and retail investor interest through Shareholder outreach programs, seminars, increased analyst coverage and social media |
Delivery on Project Milestones – add material value at Mt Todd - conclude agreements with the Northern Territory Government that provide greater certainty for the development of the Mt Todd project and improved economic returns while maintaining holding costs at appropriate levels - complete scoping studies for smaller or staged development employing Australian small-mine development strategies - advance studies and agreements that provide clarity for project development |
Budget and Treasury Management – execute the Corporation’s plans with expenditures in line with Board-approved budgets with the flexibility to adapt as corporate strategies or market conditions may change - ensure a strong treasury is maintained to allow for planning three years beyond the end of the year |
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Budget and Treasury Management | 15% | 15% | 15% |
Total | 100% | 100% | 100% |
In 2018, the Corporation introduced a phantom unit compensation program for employees as a tool to link employee cash compensation to the Corporation’s share price performance. The Corporation granted 265,000 phantom units of the Corporation.Corporation (each, a “Phantom Unit”) to certain employees during the year ended December 31, 2018. The value of each Phantom Unit is equal to the Corporation’s share price on the vesting date and is payable in cash. The final tranche of the 2018 Phantom Units vested in July 2021. No Phantom Units remain outstanding or have been granted since the final vesting in July 2021.
StockShare-Based Incentive Awards
The Corporation provides stock-basedshare-based incentives to employees and directors under twothree separate share-based incentive plans, the Stock Plans (defined below)Option Plan, the LTIP, and the DSU Plan (collectively, the “Plans”), which are designed to align compensation with the enhancement of shareholderShareholder value. The Plans are administered by the Compensation Committee (as delegated by the Board). The Plans are designed to be complementary.
The Corporation has a Stock Option Plan which provides for grants of OptionsOptions to directors, officers, employees and consultants of the Corporation or its subsidiaries.
The Corporation also has the LTIP which is intended to complement the Stock Option Plan, together referred to as the “Stock Plans”. The LTIP provides for grants to directors, officers, employees and consultants of the Corporation or its subsidiaries (each, an “Optionee”).
The LTIP provides grants of RSUs and restricted stock (“Restricted Stock”) or RSUs of Common SharesStock” and collectively, the “LTIP Awards) to officers, employees and consultants of the Corporation.Corporation or its subsidiaries (each, an “LTIP Participant”). Non-employee directors are not eligible for grants of RSUs and Restricted Stock under the LTIP.
The DSU Plan provides for grants of DSUs to Eligible Directors (as defined below).
The following table sets out the maximum number of Common Shares which may be reserved, set aside and made available for issue underissuable pursuant to the Stock Plans (together with any other security based compensation arrangementsterms of the Corporation) is a variable number equal to 10% of the issuedPlans and outstanding Common Shares on the date of the grant on a non-diluted basis. applicable securities laws.
| Maximum Number of Common Shares Issuable: | |||||||
| Under Each Plan(1) | Under the Plans in Aggregate (1)(2) | To Non-Employee Directors | At any Time to Insiders of the Corporation (1)(2) | Issued to Insiders Within a Calendar Year(1)(2) | To Any One Individual (1)(2) | To Any One Individual Within a Calendar Year | |
10% | 10% | The lesser of: 1%(1) and an annual value of $150,000 | 10% | 10% | 5% | 3,000,000 Common Shares | ||
LTIP | 5% | 10% | N/A | 10% | 10% | N/A | 3,000,000 Common Shares | |
DSU Plan | 3% | 10% | The lesser of: 1%(1) and an annual value of $150,000 | 10% | 10% | N/A | N/A |
Notes:
(1) | To be calculated based on the aggregate number of issued and outstanding Common Shares on a non-diluted basis. |
(2) | Together with all other security based compensation of the Corporation. |
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As of March 9, 2018,10, 2023, an aggregate of 3,612,4074,009,342 Common Shares (or 3.6%3.4% of the total number of issued and outstanding Common Shares) are issuable under the Stock PlansOption Plan, the DSU Plan and the LTIP pursuant to outstanding Options, DSUs and RSUs and 6,341,5887,930,906 Common Shares (or 6.4%6.6% of the total number of issued and outstanding Common Shares) in aggregate remain available for future grants under the Stock Plans. Option Plan, DSU Plan and LTIP.
As of March 9, 2018,10, 2023, the total number of Common Shares issuable under the Stock PlansOption Plan, DSU Plan and LTIP was comprised of: (i) 1,964,500667,000 Common Shares (or 2.0%0.6% of the total number of issued and outstanding Common Shares) issuable upon the due exercise of vested Options granted under the Stock Option Plan, and (ii) 1,647,9071,451,000 Common Shares (or 1.7%1.2% of the total number of issued and outstanding Common Shares) issuable upon the distribution of DSUs granted under the DSU Plan and (iii) 1,891,342 Common Shares (or 1.6% of the total number of issued and outstanding Common Shares) issuable upon the vesting of RSUs granted under the LTIP.
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Further details of the objectives and operations of each of the Stock Plans are discussed in the sections below.
Stock Option Plan
The Stock Option Plan provides for the grant of options to directors, officers, employees and consultants of the Corporation or its subsidiaries (“Participants”). Subject to applicable stock exchange requirements, the maximum number of Common Shares which may be reserved, set aside, and made available for issue under the Stock Option Plan, (together with any other security based compensation arrangements of the Corporation)DSU Plan, and LTIP combined is a variable number equal to 10% of the issued and outstanding Common Shares on the date of the grant on a non-diluted basis.
The maximumAs of March 10, 2023, 11,273,248 Common Shares (or 9.4% of the total number of issued and outstanding Common Shares that may be reservedShares) remain available for issuance to any individualfuture grants under the Stock Option Plan, together with theplan, 2,131,074 Common Shares issuable under all security based compensation arrangements(or 1.8% of the Corporation, is thattotal number of issued and outstanding Common Shares) remain available for future grants under the DSU Plan, and 4,078,782 Common Shares (or 3.4% of the total number of issued and outstanding Common Shares) will remain available for future grants under the LTIP. Each amount of Common Shares thatremaining available for future grants set out above is equivalentsubject to 5%the maximum aggregate of grants under the Common Shares issuedStock Option Plan, DSU Plan and outstanding on a non-diluted basis. The total numberLTIP combined of Common Shares issuable to insiders of the Corporation at any time and issued to insiders of the Corporation within any one-year period pursuant to Options together with any other security based compensation arrangements of the Corporation, shall not exceed 10% of the issued and outstanding Common Shares on the date of the grant on a non-diluted basis. The maximum number of
Common Shares issuable to Participants within any calendar year period is 3,000,000 Common Shares, and the maximum numberAnnual Burn Rates of Options, issuable to non-executive director is the lesser of 1% of the issuedLTIP Awards and outstanding Common Shares and an annual value of $150,000 per non-executive director Participant. Under the Stock Option Plan, Options may be exercised by the payment in cash of the Option exercise price to the Corporation. All Options are subject to the terms and conditions of an option agreement entered into by the Corporation and each participant at the time an Option is granted.DSUs
In accordance with the requirements of section 613 of the TSX Company Manual, the following table sets out the burn rate of the Options, granted under the Stock Option PlanLTIP Awards and DSUs as of the end of the financial year ended December 31, 20172022 and for the two preceding financial years. The burn rate is calculated by dividing the number of Options, LTIP Awards or DSU Awards, as applicable, granted under the Stock Option PlanPlans during the relevant fiscal year by the weighted average number of securities outstanding for the applicable financial year.
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|
|
|
| |
|
|
| |||
|
|
|
|
|
|
| 50,000 |
| Nil | ||
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|
|
|
|
|
Weighted average of the outstanding securities for that fiscal year | 98,627,255 |
| 89,064,260 |
| 82,571,182 |
|
|
|
|
|
|
| 0.06% |
| Nil |
| | | | | |
| Year ended December | | Year ended December | | Year ended December |
– | | – | | – | |
Number of LTIP Awards granted under the LTIP | 759,000 | | 891,000 | | 1,609,000 |
Number of DSU Awards granted under the DSU Plan | 324,000 | | 204,000 | | 360,000 |
118,005,490 | | 110,263,237 | | 101,814,139 | |
Annual Burn Rate: Options | 0.0% | | 0.0% | | 0.0% |
Annual Burn Rate: LTIP Awards | 0.6% | | 0.8% | | 1.6% |
Annual Burn Rate: DSU Awards | 0.3% | | 0.2% | | 0.4% |
The granting or exerciseFurther details of the objectives and operations of each Option granted underof the Plans are discussed in the sections below.
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Stock Option Plan is subject to withholding taxes, at the discretion of the Corporation.
The Stock Option Plan is administered by the Board or a delegated committee of the Board, whichCompensation Committee has full and final discretion to determine (i) the total number of optioned shares to be made available under the Stock Option Plan, (ii) the directors, officers, employees and consultants of the Corporation or its subsidiaries who are eligible to receive Options, under the Stock Option Plan (“Optionees”), (iii) the time when and the price at which Options will be granted (iv) the time when and the price at which Options may be exercised, and (v)(iv) the conditions and restrictions on the exercise of Options.
. Pursuant to the terms of the Stock Option Plan, theThe exercise price of an Option must not be less than the closing price of the Common Shares on (a)(i) in the case of Options with an exercise price in USU.S. dollars, the NYSE American, or (b)(ii) in the case of Options with an exercise price in Canadian dollars, the Toronto Stock Exchange (“TSX,”), in either case, on the last trading day preceding the date of grant.
Options become exercisable only after they vest in accordance with the respective option agreement and must expire no later than ten years from the date of grant; provided that, if the expiry date of an Option occurs during a blackout period, such expiry date shallwill be deemed to be extended to the date that is the 10th10th business day after the last day of the applicable blackout period.
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Options granted underperiod pursuant to the terms of the Stock Option Plan are non-transferable and non-assignable other than on the death of a participant.Plan. An Optionee has no rights whatsoever as a Shareholder in respect of the Common Shares subject to unexercised Options. Options are subject to withholding taxes at the discretion of the Corporation.
Causes of Cessation of Options
Pursuant to the terms of the Stock Option Plan, if any Optionee ceases to be a director, officer or employee of the Corporation or its subsidiaries, as a result of termination for “cause” (as defined in the Stock Option Plan), all unexercised Options will immediately terminate. If an Optionee ceases to be a director, officer or employee of the Corporation, or its subsidiaries, or ceases to be a consultant to the Corporation, for any reason other than termination for cause, his or her Options may be exercised up to, but not after, the earlier of 30 days from the date of ceasing to be a director, officer, employee or consultant, or the expiry date of the Option to the extent they were exercisable. In the event of death of an Optionee, the legal representatives of such Optionee have the right to exercise the Options at any time up to, but not after, the earlier of 90 days from the date of death or the expiry date of such Option.
The Board may amend the Stock Option Plan at any time; provided, however that no such amendment may, without the consentNo Assignment or Transfer of an Optionee, adversely alter or impair any Option previously granted to such Optionee. Any amendment to be made to the Stock Option Plan or anOptions
An Option is subject tonot transferable or assignable other than by will or other testamentary instrument or the prior approvallaws of succession or administration and may be exercisable during the lifetime of the TSX and the NYSE American and the Shareholders, if requiredOptionee only by the rules of the TSX or the NYSE American. The Board has the power and authority to approve amendments relating to the Stock Option Plan or a specific Option without further approval of the Shareholders of the Corporation, to the extent that such amendments relate to, among other things: (a) altering, extending or accelerating the terms of vesting applicable to any Option or group of Options; (b) altering the terms and conditions of vesting applicable to any Option or group of Options; (c) changing the termination provisions of an Option, provided that the change does not entail an extension beyond the original expiry date of such Option; (d) accelerating the expiry date of Options; (e) the application of sections 6. 8 (third party offer) and 6.9 (alteration of shares) of the Stock Option Plan; (f) effecting amendments respecting the administration of the Stock Option Plan; (g) amending the definitions contained within the Stock Option Plan; (h) effecting amendments of a “housekeeping” or administrative nature; (i) effecting amendments necessary to comply with the provisions of applicable laws (including the rules, regulations and policies of the TSX and the NYSE American), or necessary or desirable for any advantages or other purposes of any tax law; (j) amending or modifying the mechanics of exercise of the Options; and (k) any other amendment, whether fundamental or otherwise, not requiring Shareholder approval under applicable law (including the rules, regulations, and policies of the TSX and the NYSE American). No amendment of the Stock Option Plan may contravene the requirements of the TSX, the NYSE American or any applicable securities commission. Optionee.
None of the following amendments to the Stock Option Plan may be made unless Shareholder approval is obtained: (i) to increase the maximum number of Common Shares issuable under the Stock Option Plan; (ii) to reduce the Exercise Price of an Option (including cancellation and reissuance at a lower Exercise Price) held by a non-Insider; (iii) to extend the term of any Options held by non-insiders of the Corporation, other than an extension during a Black Out Period; (v) to increase the number of Common Shares issuable to non-employee directors Participants; (vi) to permit Options to be transferrable or assignable; (vii) to amend the amendment provisions in the Stock Option Plan; or (viii) where approval is required by the Exchanges (whether it be Exchange or shareholder approval).
Amendments to the Stock Option Plan for the following require disinterested Shareholder approval, amendments that: (i) could result in the number of Common Shares issuable to insiders of the Corporation exceeding 10% of the issued and outstanding Common Shares; (ii) reduce the Exercise Price of an Option (including cancellation and reissuance at a lower Exercise Price) held by an Insider; (iii) extend the term of any Option held by insiders of the Corporation, other than an extension during a Black Out Period; and (iv) require disinterested Shareholder approval under applicable law (including rules of the Exchanges).
Long Term Equity Incentive Plan
The purpose of the LTIP is to assist the Corporation in attracting, retaining and motivating key employees, directors, officers and consultants of the Corporation and its subsidiaries, and to more closely align the personal interests of such persons with Shareholders, thereby advancing the interests of the Corporation and its Shareholders and increasing the long-term value of the Corporation.
In 2017, the LTIP was utilized to incentivize achievement of corporate goals. The overall corporate goals were divided into two broad categories as follows:
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The LTIP is intended to complement (not replace) the Stock Option Plan.
The LTIP provides for grants of awards to directors, officers, employees and consultants of the Corporation or its affiliates. “LTIP Participant” when used in this Information Circular means employee and consultant participants, but not director participants.
The maximum number of Common Shares available for issuance under the LTIP, together with all other security based compensation arrangements of the Corporation (which includes the Stock Option Plan) is 10% of the issued and outstanding Common Shares on a non-diluted basis. The total number of Common Shares issuable to insiders of the Corporation at any time and issued to insiders of the Corporation within any one-year period under the LTIP, together with any other security based compensation arrangements of the Corporation, shall not exceed 10% of the issued and outstanding Common Shares on a non-diluted basis. No LTIP Participant can receive more than 3,000,000 Common Shares in any calendar year for a “performance award” within the meaning of Section 162(m) of the U.S. Internal Revenue Code of 1986 (the “Tax Code”). The total number of Common Shares issuable to director participants under the LTIP shall not exceed the lesser of: (i) 1% of the issued and outstanding Common Shares; and (ii) an annual award value of $150,000 per director participant.
In accordance with the requirements of section 613 of the TSX Company Manual, the following table sets out the burn rate of the Awards granted under the LTIP as of the end of the financial year ended December 31, 2017 and for the two preceding financial years. The burn rate is calculated by dividing the number of Awards granted under the Stock Option Plan during the relevant fiscal year by the weighted average number of securities outstanding for the applicable financial year.
The LTIP is administered by the Compensation Committee (as delegated by the Board). The Compensation Committee determines the persons to whom awardsLTIP Awards are to be made; determines the type, size, terms, and conditions of awards;LTIP Awards; determines the prices to be paid for LTIP Awards; interprets the LTIP; adopts, amends, and rescinds administrative guidelines and other rules and regulations relating to the LTIP; and makes all other determinations and takes all other actions it believes are necessary or advisable for the implementation and administration of the LTIP.
Restricted Share Units (“RSUs”)
The LTIP provides that the Compensation Committee may, from time to time and in its sole discretion, grant awards of RSUs and/or Restricted Stock to any LTIP Participant. All grants of LTIP Awards are subject to the terms and conditions of an LTIP Award agreement entered into between the Corporation and the LTIP Participant or director participant. at the time the LTIP Award is granted.
RSUs are not Common Shares, but rather represent a right to receive from the Corporation at a future date newly-issued Common Shares. All grants of RSUs are subject to the terms and conditions of an Award agreement entered into between the Corporation and the LTIP Participant or the director participant (as the case may be) at the time the RSU is granted.
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The Compensation Committee has the authority to make the receipt of Common Shares under the RSUs conditional upon the expiry of a time-basedtime-based vesting period, the attainment of specified performance goals or such other factors as the Compensation Committee determines in its discretion. The duration of the vesting period and other vesting terms applicable to a grant of RSUs shall be determined at the time of the grant by the Compensation Committee provided that such vesting period shall be a minimum of one year in duration. Notwithstanding certain provisions that allow the Compensation Committee to accelerate vesting of an Award under the LTIP, the Compensation Committee cannot use this discretion to accelerate the vesting of an Award under the LTIP to a period of less than one year in duration.
Upon expiry of the applicable vesting period or at such later date as may be otherwise specified in the Award agreement, the. Common Shares issuable pursuant to the vesting of RSUs will be registered in the name of the LTIP Participant or director participant, or as the LTIP Participant or director participant may direct, subject to applicable securities laws and upon such issuance of Common Shares the vested RSUs will be cancelled.
RSUs are settled in Common Shares, unless (i) the Corporation withholds shares equivalent to the value of employee withholding tax obligations which result from RSUs vesting; or (ii) the Corporation offers the LTIP Participant or director participant the rightoption to receive cash in lieu of Common Shares based on the Fair Market Value (as defined in the LTIP) that such Common Shares would have at the time of settlement and the LTIP Participant or director participant, in its discretion, so elects.settlement.
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Restricted Stock
The are Common Shares which are subject to such restrictions as the Compensation Committee may from timeimpose, such as forfeiture conditions, transfer restrictions or a restriction on, or prohibition against, the right to time, grant Restricted Stock and/receive any dividend or RSUs LTIP Participantsother right or director participants, subject to the terms and conditions of the LTIP and any additional terms and conditions determined by the Compensation Committee (collectively “Awards”). All grants of Restricted Stock are subject to the terms and conditions of an award agreement entered into between the Corporation and the LTIP Participant or the director participant (as the case may be) at the time the RSU is granted.
property with respect thereto. The Compensation Committee has the authority to establish the terms for the lapse of restrictions applicable to Restricted Stock conditional upon the expiry of a time-based vesting period, the attainment of specified performance goals or such other factors as the Compensation Committee may determine in its discretion. Upon grant of Restricted Stock, the Corporation issues and holds share certificates registered in the name of such LTIP Participants. The share certificates bear a legend referring to the LTIP Award agreement and the possible forfeiture of such shares of Restricted Stock.
The duration of the vesting period and other vesting terms applicable to a grantgrants of RSUs or Restricted Stock shall beare determined at the time of the grant by the Compensation Committee provided thatand such vesting period shallmust be a minimum of one year in duration. Notwithstanding certain provisions that allow the Compensation Committee to accelerate vesting of an Award award under the LTIP, the Compensation Committee does not intend tocannot use this discretion in the ordinary course to accelerate the vesting of an Awardaward under the LTIP to a period of less than one year in duration.
Common Shares of Restricted Stock are subject to such restrictions asIn administering the LTIP, the Compensation Committee may impose (including, without limitation, forfeiture conditions, transfer restrictions or a restriction on, or prohibition against,conducts annual reviews of corporate performance and the rightLTIP Participants’ performance to receive any dividend or other right or property with respect thereto), which restrictions may lapse separately or in combination at such time or times, in such installments or otherwise as thedetermine whether performance goals have been achieved. The Compensation Committee deems appropriate.
also takes into consideration past LTIP Award grants and existing unvested LTIP Awards when considering whether to grant new LTIP Awards. The Corporation shall issueCompensation Committee typically sets goals for the LTIP Participant, which are aligned with items of corporate strategy, health, safety environment and hold share certificates registeredsocial responsibility, regulatory compliance, and fiscal management. Performance goals in the namepast included items such as attainment of each LTIP Participant or director participant granted Restricted Stock undercertain regulatory permits relating to Mt Todd; completion of economic and technical feasibility studies on Mt Todd, including the LTIP. The share certificates shall bear a legend referring to the award agreementfeasibility studies for Mt Todd and the possible forfeitureachievement of such sharescertain share price performance criteria.
Causes of Restricted Stock.Cessation of LTIP Awards
Except as otherwise determined by the Compensation Committee, upon a Termination Date (as defined in the LTIP) that occurred as a result of the death or disability of the LTIP Participant, or director participant, all vested LTIP Awards will enure to the benefit of the LTIP Participant’s or the director participant’s heirs, executors and administrators. Except as otherwise determined by the Compensation Committee, if aan LTIP Participant’s employment, term of office or engagement is terminated for cause or in the case of a consultant participant, for breach of contract, any LTIP Awards held by the LTIP Participant (whether vested or not) are forfeited to the Corporation. Except as otherwise determined by the Compensation Committee, where a director participant’s term of office is terminated for breach of the director participant’s fiduciary duty, then any Awards held by the director participant (whether vested or not) are forfeited to the Corporation. The LTIP provides for a number of instances that permit the Compensation Committee to accelerate the vesting of any outstanding LTIP Awards.
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Unless otherwise determined by the Compensation Committee or the Board at or after the date of grant, if aan LTIP Participant or director participant ceases to be employed or engaged by the Corporation or its subsidiaries within 12 months following a Change in Control (as defined in the LTIP) for any reason other than for cause, voluntary resignation (other than for good reason (as defined by the LTIP)), retirement, death or disability, each LTIP Award held by that LTIP Participant or director participant that is not fully vested on the date at which such person ceases to be a director, officer or consultant shall become free of all restrictions, conditions and limitations, and become fully vested.
The Board shall have the discretion to authorize such steps to be taken as it may consider to be equitable and appropriate in the event of any Share Reorganization, Corporate Reorganization or Special Distribution (each of such terms as defined in the LTIP), including the acceleration of vesting in order to preserve proportionately the rights, value, and obligations of the LTIP Participants or director participants holding LTIP Awards in such circumstances.
No Assignment or Transfer of LTIP Awards
No assignment or transfer of LTIP Awards, whether voluntary, involuntary, by operation of law or otherwise, vests any interest or right in such LTIP Awards whatsoever in any assignee or transferee. Immediately upon any assignment or transfer, or any attempt to make the same, such LTIP Awards will terminate, provided that any LTIP Awards held by a LTIP Participant that have vested at the Termination Date will enure to the benefit of the LTIP Participant’s heirs, executors and administrators.
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Current LTIP Awards
Employees and consultant companies of the Corporation or its subsidiaries are eligible to receive LTIP Awards under the LTIP. Currently there are 4 executive officers and 11 employees that can participate under the LTIP. Non-executive directors of the Corporation are not eligible to receive LTIP Awards under the LTIP.
The Board has not granted any LTIP Awards that are conditional on the approval of the LTIP amendment resolution at this Annual Meeting and there are no existing contractual obligations to issue LTIP Awards that are contingent upon the approval of the resolution.
Because the grant of LTIP Awards under the LTIP is at the sole discretion of the Board and the Compensation Committee, it cannot currently be determined how many of such LTIP Awards may be granted in the future to any individual participant, all executive officers as a group, any associate of an executive officer, any consultant company of the Corporation or an affiliate of the Corporation, all consultant companies as a group, any employee of the Corporation or all employees as a group.
Certain United States Federal Income Tax Consequences related to the LTIP
The following is a brief summary of certain United States federal income tax consequences with respect to the grant of awards under the LTIP (the “Plan”). This summary does not describe all federal income tax consequences, including the consequences of owning and selling the Common Shares, nor does it describe Canadian, state, local or foreign income tax consequences.
Scope of This Disclosure
This summary does not address the U.S. federal income tax consequences of participation in the Plan by a non-U.S. Participant. For purposes of this summary, a “U.S. Participant” is a participant in the Plan who is either a citizen of the U.S. or a resident alien of the U.S. for purposes of the Internal Revenue Code of 1986, as amended (the “Code”), and the Canada-U.S. Tax Convention. For purposes of this summary, a “non-U.S. Participant” is a participant in the Plan who is not a U.S. Participant.
Tax Consequences With Respect to Awards of Restricted Shares or Restricted Share Units
There are no tax consequences to a U.S. Participant or the Corporation by reason of the grant of restricted stock or restricted share units under the Plan. If an award is payable in Common Shares that are subject to a substantial risk of forfeiture, unless a special election is made by the holder of the award under section 83(b) of the Code, the holder must recognize ordinary income equal to the fair market value of the Common Shares received (determined as of the first time the Common Shares become transferable or not subject to substantial risk of forfeiture, whichever occurs earlier).
The holder’s basis for the Common Shares acquired under the Plan will be the amount of ordinary income recognized either when the Common Shares are received (for restricted share units or deferred share units) or when the shares are vested (for restricted share awards, subject to earlier recognition if a section 83(b) election is made). The Corporation will generally be entitled at that time to a U.S. income tax deduction for the same amount, subject to the rules of Section 162(m) of the Code.
Change in Control
Depending on the terms of a U.S. Participant's award agreement, upon a change in control of the Corporation, restrictions on a U.S. Participant's award may lapse, or a U.S. Participant's award may mature on an accelerated schedule. If this type of benefit, or other benefits and payments connected with a U.S. Participant's award that result from a change in control of the Corporation, are granted to certain individuals (such as the Corporation’s executive officers), the benefits and payments may be deemed to be "parachute payments" within the meaning of Section 280G of the Code. Section 280G provides that if parachute payments to an individual equal or exceed three times the individual's "base amount," the excess of the parachute payments over one times the base amount will be subject to a 20% excise tax payable by the individual. Any amount that is subject to an excise tax is also not deductible by the Corporation. "Base amount" is the individual's average annual compensation over the five taxable years preceding the
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taxable year in which the change in control occurs. Each U.S. Participant should consult his or her own tax advisor own tax advisor regarding potential tax liability upon a change in control of the Corporation.
Certain Special Rules
The foreign earned income exclusion provisions and the foreign tax credit provisions of the Code may, under certain circumstances, reduce the U.S. federal income tax liability of a U.S. Participant with respect to participation in the Plans. U.S. Participants should consult their own tax advisor regarding the foreign earned income exclusion provisions and the foreign tax credit provisions of the Code.
Income Tax Deduction
Subject to the usual rules concerning reasonable compensation, including the Corporation’s obligation to withhold or otherwise collect certain income and payroll taxes, the Corporation may be entitled to a corresponding income tax deduction at the time a participant recognizes ordinary income from awards made under the Plans. However, Section 162(m) of the Code prohibits publicly held corporations from deducting more than $1,000,000 per year in compensation paid to certain current and former named executive officers (the “covered executives”). Therefore, annual compensation paid to a covered executive in excess of $1,000,000 will generally not be deductible.
Deferred Share Unit Plan (DSU Plan)
The purpose of the DSU Plan is to assist the Corporation in attracting, retaining, and motivating non-employee directors of the Corporation and to more closely align the personal interests of such persons with Shareholders, thereby advancing the interests of the Corporation and its Shareholders and increasing the long-term value of the Corporation. Any individual who is a non-employee director of the Corporation (an “Eligible Director”) is eligible to participate in the DSU Plan.
The DSU Plan is administered by the Board, which, from time to time in its sole discretion, will cause the Corporation to enter into agreements effecting grants of DSUs to Eligible Directors (“DSU Plan Participants”), pursuant to which the Corporation will agree to pay, and the DSU Plan Participant will have the right to receive, Common Shares (the “Payment Shares”). In respect of each grant of DSUs, the Board will determine, among other things, the number of DSUs allocated to the DSU Plan Participant and such other terms and conditions of the DSUs applicable to each grant.
DSUs are fully vested upon being granted and credited to an account maintained by the Corporation for each DSU Plan Participant by means of bookkeeping entry (“DSU Account”). Notwithstanding the vesting of DSUs, the DSU Plan Participants receive payment shares only after they have ceased to be a director of the Corporation.
The term during which a DSU may be outstanding will, subject to the provisions of the DSU Plan (which require or permit the acceleration or the extension of the term), be such period as may be determined from time to time by the Board, but subject to the rules of any stock exchange or other regulatory body having jurisdiction over the Corporation.
Notwithstanding any other provision of the DSU Plan, the maximum number of Common Shares issuable pursuant to outstanding DSUs at any time is limited to 3% of the aggregate number of issued and outstanding Common Shares on a non-diluted basis. Also, the maximum number of Common Shares available for issuance pursuant to outstanding DSUs under the DSU Plan, together with all other security-based compensation arrangements, which include the Stock Option Plan and the LTIP, may not exceed 10% of the Common Shares outstanding from time to time, on a non-diluted basis.
In addition, the number of Common Shares issuable to insiders of the Corporation, at any time, within any one-year period pursuant to DSUs together with any other security-based compensation arrangements, may not exceed 10% of the issued and outstanding Common Shares on a non-diluted basis. The number of Common Shares issued to Eligible Directors shall not exceed the lesser of; (i) 1% of the issued and outstanding Common Shares per Eligible Director; and (ii) an annual DSU value of $150,000 per Eligible Director.
DSUs that are cancelled, terminated or expire result in the Common Shares that were reserved for issuance thereunder being available for a subsequent grant of DSUs pursuant to the DSU Plan. Any increase in the issued and outstanding Common Shares (whether as a result of the issue of Common Shares pursuant to DSUs or otherwise) will result in an
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increase in the number of Common Shares that may be issued pursuant to DSUs outstanding at any time. Further, if the acquisition of Common Shares by the Corporation for cancellation should result in the above tests no longer being met, this will not constitute non-compliance with the above limitations for any awards outstanding prior to such purchase of Common Shares for cancellation.
Causes of Cessation of DSU Plan Awards
Upon the death of a DSU Plan Participant prior to the distribution of the DSUs credited to the DSU Account of such DSU Plan Participant under the DSU Plan, Payment Shares shall be issued or paid to the estate of such DSU Plan Participant on or about the thirtieth (30th) day after the Corporation is notified of the death of the DSU Plan Participant or on a later date elected by the DSU Plan Participant’s estate in the form prescribed for such purposes by the Corporation and delivered to the Chief Financial Officer of the Corporation not later than twenty (20) days after the Corporation is notified of the death of the DSU Plan Participant, provided that such elected date is no later than the last business day of the calendar year following the calendar year in which the DSU Plan Participant dies so that payment can be made on or before such last business day. Notwithstanding the above, upon the death of a U.S. DSU Plan Participant, the DSU Account shall be distributed to the estate of such U.S. DSU Plan Participant on the first business day following ninety (90) days after the U.S. DSU Plan Participant’s date of death.
If the Board terminates or suspends the DSU Plan, previously credited DSUs may, at the Board’s election, be distributed to DSU Plan Participants or may remain outstanding and in effect in accordance with the terms of the DSU Plan. The Board will not require the consent of any affected DSU Plan Participant in connection with a termination of the DSU Plan in which Payment Shares are issued to the DSU Plan Participant in respect of all such DSUs.
No Assignment or Transfer of DSU Plan Awards
Except as required by law, the rights of a DSU Plan Participant under the DSU Plan are not capable of being assigned, transferred, alienated, sold, encumbered, pledged, mortgaged, or charged and are not capable of being subject to attachment or legal process for the payment of any debts or obligations of the DSU Plan Participant.
For information about amendments to the DSU Plan or to grants of DSUs, see “Amendments to the Plans, Options, LTIP Award Agreements and DSUs”.
Amendments to the Plans, Options, LTIP Award Agreements and DSUs
Subject to the rules, regulations and policies of the TSX, the NYSE American and applicable law, the Compensation Committee may, without notice or Shareholder approval, at any time or from time to time, make certain amendments to the LTIPPlans or a specific Option, LTIP Award or DSU Award for the purposes of: (i) altering, extending or accelerating the terms of vesting applicable to any Award or group of Awards;vesting; (ii) making any amendments toamending the general vesting provisions of an Award;provisions; (iii) changing the termination provisions of an Award, provided the change does not entail an extension beyond the original expiry date of such Award;provisions; (iv) accelerating the expiry date of an Award;Options or LTIP Awards; (v) making any amendmentsaccelerations of time related to third party offers in accordance with the provisionsStock Option Plan and adjustments related to stock divisions, consolidations, share reclassifications, amalgamations, reorganizations or similar transactions in accordance with the Stock Option Plan; (vi) amending or modifying the mechanics of exercise of the LTIP that relate toOptions; (vii) amending termination of employment in Section 5 ofprovisions under the LTIP; (vi)(viii) making any amendments to provide covenants of the Corporation in order to protect LTIP Participants; (vii) making any amendments not inconsistent with the LTIP as may be necessary or desirable with respect to matters or questions which, in the good faith opinion of the Board, having in mind the best interests of the LTIP Participants and director participants, it may be expedient to make, including amendments that are desirable as a result of changes in law; (viii) making any amendments for the purposes of(ix) curing or correcting any ambiguity, or defect, or inconsistent provision or clerical omission or mistake or manifest error in the LTIP; (ix) making any amendments to any definitions in the LTIP;error; (x) effecting amendments respecting administration of the LTIP; andamending definitions; (xi) making amendments of a “housekeeping” or administrative nature.
Nonenature; (xii) effecting amendments necessary to comply with the provisions of applicable laws, or desirable for any advantages of any tax law (subject in the case of LTIP, to the Board being of the followingopinion that such amendments will not be prejudicial to the rights or interests of the participants in the LTIP); and (xiii) any other amendment, whether fundamental or otherwise, not requiring Shareholder approval under applicable law. No amendment of the Plans may contravene applicable laws, including the rules, regulations, and policies of the TSX and the NYSE American.
Shareholder approval must be obtained for amendments to LTIP may be made unless Shareholder approval is obtained:the Plans that: (i) to increase the maximum number of Common Shares issuable under the LTIP;Plans; (ii) toreduce the exercise price of an Option held by a non-insider of the Corporation; (iii) extend the term of any Options held by a non-insider of the Corporation, other than an extension during a Black Out Period (as defined in the Plans); (iv) increase the number of Common Shares issuable to insiders of the Corporation or to non-employee director participants; (iii)participants, as applicable; (v) permit Options or DSUs to be transferrable or assignable; (vi) to add categories of persons eligible to participate in the DSU Plan; (vii) amend the
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amendment provisions in the LTIP; (iv) toPlans; (viii) add any form of financial assistance to a Participant an LTIP Participant; or a Director Participant; or (v)(ix) where approval is required by the Exchanges (whether it be Exchange or shareholderShareholder approval).
Amendments to the LTIPApproval by disinterested Shareholders is required for the following require disinterested Shareholder approval, amendments that: (i) could result in the number of Common Shares issuable to insiders of the Corporation exceeding 10% of the issued and outstanding Common Shares; (ii) reduce the exercise price of an Option (including cancellation and reissuance at a lower exercise price) held by insiders of the Corporation; (iii) extend the term of any Option, LTIP Award or DSU Award held by insiders of the Corporation, other than an extension during a Black Out Period; and (iii)(iv) require disinterested Shareholder approval under applicable law (including rules of the Exchanges).
No assignment or transfer of Awards, whether voluntary, involuntary, by operation of law or otherwise, vests any interest or right in such Awards whatsoever in any assignee or transferee. Immediately upon any assignment or transfer, or any attempt to make the same, such Awards will terminate and be of no further force or effect, provided that any Awards held by a LTIP Participant or director participant that have vested at the Termination Date will enure to the benefit of the LTIP Participant or director participant’s heirs, executors and administrators.
Perquisites and Other Personal Benefits
The Corporation’s named executive officers are not generally entitled to significant perquisites or other personal benefits not offered to the Corporation’s employees. The Corporation does sponsor a qualified tax-deferred savings plan for U.S. employees in accordance with the provisions of Section 401(k) of the Tax Code, which is described further below under the heading “Executive Compensation -– Pension and Retirement Savings Plans”.
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Compensation for the Corporation’s Named Executive Officers in 2017 2021
The Corporation’s named executive officers (defined below) for the fiscal year ended December 31, 20172022 were Frederick H. Earnest, who served as the Corporation’s President and Chief Executive Officer, John F. Engele,Douglas L. Tobler who served as the Corporation’s Senior Vice President and Chief Financial Officer and John W. Rozelle, who served as the Corporation’s Senior Vice President.
The Corporation’s employment agreements with our named executive officers are described below under the heading “Executive Compensation -– Executive Employment Agreements”. The compensation paid to the Corporation’s named executive officers is described below under the heading “Executive Compensation -– Summary Compensation Table”.
Effects of Regulatory Requirements on Executive Compensation
Section 409A of the Tax Code generally affects the granting of most forms of deferred compensation which were not earned and vested prior to 2005. The Corporation’s compensation program is designed to comply with the final regulations of the U.S. Internal Revenue Service and other guidance with respect to Section 409A of the Tax Code, and we anticipate that the Compensation Committee will continue to design and administer the Corporation’s compensation programs accordingly.
Various rules under current generally accepted accounting practices impact the manner in which the Corporation accounts for grants of Options to employees, including executive officers, on its financial statements. While the Compensation Committee reviews the effect of these rules (including FAS 123(R)) when determining the form and timing of grants of Options to the Corporation’s employees, including executive officers, this analysis is not necessarily the determinative factor in any such decision regarding the form and timing of these grants.
Clawback Policy
The Corporation does not currently have a clawback policy in relation to recoupment of executive compensation upon a material restatement of the Corporation’s financial statements. The Compensation Committee has not considered such a clawback policy necessary given the nature of the Corporation’s operations, the types of incentive awards granted to executive officers and the nature the Corporate Objectives set for compensation bonus awards. Given recently adopted rules by the United States Securities and Exchange Commission requiring stock exchanges to adopt listing rules requiring the adoption of clawback policies by listed companies, the Compensation Committee has determined to monitor the new listing rules and promptly adopt a clawback policy that meets the necessary
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requirements of the new listing rules and meets the best interests of the Corporation in protecting Shareholders and attracting and retaining qualified executive officers.
Compensation Committee Interlocks and Insider Participation
No executive officer of the Corporation is or has been a director or a member of the Compensation Committee of another entity having an executive officer who is or has been a director or a member of the Compensation Committee of the Corporation.
Compensation Committee Report on Executive Compensation
The Compensation Committee has reviewed and discussed this Compensation Discussion and Analysis with management and, based on such review and discussions, the Compensation Committee recommended to the Board of the Corporation that this Compensation Discussion and Analysis be included in this Information Circular.
Submitted on behalf of the Compensation Committee
John M. Clark (Chairman)(Chair)
W. DurrandDurand Eppler
Tracy A. Stevenson
The above filed report of the Compensation Committee will not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference in any of the Corporation’s filings under the United States Securities Act of 1933 or the Exchange Act, each as amended, except to the extent that we specifically so incorporate the same by reference.
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Summary Compensation Table
The table below sets forth, for the fiscal years indicated, all compensation awarded to, paid to or earned by (i) those individuals who, during the fiscal year ended December 31, 2017,2022, served as (i) the Corporation’s President and Chief Executive Officer, (ii) Senior Vice President and Chief Financial Officer and (iii) the Corporation’s one othernext most highly compensated executive officer whose total compensation was, individually, more than C$150,000 during the fiscal year ended December 31, 2017.2022. These officers are referred to in this Information Circular as the Corporation’s “named executive officers”.
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| �� |
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| |
Name and Principal Position |
| Year |
| Salary(5) |
| Bonus(5) |
| Stock Awards(1)(2) |
| Option Awards (1)(2) |
| All Other Compensation (3)(4) |
| Total |
(a) |
| (b) |
| (c) |
| (d) |
| (e) |
| (f) |
| (i) |
| (j) |
Frederick H. Earnest, |
| 2017 | $ | 325,000 | $ | – | $ | 231,681 | $ | – | $ | 10,800 | $ | 567,481 |
President and Chief Executive Officer |
| 2016 |
| 292,500 |
| – |
| 260,320 |
| – |
| 10,600 | $ | 563,420 |
|
| 2015 |
| 273,541 |
| – |
| 140,542 |
| – |
| 9,105 |
| 423,188 |
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|
John F. Engele, |
| 2017 |
| 280,000 |
| – |
| 100,427 |
| – |
| 10,800 |
| 391,227 |
Senior Vice President |
| 2016 |
| 280,000 |
| – |
| 105,670 |
| – |
| 10,600 |
| 396,270 |
and Chief Financial Officer |
| 2015 |
| 263,667 |
| – |
| 58,192 |
| – |
| 9,558 |
| 331,417 |
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|
John W. Rozelle, |
| 2017 |
| 225,000 |
| – |
| 64,367 |
| – |
| 10,800 |
| 300,167 |
Senior Vice President |
| 2016 |
| 225,000 |
| – |
| 67,730 |
| – |
| 10,600 |
| 303,330 |
|
| 2015 |
| 211,875 |
| – |
| 37,463 |
| – |
| 6,900 |
| 256,238 |
| | | | | | | | | | | | | | |
Name and Principal Position | | Year | | Salary ($) | | Bonus(1) ($) | | Stock Awards(2) ($) | | Option Awards(2)(3) ($) | | All Other Compensation(4)(5) ($) | | Total ($) |
| 2022 | | 350,000 | | – | | 143,830 | | – | | 12,200 | | 506,030 | |
President and Chief Executive | | 2021(6) | | 345,833 | | 100,000 | | 214,422 | | – | | 11,600 | | 671,855 |
Officer | | 2020 | | 325,000 | | – | | 192,440 | | – | | 11,400 | | 528,840 |
| | | | | | | | | | | | | | |
Douglas L. Tobler, | | 2022 | | 275,000 | | – | | 74,250 | | – | | 12,200 | | 361,450 |
Chief Financial Officer | | 2021 | | 275,000 | | 40,000 | | 110,314 | | – | | 11,600 | | 436,914 |
| | 2020 | | 275,000 | | – | | 106,926 | | – | | 11,400 | | 393,326 |
| | | | | | | | | | | | | | |
John W. Rozelle, | | 2022 | | 240,000 | | – | | 54,730 | | – | | 12,200 | | 306,930 |
Senior Vice | | 2021(6) | | 237,500 | | 50,000 | | 81,736 | | – | | 11,600 | | 380,836 |
President | | 2020 | | 225,000 | | – | | 71,144 | | – | | 11,400 | | 307,544 |
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_____________________________
(1) | In the second quarter of 2021, the Corporation paid a discretionary cash bonus to each named executives upon the approval of the Mining Management Plan. |
(2) | For assumptions regarding the valuation of LTIP Awards, Phantom Units, and Options, see Note 6 to the Corporation’s audited annual consolidated financial statements for the year ended December 31, 2022 as filed with the Corporation’s Annual Report on Form 10-K on February 23, 2023. |
(3) | The amounts in this column represent the dollar amounts for the aggregate grant-date fair value of Options granted pursuant to the Stock Option Plan, computed in accordance with FASB ASC Topic 718. |
(4) | Perquisites and other personal benefits for the most recently completed financial year do not exceed $10,000 for any of the named executive officers unless otherwise noted. |
(5) | Represents the Corporation’s contribution under the Corporation’s Retirement Savings Plan, except where otherwise indicated. The named executive officers of the Corporation participate in this plan on the same basis as all other employees of the Corporation. See “Pension and Retirement Savings Plans”. |
(6) | In March 2021, salary adjustments were made for Mr. Earnest and Mr. Rozelle. |
Pay versus Performance
(1)Effective on August 1, 2013, senior management accepted a 20% reduction to base salary together with
As required by Item 402(v) of Regulation S-K, we are providing the elimination of discretionary incentive payments underfollowing information about the STIP. Effective on August 1, 2015, the Board of Directors authorized: (i) restoration of one-halfrelationship between executive “compensation actually paid” (as defined by SEC rules) and certain financial performance metrics of the 20% reductionCorporation for the last two fiscal years. In determining the “compensation actually paid” to our named executive officers, we are required to make various adjustments to amounts that have been previously reported in base salary, resultingthe Summary Compensation Table (“SCT”) in previous years, as the SEC’s valuation methods for this section differ from those required in the SCT. The table below summarizes compensation values both as previously reported in our SCT, as well as the adjusted values required in this section for the 2021 and 2022 calendar years. The Compensation Committee did not consider the pay versus performance disclosure when making its incentive compensation decisions.
The following table sets forth information concerning the compensation of our principal executive officer, or “PEO,” and, on an average basis, the compensation of our other named executive officers, or “NEOs,” for each of the years ending December 31, 2022 and 2021, as such compensation relates to our financial performance for each such year. The PEO for each of the years presented within the following tables was Frederick H. Earnest, President, Chief Executive Officer and Director. The NEO's for each of the years presented were Douglas L. Tobler, Chief Financial Officer and John W. Rozelle, Senior Vice President.
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Year | SCT Total | Compensation | Average | Average | Value of Initial Fixed $100 Investment Based on Total Shareholder Return(3) | Net |
2022 | $506,030 | $486,562 | $334,190 | $323,796 | $46.30 | $4,931 |
2021 | $671,855 | $497,105 | $408,875 | $321,435 | $65.74 | $15,237 |
(1) | The dollar amounts reported for the PEO under “Compensation Actually Paid” represent the amount of “Compensation Actually Paid” to the PEO, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to the PEO during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the adjustments in the table below were made to the PEO’s total compensation for each year to determine the compensation actually paid: |
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Reconciliation of PEO SCT Total and Compensation Actually Paid | 2022 | 2021 |
Total Compensation as reported in SCT | $506,030 | $671,855 |
Fair value of equity awards granted during year as reported in SCT | $(143,830) | $(214,422) |
Fair value of equity compensation granted in current year—value at end of year-end | $121,000 | $198,090 |
Change in fair value for end of prior year to vesting date for awards made in prior years that vested during current year | $49,965 | $(26,943) |
Change in fair value from end of prior year to end of current year for awards made in prior years that were unvested at end of current year | $(44,590) | $(119,757) |
Fair value of awards forfeited in current year determined at end of prior year | $(2,013) | $(11,718) |
Compensation Actually Paid | $486,562 | $497,105 |
(2) | The dollar amounts reported for the NEOs under “Compensation Actually Paid” represent the average amount of “Compensation Actually Paid” to the NEOs, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the adjustments in the table below were made to the NEOs’ average total compensation for each year to determine the compensation actually paid: |
Reconciliation of NEO SCT Total and Compensation Actually Paid | 2022 | 2021 |
Total Compensation as reported in SCT | $334,190 | $408,875 |
Fair value of equity awards granted during year as reported in SCT | $(64,490) | $(96,025) |
Fair value of equity compensation granted in current year—value at end of year-end | $54,250 | $88,750 |
Change in fair value for end of prior year to vesting date for awards made in prior years that vested during current year | $21,276 | $(12,191) |
Change in fair value from end of prior year to end of current year for awards made in prior years that were unvested at end of current year | $(20,125) | $(52,108) |
Fair value of awards forfeited in current year determined at end of prior year | $(1,305) | $(15,866) |
Compensation Actually Paid | $323,796 | $321,435 |
(3) | For purposes of calculating the cumulative total Shareholder return, the measurement period is the market close on the last trading day of 2020, through and including the end of the year for which cumulative total Shareholder return is being calculated. |
Analysis of the Information Presented in the Pay Versus Performance Tables
Because we are not a remaining 10% reductionproduction stage mining company, we did not have any revenue, from continuing operations during the periods presented. Consequently, we have not historically focused on net income (loss) as a performance measure for our executive compensation programs. In 2021 and 2022, our net loss improved from approximately $15 million in 2021 to base salary;approximately $4.9 million in 2022 and (ii) a one-time payment equalduring the same period the compensation actually paid for our PEO decreased slightly from $497,105 in 2021 to 10% of base salary, of which$486,562 in 2022 and average compensation actually paid for our other NEOs remained essentially unchanged going from $321,435 in 2021 to $323,796.
The following graph shows the compensation actually paid to Mr. Earnest and the average amount of compensation actually paid to our NEOs as a group (excluding Mr. Earnest) during the periods presented and total Shareholder return over those periods. Total Shareholder return was negative during 2021 and 2022., Mr. Earnest’s compensation actually paid showed a decrease year over year and the average amount of compensation actually paid to our NEOs as a group (excluding Mr. Earnest) remained approximately flat.
We utilize performance measures to align executive compensation with performance, but those tend not to be financial performance measures, such as total Shareholder return. For example, as described in more detail above in the equivalent value in RSU’s, while Mr. Engelesection “Executive Compensation – Compensation Discussion and Mr. Rozelle were paid in cash. Similarly, in 2016, a one-time payment equalAnalysis,” our named executive officers are eligible to 10%receive short term bonuses which are designed to provide appropriate incentives to our executives to achieve defined annual individual and corporate goals. Additionally, we believe stock options and restricted share units, which are an integral part of base salary, of which Mr. Earnest was paid in the equivalent value in RSU’s, while Mr. Engele and Mr. Rozelle were paid in cash. In July 2017, with an effective date of August 1, 2017, the Board restored the remaining 10% reduction to base compensation. In addition, a one-time payment equal to 7/10 of 10% of each respective manager’s base salary was paid in cash to each member of senior management. The Board of Directors will determine when it is appropriate to restore annual discretionary incentive awards. All securities under optionour executive compensation program, are for Common Shares. No stock appreciation rights are outstanding. For assumptions regarding the valuation of Awards and Options, see note 6closely related to the Corporation’s audited annualperformance, although
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not directly tied to total Shareholder return, because their value is directly correlated to the market price of our Common Shares and requires that the executive officer continues in our employment over the vesting period. As such, these stock option awards and restricted share units strongly align our executive officers’ interests with those of our Shareholders by providing a continuing financial statementsincentive to maximize long-term value for our Shareholders and by encouraging our executive officers to continue in our employment for the year ended December 31, 2017 as filed with the Corporation’s Form 10-K on March 6, 2018. long-term.
(2)The amounts in this column represent the dollar amounts for the aggregate grant-date fair value computed in accordance with FASB ASC Topic 718, of Options granted pursuant to the Stock Option Plan.
(3)Perquisites and other personal benefits for the most recently completed financial year do not exceed $10,000 for any of the named executive officers unless otherwise noted.
(4)Represents the Corporation’s contribution under the Corporation’s Retirement Savings Plan, except where otherwise indicated. The named executive officers of the Corporation participate in this plan on the same basis as all other employees of the Corporation. See “Pension and Retirement Savings Plans”.
Executive Employment Agreements
Employment Agreement with Frederick H. Earnest. Frederick H. Earnest has been engaged under an employment contract effective September 22, 2006, pursuant to which he was initially engaged to serve as Senior Vice President of Project Development of the Corporation and Vista Gold U.S., Inc., its wholly-owned subsidiary. From August 1, 2007 to January 1, 2012, Mr. Earnest served as President and Chief Operating Officer of the Corporation and of Vista Gold U.S., Inc,Inc., which was reflected in an employment agreement dated March 17, 2009.Since January 1, 2012, Mr. Earnest has served as President and Chief Executive Officer of the Corporation and Vista Gold U.S., Inc. Effective March 17, 2009, Mr. Earnest’s employment agreement was amended and restated, and it was further amended effective January 1, 2012. On November 1, 2012, Mr. Earnest entered a new employment agreement, which was amended effective March 12, 2014, and January 1, 2016.
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2016, March 8, 2019, and May 26, 2022.
Pursuant to the terms of his amended employment contract, Mr. Earnest is to receive an annual base salary of $325,000$350,000 and annual discretionary incentive payments. The grant of any incentive payment shall be in the sole discretion of the Board and shall be earned only after the grant thereof by the Board. Mr. Earnest’s eligibility to receive such incentive payment is conditioned upon his continued employment, both at the time the Board considers the grant of incentive payments and at the time such incentive payments are actually granted and paid. Mr. Earnest is also eligible to receive other benefits made available to the Corporation’s senior executive officers, including participation in any benefit plans and policies. Effective August 1, 2013,For the year ended December 31, 2021, in addition to his annual salary, Mr. Earnest received a 20% reduction to his salary and eliminationdiscretionary cash bonus of discretionary incentive payments under$100,000 upon the STIP. In July 2015, with an effective date of August 1, 2015, the Board restored one-halfapproval of the 20% compensation reduction, resulting in a remaining 10% reduction to Mr. Earnest’s base compensation. In addition, at the same time, the Board authorized a one-time payment equal to 10% of Mr. Earnest’s base salary, which was paid in the equivalent value in RSU’s, at Mr. Earnest’s option. Similarly, in 2016, the Board authorized a one-time payment equal to 10% of Mr. Earnest’s base salary, which was paid in the equivalent value in RSU’s, at Mr. Earnest’s option. InMining Management Plan.
On July 2017, with an effective date of August 1, 2017, the Board restored the remaining 10% reduction to base compensation for Mr. Earnest. In addition, a one-time payment equal to 7/10 of 10% Mr. Ernest’s base salary was paid in cash. The Board will determine when it is appropriate to restore annual discretionary incentive awards.
In addition, in 2015,24, 2018, the Corporation granted Mr. Earnest 553,000114,000 Phantom Units. The Phantom Units vested in three equal parts: 1/3 at 12 months from grant, 1/3 at 24 months from grant, and 1/3 at 36 months from grant. The final tranche of the 2018 Phantom Units vested in July 2021, at which time each Phantom Unit was settled in cash at an amount equal to the Corporation’s closing share price on that day.
In addition, in 2020, the Corporation granted to Mr. Earnest 466,000 RSUs to receive 553,000 466,000Common Shares under the LTIP. In 2016, the Corporation granted Mr. Earnest 306,279 RSUs to receive 306,279 Common Shares under the LTIP. In 2017,2021, the Corporation granted to Mr. Earnest 277,000279,000 RSUs to receive 277,000279,000Common Shares under
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the LTIP. In 2022, the Corporation granted to Mr. Earnest 242,000 RSUs to receive 242,000 Common Shares under the LTIP. See “Executive Compensation -– Outstanding Equity Awards and Options Exercised as at December 31, 20172022 Table” below for a description of vesting and other terms applicable to Mr. Earnest’s Options.Options and RSUs.
Employment Agreement with John F. EngeleDouglas L. Tobler. Douglas L. Tobler . John F. Engele has been engaged under an employment contract effective May 29, 2012,July 1, 2019, pursuant to which he was engaged to serve as Senior Vice President and Chief Financial Officer of the Corporation and Vista Gold U.S., Inc., its wholly-owned subsidiary.Mr. Engele entered into a newTobler’s employment agreement effective November 1, 2012, which was amended on March 12, 2014 and January 1, 2016.restated effective May 26, 2022.
Pursuant to the terms of his amended employment contract, Mr. EngeleTobler is to receive an annual base salary of $280,000$275,000 and annual discretionary incentive payments. The grant of any incentive payment shall be in the sole discretion of the Board and shall be earned only after the grant thereof by the Board.Board. Mr. Engele’sTobler’s eligibility to receive such incentive payment is conditioned upon his continued employment, both at the time the Board considers the grant of incentive payments and at the time such incentive payments are actually granted and paid. Mr. EngeleTobler is also eligible to receive other benefits made available to the Corporation’s senior executive officers, including participation in any benefit plans and policies. Effective August 1, 2013,For the year ended December 31, 2021, in addition to his annual salary, Mr. EngeleTobler received a 20% reduction to his salary and eliminationdiscretionary cash bonus of discretionary incentive payments under$40,000 upon the STIP. In July 2015, with an effective date of August 1, 2015, the Board restored one-halfapproval of the 20% compensation reduction, resulting in a remaining 10% reduction to Mr. Engele’s base compensation. In addition, at the same time, the Board authorized a one-time payment equal to 10% of Mr. Engele’s base salary, which was paid in cash, at Mr. Engele’s option. Similarly, in 2016, the Board authorized a one-time payment equal to 10% of Mr. Engele’s base salary, which was paid in cash, at Mr. Engele’s option. In July 2017, with an effective date of August 1, 2017, the Boardrestored the remaining 10% reduction to base compensation for Mr. Engele. In addition, a one-time payment equal to 7/10 of 10% Mr. Engele’s base salary was paid in cash. The Board will determine when it is appropriate to restore annual discretionary incentive awards.Mining Management Plan.
In addition, in 2015,2020, the Corporation granted to Mr. Engele 233,000Tobler 259,000 RSUs to receive 233,000 259,000Common Shares under the LTIP. In 2016,2021, the Corporation granted to Mr. Engele 134,000Tobler 144,000 RSUs to receive 134,000 144,000Common Shares under the LTIP. In 2017,2022, the Corporation granted to Mr. Engele 120,000Tobler 125,000 RSUs to receive 120,000125,000 Common Shares under the LTIP. See “Executive“Executive Compensation - – Outstanding Equity Awards and Options Exercised as at December 31, 20172022 Table” below for a description of vesting and other terms applicable to Mr. Engele’s Options.Tobler’s Options and RSUs.
Employment Agreement with John W. Rozelle. John W. Rozelle has been engaged under an employment contract effective May 16, 2011, pursuant to which he was initially engaged to serve as Vice President Technical Services of the Corporation and Vista Gold U.S., Inc., its wholly-owned subsidiary. Mr. Rozelle entered into a new employment agreement on August 1, 2012, Mr. Rozelle has served as Senior Vice President of the Corporation and Vista Gold U.S., Inc..Inc. Effective November 1, 2012, Mr. Rozelle entered a new employment agreement, which was amended effective January 1, 2016.
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2016, and May 26, 2022.
Pursuant to the terms of his amended employment contract, Mr. Rozelle is to receive an annual base salary of $225,000$240,000 and annual discretionary incentive payments. The grant of any such incentive payment shall be in the sole discretion of the Board and shall be earned only after the grant thereof by the Board. Mr. Rozelle’s eligibility to receive such incentive payment is conditioned upon his continued employment, both at the time the Boardconsiders the grant of incentive payments and at the time such incentive payments are actually granted and paid. Mr. Rozelle is also eligible to receive other benefits made available to the Corporation’s senior executive officers, including participation in any benefit plans and policies. Effective August 1, 2013,For the year ended December 31, 2021, in addition to his annual salary, Mr. Rozelle received a 20% reduction to his salary and eliminationdiscretionary cash bonus of discretionary incentive payments under$50,000 upon the STIP. In July 2015, with an effective date of August 1, 2015, the Board restored one-halfapproval of the 20% compensation reduction, resulting in a remaining 10% reduction to Mr. Rozelle’s base compensation. In addition, at the same time, the Board authorized a one-time payment equal to 10% of Mr. Rozelle’s base salary, which was paid in cash, at Mr. Rozelle’s option. Similarly, in 2016, the Board authorized a one-time payment equal to 10% of Mr. Rozelle’s base salary, which was paid in cash, at Mr. Rozelle’s option. InMining Management Plan.
On July 2017, with an effective date of August 1, 2017, the Board restored the remaining 10% reduction to base compensation for Mr. Rozelle. In addition, a one-time payment equal to 7/10 of 10% Mr. Rozelle’s base salary was paid in cash. The Board will determine when it is appropriate to restore annual discretionary incentive awards.
In addition, in 2015,24, 2018, the Corporation granted Mr. Rozelle 150,000 32,000 Phantom Units. The Phantom Units vested in three equal parts: 1/3 at 12 months from grant, 1/3 at 24 months from grant, and 1/3 at 36 months from grant. The final tranche of the 2018 Phantom Units vested in July 2021, at which time each Phantom Unit was settled in cash at an amount equal to the Corporation’s closing share price on that day.
In addition, in 2020, the Corporation granted to Mr. Rozelle 172,000RSUs to receive 150,000 172,000Common Shares under the LTIP. In 2016,2021, the Corporation granted to Mr. Rozelle 86,000 106,000RSUs to receive 86,000 106,000Common Shares under the LTIP. In 2017,2022, the Corporation granted to Mr. Rozelle 77,00092,000 RSUs to receive 77,00092,000 Common Shares under the LTIP. See “Executive Compensation -– Outstanding Equity Awards and Options Exercised as at December 31, 20172022 Table” below for a description of vesting and other terms applicable to Mr. Rozelle’s Options.Options and RSUs.
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Grants of Plan Based Awards as at December 31, 2017 Table2022
A summary of plan-based awards granted during the year ended December 31, 20172022 to named executive officers is set out in the table below. All grants are of Options under the Stock Option Plan and RSUs under the LTIP.
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Name |
| Grant Date |
| All Other Stock Awards: Number of Shares of Stock or Units |
| Grant Date Fair Value of Stock and Option Awards |
(a) |
| (b) |
| (i) |
| (l) |
Frederick H. Earnest, |
| 3/5/2017 |
| 87,000 |
| 0.97 |
President and Chief Executive Officer |
| 8/3/2017 |
| 190,000 |
| 0.83 |
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John F. Engele, |
| 3/5/2017 |
| 38,000 |
| 0.97 |
Senior Vice President and Chief Financial Officer |
| 8/3/2017 |
| 82,000 |
| 0.83 |
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John W. Rozelle, |
| 3/5/2017 |
| 24,000 |
| 0.97 |
Senior Vice President |
| 8/3/2017 |
| 53,000 |
| 0.83 |
| | | | | | | |
Name | | | Grant Date | | All Other Stock Awards: Number of Shares of Stock or Units | | Grant Date Fair Value of Stock and Option Awards(1) ($) |
Frederick H. Earnest | | | 3/2/2022 | | 242,000 | | 143,830 |
President and Chief Executive Officer | | | | | | | |
| | | | | | | |
Douglas L. Tobler | | | 3/2/2022 | | 125,000 | | 74,250 |
Chief Financial Officer | | | | | | | |
| | | | | | | |
John W. Rozelle | | | 3/2/2022 | | 92,000 | | 54,730 |
Senior Vice President | | | | | | | |
(1) | The base price for Common Shares underlying grants of RSUs awarded under the LTIP is the closing market price of the Common Shares on the NYSE American on the day prior to the date of the grant. Pursuant to the terms of the Stock Option Plan, the exercise price for Common Shares underlying grants awarded under the Stock Option Plan is not less than the closing market price of the Common Shares on either the TSX or the NYSE American as of the day prior to the date of the grant. The amounts in this column represent the dollar amounts for the aggregate grant-date fair value, computed in accordance with FASB ASC Topic 718, of RSUs granted pursuant to the LTIP. |
(1) The base price for Common Shares underlying grants of RSUs awarded under the LTIP is the closing market price of the Common Shares on the NYSE American on the day prior to the date of the grant. Pursuant to the terms of the Stock Option Plan, the exercise price for Common Shares underlying grants awarded under the Stock Option Plan is not less than the closing market price of the Common Shares on either the TSX or the NYSE American as of the day prior to the date of the grant.
- 41 -
The reported high and low trading prices of the Common Shares on the NYSE American for the 30 days prior to the date of the grants of RSUs referred to above are set out in the table below.
|
|
|
|
|
|
| NYSE American | ||
|
| High |
| Low |
02/06/17 – 03/05/17 (RSUs) |
| $1.20 |
| $0.97 |
07/04/17 – 08/03/17 (RSUs) |
| $0.81 |
| $0.87 |
| | | | |
| | NYSE American | ||
| | High | | Low |
1/22/2021 – 2/22/2021 (RSUs) | | $0.89 | | $0.66 |
Outstanding Equity Awards and Options Exercised as at December 31, 2017 Table2022
A summary of the number and the value of the outstanding equity awards at December 31, 20172022 held by the named executive officers is set out in the table below.
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
|
| Option Awards |
| Stock Awards(1) | ||||||||||||||||||||
| | | | | | | | | | | | | ||||||||||||
| | Option Awards | | Stock Awards(1) | ||||||||||||||||||||
Name |
| Number of Securities Underlying Unexercised Options (#) Exercisable |
| Number of Securities Underlying Unexercised Options (#) Unexercisable |
| Option Exercise Price ($) |
| Option Expiration Date |
| Number of Shares or Units of Stock That Have Not Vested (#) |
| Market Value of Shares or Units of Stock That Have Not Vested ($) | | Number of Securities Underlying Unexercised Options (#) Exercisable | | Option Exercise Price ($) | | Option Expiration Date | | Value of unexercised in-the-money options ($) | | Number of Shares or Units of Stock That Have Not Vested (#) | | Market Value of Shares or Units of Stock That Have Not Vested ($) |
(a) |
| (b) |
| (c) |
| (e) |
| (f) |
| (g) |
| (h) | ||||||||||||
Frederick H. Earnest, |
| 150,000 |
| nil |
| 0.36 |
| 12/30/2018 |
| 43,300(2) |
| 30,310 | ||||||||||||
Frederick H. Earnest | | 100,000 | | 0.75 | | 3/9/2023 | | - | | 43,334(2) | | 21,667 | ||||||||||||
President and |
| 25,000 |
| nil |
| 0.52 |
| 3/25/2019 |
| 123,066(3) |
| 86,146 | | 147,000 | | 0.62 | | 7/24/2023 | | - | | 169,000(3) | | 84,500 |
Chief Executive Officer |
|
|
|
|
|
|
|
|
| 87,000(4) |
| 60,900 | | | | | | | | | | 242,000(4) | | 121,000 |
|
|
|
|
|
|
|
|
|
| 190,000(5) |
| 133,000 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
John F. Engele, |
| 112,500 |
| nil |
| 0.36 |
| 12/30/2018 |
| 23,300(6) |
| 16,310 | ||||||||||||
Senior Vice President and |
| 25,000 |
| nil |
| 0.52 |
| 3/25/2019 |
| 52,866(7) |
| 37,006 | ||||||||||||
| | | | | | | | | | | | | ||||||||||||
Douglas L. Tobler | | 150,000 | | 0.77 | | 6/27/2024 | | - | | 24,000(5) | | 12,000 | ||||||||||||
Chief Financial Officer |
|
|
|
|
|
|
|
|
| 38,000(8) |
| 26,600 | | | | | | | | | | 87,667(6) | | 43,834 |
|
|
|
|
|
|
|
|
|
| 82,000(9) |
| 57,400 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
John W. Rozelle, |
| 112,500 |
| nil |
| 0.36 |
| 12/30/2018 |
| 15,000(10) |
| 10,500 | ||||||||||||
| | | | | | | | | | 125,000(7) | | 62,500 | ||||||||||||
| | | | | | | | | | | | | ||||||||||||
John W. Rozelle | | 50,000 | | 0.75 | | 3/9/2023 | | - | | 16,000(8) | | 8,000 | ||||||||||||
Senior Vice President |
| 25,000 |
| nil |
| 0.52 |
| 3/25/2019 |
| 33,800(11) |
| 23,660 | | 13,000 | | 0.62 | | 7/24/2023 | | - | | 64,000(9) | | 32,000 |
|
|
|
|
|
|
|
|
|
| 24,000(12) |
| 16,800 | ||||||||||||
|
|
|
|
|
|
|
|
|
| 53,000(13) |
| 37,100 | ||||||||||||
| | | | | | | | | | 92,000(10) | | 46,000 |
- 44 -
________________________________
(1) |
| Each RSU represents a contingent right to receive one Common Share. |
(2) |
|
|
|
|
(4) |
|
|
|
|
(5) |
|
|
|
|
(7) |
|
|
|
|
(8) |
|
|
|
|
(9) | 44,000 of the RSUs vest on February 23, 2023 provided share price performance of the Common Shares meets certain criteria; |
(10) |
|
|
|
|
- 42 -
No Options were exercised in 2017 by a named executive officer. In 2017,2022, the following RSUs held by named executive officers vested: (i) 359,942387,498 RSUs held by Mr. Earnest, (ii) 182,641191,324 RSUs held by Mr. EngeleTobler, and (iii) 130,915145,000 RSUs held by Mr. Rozelle.
Pension and Retirement Savings Plans
The Corporation sponsors a qualified tax-deferred savings plan in accordance with the provisions of Section 401(k) of the Tax Code, which is available to permanent US-based employees. Under the terms of this plan, the Corporation makes contributions of up to 4% of eligible employees’ salaries, subject to statutory maximums. The Corporation has no plans to provide pension or other retirement benefits.
Nonqualified Deferred Compensation
The Corporation has no plans that provide for deferred compensation to its executive officers.
Termination of Employment, Change in Responsibilities and Employment Contracts
Payments Upon Termination or Change in Responsibilities
The employment agreements with Frederick H. Earnest, John F. Engele,Douglas L. Tobler and John W. Rozelle contain provisions which entitle each of them to payments following termination or alteration of their respective employment with the Corporation in the event of a material adverse change, or termination of employment following a change of control or termination of employment by the Corporation without just cause. Each individual, depending on the nature of the termination, will be entitled to continuation of salary, accrued vacation pay, and employer-paid fringe benefits, for a stated period of time. Alternatively, each individual may elect to receive a lump sum payment of these amounts. In the event of termination following a change in control, each individual would also receive payment of amounts due under the STIP program. The total continuation period and lump sum benefit payment amounts between which the executives can choose are set out below.
“Material adverse change” means (i) the assignment of any duties that are substantially inconsistent with or materially diminish his respective position, or (ii)position; a material reduction in base salary or other compensation,compensation; or (iii) the relocation of the primary work location to any location more than 50 miles away from the primary work location as of the date of his applicable agreement.
“Just“Just cause” includes any of his (i) failure to perform assigned responsibilities that continues unremedied after written notice from the Corporation, (ii)Corporation; death or permanent disability, (iii)disability; breach of any fiduciary duty owed to the Corporation,Corporation; or (iv) conviction in a criminal proceeding.
“Change of control” means (i) any consolidation, merger, reorganization or other transaction of the Corporation that results in the Shareholders owning less than the majority of the aggregate voting power, (ii)power; sale or disposition of all or
- 45 -
substantially all of the Corporation’s assetsassets; or (iii) any transaction which results in the current Board ceasing to constitute the majority of the Board.
- 43 -
|
|
|
|
| ||||
| | | | | ||||
Material adverse change: | Material adverse change: | Material adverse change: | ||||||
Name |
| Period |
| Total benefit amount | | Period | | Total benefit amount |
Mr. Earnest |
| 24 months | $ | 794,917 | | 24 months | $ | 794,462 |
Mr. Engele |
| 18 months | $ | 495,893 | ||||
Mr. Tobler | | 24 months | $ | 629,940 | ||||
Mr. Rozelle |
| 18 months | $ | 388,415 | | 18 months | $ | 425,359 |
| | | | | ||||
Without just cause: | Without just cause: | |||||||
Name | | Period | | Total benefit amount | ||||
Mr. Earnest | | 24 months | $ | 794,462 | ||||
Mr. Tobler | | 12 months | $ | 314,970 | ||||
Mr. Rozelle | | 12 months | $ | 283,573 | ||||
| | | | | ||||
Change of control: | Change of control: | |||||||
Name | | Period | | Total benefit amount | ||||
Mr. Earnest | | 24 months | $ | 794,462 | ||||
Mr. Tobler | | 24 months | $ | 629,940 | ||||
Mr. Rozelle | | 18 months | $ | 425,359 |
|
|
|
|
|
Without just cause: | ||||
Name |
| Period |
| Total benefit amount |
Mr. Earnest |
| 24 months | $ | 794,917 |
Mr. Engele |
| 12 months | $ | 333,941 |
Mr. Rozelle |
| 12 months | $ | 264,755 |
|
|
|
|
|
Change of control: | ||||
Name |
| Period |
| Total benefit amount |
Mr. Earnest |
| 24 months | $ | 1,058,167 |
Mr. Engele |
| 18 months | $ | 635,893 |
Mr. Rozelle |
| 18 months | $ | 388,415 |
For a description of the treatment of outstanding Options held by named executive officers upon termination, see “Executive Compensation –– Compensation Discussion and Analysis – Elements of the Corporation’s Compensation Program for Fiscal Year 20172022 – Stock Incentive Awards – Stock Option Plan” above.
Other than as described above, the Corporation has no plan or arrangement in respect of compensation received or that may be received by named executive officers to compensate such officers in the event of the termination of their employment, resignation, or retirement, following a change of control of the Corporation, or in the event of a change in responsibilities following any such change of control.
CEO Pay Ratio
The following pay ratio and supporting information compares the annual total compensation of our employees other than our CEO (including full-time, part-time, seasonal and temporary employees) and the annual total compensation of our CEO, as required by Section 953(b) of the Dodd-Frank Act. The pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K.
For 2017, our last completed fiscal year:
|
|
|
|
Based on this information, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all other employees was 4.97 to 1.
To determine the pay ratio, we took the following steps:
We determined that as of December 31, 2017, the determination date, our employee population consisted of approximately 17 individuals, not including the CEO, located in the United States and Australia. This population consists of our full-time, part-time, temporary and seasonal employees. We excluded certain independent contractors who are employed by, and whose compensation is determined by, an unaffiliated third party.
- 44 -
We utilized the 2017 annual base salary, bonus, employer contributions to retirement plans and stock-based compensation to determine the compensation for each employee because they are recent periods for which employee census and compensation information are readily available. For those employees compensated in Australian dollars, we converted the Australia dollar compensation to US dollars at the December 31, 2017 foreign exchange rate
Once we identified our median employee, we calculated such employee’s annual total compensation for 2017 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K. With respect to the CEO, we used the amount reported as total compensation in the Summary Compensation Table included in this Proxy Statement. Any adjustments, estimates and assumptions used to calculate total annual compensation are described in footnotes to the Summary Compensation Table.
Compensation of Directors (1)
The following table sets forth a summary of the compensation earned by the directors of the Corporation during fiscal year ended December 31, 2017.2022(1).
|
|
|
|
|
|
|
|
| |||||||||
| | | | | | | | | | ||||||||
| | | | | | | | | | ||||||||
Name |
| Fees earned ($) |
| Stock awards ($) |
| Option Awards ($) |
| Total ($) | | Annual Retainer ($) | | Chair Fees ($) | DSU Awards ($) | | Option Awards ($) | | Total ($) |
(a) |
| (b)(2) |
| (c) |
| (d) |
| (e) | |||||||||
Michael B. Richings |
| 56,400 |
| 34,110 |
| - |
| 90,510 | |||||||||
Michael B. Richings(2) | | 32,000 | | 20,000 | 45,360 | | – | | 97,360 | ||||||||
John M. Clark |
| 35,400 |
| 34,110 |
| - |
| 69,510 | | 32,000 | | 4,000 | 45,360 | | – | | 81,360 |
W. Durand Eppler |
| 40,400 |
| 34,110 |
| - |
| 74,510 | | 32,000 | | 750 | 45,360 | | – | | 78,110 |
C. Thomas Ogryzlo |
| 32,400 |
| 34,110 |
| - |
| 66,510 | |||||||||
Deborah J. Friedman | | 32,000 | | 3,000 | 45,360 | | – | | 80,360 | ||||||||
C. Thomas Ogryzlo(2) | | 32,000 | | 3,000 | 45,360 | | – | | 80,360 | ||||||||
Tracy A. Stevenson |
| 38,400 |
| 34,110 |
| - |
| 72,510 | | 32,000 | | 7,000 | 45,360 | | – | | 84,360 |
(1) |
| Directors did not receive any compensation as non-equity incentive plan compensation, through pensions or any other form of compensation, including any agreement to make charitable donations in the director’s name, except for compensation disclosed in the |
(2) |
|
|
The 2022 cash remuneration to directors was changed to include an annual retainer and Chair fees and to eliminate meeting fees. In 2017,2022, each director earned aan annual retainer fee of $24,000.$32,000. In addition, the Chair of the Board earned $20,000 in 2022. The Chair of the Audit Committee earned $6,000 in 2017. The Chairman of the Board earned an additional $24,000$7,000 in 2017.2022. The Chair of the Compensation Committee earned an annual fee of $4,000 in 2022. The Chair of the Corporate Governance and Nominating Committee earned an annual fee of $3,000 in 2017.2022. The directors alsoChair of the Health, Safety, Environment and Social Responsibility Committee earned aan annual fee ranging from $400of $3,000 in 2022. On March 2, 2022, each member of the Board was awarded 54,000 DSUs valued at $45,360 at the time of issuance. The Common Shares issuable pursuant to $1,500 per meeting held during 2017. In addition, duringthese DSUs will be issued at the fiscal year ended December 31, 2017,time each director was granted 44,000 RSUs to receive 44,000 Common Shares.leaves their position on the Board. The Corporation also
- 46 -
reimburses directors for out-of-pocket expenses related to their attendance at meetings. W. Durand Eppler earned an additional $8,000 as Chairman of a special Mt Todd Strategy committee of the Board. No other amounts were paid or are payable to directors of the Corporation for committee participation or special assignments.
Management of the Corporation compiled a comparative report of board compensation, which included the board compensation practices of nine comparable mining companies and summarized the information by director position and responsibility. The information was presented to the non-executive directors, who then considered current board compensation independent of the executive directors. In addition to the board compensation practices summarized in the report from management of the Corporation, the non-executive directors also considered market conditions and current financial circumstances and goals of the Corporation. Upon consideration of this information, the fees, stock awards and option awards specified in the table above were recommended by the non-executive directors and approved in a meeting of the Board with all directors present.
The total aggregate cash remuneration paid or payable by the Corporation and its subsidiaries during the financial year ended December 31, 20172022 (i) to the directors of the Corporation, in their capacity as directors of the Corporation and any of its subsidiaries, was $203,000,$229,750, and (ii) to the named executive officers of the Corporation and any of its subsidiaries who received in their capacity as officers or employees of the Corporation aggregate remuneration in excess of C$150,000, was $862,400.$901,600. This sum includes compensation paid to named executive officers pursuant to retirement savings plan of $32,400.$36,600.
- 45 -
Securities Authorized For Issuance Under Equity Compensation Plans
The following table sets out information relating to the Corporation’s equity compensation plans as at December 31, 2017.2022. The Corporation’s equity compensation plans as of December 31, 20172022 were the Stock Option Plan, the DSU Plan and the LTIP.
|
|
|
|
|
|
| ||||||
| | | | | | | ||||||
Plan Category |
| Number of securities to be issued upon exercise/conversion of outstanding options and rights |
| Weighted-average exercise price of outstanding options |
| Number of securities remaining available for future grants under equity compensation plans (excluding securities reflected in column (a)) | | Number of securities to be issued upon exercise/conversion of outstanding options and rights | | Weighted-average exercise price of outstanding options and rights | | Number of securities remaining available for future grants under equity compensation plans (excluding securities reflected in column (a)) |
|
| (a) |
| (b) |
| (c) | ||||||
| | (a) | | (b) | | (c) | ||||||
Equity compensation plans approved by securityholders |
| 2,712,407 |
| 0.42 |
| 7,228,794 | | 4,093,008 | | 0.24 | | 7,755,080 |
Equity compensation plans not approved by securityholders |
| N/A |
| N/A |
| N/A | | N/A | | N/A | | N/A |
Total |
| 2,712,407 |
| 0.42 |
| 7,228,794 | | 4,093,008 | | 0.24 | | 7,755,080 |
| | | | | | |
As of March 9, 2018, 1,647,907December 31, 2022, 1,472,008 RSUs arewere outstanding under the LTIP, 1,254,000 DSUs were outstanding under the DSU Plan, and 1,964,5001,367,000 Options arewere outstanding under the Stock Option Plan to acquire in aggregate 3,612,4074,093,008 Common Shares, which RSUs, DSUs, and Options have been granted to the directors, officers, employees, and consultants of the Corporation.Corporation, as applicable.
There are no governmental laws, decrees or regulations in Canada that restrict the export or import of capital, including foreign exchange controls, or that affect the remittance of dividends, interest or other payments to non-resident holders of the securities of Vista Gold, other than Canadian withholding tax. See “Certain Canadian Federal Income Tax Considerations for U.S. Residents” below.
Certain Canadian Federal Income Tax Considerations for U.S. Residents
The following summarizes certain Canadian federal income tax consequences generally applicable under the Income Tax Act (Canada) and the regulations enacted thereunder (collectively, the “Canadian“Canadian Tax Act”Act”) and the Canada-United States Income Tax Convention (1980) (the “Convention”“Convention”) to the holding and disposition of Common Shares.
Comment is restricted to holders of Common Shares each of whom, at all material times for the purposes of the Canadian Tax Act and the Convention,Convention:
(i) | is resident solely in the United |
- 47 -
(ii) | is entitled to the benefits of the |
(iii) | holds all Common Shares as capital |
(iv) | holds no Common Shares that are “taxable Canadian property” |
(v) | deals at arm’s length with and is not affiliated with the |
(vi) | does not and is not deemed to use or hold any Common Shares in a business carried on in |
- 46 -
(vii) | is not an insurer that carries on business in Canada and |
(each such holder, a “U.S.“U.S. Resident Holder”Holder”).
Certain U.S.-resident entities that are fiscally transparent for United States federal income tax purposes (including limited liability companies) mayare generally not in all circumstances be regarded by the Canada Revenue Agency (the “CRA”) asthemselves entitled to the benefits of the Convention. MembersHowever, members of or holders of an interest in such an entityentities that holdshold Common Shares may be entitled to the benefits of the Convention for income derived through such entities. Such members or holders should consult their own tax advisers regarding the extent, if any, to which the CRA will extend the benefits of the Convention to the entityadvisors in respect of its Common Shares.this regard.
Generally, a holder’s Common Shares will be considered to be capital property of the holder provided that the holder is not a trader or dealer in securities, did not acquire, hold, or dispose of the Common Shares in one or more transactions considered to be an adventure or concern in the nature of trade (i.e. speculation), and does not hold the Common Shares as inventory in the course of carrying on a business.
Generally, a holder’s Common Shares will not constitute “taxablebe “taxable Canadian property”property” of the holder at a particular time at which the Common Shares are listed on a “designated stock exchange” (which currently includes the TSX and NYSE American)TSX) unless both of the following conditions are true met at any time during the 60 month60-month period immediately precedingending at the particular time:
In certain other circumstances, a Common Share may be deemed to be “taxable Canadian property” for purposes of the Canadian Tax Act.Act.
This summary is based on the current provisions of the Canadian Tax Act and the Convention in effect on the date hereof, all specific proposals to amend the Canadian Tax Act and Convention publicly announced by or on behalf of the Minister of Finance (Canada) on or before the date hereof, and the current published administrative and assessing policies of the CRA. It is assumed that all such amendments will be enacted as currently proposed, and that there will be no other material change to any applicable law or administrative or assessing practice, although no assurance can be given in these respects.this respect. Except as otherwise expressly provided, this summary does not take into account any provincial, territorial or foreign tax considerations, which may differ materially from those set out herein.
This summary is of a general nature only, is not exhaustive of all possible Canadian federal income tax considerations and is not intended to be and should not be construed as legal or tax advice to any particular U.S. Resident Holder. U.S. Resident Holders are urged to consult their own tax advisers for advice with respect to their particular circumstances. The discussion below is qualified accordingly.
A U.S. Resident Holder who disposes or is deemed to dispose of one or more Common Shares generally should not thereby incur any liability for Canadian federal income tax in respect of any capital gain arising as a consequence of the disposition.
- 48 -
A U.S. Resident Holder to whom the Corporation pays or is deemed to paya dividendon the holder’s Common Shares will be subject to Canadian withholding tax, and the Corporation will be required to withhold the tax from the dividend and remit it to the CRA for the holder’s account. The rate of withholding tax under the Canadian Tax Act is 25% of the gross amount of the dividend(subject (subject to reduction under the provisions of an applicable tax treaty). Under the Convention, a U.S. Resident Holder who beneficially owns the dividend will generally be subject to Canadian withholding tax at the rate of 15% 15 % (or 5%, if the U.S. Resident Holder who beneficially owns the dividend is a company that is not fiscally transparent and which owns at least 10% of the voting stock of the Corporation, 5%)Corporation) of the gross amount
- 47 -
of the dividend.dividend.
Indebtedness of Directors and Executive Officers
None of theNo current or former directors, executive officers or employees, nor any associates or affiliates of the foregoing persons is, as of the date hereof, indebted to the Corporation or any of its subsidiaries.
Orders, Penalties and Settlement Agreements
To the knowledge of the Corporation, no proposed director of the Corporation is, as at the date of this Information Circular, or was within 10 years before the date of this Information Circular, a director, chief executive officer or chief financial officer of any company (including the Corporation), that:
(a)(1)was subject to an order that was issued while the proposed director was acting in the capacity as director, chief executive officer or chief financial officer, or
(b)(2)was subject to an order that was issued after the proposed director ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer.
For the purposes of paragraph (a)(1), above, “order” means: (i) a cease trade order; (ii) an order similar to a cease trade order; or (iii) an order that denied the relevant company access to any exemption under securities legislation that was in effect for more than 30 consecutive days.
To the knowledge of the Corporation, no proposed director of the Corporation is, as at the date of this Information Circular, or has been within the 10 years before the date of this Information Circular, a director or executive officer of any company (including the Corporation) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets.
To the knowledge of the Corporation, no proposed director of the Corporation has, within 10 years before the date of this Information Circular, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the proposed director of the Corporation.
To the knowledge of the Corporation, no proposed director of the Corporation has been subject to (a) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or (b) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable shareholderShareholder in deciding whether to vote for a proposed director.
Interest of Certain Persons in Matters to be Acted Upon
Except as described in this Information Circular, no (i) person who has been a director or executive officer of the Corporation at any time since the beginning of Corporation’s the last financial year, (ii) proposed nominee for director, or (iii) associate or affiliate of any of the foregoing persons, has any material interest, direct or indirect by way of
- 49 -
beneficial ownership of securities or otherwise, in any matter to be acted upon at the Meeting (other than the election of directors).
Interest of Informed Persons in Material Transactions
Except as described in this Information Circular, no (i) informed person of the Corporation, (ii) proposed director of the Corporation, or (iii) associate or affiliate of any of the foregoing persons, has had any material interest, direct or indirect, in any transaction since the commencement of the Corporation’s most recently completed financial year or
- 48 -
in any proposed transaction which has materially affected or would materially affect the Corporation or its subsidiaries.
Review, Approval or Ratification of Transactions with Related Parties
The Corporation has adopted a written policy for the review of transactions with related persons which is available on the Corporation’s website at www.vistagold.com. The policy requires review, approval or ratification of all transactions in which (i)i) the aggregate amount involved will or may be expected to exceed $100,000 in any calendar year; (ii) the Corporation is a participant; and (iii) any directors, executive officers, significant shareholdersShareholders and any immediate family member of the foregoing persons has or will have a direct or indirect material interestsubject to certain categories of transactions that are deemed to be pre-approved under the policy. As set forth in the policy, the pre-approved transactions include, among others, employment of executive officers, director compensation (in general, where such transactions are required to be reported in the Corporation’s proxy statement pursuant to the SEC compensation disclosure requirements), as well as certain transactions where the amounts involved do not exceed specified thresholds, certain charitable contributions and transactions where all shareholdersShareholders receive proportional benefits. All related party transactions must be reported for review by the Corporate Governance and Nominating Committee of the Board. Transactions deemed to be pre-approved are not required to be reported to the Committee, except for certain pre-approved transactions, a summary of which must be submitted to the Corporate Governance and Nominating Committee for review at its next following meeting.
In determining whether to approve or ratify related party transactions, the Corporate Governance and Nominating Committee will take into consideration, among other factors it deems appropriate, whether the transactions are on terms no less favorable to the Corporation than those available to unaffiliated third-parties under the same or similar circumstances and the extent of the related person’s interest in the transaction. If a related party transaction is to be ongoing, the Corporate Governance and Nominating Committee may establish guidelines for the Corporation’s management to follow in its ongoing dealings with the related person.
There are no management functions of the Corporation which are to any substantial degree performed by persons other than the directors, seniorexecutive officers or managers of the Corporation. The Corporation has entered into employment agreements with Frederick H. Earnest, President and Chief Executive Officer John F. Engele, Senior Vice President and Chief Financial Officer, and John Rozelle, Senior Vice President as set forth above under the heading “Executive Compensation – Executive Employment Agreements”.
Under the Exchange Act, the deadline for submitting Shareholder proposals for inclusion in the management information and proxy circular for an annual general meeting of the Corporation is calculated in accordance with Rule 14a-8(e) of Regulation 14A to the Exchange Act. If the proposal is submitted for a regularly scheduled annual general meeting, the proposal must be received at the Corporation’s principal executive offices not less than 120 calendar days before the anniversary date of the Corporation’s management information and proxy circular released to the Shareholders in connection with the previous year’s annual general meeting. However, if the Corporation did not hold an annual general meeting the previous year, or if the date of the current year’s annual general meeting has been changed by more than 30 days from the date of the previous year’s meeting, then the deadline is a reasonable time before the Corporation begins to print and mail its proxy materials. Accordingly, unless the date of the next annual general meeting is changed by more than 30 days from the date of this year’s meeting the deadline for submitting Shareholder proposals for inclusion in the management information and proxy circular for the next annual general meeting of the Corporation will be November 20, 2018.18, 2023. If a Shareholder proposal is not submitted to the Corporation by November 20, 2018,18, 2023, the Corporationoration may still grant discretionary proxy authority to vote on a Shareholder proposal if such proposal is received by the Corporation by January 31, 2019February 1, 2024 in accordance with Rule 14a-4(c)(1) of Regulation 14A of the Exchange Act.
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In addition, there are (i) certain requirements relating to Shareholder proposals contained in the Business Corporations Act (British Columbia); and (ii) certain requirements relating to the nomination of directors contained the Articles of the Corporation. A Shareholder wishingIf any person entitled to make a proposalvote at an annual meeting of the Corporation’s Shareholders wishes to propose any matter for consideration at anthe next annual meeting, in order for such proposal to be considered for inclusion in the materials made available to Shareholders in respect of such meeting, such proposal must be received by the Corporation at its registered office at least three months before the anniversary date of the current year’s annual meeting. Accordingly, based on the date of this year’s Meeting, the deadline for submitting Shareholder proposals for inclusion in the management information and proxy circular for the next annual general meeting of the Corporation or wishingwill be January 28, 2024. In addition, such person must meet the definition of a “qualified Shareholder” and otherwise comply with the requirements for Shareholder proposals set out in sections 187 to 191 of the Business Corporations Act (British Columbia).
In addition, the Corporation’s Articles contain an advance notice requirement for director nominations (the “Advance Notice Provisions”). Shareholders who wish to nominate candidates for election as directors must provide timely notice in writing to the Corporation at 7961 Shaffer Parkway, Suite 5, Littleton, Colorado 80127. The notice must be given not less than 30 days and no more than 65 days prior to the date of the annual meeting; provided, however, that in the event that the annual meeting is to be held on a person to actdate that is less than 50 days after the date on which the first public announcement of the date of the annual meeting was made, notice may be given not later than the close of business on the 10th day following such public announcement. In the case of a special meeting of Shareholders (which is not also an annual meeting) called for the purpose of electing directors, notice must be given not later than the close of business on the 15th day following the day on which the announcement in respect of such meeting was made. The Advance Notice Provisions also prescribe the proper written form for the notice. The Board may, in its sole discretion, waive any requirement of the Advance Notice Provisions. The foregoing description of the Advance Notice Provisions is intended as a directorsummary only and does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all of the Corporation should ensure
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they followprovisions of the applicable procedures set forth inArticles, which contain the full text of the Advance Notice Provisions, and which are available on SEDAR at www.sedar.com and the Corporation’s website.
In addition to satisfying the foregoing requirements under our bylaws and the Business Corporations Act (British(British Columbia) and, to comply with the Articlesuniversal proxy rules, Shareholders who intend to solicit proxies in support of director nominees other than our nominees for the 2024 annual meeting must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than February 27, 2024, unless the date of our 2024 annual meeting has changed by more than 30 days calendar days from this year's annual meeting in which case such notice will be due on the later of 60 calendar days prior to the date of the Corporation.annual meeting or the 10th calendar day following the day on which public announcement of the date of the annual meeting is first made.
Other Matters
Management of the Corporation knows of no other matters which will be brought before the Meeting other than those set forth in the Notice of Meeting. Should any other matters properly come before the Meeting, the Common Shares represented by the proxies solicited hereby will be voted on those matters in accordance with the best judgement of the persons voting such proxies.
Dissenters’ Rights of Appraisal
No action is proposed herein for which the laws of the British Columbia or the Articles of the Corporation provide a right of a Shareholder to dissent and obtain appraisal of or payment for such Shareholder’s Common Shares.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Corporation’s officers and directors, and persons who own more than 10% of the Common Shares, to file reports of ownership and changes of ownership of such securities with the SEC.
Based solely on a review of the reports received by the SEC, furnished to the Corporation, or written representations from reporting persons that all reportable transactions were reported, management believes that, during the fiscal year ended December 31, 2017, the Corporation’s officers, directors and greater than ten percent owners timely filed all reports they were required to file under Section 16(a), except that Mr. Ogryzlo filed one late report on Form 4 covering one transaction.
Multiple Shareholders Sharing the Same Address
The regulations regarding the delivery of copies of proxy materials and annual reports to Shareholders permit the Corporation and brokerage firms to send one annual report and proxy statement to multiple Shareholders who share the same address under certain circumstances. Shareholders who hold their shares through a broker may have consented to reducing the number of copies of materials delivered to their address. In the event that a Shareholder wishes to revoke such a consent previously provided to a broker, the Shareholder must contact the broker to revoke the consent. In any event, if a shareholderShareholder wishes to receive a separate Information Circular and accompanying materials for the Meeting, or the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2017,2022, the Shareholder may receive copies by contacting the Corporate Secretary at (720) 981-1185, 7961 Shaffer Parkway,
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Suite 5, Littleton, Colorado 80127. Shareholders receiving multiple copies of these documents at the same address can request delivery of a single copy of these documents by contacting the Corporation in the same manner. Persons holding sharesCommon Shares through a broker can request a single copy by contacting the broker.
Board of Directors Approval
The undersigned hereby certifies that the contents and sending of this Information Circular to the Shareholders have been approved by the Board.
Appendices
Appendix A – Form of Proxy
Appendix B – Mandate of the Board
Appendix C – Resolution Approving Amendment to the Corporation’s Long Term Equity Incentive Plan
Appendix D – Long Term Equity Incentive Plan
DATED at Littleton, Colorado, this 1617th day of March, 2018.2023.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Frederick H. Earnest
Frederick H. Earnest
President and Chief Executive Officer
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APPENDIX “A”
FORM OF PROXY
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Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY ! ! ! D99118-P83215 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! VISTA GOLD CORP. VISTA GOLD CORP. 7961 SHAFFER PARKWAY, SUITE 5 LITTLETON, CO 80127 USA 1. Election of Directors 2. Appointment of Auditors Appointment of Plante & Moran, PLLC as Auditors of the Corporation for the ensuing year. 3. Advisory Vote on the Approval of Executive Compensation To consider and, if thought appropriate, approve, on an advisory, non-binding basis, a resolution regarding the compensation of the Corporation’s named executive officers as described in the Corporation’s proxy circular. The Board of Directors recommends you vote FOR each nominee to the Board of Directors and FOR each of the following proposals: 1d. Deborah J. Friedman 1c. W. Durand Eppler 1b. Frederick H. Earnest 1e. Tracy A. Stevenson 1a. John M. Clark Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Interim Financial Statements Mark this box if you would like to receive Interim Financial Statements and accompanying Management's Discussion and Analysis by mail. NOTE: Such other business as may properly come before the meeting or any adjournment thereof. Annual Financial Statements Mark this box if you would like to receive the Annual Financial Statements and accompanying Management's Discussion and Analysis by mail. 4. Advisory Vote to Determine Frequency of Future Advisory votes on Executive Compensation To consider, and if thought appropriate, to approve an advisory vote on executive compensation to occur every year. For Withhold Yes No ! ! ! ! Yes No For Against Abstain 5. Resolution Approving the Amendment to the Corporation’s For Against Abstain Long Term Equity Incentive Plan To consider, and if thought appropriate, approve the resolution regarding the amendment to the Corporation’s LTIP, the full text of which ordinary resolution is set out in Part I to Appendix “C” in the Corporation’s proxy circular. ! ! ! ! 1 Year 2 Years 3 Years Abstain VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 10:00 AM (PDT) on April 25, 2023. Have your proxy card in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 10:00 AM (PDT) on April 25, 2023. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. SCAN TO VIEW MATERIALS & VOTE w |
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D99119-P83215 Important Notice Regarding the Availability of Proxy Materials for the Annual General and Special Meeting: The Notice and Proxy Statement and Annual Report on Form 10-K are available at www.proxyvote.com. Continued and to be signed on reverse side VISTA GOLD CORP. Annual General and Special Meeting of Shareholders April 27, 2023 10:00 AM (PDT) This proxy is solicited by management and the Board of Directors I/We being shareholder(s) of Vista Gold Corp. hereby appoint: Frederick H. Earnest, or failing him, Douglas L. Tobler, OR _____________ as my/our proxyholder with full power of substitution and to attend, act and to vote for and on behalf of the shareholder in accordance with the following direction (or if no directions have been given, as recommended by management and the Board of Directors) and all other matters that may properly come before the Annual General and Special Meeting of Shareholders of Vista Gold Corp. to be held at the offices of Borden Ladner Gervais LLP, Suite 1200, 200 Burrard Street, Vancouver, British Columbia on April 27, 2023 10:00 AM (PDT) and at any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations, FOR each nominee to the Board and FOR each proposal. |
APPENDIX “A”
FORM OF PROXY
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APPENDIX “B”
VISTA GOLD CORP.
(the “Company”)
MANDATE OF THE BOARD OF DIRECTORS
VISTA GOLD CORP.
(the “Corporation”)
MANDATE OF THE BOARD OF DIRECTORS
(Adopted on March 2, 2009, as amended on March 5, 2013, March 3, 2015 and March 7, 2016)
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| STEWARDSHIP OF THE COMPANY |
The Board of Directors of the Company (the “Board”) is responsible for:
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Each directorDirector has the responsibility to:
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A majority of the Board will, at all times, be independent directors as defined in then- currentthen-current laws applicable to the Company and the requirements of any stock exchange applicable to the Company.
The Board shall appoint a Chairchair of the Board. Where itIf the Board appoints as chair a person who is not appropriate for the Chair to be an independent director, the Board should consider whether it should appoint an independent director to act as a lead director. The Board shall develop a written position description delineating the Chair’schair’s role.
To be considered for nomination and election to the Board, directors must demonstrate integrity and high ethical standards in their business dealings, their personal affairs, and in the discharge of their duties to and on behalf of the Company.
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| NOMINATION OF DIRECTORS |
Prior to nominating or appointing individuals as directors, the Board will consider what competencies and skills the Board, as a whole, should possess and assess what competencies and skills each existing director possesses. The Board will consider the appropriate size of the Board, with a view to facilitating effective decision making. In addition, the Board will consider diversity in the selection criteria of new Board members. In carrying out each of these functions, the Board will consider the advice and input of the Corporate Governance and Nominating Committee.
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| BOARD MEETINGS |
The Board is responsible to meet in person, or by telephone conference call (or by other means permitted by applicable laws), at least once each quarter and otherwise as often as required to discharge the duties of the Board.
The independent members of the Board shall hold regular meetings at which non-independent members of the Board and members of management are not in attendance.attendance in accordance with then-current laws applicable to the Company and the requirements of any stock exchange applicable to the Company.
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| COMMITTEES OF THE BOARD |
The Board discharges its responsibilities directly and through its committees. Accordingly, the Board shall:
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(ii) | manage the affairs of the Committee, and |
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(i)provide leadership4.Regularly receive and consider reports and recommendations of each Committee, including, in particular, the Audit Committee reports and recommendations, particularly with respect to the Committee,
(ii)manage the affairs of the Committee, and
(iii)ensure that the Committee functions effectively in fulfilling its duties to the BoardCompany’s annual audit and the Company;annual and quarterly reports and financial statements.
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| SUPERVISION OF MANAGEMENT |
The Board is responsible to:
1.Select and appoint the Chief Executive Officer (“CEO”); 2.Establish CEO goals and objectives, and evaluate CEO performance and develop a written position description for the CEO which includes delineating management’s responsibilities; 3.Assist the CEO to select and appoint executive officers, establish executive officers’ goals and objectives, and monitor their performance; 4.Determine the compensation of the CEO, after receiving the recommendations of the Compensation Committee, and in conjunction with the CEO, set the compensation of the other executive officers of the Company; and 5.Maintain a succession plan for the replacement of the CEO and other executive officers. |
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The Board is responsible to:
| 1.Develop the Company’s approach to corporate governance and annually review and either approve or require revisions to the mandate of the Board and the charters of each Committee, position descriptions, the code of business conduct and ethics (the “Code”) and all other policies of the Company (collectively the “Governance Documents”); 2.Take reasonable steps to satisfy itself that each director, the CEO and the executive officers are:
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(iii) | fostering a culture of integrity throughout the Company; |
(iii)fostering a culture that all new directors fully understand: (i) the role of integrity throughout the Company;Board, its Committees and its directors; (ii) the commitment of time and resources that the Company expects; and (iii) the nature and extent of the Company’s business and operations; and
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The Board is responsible to:
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| WAIVERS AND CONFLICTS |
The Board is responsible for:
| 1.Monitoring compliance with the Code and reviewing departures from the Code; |