(Draft -7/1/02)SCHEDULE 14A
(Rule
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934Filed by the Registrant [X] Filed by a Party other than the Registrant [ ]
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Confidential, Forfor Use of the
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[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material under Rule 14a-12
[_] | Definitive Proxy Statement |
[_] | Definitive Additional Materials |
[_] | Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 |
COEUR D'ALENED’ALENE MINES CORPORATION
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(Name
(Name of Registrant as Specified in Its Charter)
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(Name
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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File: 853396
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PRELIMINARY PROXY SOLICITING MATERIAL DATED JULY 26, 2002
(1) Amount previously paid: |
(2) Form, schedule or registration statement no.: |
(3) Filing party: |
(4) Date filed: |
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COEUR D'ALENED’ALENE MINES CORPORATION
400 COEUR D'ALENE MINES BUILDING
POST OFFICE BOXCoeur D’Alene Mines Building
Post Office Box I
505 FRONT AVENUE
COEUR D'ALENE, IDAHOFront Avenue
Coeur D’Alene, Idaho 83814
August ___, 2002
April 15, 2004
Dear Shareholder:
We are pleased to invite you to attend our Annual Meeting of Shareholders. This year it will be held the morning of Tuesday, September 17, 2002,Thursday, May 20, 2004 at 9:0030 A.M., local time, at The Coeur d'Alened’Alene Resort and Conference Center, Second Street and Front Avenue, Coeur d'Alene,d’Alene, Idaho. The primary business of the meeting will be to:
o elect directors,
o approve
A Notice of the Annual Meeting and the Proxy Statement follow. You will also find enclosed a proxy card. We invite you to attend the meeting in person, but if this is not feasible, it is important that you be represented by proxy. If you cannot attend the meeting, we urge you to date and sign the enclosed proxy card, and return it promptly. We have provided a return-addressed, permit-stamped envelope for your convenience.
Sincerely,
/s/ Dennis E. Wheeler
DENNIS E. WHEELER
Chairman of the Board,
President and Chief Executive Officer
Sincerely, | ||
DENNIS E. WHEELER | ||
Chairman of the Board and Chief Executive Officer | ||
WE URGE YOU TO CAREFULLY CONSIDER EACH OF THE MATTERS TO BE VOTED UPON AT THE ANNUAL MEETING AND THE BOARD'SBOARD’S RECOMMENDATION THAT SHAREHOLDERS VOTE FOR EACH OF THE PROPOSALS BEING PRESENTED.
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COEUR D'ALENED’ALENE MINES CORPORATION
400 COEUR D'ALENE MINES BUILDING
Coeur d’Alene Mines Building
505 FRONT AVENUE
POST OFFICE BOXFront Avenue
Post Office Box I
COEUR D'ALENE IDAHO
Coeur d’Alene Idaho 83814
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Dear Shareholder:
Notice is hereby given that our Annual Meeting of Shareholders will be held at The Coeur d'Alened’Alene Resort and Conference Center, Second Street and Front Avenue, Coeur d'Alene,d’Alene, Idaho, on Tuesday, September 17, 2002,Thursday, May 20, 2004, at 9:0030 A.M., local time, for the following purposes:
1. To electre-elect a Board of Directors consisting of 10eight persons to serve for the ensuing year or until their respective successors are duly elected and qualified;
2. To approve an amendment of our Restated and Amended Articles of Incorporation authorizing an increase in the number of authorized shares of common stock from 125250 million to 250500 million shares; and
3. To amend our Executive Compensation Program to authorize the
reservation of an additional 1,000,000 shares of common stock for issuance
under the program;
4. To amend our Non-Employee Directors' Stock Option Plan to authorize
the reservation of an additional 500,000 shares of common stock for
issuance under options to be granted under the plan; and
5. To transact such other business as properly may come before the meeting.
Nominees for directors to be elected at the Annual Meeting are set forth in the enclosed Proxy Statement.
Only shareholders of record at the close of business on Tuesday, July 30,
2002,April 1, 2004, the record date fixed by the Board of Directors, are entitled to notice of, and to vote at, the Annual Meeting.
By order | ||
DENNIS E. WHEELER | ||
Chairman of the Board | ||
Coeur d'Alene,d’Alene, Idaho
August ____, 2002
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April 15, 2004
YOUR VOTE IS IMPORTANT
PLEASE DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY CARD SO THAT YOUR SHARES MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES. MAIL THE PROXY CARD IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. THE GIVING OF THE PROXY DOES NOT AFFECT YOUR RIGHT TO VOTE IN PERSON SHOULD YOU ATTEND THE MEETING.
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This proxy statement is furnished in connection with the solicitation by our Board of Directors of proxies of shareholders for shares to be voted at the Annual Meeting of Shareholders to be held on Tuesday, September 17, 2002,Thursday, May 20, 2004, and any and all adjournments thereof.
Any shareholder executing a proxy has the right to revoke it at any time prior to its exercise by giving notice to our Secretary.
This proxy statement and the accompanying proxy are being mailed or given to our shareholders on or about August __, 2002.
April 15, 2004.
All shareholders of record as of the close of business on July 30, 2002,April 1, 2004, are entitled to vote at the Annual Meeting or any adjournment thereof upon the matters listed in the Notice of Annual Meeting. Each shareholder is entitled to one vote for each share held of record on that date. As of the close of business on June 30, 2002,April 1, 2004, a total of 79,030,849213,090,918 shares of our common stock were outstanding [to be updated to July 30, 2002 in the definitive proxy statement].outstanding.
Shares represented by a proxy will be voted according to the instructions, if any, given in the proxy. Unless otherwise instructed, the person or persons named in the proxy will vote:
o
Votes cast by proxy or in person at the Annual Meeting will be tabulated by the inspectors of election appointed by us for the meeting. The number of shares represented at the meeting in person or by proxy will determine whether or not a quorum is present. The inspectors
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We will bear the cost of soliciting proxies. Proxies may be solicited by directors, officers or regular employees in person or by telephone or telegram. We have retained Morrow & Company, Inc., New York, New York, to assist in the solicitation of proxies. Morrow & Company'sCompany’s charge will be $8,000 plus out-of-pocket expenses.
Eight directors are to be elected at the Annual Meeting, each to serve for one year or until his successor is elected and qualified. Proxies will be voted at the Annual Meeting, unless authority is withheld, FOR the election of the 10eight persons named below. All of the nominees currently are directors, except for J.
Kenneth Thompson who is being nominated to fill the vacancy created by the
retirement of Joseph C. Bennett, who retired from the Board after serving the
Company dutifully as a director since 1981.directors. We do not contemplate that any of the persons named below will be unable, or will decline, to serve; however, if any such nominee is unable or declines to serve, the persons named in the accompanying proxy will vote for a substitute, or substitutes, in their discretion.
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Nominees Age Director Since
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Dennis E. Wheeler.................................... 59 1978
Chairman of the Board of Coeur d'Alene Mines
Corporation since May 1992; President since
December 1980; Chief Executive Officer since
December 1986; Chief Administrative Officer from
December 1980 to December 1986; Secretary from
January 1980 to December 1980; Senior Vice
President and General Counsel from 1978 to 1980.
Member of the Board of Directors and Chairman of
the Audit Committee of Sierra Pacific Resources
(a NYSE-listed public utility holding company).
James J. Curran...................................... 62 1989
Chairman of the Board and Chief Executive
Officer of First Interstate Bank, Northwest
Region (Alaska, Idaho, Montana, Oregon and
Washington) from October 1991 to April 30, 1996;
Chairman of the Board and Chief Executive
Officer of First Interstate Bank of Oregon, N.A.
from February 1991 to October 1991; Chairman and
Chief Executive Officer of First Interstate Bank
of Denver, N.A. from March 1990 to January 1991;
Chairman, President and Chief Executive Officer
of First Interstate Bank of Idaho, N.A. from
July 1984 to March 1990.
James A. McClure..................................... 77 1991
Of Counsel, Givens & Pursley; Consultant to the
Washington, D.C. consulting firm of McClure,
Gerard & Neuenschwander, Inc.; United States
Senator from Idaho from 1972 to 1991; former
Chairman of the Senate Energy and Natural
Resources Committee.
Cecil D. Andrus...................................... 70 1995
Governor of Idaho (1971-1977 and 1987-1995);
Secretary of the U.S. Department of the Interior
(1977-1981). Director of Albertson's Inc. (a
nation-wide grocery retail chain), Key Corp.
(commercial banking) and RENTRAK (a video
cassette leasing company). Chairman of the
Andrus Center for Public Policy at Boise State
University; "Of Counsel" member of the Gallatin
Group (a policy consulting firm).
John H. Robinson..................................... 51 1998
Executive Director of Amey PLC (a business
process outsourcing company) since April 1,
2000. Vice Chairman of Black & Veatch, an
international engineering and construction firm,
from January 1999 to March 2000; Managing
Partner of that company from 1989-1999; Chairman
of Black and Veatch U.K., Ltd and President of
Black & Veatch International from 1994 to March
2000. Member of the Board of Directors of
Alliance Resource Partners MLP (coal mining).
Nominees | Age | Director Since | ||||||
---|---|---|---|---|---|---|---|---|
Dennis E. Wheeler Currently, Chairman of the Board and Chief Executive Officer of Coeur d'Alene Mines Corporation. Chairman of the Board and President from May 1992 to September 2002; President from December 1980 to September 2002; Chief Executive Officer since December 1986; Chief Administrative Officer from December 1980 to December 1986; Secretary from January 1980 to December 1980; Senior Vice President and General Counsel from 1978 to 1980. | 61 | 1978 | ||||||
James J. Curran Chairman of the Board and Chief Executive Officer of First Interstate Bank, Northwest Region (Alaska, Idaho, Montana, Oregon and Washington) from October 1991 to April 30, 1996; Chairman of the Board and Chief Executive Officer of First Interstate Bank of Oregon, N.A. from February 1991 to October 1991; Chairman and Chief Executive Officer of First Interstate Bank of Denver, N.A. from March 1990 to January 1991; Chairman, President and Chief Executive Officer of First Interstate Bank of Idaho, N.A. from July 1984 to March 1990. | 64 | 1989 | ||||||
James A. McClure Former United States Senator from Idaho from 1972 to 1991; former Chairman of the Senate Energy and Natural Resources Committee. | 79 | 1991 |
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Nominees Age Director Since
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Robert E. Mellor..................................... 58 1998
Chairman, Chief Executive Officer and President
of Building Materials Holding Corporation
(distribution, manufacturing and sales of
building materials and component products) since
1997, director since 1991; Of Counsel, Gibson,
Dunn & Crutcher, LLP, 1991-1997. Member of the
Board of Directors of The Ryland Group, Inc.
(national residential home builder).
Timothy R. Winterer.................................. 65 1998
President, Chief Operating Officer and Director
of Western Oil Sands from January 2000 to
December 2001. President and Chief Executive
Officer of BHP World Minerals Corporation
(international resources company) from 1997 to
1998; Group General Manager and Executive Vice
President, BHP World Minerals (1996-1997);
Senior Vice President and Group General Manager,
BHP World Minerals (1992-1996); Senior Vice
President, Operations International Minerals,
BHP Minerals (1985-1992); Executive Vice
President, Utah Development Company (1981-1985).
Xavier Garcia de Quevedo Topete...................... 55 1999
President and Chief Operating Officer of Asarco
Incorporated (copper mining company) since
November 19, 1999. General Director of Grupo
Ferroviario Mexicano, S.A. de C.V. and of
Ferrocarril Mexicano, S.A. de C.V. from December
1997 to December 1999; General Director of
Development and Projects of Grupo Mexico, S.A.
de C.V. from (copper and precious metals mining
company) 1994 to 1997 and Alternate Director of
that company since 1998; director of Asarco
Incorporated since 1999; and director of
Southern Peru Copper Corporation since December
1999.
Daniel Tellechea Salido.............................. 56 1999
Managing Director for Administration and Finance
of Grupo Mexico S.A. DE C.V. since 1994;
Alternate Director of Grupo Mexico since 1998;
Managing Director of Mexicana De Cobre, S.A. DE
C.V., 1986 - 1993; Director, Vice President and
Chief Financial Officer of Asarco Incorporated
since 1999; Director and Vice President of
Finance of Southern Peru Copper Corporation
since 1999.
Nominees | Age | Director Since | ||||||
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Cecil D. Andrus Governor of Idaho (1971-1977 and 1987-1995); Secretary of the U.S. Department of the Interior (1977-1981). Director of Albertson's Inc. (a nation-wide grocery retail chain), Key Corp. (commercial banking) and RENTRAK (a video cassette leasing company). Chairman of the Andrus Center for Public Policy at Boise State University; "Of Counsel" member of the Gallatin Group (a policy consulting firm) from March 1995 to present. | 72 | 1995 | ||||||
John H. Robinson President and Chief Operating Officer of Metilinx Inc. (system optimization software) from November 2003 to present. Currently a member of the Board of Directors of Alliance Resource Management GP, LLC (a NASDAQ-listed coal mining company). Executive Director of Amey plc (a London FTSE-listed business process outsourcing company) from April 2000 to September 2002, Vice Chairman of Black & Veatch Inc (international engineering and construction) from January 1999 to March 2000, Managing Partner of Black & Veatch Inc. from January 1989 to December 1998, and Chairman of Black & Veatch UK Ltd. from 1994 to March 2000. | 53 | 1998 | ||||||
Robert E. Mellor Chairman, Chief Executive Officer and President of Building Materials Holding Corporation (distribution, manufacturing and sales of building materials and component products) since 1997, director since 1991; Member of the Board of Directors of The Ryland Group, Inc. (national residential home builder). Member of the Board of Directors of Monro Muffler/Brake, Inc. Of Counsel, Gibson, Dunn & Crutcher, LLP, 1991-1997. | 60 | 1998 |
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Nominees Age Director Since
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J. Kenneth Thompson.................................. 50
President of Pacific Rim Leadership Development,
LLC (executive consulting firm in Anchorage,
Alaska.) from May 2000 to present. Executive
vice president of ARCO's Asia Pacific oil and
gas operating companies in Alaska, California,
Indonesia, China and Singapore from January 1998
to June 2000. President of ARCO Alaska, Inc.,
the parent company's oil and gas producing
division based in Anchorage, Alaska from June
1994 to January 1998. Member of the Board of
Directors of Alaska Airlines and Alaska Air
Group, Inc.
Nominees | Age | Director Since | ||||||
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Timothy R. Winterer President, Chief Operating Officer and Director of Western Oil Sands from January 2000 to December 2001. President and Chief Executive Officer of BHP World Minerals Corporation (international resources company) from 1997 to 1998; (1996-1997); Senior Vice President and Group General Manager, BHP World Minerals (1992-1996); Senior Vice President, Operations International Minerals, BHP Minerals (1985-1992); Executive Vice President, Utah Development Company (1981-1985). | 67 | 1998 | ||||||
J. Kenneth Thompson President and CEO of Pacific Star Energy LLC (natural gas pipeline and processing company in Anchorage, Alaska) from January 2003 to present. President of Pacific Rim Leadership Development, LLC (executive consulting firm in Anchorage, Alaska) from May 2000 to the present. Executive vice president of ARCO's Asia Pacific oil and gas operating companies in Alaska, California, Indonesia, China and Singapore from January 1998 to June 2000. President of ARCO Alaska, Inc., the parent company's oil and gas producing division based in Anchorage, Alaska from June 1994 to January 1998. Member of the Board of Directors of Alaska Airlines and Alaska Air Group, Inc. | 52 | 2002 |
Our Board of Directors met nine times during 2001.2003. We have an Audit Committee comprised solely of outside directors and presently consisting of Messrs. Curran (Chairman), McClure and Winterer.Thompson. The Audit Committee is responsible for reviewing and reporting to the Board of Directors with respect to various auditing and accounting matters, including the selection of our independent public accountants, the scope of the audit procedures, the nature of all audit and non-audit services to be performed, the performance of our independent accountants and our accounting practices and policies. The Audit Committee met fourthree times during 2001.2003.
The Board also has a Compensation Committee, comprised solely of outside directors and presently consisting of Messrs. Mellor (Chairman), Andrus Robinson and Mellor.Robinson. The Compensation Committee is responsible for determining the annual compensation of the Company’s executive officers and directors, overseeing the Company’s stock incentive plans and other executive benefit plans and providing guidance in the area of certain employee benefits. The Compensation Committee met one timeonce during 2001. Each director attended2003. We expect that at least
75% of the meetingsnext meeting of the Board of Directors and committees on which he served,
except for Daniel Tellechea Salido, who missed three meetingsfollowing our annual meeting of shareholders, the Board of Directors.Directors will appoint Mr. Thompson as the Chairman of the Compensation Committee succeeding Mr. Mellor who will remain a member of the Committee.
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Our Board also has an Executive Committee on which Messrs. Wheeler, Curran, Mellor, Robinson and WheelerWinterer currently serve. The Executive Committee is authorized to act in the place of the Board of Directors on limited matters that require action between Board meetings.
On February 5, 2004, the Board established a Nominating and Corporate Governance Committee consisting of Mr. Mellor, Mr. Thompson and Mr. Winterer, in response to recent amendments to the New York Stock Exchange’s corporate governance listing standards and rules issued by the SEC. The Nominating and Corporate Governance Committee is responsible for proposing nominees for the Board of Directors, evaluation of the performance of executive officers and members of the Board and its committees, the establishment of corporate governance guidelines and related corporate governance matters. We expect that at the next meeting of the Board of Directors following our annual meeting of shareholders, the Board of Directors will appoint Mr. Mellor as the Chairman.
Each of the members of the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee are independent directors within the meaning of applicable New York Stock Exchange listing standards and rules. Copies of the charters of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are available at our websitewww.coeur.com.
Each director attended at least 75% of the meetings of the Board of Directors and committees on which he served during 2003.
The Nominating and Corporate Governance Committee has adopted a policy pursuant to which a shareholder who has owned at least 1% of the Company’s outstanding shares of common stock for at least two years may recommend a director candidate that the committee will consider when there is a vacancy on the board either as a result of a director resignation or an increase in the size of the board. Such recommendation must be in writing addressed to the Chairman of the Nominating and Corporate Governance Committee at the Company’s principal executive offices and must be received by the Chairman at least 120 days prior to the anniversary date of the release of the prior year’s proxy statement. Although the Committee has not formulated any specific minimum qualifications that the committee believes must be met by a nominee that the committee recommends to the board, the factors it will take into account will include strength of character, mature judgment, career specialization, relevant technical skills or financial acumen, diversity of viewpoint and industry knowledge, as set forth in the Committee’s charter. The Committee does not havebelieve that there will be any differences between the manner in which the committee evaluates a nominating committee.
nominee recommended by a shareholder and the manner in which the committee evaluates nominees recommended by other persons.
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Shareholders desiring to communicate with a director, the non-management directors as a group or the full board may address such communication to the attention of the William F. Boyd, Esq., counsel to the Company, 601 Sherman Avenue, Suite 1, Coeur d’Alene, Idaho 83814, and such communication will be forwarded to the intended recipient or recipients.
The Company has a policy that encourages directors to attend each annual meeting of shareholders, absent extraordinary circumstances. Each of the eight members of last year’s board attended the annual meeting on May 20, 2003.
Non-management members of the Board of Directors conduct at least two regularly-scheduled meetings per year without members of management being present. The Board will designate a director to preside over each meeting of non-management directors.
In February 2004, the Board of Directors adopted Corporate Governance Guidelines and a Code of Business Conduct and Ethics for Directors, Officers and Employees in accordance with recently-amended New York Stock Exchange corporate governance listing standards. Copies of these documents are available at our websitewww.coeur.com.
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The following table sets forth information, as of June 30, 2002, [to be
updated to July 30, 2002 in the definitive proxy statement]April 1, 2004, concerning the beneficial ownership of our common stock by shareholders known by us to be the
beneficial owner of more than 5% of our outstanding shares of common stock by each of the nominees for election as directors, and by all of our directors/nominees and executive officers as a group:
Shares
Beneficially Percentgroup. No shareholder is known by us to be the beneficial owner of Owned Outstanding
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Asarco Incorporated.......................... 7,175,000 (1) 9.35
Dennis E. Wheeler............................ 432,522 (2)(3) .56
James J. Curran.............................. 162,736 (2)(3) .21
James A. McClure............................. 28,060 (3) *
Cecil D. Andrus.............................. 27,813 (3) *
John H. Robinson............................. 37,536 (3) *
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Shares
Beneficially Percentmore than 5% of Owned Outstanding
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Robert E. Mellor............................. 24,959 (3) *
Timothy R. Winterer.......................... 50,719 (3) *
Daniel Tellechea Salido...................... 23,754 (3)(4) *
Xavier Garcia de Quevedo Topete.............. 23,754 (3)(4) *
J. Kenneth Thompson.......................... -0- *
All executive officers and nominees for
director as a group (18 persons)............ 1,001,708 1.31
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(*) Holding constitutes less than .10%our outstanding shares of the outstanding shares.
(1) Asarco Incorporated is primarily engaged in the mining and production of
copper and is a wholly-owned subsidiary of Grupo Mexico, S.A. de C.V., a copper
and precious metals mining company headquartered in Mexico. The address of
Asarco Incorporated is 1150 N. 17th Avenue, Tucson, AZ 85703-0747.
(2) Individual shares investment and voting powers over certain of his shares
with his wife. The other directors have sole investment and voting power over
their shares.
(3) common stock.
Shares Beneficially Owned | Percent of Outstanding | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dennis E. Wheeler | 990,769 | (1) | (2) | .46 | |||||||
James J. Curran | 185,884 | (1 | )(2) | .10 | |||||||
James A. McClure | 32,689 | (2 | ) | * | |||||||
Cecil D. Andrus | 32,422 | (2 | ) | * | |||||||
John H. Robinson | 46,795 | (2 | ) | * | |||||||
Robert E. Mellor | 29,588 | (2 | ) | * | |||||||
Timothy R. Winterer | 64,607 | (2 | ) | * | |||||||
J. Kenneth Thompson | 62,945 | (2 | ) | * | |||||||
Mitchell J. Krebs | 84,913 | * | |||||||||
Dieter A. Krewedl | 103,686 | (2 | ) | .10 | |||||||
Robert Martinez | 317,940 | (2 | ) | .15 | |||||||
James A. Sabala | 114,282 | .10 | |||||||||
All executive officers and nominees | |||||||||||
for director as a group (17 persons) | 2,481,023 | 1.16 |
(*) | Holding constitutes less than .10% of the outstanding shares. |
(1) | Individual shares investment and voting powers over certain of his shares with his wife. The other directors have sole investment and voting power over their shares. |
(2) | Holding includes the following shares which may be acquired upon the exercise of exercisable options outstanding under the 2003 Long-Term Incentive Plan, executive compensation program or Non-Employee Directors’ Stock Option Plan: Dennis E. Wheeler – 699,525 shares; James J. Curran — 185,784 shares; James A. McClure – 32,339 shares; Cecil D. Andrus – 32,342 shares; John H. Robinson – 46,695 shares; Robert E. Mellor – 29,488 shares; Timothy R. Winterer – 63,607 shares; J. Kenneth Thompson 52,945 shares; Dieter A. Krewedl – 62,019 shares; Robert Martinez – 182,311 shares; and all executive officers and directors as a group – 1,511,963 shares. |
The discussion set forth below discusses our executive compensation program, including the 2003 Long-Term Incentive Plan under(the “LTIP”) that was approved by our Executive Compensation Program or Non-Employee Directors' Stock Option
Plan: Dennis E. Wheeler - 375,784 shares; James J. Curran - 162,636 shares;
James A. McClure - 27,710 shares; Cecil D. Andrus - 27,713 shares; John H.
Robinson - 37,436 shares; Robert E. Mellor - 24,859 shares; Timothy R. Winterer
- - 49,719 shares; Daniel T. Salido - 23,754 shares; Xavier G. de Q. Topete -
23,754 shares;shareholders on May 20, 2003, and allreplaced our prior Long-Term Incentive Plan, and pursuant to which we may annually grant: nonqualified stock options, incentive stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units, performance shares, performance units, cash-based awards and stock-based awards to our executive officers and directors as a group - 937,722
shares.
(4) Daniel T. Salido and Xavier G. de Q. Topete are designees of Grupo Mexico,
S.A. de C.V., a Mexican copper and precious metals mining company that is the
parent of Asarco Incorporated.
COMPENSATION AND RELATED MATTERS
Compensation Committee Report
The following descriptionofficers. No new stock options were granted to any of our executive compensation practices and
policies is presented on behalf of the Compensation Committee of our Board of
Directors. The present members of the Committee are Cecil D. Andrus, John H.
Robinson and Robert E. Mellor. The fundamental philosophy of our Executive
Compensation Program is to offer competitive compensation opportunities based on
the Company's performance and to a lesser extent, individual performance. Our
Company and the Committee, at least annually, utilize the services of Hewitt
Associates, a leading, independent executive compensation consulting firm, in
connection with the implementation of the Executive Compensation Program. In
addition, the Committee also receives information from other mining company
compensation studies.
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Compensation of our executive officers is reviewed annually by the
Committee, which is comprised entirely of outside directors, and is directly
linked to our financial performance comparisons with other companies in the
mining industry and shareholder interests. Total compensation opportunities are
competitive with those offered by other employers in the precious metals mining
industry on a size-adjusted basis. Annual base salaries are targeted at
approximately the 50th percentile of such companies on a size-adjusted basis.
Annual incentive compensation awards under the AIP are based on target
award levels, expressed as a percentage of base salaries, established at the
beginning of each annual performance period for participating executives and
vary (from 50% for the Chairman, President and CEO to lower amounts for other
executives) depending upon the individual's level of responsibility and impact
on overall Company performance. Specific individual and group objectives,
reflecting the executive's responsibilities, are developed for each
participating executive prior to the beginning of the year. Objectives for
participants other than the Chairman, President and CEO are established for each
participant by the CEO, and reviewed by the Compensation Committee. Individual
objectives for the Chairman, President and CEO are established by the Committee
and for 2001 included objectives relating to our operations, management and
growth. Accordingly, the Compensation Committee reviews the executive's
performance relative to the predetermined goals and reports toLTIP in 2003.
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On March 11, 2003, the Board of Directors. In addition, financial objectives are established forDirectors awarded to the Company
based on growthmanagement group a total of total assets and cash flow return on total assets. Actual
awards paid after1,240,000 restricted shares which initially were to vest at the end of each annual performancea three-year period vary fromafter grant of such shares. At a meeting on February 5, 2004, the target
awardsBoard of Directors, based onupon the actual versus targeted performance objectives. In 2001, 50%Company’s achievement of certain strategic goals during 2003, amended the vesting schedule such that these shares will vest to the extent of one-third of the target award value was basedamount on financial performanceeach anniversary following the grant date of the Company and
50% was based on the individual performance of the participant. Awards vary from
zero percent to 200 percent of the target awards. The total annual incentive
awards paidsuch shares. Of such shares, 200,000 shares were issued to our Chief Executive Officer, and the other four highest paid125,000 shares were issued to each of our three senior executive officers employed at the end of 2001and between 70,000 to 85,000 shares were $450,695 comparedissued to $202,025 in 2000, and $850,406 in 1999.
Long-term incentive awards under the Executive Compensation Program consist
of stock options granted under the LTIP and performance shares awarded under the
LTPSP. Of each long-term incentive awarded, 25% is allocated to stock options
granted under the LTIP and 75% is allocated to performance shares awarded under
the LTPSP.
Awards of stock options are based on established percentages of base salary
and vest cumulatively at a rate of 25% per year. The options expire ten years
after the date of grant. Option exercise prices are equal to the fair market
value of the common stock on the date of grant. As of July 30, 2002,
nonqualified stock options and incentive stock options to purchase a total of
689,438 shares of common stock at an average exercise price of $1.58 per share
were outstanding.
Performance shares awarded under the LTPSP are designed to award key
executives for overall company performance over a three-year time period and to
align the interests of such executives with those of shareholders by rewarding
increases in shareholder value. In August 2000, the vesting period for future
LTPSP awards was reduced from four to three years. Before each performance
period begins, target awards, expressed as a percentage of base salaries, are
established for each executive, with a target award level (varying from 150% for
our
10
Chairman/President/CEO to lower amounts for other executives) for each
participant depending upon the individual's level of responsibility and impact
on overall total return to shareholders.
Actual LTPSP awards paid at the end of the performance period vary from the
initial award target based on our company's actual total shareholder return
relative to the total shareholder returns of a group of other comparable
companies in the precious metals mining industry. The comparable companies are
Apex Silver Mines Ltd., Bema Gold Corp., Cambior Inc., Echo Bay Mines Corp.,
First Silver Reserve, Inc., Glamis Gold Ltd., Hecla Mining Co., Homestake Mining
Company, Kinross Gold Corp., Meridian Gold, Inc., Pan American Silver
Corporation, TVX Gold, Inc. and Viceroy Resources Corp. Total shareholder return
is the price of the common stock at the end of the year plus dividends during
the year, divided by the market value of the common stock at the beginning of
the year. Actual award payments may vary from zero percent to 150% of the target
awards. Final awards under the LTPSP, which are not determinable until
completion of the three-year performance period, are paid 60% in shares of
common stock and 40% in cash.
Payments made in March 2002 under the AIP were based on 2001 performance.
As stated above, 50% of an AIP award is based on the prior year's growth of our total assets and cash flow return on investment and 50% is based on individual
performance measured against predetermined individual or group objectives. With
respect to the individual performance portion of the March 2002 AIP award to our
Chairman, President and CEO, the award was based on 2001 performance and
reflected the following company performance accomplishments in 2001:
o the reduction in the cash cost of silver production to $3.93 per ounce
in 2001, compared to $4.09 per ounce in 2000;
o the $59.1 million, or 29%, reduction in our convertible indebtedness
as a result of our ongoing debt restructuring program which increased
shareholders' equity and decreased future cash interest payments;
o the preparation of our Cerro Bayo high-grade gold and silver mine in
southern Chile for the commencement of production in early 2002;
o the commencement of a final feasibility study at our San Bartolome
silver property in Bolivia with the assistance of a $760,000 grant
from the U.S. Trade Development Agency, and the securing of additional
mining and exploration rights that increased silver resources and
enhanced project economics there;
o the introduction of trackless mining in selected areas at Coeur Silver
Valley that will improve productivity and reduce future cash costs
there;
o our entering into of a final settlement agreement with U.S. Government
in March 2001, terminating our involvement and obligations with
respect to litigation for the cleanup of the Coeur d'Alene Basin; and
o our receipt of the industry's top safety honor, the Sentinels of
Safety Award, at our Rochester mine in Nevada.
11
It should be noted that the above discussion of Company performance
accomplishments arises in the context offive other executive compensation relating to the
year end of December 31, 2001, and, therefore, does not include any discussion
of company performance accomplishments during the current year which ends on
December 31, 2002. Company performance accomplishments during 2002 will be
discussed in next year's proxy statement in the context of executive
compensation relating to the year ending December 31, 2002.officers.
On May 8, 2001, the Compensation Committee andFebruary 19, 2004, the Board of Directors approved an option exchange program that the Company extendedawarded a total of 152,737 restricted shares which will vest to the four
persons employed by us that held fully-vested options that had been grantedextent of one-third of the award amount on each anniversary following the grant date of such shares. Of such shares, 57,339 shares were issued to themour Chief Executive Officer, 19,610 were issued to our President and Chief Operating Officer; 17,202 were issued to our Executive Vice President and Chief Financial Officer; 8,257 were issued to our Vice President Corporate Development; and between 1992 and 1997. The options entitled the holders2,305 to purchase an
aggregate of 268,86111,755 shares were issued to each of our common stock at exercise prices ranging from
$13.125 to $20.875 per share. The options were to expire ten years from the date
of grant. The closing sale price of the common stock on the New York Stock
Exchange on May 8, 2001, was $1.26 per share. Pursuant to the option exchange
program, on May 15, 2001, the four persons were extended the right prior to June
15, 2001, to tender and have cancelled their options granted between 1992 and
1997 and have a new option granted in exchange therefore on December 17, 2001,
(which is six months and one day after June 15, 2001). Each of the four persons
exercised their right and new, fully-vested options exercisable for a ten-year
period were granted to them on December 17, 2001, at an exercise price equal of
$0.74 per share, which was the market value of the common stock on that date.
The option exchange program was instituted to provide incentives to optionees by
making available options with more realistically priced exercise prices equal to
the market value of the shares on the date of grant of the repriced options. The
Company was able to provide these incentives without increasing the number of
shares and potential dilution to shareholders under outstanding options.
The following table sets forth information relating to the above option
exchange program. We have not previously repriced outstanding options.
Hewitt Associates, an independent consulting firm, has advised our Board of Directors and its Compensation Committee regarding our executive compensation program since 1989. The program was originally approved by shareholders in 1989. Amendments to the program approved by shareholders in 1995 and a new LTIP approved by shareholders in 2003 were designed to make us remain competitive with mining industry peer companies and to further align the financial incentives of management with the shareholders’ interests. Our Executive Compensation Program providesexecutive compensation program was designed to provide incentives to executive officers to meet short-term and long-term objectives and attract, retain and motivate key executives that significantly affect our performance. Officers of Coeur d'Alened’Alene Mines Corporation and its subsidiaries (currently totaling 1314 persons) are eligible to participate in the program. Hewitt Associates, a
leading, independentUnder the executive compensation consulting firm, advises our Board
of Directors, its Compensation Committee and our Chief Executive Officer
regarding the implementation of the program. Under the Executive Compensation
Program,program, base salary and annual incentive are targeted, at approximatelyin consideration of several factors including performance and levels of responsibility and experience, between the 50th and 75th percentile of that reported for other companies in the mining industry on a size-adjusted basis. The total compensation opportunity (including long-term incentive) is targeted at the 75th percentile, based on stated performance objectives. The program was originally approved by shareholders in 1984.
Amendments to the program approved by shareholders in 1995 were designed to make
us remain competitive with mining industry peer companies and to align even
further the financial incentives of management
13
with the shareholders' interests. We believe the Executive Compensation Programexecutive compensation program is structured to motivate the key executives to best serve the shareholders by conducting business in a manner that enhances shareholder value.
12
Our Executive Compensation Programexecutive compensation program is administered by the Compensation Committee of the Board of Directors, which is composed entirely of outsideindependent directors. The Committee works with Hewitt Associates and our Chief Executive Officer to assure that the program meets the objectives set forth above, and is consistent with other plans in the mining industry. In addition, the Compensation Committee meets annually to set executive compensation for the year, to review recommendations of the independent consultant and to recommend compensation changes to the Board of Directors. The selection of officers receiving grants of stock options, andrestricted shares or other awards of stock under the program, and decisions concerning the timing, pricing and amount of such grants and awards, are made by the Compensation Committee. The Board makes the final decision regarding all other elements of executive compensation, including executivesexecutives’ salaries.
The Executive Compensation Programexecutive compensation program consists of three basic elements: (i) base salary, (ii) annual incentive compensation, and (iii) long-term incentive compensation. The program is performance based.performance-based. For the year 2001,2003, 50% of each executive'sexecutive’s annual incentive compensation was determined by our company'sCompany’s overall financial performance relative to predetermined goals established by the Board of Directors, and the remaining 50% was determined by the executive'sexecutive’s performance relative to their individual predetermined goals. Goals of the Chief Executive Officer are set and reviewed by the Compensation Committee, which makes recommendations to the Board of Directors. Goals of other executives are set by the Chief Executive Officer, reviewed by the Compensation Committee and approved by the Board of Directors. Seventy five percent of each executive's
long-term incentive compensation is based upon our company's total return to
shareholders compared to a mining industry peer group and the remaining 25%
consists of stock options which align the executive's compensation with
shareholder interests.
During 2001,2003, Hewitt Associates reviewed executive compensation and the target levels. The compensation of our executive officers is also linked to our company'sCompany’s financial performance as well as the individual officer'sofficer’s performance. As more fully discussed below under "Compensation“Compensation Committee Report,"” annual incentive compensation awards under the Annual Incentive Plan (the "AIP"“AIP”) are based upon target award levels expressed as a percentage of base salaries, established at the beginning of each year for participating executives, and vary depending upon the individual'sindividual’s level of responsibility and impact on our company'sCompany’s overall performance. Commencing in 2001,2004, 50% of the AIP target award value has beenwill be based on our financialCompany’s production, cash costs, reserves, income and cash flow return on investment performance as related to predetermined goals, and the remaining 50% by the individual executive'sexecutive’s performance relative to individual predetermined goals.
The vesting period applicable to future LTPSP
awards also was reduced from four to three years.
The program's Long-Term Incentive Plan (the "LTIP")LTIP is based upon a four-year performance period.three-year vesting period for stock options, restricted shares and other awards that may be made under the LTIP. Long-term incentives includemay includenonqualified stock options, granted under
the LTIP andincentive stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units, performance shares, (payable in shares of common stockperformance units, cash-based awards and cash
after a four-year performance
14
period) granted under our Long-Term Performance Share Plan (the "LTPSP"). Thestock-based awards. Ordinarily, the exercise price of options granted under the LTIP is equal to the fair market value of the common stock on the date of grant of the options. The long-term compensation opportunities associated with options that vest at a raterestricted shares and the other forms of 25% a
year and shares of common stock thatawards available under the LTIP are issued after a four-year period are
directly related tobased on the market value of our common stock. Long-term incentive
awards paid understock on the LTPSP reward long-term shareholder value enhancement
relative to industry competitors over a three-year performance period. No stock
options underday of the LTIP have been granted nor performance shares under the LTPSP
awarded for services rendered in 2001.grant.
13
During the seven-yearnine-year period from 1995 through 2001,2003, a total of 1,500,0009,657,000 shares of common stock were authorized for issuance under the Executive
Compensation Program.executive compensation programs. As of July 30, 2002, 816,291April 1, 2004, 6,354,331 shares remained available to underlie awards to be granted in the future under the program and it is
anticipated that 699,614 shares will remain available after the planned granting
of options in October 2002. Proposal No. 3 to be voted on at this Annual Meeting
contemplates a 1,000,000 share increase in the number of shares reserved for
issuance under Executive Compensation Program awards during the next two years.program.
The total annual incentive awards paid to our Chief Executive Officer and the other four highest paid executive officers employed at the end of the year were $971,355 in 2003 compared to $543,679 in 2002 and $450,695 in 2001, compared to $202,025 in 2000, and $850,406 in 1999, and their total annual compensation was $1,497,094 in 2003 compared to $1,379,826 in 2002 and $1,353,851 in 2001, compared to $1,282,139
in 2000 and $1,154,872 in 1999.2001.
The following Summary Compensation Table sets forth the annual base salary, annual bonus (including cash and stock) and long-term incentive compensation (including stock awards, options granted and long-term incentive cash payments) earned by our Chief Executive Officer and the other four highest paid executive officers employed at the end of the year for services rendered during each of the last three years.
15
Annual Compensation | Long Term Compensation Awards | |||||||||||||||||||||||||
Name and Principal Position | Year | Salary ($) | Bonus ($) (1) | Other Annual Compen -sation ($) (2) | Restricted Stock Awards (#Sh) (3) | Shares Underlying Options (#Sh) (4) | Payouts LTIP Payouts ($) | All Other Compensation ($) (5) | ||||||||||||||||||
Dennis E. Wheeler | 2003 | $ | 485,126 | $ | 466,250 | -- | 200,000 | -- | -- | $ | 15,999 | |||||||||||||||
Chairman & Chief | 2002 | 499,400 | 300,000 | -- | -- | 395,071 | -- | 46,135 | ||||||||||||||||||
Executive Officer | 2001 | 485,658 | 212,916 | -- | -- | 229,090 | -- | 35,668 | ||||||||||||||||||
Robert Martinez | 2003 | $ | 278,549 | $ | 192,660 | -- | 125,000 | -- | -- | $ | 15,999 | |||||||||||||||
President & | 2002 | 293,192 | 131,100 | -- | -- | 131,382 | -- | 25,392 | ||||||||||||||||||
Chief Operating Officer | 2001 | 288,241 | 94,050 | -- | -- | 20,429 | -- | 24,892 | ||||||||||||||||||
James A. Sabala (6) | 2003 | $ | 235,359 | $ | 179,000 | -- | 125,000 | -- | -- | $ | 204,789 | (9) | ||||||||||||||
Executive Vice-President | ||||||||||||||||||||||||||
Chief Financial Officer | ||||||||||||||||||||||||||
Dieter A. Krewedl (7) | 2003 | $ | 202,090 | -- | -- | 41,667 | -- | -- | $ | 16,000 | ||||||||||||||||
Senior Vice President | 2002 | 197,193 | 77,481 | -- | -- | 56,763 | -- | 18,007 | ||||||||||||||||||
Exploration | 2001 | 193,318 | 46,612 | -- | -- | -- | -- | 15,674 | ||||||||||||||||||
Mitchell J. Krebs(8) | 2003 | $ | 195,969 | $ | 133,445 | -- | 85,000 | -- | -- | $ | 16,000 | |||||||||||||||
Vice President | ||||||||||||||||||||||||||
Corporate Development |
(1) | Annual incentive payments under the AIP are paid in cash and based on target award levels established by the Compensation |
14
(2) | Does not report perquisites amounting to less than the lesser of $50,000 or 10% of total salary and bonus. |
(3) | On March 11, 2003, the Board of Directors awarded a total of 660,000 restricted shares to the above named executive officers. These restricted shares initially were to vest at the end of a three-year period following the grant of such shares. At a meeting on February 5, 2004, the Board of Directors, based upon the Company’s achievement of certain strategic goals during 2003 and to provide further incentive to management, amended the vesting schedule such that these shares will vest to the extent of one-third of the award amount on each anniversary following the grant date of such shares. The aggregate number and market value (based on the $5.78 per share closing price of the shares on the New York Stock |
(4) | Reports the number of shares underlying nonqualified options and incentive stock options granted under the LTIP with respect to each of the respective years. No new stock options were granted to any of our officers under the LTIP in 2003. |
(5) | Includes contributions to the Defined Contribution and 401(k) Retirement Plan (the “Retirement Plan”) and amounts credited to our Non-Qualified Supplemental Retirement and Deferred Compensation Plan (the “Supplemental Plan”) prior to its termination. All full-time employees participate in the Retirement Plan. The amount of our annual contribution is determined annually by the Board of Directors and may not exceed 15% of the participants’ aggregate compensation. However, for the years 2001, |
15
(6) | Mr. Sabala commenced his employment with us on January 27, 2003. Our employment agreement with Mr. Sabala is described under “Employment Agreements” below. |
(7) | Mr. Krewedl resigned his employment with us on December 31, 2003. Our employment agreement with his successor, Mr. Donald J. Birak, is described under “Employment Agreements” below. |
(8) | Mr. Krebs began his employment with us on February 1, 2003. Our employment agreement with Mr. Krebs is described under “Employment Agreements” below. |
(9) | Includes $100,000 received upon execution of Mr. Sabala’s employment contract and $93,140 of reimbursable moving expenses. |
The amounts reported above for 1999 and 2000 were paid in March
2000 and May 2001, respectively. The amounts reported above for 2001 were paid
in March 2002.
(2) Does not report perquisites amounting to less than the lesser of $50,000 or
10% of total salary and bonus.
(3) Shares of common stock awarded under the LTPSP are issued upon completion of
a three-year performance period after the date of grant. Prior to 1993, the
Executive Compensation Program provided for annual awards of restricted stock
that vested over a four-year period. Commencing in 1993, awards haveOption Grants Table has been paid
in shares of common stock and cash in amounts
16
that are not determinable until completion of a four-year award cycle. The
aggregate number and market value (based on the $0.80 per share closing price of
the shares on the New York Stock Exchange on December 31, 2001) of the
restricted shares of common stock granted pursuant to the LTPSP prior to 1993
and held by the above executive officers at December 31, 2001, were as follows:
Dennis E. Wheeler - 27,774 shares ($22,291.20) and Robert Martinez - 4,173
shares ($3,338.40).
(4) Reports the number of shares underlying nonqualified options and incentive
stock options granted under the LTIP with respect to each of the respective
years. The options granted with respect to 1999 performance were granted in
March 2000. Noomitted since no options were granted with respect to 2000 or 2001 performance.
The options granted during 2001 were granted in December 2001 in connection with
the option exchange program described below.
(5) Reports cash payouts (not awards) under the LTPSP. Payments are made under
the LTPSP after the end of the three-year performance period after award. The
above reported payments relate to awards made in 1998 and are based on the
performance period ending December 31, 2001. No long-term incentive plan awards
have been made under the LTPSP with respect to services rendered in 2001.
(6) Includes contributions to the Defined Contribution and 401(k) Retirement
Plan (the "Retirement Plan") and amounts credited to our Supplemental Retirement
Plan. All full-time employees participate in the Retirement Plan. The amount of
our annual contribution is determined annually by the Board of Directors and may
not exceed 15% of the participants' aggregate compensation. However, for the
years 1999, 2000 and 2001, the contribution was 5%. In addition, the Retirement
Plan provides for an Employee Savings Plan which allows each employee to
contribute up to 16% of compensation, subject to a maximum contribution of
$10,500. We contribute an amount equal to 50% of the first 6% of any such
contributed amount. Accrued benefits under the Retirement Plan are fully vested
after five years of employment. Retirement benefits under the Retirement Plan
are based on a participant's investment fund account upon retirement, the
participant's age and the form of benefit payment elected by the participant. We
maintain the Supplemental Retirement Plan for our executive officers. Under the
Supplemental Retirement Plan, an amount is accrued that equals the portion of
the contribution to the Retirement Plan that is restricted due to restrictions
under ERISA. In 2001, each of Messrs. Wheeler, Martinez, Krewedl, Duff and Burns
were credited with company contributions of $13,600 under the Retirement Plan.
In 2001, Messrs. Wheeler, Martinez, Krewedl, Duff and Burns were credited with
$20,805, $11,191, $1,964, $803, and $3,040, respectively, pursuant to the
Supplemental Retirement Plan. The amounts of all other compensation reported in
the above table also include "above-market" interest earnings on deferred
compensation that is accrued under our Supplemental Retirement Plan.
"Above-market" interest earnings on deferred compensation is the excess of such
interest over 120% of the applicable federal long-term interest rate, with
compounding, as prescribed under the Internal Revenue Code. In 2001, the amounts
of above-market interest earnings accrued for the benefit of Messrs. Wheeler,
Martinez, Krewedl, Duff and Burns, amounted to $1,262.41, $100.67, $10.03, 19.27
and $17.04, respectively.
As reported to shareholders in the proxy statement relating to last year's
Annual Meeting of Shareholders, the following Option Grants Table sets forth,
for each of the named executive
17
officers, information regarding individual grants of options granted under the
LTIP in December 2001 and their potential realizable values. Information
regarding individual option grants includes the number of options granted, the
percentage of total grants to employees represented by each grant, the per-share
exercise price and the expiration date. The potential realizable value of the
options are based on assumed annual 0%, 5% and 10% rates of stock price
appreciation over the term of the option. Also set forth is the amount of the
increases in the value of all of our outstanding shares of common stock that
would be realized in the event of such annual rates of stock price appreciation.
All of the reported grants were made in connection with an option exchange
program which was approved by the Board of Directors and its Compensation
Committee on May 8, 2001, and was extended to the four persons employed by us
that held fully-vested options that had been granted to them between 1992 and
1997. The options entitled the holders to purchase an aggregate of 268,861
shares at exercise prices ranging from $13.125 to $20.875 per share during the
ten-year period following grant. Pursuant to the option exchange program, on May
15, 2001, the four persons were extended the right prior to June 15, 2001, to
tender and have cancelled their options granted between 1992 and 1997 and have a
new option granted in exchange therefore on December 17, 2001, (which is six
months and one day after June 15, 2001). Each of the four persons exercised
their right and new, fully-vested options exercisable for a ten-year period were
granted to them on December 17, 2001, at an exercise price equal to $0.74 per
share, which was the market value of the common stock on that date.
Option Grants Table
Individual Grants Potential Realizable
-------------------------------------------------------- Value at Assumed
Number of % of Total Annual Rates of
Shares Options Stock Price
Underlying Granted Appreciation
Options to Employees Exercise for Option Term(4)
Granted in Fiscal Price Expiration -------------------------------
(#) (1) Year (2) ($/SH) (3) Date 0% ($) 5% ($) 10% ($)
---------- ------------ ---------- ---------- ------ -------- --------
Dennis E. Wheeler..... 229,090 85.2 $0.74 12/17/11 $ 0 $107,672 $270,326
Robert Martinez....... 20,429 7.6 0.74 12/17/11 0 9,602 24,106
James K. Duff......... 8,031 3.0 0.74 12/17/11 0 3,775 9,477
All Shareholders (4).. 0 126,365 317,256
Named Executive
Officers' Gains
as a % of All
Shareholder Gains.... 0 .35% .35%
(1) The options include nonqualified and incentive stock options that were
fully-vested upon the date of grant.
(2) Based on options for a total of 268,861 shares granted to four persons,
including the above three officers.
(3) The exercise price is equal to the closing sale price of the common stock
reported on the New York Stock Exchange on the date of grant of the option.
(4) The potential realizable values shown in the columns are net of the option
exercise price. These amounts assume annual compounded rates of stock price
appreciation of 0%, 5%, and 10% from the date of grant to the option
expiration date, a term of ten years. These rates have been set by the U.S.
Securities and Exchange Commission and are not intended to forecast future
appreciation, if any, of our common stock. Actual gains, if any, on stock
option exercises are
18
dependent on several factors including the future performance of our common
stock, overall stock market conditions, and the optionee's continued
employment through the vesting period. The amounts reflected in this table
may not actually be realized.
(5) Total dollar gains based on assumed annual rates of appreciation shown and
the 76,724,211 shares of common stock outstanding on June 30, 2002 [to be
updated to July 30, 2002 in the definitive proxy statement].
Information in the above Options Grant Table relates to options granted
during the year ended December 31, 2001. Information relating to options granted
and to be granted during the year ended December 31, 2002, to the executive officers named in the Summary Compensation Table will be set forth in the proxy
statement relating to our Annual Meeting of Shareholders expected to be held in
Juneduring fiscal year 2003.
The following aggregate Option Exercises and Year-End Option Value Table sets forth, for each of the named executive officers, information regarding the number and value of unexercised options at December 31, 2001.2003. No options were exercised during 20012003 by such persons.
Aggregate
Name | Shares Acquired on Exercise (#) | Value Realized ($) | Number of Shares Underlying Unexercised Options at FY-End (#) Exercisable/ Unexercisable | Value of Unexercised in-the-Money Option at FY-End ($) (1) Exercisable Unexercisable | ||||||||||
Dennis E. Wheeler | 0 | 0 | 680,684 / 18,841 | $ | 2,914,073 / 41,827 | |||||||||
Robert Martinez | 0 | 0 | 175,936 / 6,375 | $ | 709,818 / 14,153 | |||||||||
James A. Sabala | 0 | 0 | -/- | $ | -/- | |||||||||
Dieter A. Krewedl | 0 | 0 | 62,019 / 1,752 | $ | 242,912 / 3,889 | |||||||||
Mitchell J. Krebs | 0 | 0 | -/- | $ | -/- |
(1) | Market value of underlying securities at exercise or year-end, minus the exercise price. |
16
The following table sets forth information regarding long-term incentive awards made in 2003:
Estimated Future Payouts Under Non-Stock Price-Based Plans | |||||||||||||||||
Number of Restricted Shares | Performance or other Period until Maturation | Threshold ($ or #) ) | Target ($ or #) | Maximum ($ or #)) | |||||||||||||
Dennis E. | 200,000 | 1/3 per year | - | - | - | ||||||||||||
Robert | 125,000 | 1/3 per year | - | - | - | ||||||||||||
James A. | 125,000 | 1/3 per year | - | - | - | ||||||||||||
Dieter A. | 125,000 | 1/3 per year | - | - | - | ||||||||||||
Mitchell J. Krebs | 85,000 | 1/3 per year | - | - | - |
Information in the exercise price.
No long-term incentive plan awards were made for services rendered in 2001
under the LTPSP. Therefore, noabove Long-Term Incentive Plan Awards Table relates to restricted shares awarded during the year ended December 31, 2003. On March 11, 2003, the Company made awards of restricted shares of common stock to each of the named executive officers. The restricted shares shall vest to the extent of one-third of the award amount on each anniversary following the grant date of such shares subject to certain terms of the agreements related to each of the awards and the Long Term Incentive Plan under which the awards were made. Awards under the Long-Term Incentive Plan were based upon each executive’s level of responsibility and impact upon Company performance.
The following table sets forth information as of December 31, 2003, regarding the Company’s equity compensation plans.
Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options,warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | ||||||||
(a) | (b) | (c) | |||||||||
Equity compensation plans approved by security holders | �� | 1,650,054 | 2.11 | 7,444,140 | |||||||
Equity compensation plans not approved by security holders | 0 | -- | -- | ||||||||
Total | 1,650,054 | 7,444,140 |
17
The following description of our executive compensation practices and policies is set
forthpresented on behalf of the Compensation Committee of our Board of Directors. The present members of the Committee are Robert E. Mellor (Chairman), Cecil D. Andrus and John H. Robinson, each of whom is an independent director under New York Stock Exchange listing standards. The fundamental philosophy of our executive compensation program is to offer competitive compensation opportunities based on the Company’s performance and individual performance. Our Company and the Committee, at least annually, utilize the services of Hewitt Associates, a leading, independent executive compensation consulting firm, in this proxy statement.connection with the implementation of the executive compensation program. In addition, the Committee also receives information from other mining company compensation studies.
Compensation of our executive officers is reviewed annually by the Committee, which is comprised entirely of outside directors. It is directly linked to our operating and financial performance, comparisons with other companies in the mining industry and is designed to align management’s interests with those of the shareholders. Total compensation opportunities available to management are competitive with those offered by other employers in the precious metals mining industry on a size-adjusted basis. Annual base salaries are targeted, in consideration of several factors including performance and levels of responsibility and experience, between the 50th and 75th percentile of that reported for other companies in the mining industry on a size-adjusted basis.
Annual incentive compensation awards under the AIP are based on target award levels, expressed as a percentage of base salaries, established at the beginning of each annual performance period for participating executives and vary (from 65% for the Chairman and CEO to lower amounts for other executives) depending upon the individual’s level of responsibility and impact on overall Company performance. Specific individual and group objectives, reflecting the executive’s responsibilities, are developed for each participating executive prior to the beginning of the year. Objectives for participants other than the Chairman and CEO are established for each participant by the CEO, and reviewed by the Compensation Committee. Individual objectives for the Chairman and CEO are established by the Committee and, for 2003, included objectives relating to our operations, management and growth. Accordingly, the Compensation Committee reviews the executive’s performance relative to the predetermined goals and reports to the Board of Directors. In addition, financial objectives are established for the Company based on growth of total assets and cash flow return on total investment. Actual awards paid after the end of each annual performance period vary from the target awards based on the actual versus targeted performance objectives. In 2003, 50% of the target award value was based on financial performance of the Company and 50% was based on the individual performance of the participant. Awards vary from zero percent to 200 percent of the target awards. The total annual incentive awards paid to our Chief Executive Officer and the other four highest paid executive officers employed at the end of 2003 were $971,355 compared to $543,679 in 2002, and $450,695 in 2001.
No new stock options were granted to any of our officers under the LTIP in 2003.
18
Awards made under our LTIP are based on established percentages of base salary and vest cumulatively at a rate of 33 1/3% per year. The options expire ten years after the date of grant. Option exercise prices are equal to the fair market value of the common stock on the date of grant. As of April 1, 2004, nonqualified stock options and incentive stock options to purchase a total of 1,452,505 shares of common stock at an average exercise price of $2.75 per share were outstanding. As of April 1, 2004, restricted shares equaling a total of 1,194,943 shares of common stock had been awarded to our executive officers. As mentioned above, the 2003 Long-Term Incentive Plan that was approved by our shareholders on May 20, 2003 replaced our prior Long-Term Incentive Plan and Long-Term Incentive Performance Share Plan. Pursuant to the 2003 Long-Term Incentive Plan, in addition to stock options and restricted shares, we may annually grant stock appreciation rights (“SARs”), performance shares, performance units, cash-based awards and stock-based awards to our executive officers. In 2003, other than the grant of restricted shares discussed above, we made no long-term incentive awards.
Payments made in February, 2004 under the AIP were based on 2003 performance. As stated above, 50% of an AIP award is based on the prior year’s growth of our total assets and cash flow return on investment and 50% is based on individual performance measured against predetermined individual or group objectives. With respect to the individual performance portion of the February, 2004 AIP award to our Chairman and CEO, the award was based on 2003 performance and reflected the following Company performance accomplishments in 2003:
19
It should be noted that the above discussion of Company performance accomplishments arises in the context of executive compensation relating to the year ending December 31, 2003, and, therefore, does not discuss Company performance accomplishments during the current year which ends on December 31, 2004.
Compensation Committee of the Board of Directors | |||||
ROBERT E. MELLOR, Chairman | |||||
CECIL D. ANDRUS | |||||
JOHN H. ROBINSON |
20
On December 6, 2002, our Board of Directors approved the termination of our Non-Qualified Supplemental Retirement and Deferred Compensation Plan Pursuantpursuant to our Supplemental Retirement Deferred Compensation Plan,which officers maywere entitled to defer up to 50% of their salary as well asand 100% of the cash portion of awards under the AIP and LTPSP. Amounts deferred accrue interest at a prime
lending rate plus 1%, not to exceed 10%, and payout may be effected by a lump
sum orLTPSP, effective December 31, 2002. The plan was terminated as an annuity. Any portionemployee cost reduction program. In accordance with the terms of the incentive award may be deferred into Coeur
d'Alene Mines' stock equivalentsplan, the account balances accrued at the time of termination of the plan were distributed to plan participants. The following table sets forth the account balances of the officers named in the Supplemental Retirement DeferredSummary Compensation PlanTable and two other plan participants at December 31, 2002, which amounts were distributed to the participants during January and February 2003:
Name of Participant | Account Balance | ||||
Dennis E. Wheeler | $ 567,218.29 | ||||
Robert Martinez | 62,028.32 | ||||
Geoffrey A. Burns | 9,714.48 | ||||
Dieter A. Krewedl | 8,158.85 | ||||
Other Participant | 14,822.91 | ||||
Total | $ 661,942.85 | ||||
Directors’ Fees
Commencing in 2004 outside directors will receive an annual fee of $60,000, Committee Chairmen will receive an annual meeting fee of $5,000 and outside directors, except for a minimum of five years andthe Committee Chairman, will receive a 25% match on
the amount deferred.
19
Directors' Feesmeeting fee of $1,500 for any committee meeting. During 2003, annual directors’ fees were $50,000 and committee members received no compensation for their service as committee members. Pursuant to our Non-Employee Directors'Directors’ Stock Option Plan, outside directors must receive at least $5,000$10,000 of their $50,000 annual director fees in the form of stock options in lieu of $5,000$10,000 of cash compensation and are able to elect to receive stock options in lieu of cash fees for up to the $45,000$50,000 balance of their annual director fees. Information relating to options granted to outside directors in January, 2001,2003, was set forth in last year'syear’s proxy statement relating to the 20012003 Annual Meeting of Shareholders. The following table sets forth information regarding options that were granted under the plan to non-employee directors on January 4, 2002:
Amount6, 2004:
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Name of Outside Director | Amount of Foregone Director's Fees | Number of Shares Subject to Option* | Option Exercise Price Per Share** | ||||||||
Cecil D. Andrus | $ | 5,000 | 1,340 | $ | 6.66 | ||||||
James J. Curran | 25,000 | 6,702 | $ | 6.66 | |||||||
James A. McClure | 5,000 | 1,340 | $ | 6.66 | |||||||
Robert E. Mellor | 5,000 | 1,340 | $ | 6.66 | |||||||
John H. Robinson | 10,000 | 2,680 | $ | 6.66 | |||||||
J. Kenneth Thompson | 50,000 | 13,404 | $ | 6.66 | |||||||
Timothy R. Winterer | 20,000 | 5,361 | $ | 6.66 | |||||||
Total | $ | 120,000 | 32,167 | ||||||||
* | The number of shares is determined by dividing each outside director’s foregone director’s fee by the per-share value of an option using the Black-Scholes option valuation method. |
** | The option exercise price is equal to the closing price of our common stock reported by the New York Stock Exchange on January 6, 2004, which was the date of grant. |
Directors’ Retirement Plan
On March 16, 2004, the Board of Number Option
Foregone of Shares Exercise
Director's Subject to Price Per
Name of Outside Director Fees Option* Share**
- ------------------------ ---------- ---------- ---------
Cecil D. Andrus..................... $5,000 11,627 $0.80
Joseph C. Bennett................... 5,000 11,627 0.80
James J. Curran..................... 25,000 58,139 0.80
James A. McClure.................... 5,000 11,627 0.80
Robert E. Mellor.................... 5,000 11,627 0.80
John H. Robinson.................... 10,000 23,255 0.80
Daniel Tellechea Salido............. 5,000 11,627 0.80
Xavier Garcia de Quevedo Topete..... 5,000 11,627 0.80
Timothy R. Winterer................. 10,000 23,255 0.80
------- ------
Total.............. $70,000 174,411
======= =======
- --------------------
* The number of shares is determined by dividing each outside director's
foregone director's fee by the per-share value of an option using the
Black-Scholes option valuation method.
** The option exercise price is equal to the average of the high and low
prices of our common stock reported by the New York Stock Exchange on
January 4, 2002, which was the date of grant.
Committee members receive no compensation for their services as Committee
members.
Directors' Retirement Plan
Pursuant toDirectors terminated the Directors' Retirement Plan, pursuant to which outside directors who havehad a minimum of five years of service arewere entitled to one year of retirement benefit for each year of service up to a maximum of ten years of retirement benefits. Each year's retirement benefit iswas equal to 40% of the outside director's annual compensation as a director at the time of retirement. In connection with the termination of the retirement plan, outside directors received cash payments equal to the net present value of their accrued benefits under the plan, as follows:
Name of Outside Director | Amount of Payment | ||||
Cecil D. Andrus | $131,649 | ||||
James J. Curran | 157,136 | ||||
James A. McClure | 157,136 | ||||
Robert E. Mellor | 88,318 | ||||
John H. Robinson | 88,318 | ||||
J. Kenneth Thompson | 19,469 | ||||
Timothy R. Winterer | 88,318 | ||||
Total | $730,344 |
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In the event of a change in control of Coeur d'Alene Mines Corporation, as defined below, all awards under the Executive Compensationexecutive compensation Program fully vest as follows:
o
A change in control of Coeur d'Alened’Alene Mines Corporation for purposes of the program is deemed to occur in the event of:
o
We have an employment agreement with Dennis E. Wheeler, Chairman of the Board President and Chief Executive Officer, which provides for a three-year term of employment and which is automatically extended for one year on June 1 of each year unless terminated or modified by us by written notice. Mr. Wheeler'sWheeler’s employment agreement, which calls for a base salary of $500,000 each year plus annual incentive compensation, includes the same change in control provisions as those included in the executive severancechange in control agreements described below, and in the event of his death, his employment agreement provides for the lump sum payment to his estate of an amount equal to his annual base salary at the time of his death.
We entered into an employment agreement on March 11, 2003 with Robert Martinez pursuant to which he was employed as President and Chief Operating Officer for a period commencing on May 31, 2003 and ending on May 31, 2005. His agreement calls for a base salary of $285,000 each year plus annual incentive compensation. Mr. Martinez’s employment agreement includes the same change of control provisions as those included in the executive change in control agreements described below.
We entered into an employment agreement on January 13, 2003, with James A. Sabala, pursuant to which he was employed as Executive Vice President and Chief Financial Officer for a two-year term commencing January 27, 2003, through January 27, 2005, in connection with the signing of which Mr. Sabala received $100,000. The agreement is renewed from day to day so that the Company and Employee are at all times bound to this agreement for a period of two years. His agreement calls for a base salary of $250,000 each year plus annual incentive compensation. Mr. Sabala’s employment agreement includes the same change of control provisions as those included in the executive change in control agreements described below.
We entered into an employment agreement on February 1, 2004, with Donald J. Birak, pursuant to which he was employed as Senior Vice President Exploration for a one-year term commencing February 1, 2004, through January 31, 2005. The agreement is renewed from day to day so that the Company and Employee are at all times bound to this agreement for a period of one year. His agreement calls for a base salary of $205,000 each year plus annual incentive compensation. Mr. Birak’s employment agreement includes the same change of control provisions as those included in the executive change in control agreements described below.
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We entered into an employment agreement effective March 11, 2003 with Mitchell J. Krebs, pursuant to which he was employed as Vice President Corporate Development for a period commencing March 11, 2003 and ending May 31, 2005. His agreement calls for a base salary of $216,000 each year plus annual incentive compensation.
During 2001,2004, and continuing from year-to-year thereafter unless terminated by us by written notice, the executive severancechange in control agreements with fivea total of ten executive officers provide that certain benefits will be payable to the executives in the event of a change in control of us and the termination of the executive'sexecutive’s employment within two years after such change in control for any reason other than for cause, disability, death, normal retirement or early retirement. The term "change“change in control"control” for purposes of the executive severancechange in control agreements has the same meaning as that discussed above under "Change“Change in Control Provisions."”
The benefits payable to an executive in the event of a change in control and such termination of employment are:
o
With the exception of Mr. Wheeler, each executive severancechange in control agreement provides that if the severance paymentschange in control payment provided thereunder would constitute a "parachute“parachute payment,"” as defined in Section 280G of the Internal Revenue Code, the payment will be reduced to the largest amount that would result in no portion being subject to the excise tax imposed by, or the disallowance of a deduction under, certain provisions of the Code. Accordingly, the present value of such payment will generally be required to be less than three times the executive'sthese executives’ average annual taxable compensation during the five-year period preceding the change in control. The change in control agreement concerning Mr. Wheeler provides that for any change in control payment provided thereunder that constitutes an “excess parachute payment,” the Company will pay Mr. Wheeler an additional amount in cash such that the net amount retained by Mr. Wheeler after the deduction of all applicable taxes will be equal to the initial change in control payment.
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General
Our Board of Directors has unanimously adopted a resolution approving, declaring advisable and recommending to shareholders for their approval an amendment to Article II of our Restated and Amended Articles of Incorporation increasing the total number of shares of our authorized common stock from 125250 million shares to 250500 million shares. As more fully discussed below, very few
authorized, unreserved shares remain available for future issuance, and the
Board of Directors desires to increase the total number of authorized shares to
pursue general corporate purposes.
The form of the proposed amendment to our Restated and Amended Articles of Incorporation is attached as Appendix A to this proxy statement. In order to become effective, the proposed amendment must be approved by the holders of a majority of the shares of common stock that are present or represented by proxy at the meeting. The proposed amendment will become effective upon the filing of the amendment with the Idaho Secretary of State, which we plan to do promptly after the Annual Meeting.
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Currently Authorized Common Stock
Of the 125 million currently authorized shares of our common stock,
79,030,849 shares were outstanding and 1,059,211 shares were held as treasury
stock at June 30, 2002 [to be updated to July 30, 2002 in the definitive proxy
statement]. In addition, as of that date, a total of 39,171,405 shares of common
stock had been reserved for possible issuance in the future for the following
purposes:
o 18,757,407 shares were reserved for issuance upon the conversion of
our $25.3 million principal amount of outstanding Series I 13 3/8%
Convertible Senior Subordinated Notes due December 31, 2003 ("Series I
13 3/8% Senior Notes");
o 15,910,370 shares were reserved for issuance upon the conversion of
our $21.5 million principal amount of outstanding Series II 13 3/8%
Convertible Senior Subordinated Notes due December 31, 2003 ("Series
II 13 3/8% Senior Notes");
o 2,540,047 shares were reserved for issuance upon the conversion of our
$65.5 million principal amount of outstanding 6 3/8% Convertible
Subordinated Debentures due January 31, 2004 ("6 3/8% Debentures");
o 824,871 shares were reserved for issuance upon the conversion of our
$14.4 million principal amount of outstanding 7 1/4% Convertible
Subordinated Debentures due October 31, 2005 ("7 1/4% Debentures");
o 816,291 shares were reserved for issuance under our Executive
Compensation Program;
o 322,419 shares were reserved for issuance under our Non-Employee
Directors' Stock Option Plan; and
In view of the fact that a total of 119,261,465 shares of our common stock
are either outstanding, held as treasury stock or reserved for future issuance
as described above, there remains only 5,738,535 shares of unissued, unreserved
shares available for future issuance.
Reasons for the Proposed Amendment
Our Board of Directors strongly recommends approval of the proposed amendment so that it will be able to have sufficient authorized but unissued and unreserved shares to permit the pursuit and effectuation of corporate transactions and for general corporate purposes requiring the issuance of common stock. Those transactions include:
o
As explained below, only [3,227,837] shares of unissued, unreserved common stock remain available for future issuance.
25
We currently have no agreements, understandings or definitive plans to issue additional shares of common stock over and above the number of our presently authorized shares. However, the Board of Directors believes that additional authorized shares should be available in the future in order to permit us to pursue the various transactions described above and to provide for our growth and financial stability. Many of the above transactions arise under circumstances requiring prompt action and do not allow the necessary time to seek shareholder approval to authorize additional shares. The Board of Directors believes that it is very important for it to have the flexibility to be able to act promptly in the best interests of our Company and its shareholders when circumstances such as those described above arise.
On August 1, 2001, we issued a total of approximately $42.6
Currently Authorized Common Stock
Of the 250 million principal amount of our Series I 13 3/8% Notes in connection with an exchange
offer by us in which we offered the Series I 13 3/8% Notes to holders of our
outstanding 6% Debentures, 6 3/8% Debentures, and 7 1/4% Debentures. On May 31,
2002, we privately issued an additional $21.5 million principal amount of Series
II 13 3/8% Notes due December 31, 2003, for $16.0 million in proceeds. Interest
on the Series I and Series II 13 3/8% Notes is payable in cash, common stock or
a combination of cash and common stock, at our option, at a rate of 13 3/8% per
year, payable on June 30 and December 31 of each year. If we elect to pay
interest in common stock, the shares of common stock will be valued at 90% of
the average of the closing sale prices of our common stock for the five trading
days immediately preceding the second trading day prior to the interest payment
date. A total of approximately 3.4 million shares of common stock were issued by
us in payment for the semi-annual interest payable on December 31, 2001, to the
holders of the then outstanding Series I 13 3/8% Notes. Furthermore, a total of
approximately 1.1 million shares of common stock were issued by us in payment
for the semi-annual interest payable on June 30, 2002, to the holders of the
then outstanding Series I and Series II 13 3/8% Notes. Based on the amount of
Series I and Series I13 3/8% Notes outstanding on June 30, 2002, each
semi-annual interest payment amounts to $3.2 million.
On June 28, 2002, the closing sale price of our common stock on the New
York Stock Exchange was $1.69 per share. Assuming that the average of the
closing sale prices of our common stock for the five trading days immediately
preceding the second trading day prior to the next interest payment date on
December 31, 2002, is $1.70 per share, and further assuming that we elect to pay
that interest payment on the Series I and Series II 13 3/8% Notes due in
24
common stock rather than cash, the shares would be valued at 90% of that amount,
or $1.53 per share. The interest payment payable on December 31, 2002, would
then require the issuance of a total of approximately 2.1 million shares of our
common stock. In addition to that interest payment, additional semi-annual
interest payments on the 13 3/8% Senior Notes will be required on June 30, 2003,
and December 31, 2003.
It should be noted that we may elect to automatically convert the Series I
and Series II 13 3/8% Notes prior to August 1, 2003, if the closing sale price
of our common stock exceeds $2.70 (i.e., 200% of the $1.35 conversion price) for
at least 20 trading days during a 30-day trading day period ending within five
trading days prior to the notice of automatic conversion. In the event of such
an automatic conversion, or if holders elect to convert their notes prior to any
notice of automatic conversion, we will be obligated to make a payment to
holders in cash or, at our option, in common stock, equal to two years worth of
interest on the converted notes, less any interest actually paid prior to the
conversion. If paid in common stock, the shares would be valued at 90% of the
average of the closing sale prices of our common stock for the five trading days
immediately preceding the second trading day prior to the conversion date. In
the case of voluntary conversions by holders, the minimum share value will be
$1.35. An increase to ourcurrently authorized but unissued and unreserved shares is
necessary to accommodate future interest payments in common stock in lieu of
cash and to the making of the above-described payments in the event of automatic
or voluntary conversions of the Series I and Series II 13 3/8% Notes prior to
August 1, 2003.
Reference is made to Proposals Nos. 3 and 4 below in which we are seeking
shareholder approval for the reservation of a total of 1,500,000 shares of our common stock, 213,090,918 shares were outstanding and 1,059,211 shares were held as treasury stock at April 1, 2004. In addition, as of that date, a total of 32,622,034 shares of common stock had been reserved for possible issuance in the future for the following purposes:
In view of the fact that a total of 246,772,163 shares of our common stock are either outstanding, held as treasury stock or reserved for future issuance as described above, there remains only [3,227,837] shares of unissued, unreserved shares available for future issuance.
Future Shareholder Approval of Common Stock Issuances
The additional shares of common stock sought by the proposed amendment would be available for future issuance without future action by shareholders, unless such action would be required by applicable law or the rules of the New York Stock Exchange. Generally, New York Stock Exchange rules require shareholder approval of proposed issuances of additional shares that would result in an increase of 20% or more in the total number of shares of common stock outstanding before any such proposed issuance, subject to exemptions for certain public and private offerings for cash and an exception where the delay in securing shareholder approval would seriously jeopardize our financial viability and where our reliance on such exception is expressly approved by the Audit Committee of our Board of Directors. Shareholder approval also is required under New York Stock Exchange rules prior to an issuance of common stock that would result in a change of control of our Company. Furthermore, New York Stock Exchange rules require shareholder approval under certain circumstances with respect to certain stock option or purchase plans and with respect to proposed issuances of common stock, or of securities convertible into or exercisable for common stock, to directors, officers or substantial shareholders of the Company or their affiliates.
25
26
Description of the Common Stock
The holders of our common stock are entitled to one vote for each share held of record on each matter submitted to a vote of shareholders. Shareholders may not accumulate their votes in elections of directors. Subject to preferences that may be applicable to any shares of preferred stock outstanding at the time, holders of common stock are entitled to receive ratably such dividends as may be declared by the Board of Directors out of funds legally available therefore, and, in the event of our liquidation, dissolution or winding up, are entitled to share ratably in all assets remaining after the payment of liabilities. Holders of common stock have no preemptive rights and have no rights to convert their common stock into any other security. The outstanding shares of common stock are fully-paid and non-assessable. We presently do not anticipate the issuance of preferred stock in the future and are not proposing to increase the number of our authorized shares of preferred stock, of which 10 million shares are authorized and none are outstanding.
Potential for Anti-Takeover Effect
Although the Board of Directors'Directors’ purpose for seeking an increase in the number of authorized shares of our common stock is not intended for anti-takeover purposes, it should be noted that authorized but unissued shares of common stock, if issued, could be used by incumbent management to make more difficult and thereby discourage an attempt to acquire control of us even though our shareholders might deem such an acquisition desirable. For example, the shares could be privately placed with purchasers who might support the Board of Directors in opposing a hostile take-over bid. The issuance of the new shares could also be used to dilute the stock ownership and voting power of a third party seeking to remove directors, replace incumbent directors, accomplish certain business transactions or alter or amend provisions of our Restated and Amended Articles of Incorporation. To the extent that it would impede any such attempts, the issuance of additional shares of common stock following effectiveness of the proposed amendment to our Restated and Amended Articles of Incorporation could potentially serve to perpetuate the existing management.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE PROPOSED
AMENDMENT TO OUR RESTATED AND AMENDED ARTICLES OF INCORPORATION INCREASING THE
NUMBER OF AUTHORIZED SHARES OF OUR COMMON STOCK FROM 125 MILLION SHARES TO 250
MILLION SHARES.
PROPOSAL NO. 3
PROPOSE AMENDMENT OF OUR EXECUTIVE COMPENSATION PROGRAM AUTHORIZING THE
RESERVATION OF AN ADDITIONAL 1,000,000 SHARES OF COMMON STOCK FOR ISSUANCE UNDER
THE PROGRAM.
During the seven-year period from 1995 through 2001, shareholders
authorized the reservation of a total of 1,500,000 shares of our common stock
for issuance under our Executive Compensation Program. As of July 30, 2002,
689,438 shares of common stock are issuable upon the exercise of outstanding
options and rights and $1.58 was the weighted average exercise price of such
outstanding options and rights.
26
On March 19, 2002, stock options for a total of 259,610 shares were granted
to 13 officers with an exercise price of $1.23 per share under the Executive
Compensation Program. As a result of an option exchange program approved by the
Board of Directors on March 19, 2002, in connection with which options held by
eight of our officers and employees for an aggregate of 116,677 shares of common
stock and exercisable at exercise prices ranging from $4.8125 to $6.11 per
share, were cancelled on March 31, 2002. We plan to grant new options for an
aggregate of 116,677 shares on October 2, 2002, (which is six months and one day
after the cancellation of such options) to such persons at an exercise price
equal to the closing sale price of the common stock on the New York Stock
Exchange on the October 2, 2002. Following the issuance of such new options,
699,614 shares will remain available for issuance under the Executive
Compensation Program.
Our Board of Directors has approved a resolution amending the program to
authorize, subject to shareholder approval at the Annual Meeting, an additional
1,000,000 shares of common stock for issuance under the program (either directly
or upon the exercise of options to be granted under the program). The 1,000,000
amount of shares called for by the proposed amendment reflects our estimate of
the maximum amount of shares, which will depend on the market value of the
common stock at the time of the award or grant, that we anticipate may be called
for in connection with awards and option grants under the Execution Compensation
Program during the next two years.
As more fully explained under the caption "Compensation and Related
Matters" above, the three component plans that constitute the Executive
Compensation Program are the Annual Incentive Plan, the Long-Term Incentive Plan
and the Long-Term Performance Share Plan. The Annual Incentive Plan provides for
annual cash incentive compensation awards, 50% of which are based on the
financial performance of our Company and 50% of which is based on the individual
officer's performance. Of each long-term incentive granted under the Executive
Compensation Program, 25% consists of incentive or non-qualified stock options
granted under the Long-Term Incentive Plan, and 75% consists of performance
shares granted under the Long-Term Performance Share Plan. The Long-Term
Incentive Plan provides for the grant of incentive and non-qualified stock
options that are based on a percent of base salary and vest cumulatively at a
rate of 25% per year. The Long-Term Performance Share Plan provides for the
issuance of performance share awards (60% of which are payable in shares of
common stock and 40% of which are payable in cash after the performance period
that has been four years for past awards and will be three years for future
awards) and are based on long-term shareholder value enhancement relative to
industry competitors over the performance period. All long-term incentive awards
granted under the Long-Term Incentive Plan and Long-Term Performance Share Plan
directly relate to the performance of the Company.
The tables set forth above under the caption "Compensation and Related
Matters" set forth data relating to the awards made under our Executive
Compensation Program for performance in 2001. Reference is made to those tables,
to the related description of the program and to the discussion of the option
exchange program in 2002 set forth above and the option exchange program in 2001
set forth in the above Compensation Committee Report.
27
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF THE PROPOSED AMENDMENT OF OUR EXECUTIVE COMPENSATION PROGRAMRESTATED AND AMENDED ARTICLES OF INCORPORATION AUTHORIZING AN INCREASE IN THE RESERVATIONNUMBER OF AN ADDITIONAL 1,000,000AUTHORIZED SHARES OF COMMON STOCK FOR ISSUANCE UNDER
THE PROGRAM.
PROPOSAL NO. 4
PROPOSED AMENDMENT OF OUR NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN AUTHORIZING
THE RESERVATION OF AN ADDITIONAL 500,000FROM 250 MILLION TO 500 MILLION SHARES OF COMMON STOCK FOR ISSUANCE
UNDER OPTIONS TO BE GRANTED UNDER THE PLAN.
At
On July 22, 2002, we advised the firm of Arthur Andersen LLP (“AA”) that it would no longer serve as our Annual Meetingindependent accounting firm. AA had served in 1995, shareholdersthat capacity since October 1999. Our determination reflected the fact that on June 15, 2002, the Securities and Exchange Commission announced that AA had informed the Commission that it will cease practicing before the Commission by August 31, 2002.
27
On July 22, 2002, we engaged the independent accounting firm of KPMG LLP to serve as our auditing firm. The decision to engage KPMG LLP was approved our Non-Employee
Directors' Stock Option Plan and authorized 200,000 sharesby the Audit Committee of our common stock
for issuance upon the exercise of options granted under the plan. At last year's
annual meeting, shareholders approved the reservation of an additional 500,000
shares for issuance under the plan. Under the plan, which is administered by our Board of Directors each outside director must receive at least $5,000and the full Board.
During the years ended December 31, 2002 and 2003, there were no disagreements between the Company and AA or KPMG LLP on any matters of his
$50,000 annual director fee in the form of stock options in lieu of $5,000 of
cash compensation. Each director also is able to elect to receive a stock option
in lieu of cash fee for upaccounting principles or practices, financial statement disclosure or auditing scope or procedure, which, if not resolved to the $45,000 balancesatisfaction of his annual director fee. AsAA or KPMG LLP, would have been referred to in their reports. KPMG LLP’s reports on the Company’s financial statements for the years ended December 31, 2002 and 2003, did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or accounting principles.
The selection of KPMG LLP as our independent accountants was approved by the dateAudit Committee of this proxy statement, 322,419 shares remain available for
issuance under the plan. Our Board of Directors, has approvedwhich is composed of independent directors, and in view of the fact there is no requirement that shareholders ratification be sought. We expect a resolution
authorizing, subject to shareholder approvalrepresentative of KPMG LLP will be present at the Annual Meeting, will have the opportunity to make a statement if he or she desires to do so and will be available to respond to appropriate questions concerning our financial statements.
The following sets forth information relating to fees billed or incurred by the Company for professional services rendered to the Company for the each of the past two years:
• | Audit Fees. The total fee billed by KPMG LLP for professional services for the audit of the Company’s financial statements for the year ended December 31, 2003, and the reviews of the Company’s financial statements included in its Quarterly Reports on Form 10-Q during 2003 was approximately $197,499. The total fee billed by KPMG LLP for professional services for the audit of the Company’s financial statements for the year ended December 31, 2002, and the reviews of the Company’s financial statements included in its Quarterly Reports on Form 10-Q during 2002 was approximately $116,000. The total fee billed by Arthur Anderson LLP for professional services for the review of the Company’s financial statements included in its Quarterly Reports on Form 10-Q during 2002 was approximately $67,000. |
• | Audit Related Fees. The aggregate fees billed by KPMG LLP for assurance and related services reasonably related to the performance of the audit or review of the Company’s financial statements other than those reported in the foregoing “Audit Fees” subsection were approximately $8,000 for fiscal year 2003, and none for fiscal year 2002. The additional services in 2003 were performed in connection with the removal of “going concern” language in auditor’s report. |
28
• | Tax Fees.The aggregate fees billed for professional services rendered by KPMG LLP for tax compliance, tax advice, and tax planning were approximately $77,615 in 2003. The aggregate fees billed for professional services rendered by Arthur Andersen LLP and Deliotte & Touche for these services in 2002 were approximately $33,100 and $40,000, respectively. |
• | All other fees. The total fees billed by KPMG LLP for all other non-audit services rendered during 2003 were approximately $231,528. The total fees billed by KPMG LLP for all other non-audit services rendered during 2002 were approximately $49,000. The total fees billed by Arthur Andersen LLP for all other non-audit services rendered during 2002 were approximately $32,000. Fees were for services rendered in connection with the Form S-3 filings and comfort letters associated with the filings. The remaining fees were for due diligence services on prospective business ventures. |
The following describes the Audit Committee’s policies and procedures regarding pre-approval of the engagement of the Company’s independent auditor to perform audit as well as permissible non-audit services for the Company.
For audit services, the independent auditor will provide the Committee with an additional 500,000 shares for issuance uponengagement letter during the exerciseJanuary-March quarter of optionseach year outlining the scope of the audit services proposed to be granted underperformed in connection with the plan. The 500,000 amountaudit of shares called forthe current fiscal year. If agreed to by the proposed
amendment reflects our estimateCommittee, the engagement letter will be formally accepted by the Committee at either its March or June Audit Committee meeting. The independent auditor will submit to the Committee for approval an audit services fee proposal after acceptance of the engagement letter.
For non-audit services, Company management will submit to the Committee for approval (during June or September of each fiscal year) the list of non-audit services that it recommends the Committee engage the independent auditor to provide for the fiscal year. Such list of services must be detailed as to the maximum amount of shares, whichparticular service and may not call for broad categorical approvals. Company management and the independent auditor will dependeach confirm to the Committee that each non-audit service on the market valuelist is permissible under all applicable legal requirements. In addition to the list of planned non-audit services, a budget estimating non-audit service spending for the fiscal year may be provided. The Committee will consider for approval both the list of permissible non-audit services and the budget for such services. The Committee will be informed routinely as the non-audit services actually provided by the independent auditor pursuant to this pre-approval process.
To ensure prompt handling of unexpected matters, the Committee delegates to its Chairperson the authority to approve the auditor’s engagement for non-audit services with fees of up to $50,000, and to amend or modify the list of approved permissible non-audit services and fees of up to $50,000. The Chairperson will report any action taken pursuant to this delegation to the Committee at its next Committee meeting.
The independent auditor must ensure that all audit and non-audit services provided to the Company have been approved by the Committee. The Chief Financial Officer of the common stockCompany will be responsible for tracking all independent auditor fees against the budget for such services and report at the time of the award or
grant, that we anticipate may be called for to underlie options to be granted to
non-employee directors during the next two to three years.
A description of our Non-Employee Directors' Stock Option Plan is set forth
above under the sub-caption "Directors' Fees" that appears under the caption
"Compensation and Related Matters." Options are automatically granted under the
plan on the third business day of January of each year to each non-employee
director. The value of the option is determined by an independent consultant
applying the Black-Scholes option valuation method designed to value a right to
acquire our shares of common stock at an exercise price equalleast annually to the fair market
value of our shares on the date of grant. The option is exercisable at any time
beginning six months from the date of grant and ending ten years from the date
of grant.
Data regarding the options that were granted under the Non-Employee
Directors' Stock Option Plan to non-employee directors on January 4, 2002 is set
forth above under "Compensation and Related Matters - Directors' Fees."
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF THE
PROPOSED AMENDMENT TO THE NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN AUTHORIZING
THE RESERVATION OF AN ADDITIONAL 500,000 SHARES OF COMMON STOCK FOR ISSUANCE
UNDER OPTIONS TO BE GRANTED UNDER THE PLAN.
28
29
The Audit Committee of our Board of Directors, which currently consists of James J. Curran, James A. McClure and Timothy R. Winterer,J. Kenneth Thompson, is governed by its charter. All the members of the Audit Committee are "independent"“independent” as defined in the rules of the Securities and Exchange Commission and the listing standards of the New York Stock Exchange. The Board of Directors has determined that James J. Curran, Chairman of the Audit Committee, is an “audit committee financial expert” within the meaning of rules adopted by the Securities and Exchange which meansCommission.
In March 2003, the Audit Committee revised its charter to reflect certain provisions included in the Sarbanes-Oxley Act that they have
no relationshipwas enacted in July 2002 as well as certain rules adopted by the SEC thereunder, as well as certain listing standards approved by the Board of Governors of the New York Stock Exchange. A copy of the charter was attached to the Company that may interfere with the exerciseproxy statement, dated April 21, 2003 relating to last year’s annual meeting of their
independence from our management.shareholders held on May 20, 2003.
The Audit Committee reviewed and discussed our audited financial statements for the year ended December 31, 20012003, with management and our independent auditing firm, Arthur AndersonKPMG LLP. In that connection, the Audit Committee discussed with Arthur AndersenKPMG LLP the matters required to be discussed by Statement of Accounting Standards No. 61. SAS 61 requires an auditor to communicate certain matters relating to the conduct of an audit to the Audit Committee including:
o
30
KPMG LLP reported to the Audit Committee that: |
In addition, the Audit Committee received from Arthur AndersenKPMG LLP the written disclosures and the letter required by Independence Standards Board Statement No. 1 and discussed Arthur Andersen'sKPMG LLP’s independence with Arthur
Andersen.KPMG LLP. Pursuant to ISB 1, Arthur Andersen:
o KPMG LLP:
Based on the above-referenced review and discussions, the Audit Committee recommended to the Board of Directors that the financial statements be included in our Annual Report on Form 10-K for the year ending December 31, 2003, for filing with the Securities and Exchange Commission. Reference is made to the Audit Committee'sCommittee’s charter for additional information as to the responsibilities and activities of the Audit Committee.
Copies of this charter are available upon request to our Secretary.
Audit Committee of the Board Directors
James J. Curran, Chairman
James A. McClure
Timothy R. Winterer
Audit and Non-Audit Fees
The total fee billed for professional services rendered by Arthur Andersen
LLP for the audit of our financial statements for the year ended December
Audit Committee of the Board Directors | |||||
JAMES J. CURRAN, Chairman | |||||
JAMES A. MCCLURE | |||||
J. KENNETH THOMPSON |
31
2001, and the reviews of the Company's financial statements included in its
Quarterly Reports on Form 10-Q during 2001 was approximately $157,522. In
addition, Arthur Andersen LLP received approximately $243,533 of fees for all
other non-audit services rendered by Arthur Anderson LLP during 2001. The Audit
Committee has considered whether Arthur Andersen's provision of the non-audit
services to the Company is compatible with maintaining Arthur Andersen's
independence.
INDEPENDENT ACCOUNTANTS
On July 22, 2002, we advised the firm of Arthur Andersen LLP ("AA") that it
would no longer serve as our independent accounting firm. AA had served in that
capacity since October 1999. Our determination reflected the fact that on June
15, 2002, the Securities and Exchange
30
Commission announced that AA had informed the Commission that it will cease
practicing before the Commission by August 31, 2002.
On July 22, 2002, we engaged the independent accounting firm of KPMG LLP
("KPMG") to serve as our new auditing firm. The decision to engage KPMG was
approved by the Audit Committee of our Board of Directors and the full Board.
Shareholders are not being asked to ratify the selection by the Board of
Directors and its Audit Committee of KPMG as our independent accountants for the
current year because there is no requirement that such ratification be sought.
We expect a representative of KPMG will be present at the Annual Meeting, will
have the opportunity to make a statement if he or she desires to do so and will
be available to respond to appropriate questions concerning our financial
statements.
The following chart compares our cumulative total shareholder return for the five years ended December 31, 2001,2003, and sixfor the two months ended June 30, 2002,February 29, 2004, with (i) the S&P 500 Index, which is a performance indicator of the overall stock market, and (ii) a peer group determined by us.
31
[OBJECT
Comparison of Five-Year Cumulative Total Return Coeur d’Alene Mines Corporation, S&P 500, and Coeur d’Alene Mines Comparator Group.
[GRAPH OMITTED]
Dec. 1998 | Dec. 1999 | Dec. 2000 | Dec. 2001 | Dec. 2002 | Dec. 2003 | Feb. 29, 2004 | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Coeur d'Alene Mines Corporation Common Stock | 100.00 | 76.74 | 20.93 | 17.86 | 42.86 | 129.03 | 158.05 | ||||||||||||||||
S&P 500 Index | 100.00 | 121.05 | 110.02 | 96.95 | 75.52 | 97.19 | 100.35 | ||||||||||||||||
Peer Group Index** | 100.00 | 86.14 | 50.90 | 76.97 | 177.13 | 247.61 | 227.58 |
Assumes $100 invested on January 1, 1996,1998, in our common stock, S&P 500 Index and the peer group index.
- ---------------
* Total return assumes reinvestment of dividends.
** The issuers of common stock included in the peer group are Apex Silver
Mines Ltd., Bema Gold Corp., Cambior Inc., Echo Bay Mines Corp., First
Silver Reserve, Inc., Glamis Gold Ltd., Hecla Mining Co., Homestake Mining
Co., Kinross Gold Corp., Meridian Gold, Inc., Pan American Silver
Corporation, TVX Gold, Inc. and Viceroy Resources Corp.
* | Total return assumes reinvestment of dividends. |
** | The issuers of common stock included in the peer group are Apex Silver Mines Ltd., Bema Gold Corp., Cambior Inc., First Silver Reserve, Inc., Glamis Gold Ltd., Hecla Mining Co., Kinross Gold Corp., Meridian Gold, Inc., Pan American Silver Corporation, and Viceroy Resources Corp. |
32
Section 16(a) of the Securities Exchange Act of 1934 as amended, requires our officers and directors, and persons who own more than 10% of a registered class of our equity securities, to file reports of securities ownership and changes in such ownership with the Securities and Exchange Commission. Initial Statements of Beneficial Ownership of Securities on Form 3 are required to be filed within ten days after the date on which the person became a reporting person. Statements of Changes of Beneficial Ownership of Securities on Form 4 are required to be filed by the tenth daywithin two business days of the month following the month
during which thea change in beneficial ownership of securities occurred. We
believe that all reportssecurities. Based on a review of securities ownershipForms 3 and changes in such ownership
required to be4 filed during 2001 were2003, no reporting persons failed to timely filed.
32
Proposals of shareholders intended to be presented at the 20032005 Annual Meeting must be received by our Secretary, 400 Coeur d'Alened’Alene Mines Building, Post Office Box I, Coeur d'Alene,d’Alene, Idaho 83814 no later than January 1, 2003,December 15, 2004, (i.e., approximately 120 days prior to April 30, 2003,15, 2005, which is the presently expected date of mailing of the proxy statement relating to next year'syear’s annual meeting), in order for them to be considered for inclusion in the 20032005 Proxy Statement. A shareholder desiring to submit a proposal to be voted on at next year'syear’s Annual Meeting, but not desiring to have such proposal included in next year'syear’s proxy statement relating to that meeting, should submit such proposal to us by February 14, 2003,March 1, 2005, (i.e., at least 45 days prior to April 30, 2003,15, 2005, which is the presently expected date of the mailing of the proxy statement relating to next year'syear’s annual meeting). Failure to comply with that advance notice requirement will permit management to use its discretionary voting authority if and when the proposal is raised at the Annual Meeting without having had a discussion of the proposal in the proxy statement.
Management is not aware of any other matters to be considered at the Annual Meeting. If any other matters properly come before the meeting, the persons named in the enclosed proxy will vote the Proxy in accordance with their discretion.
Our 2001
This proxy statement is accompanied by our 2003 Annual Report to Shareholders, which includes financial statements for the year ended December 31, 2001, was mailed on April 30, 2002, to
shareholders of record on April 18, 2002. For those shareholders who became
shareholders of record subsequent to April 18, 2002,2003. Such financial statements are incorporated by reference in this proxy statement is
accompanied by a copy of that report.statement. The Annual Report is not otherwise to be regarded as part of the proxy solicitation materials.
By order | |||||
COEUR D'ALENE MINES CORPORATION | |||||
DENNIS E. WHEELER | |||||
Chairman of the Board |
Coeur d'Alene,d’Alene, Idaho
August ___, 2002
April 15, 2004
33
(Appendix A)
Appendix A
Pursuant to Title 30, Chapter 1, Idaho Code, the undersigned corporation amends its articles of incorporation as follows:
1. The name of the corporation is: "Coeur d'Alene Mines Corporation."
2. The text of the amendment is as follows:
Article II is amended by replacing paragraph (a) of Article II with the
following:
(a) The corporation is authorized to issue two classes of shares of capital
stock to be designated, respectively, "common stock" and "preferred stock". The
total number of such shares which the corporation shall have the authority to
issue shall be 270 million. The total number of shares of common stock
authorized to be issued shall be 250 million shares, $1.00 par value per share,
and the total number of shares of preferred stock authorized to be issued shall
be 20 million, $1.00 par value per share.
3. The date of adoption of the amendment(s) was: September 17, 2002.
4. Manner of adoption:
[ ] The amendment consists exclusively of matters which do not require
shareholder action pursuant to section 30-1-1002, Idaho Code, and was,
therefore, adopted by the board of directors.
[ ] None of the corporation's shares have been issued and was, therefore,
adopted by the incorporator board of directors.
[X] The number of shares outstanding and entitled to vote was
------------------------------------------------
The number of shares cast for and against each amendment was:
Amended article Shares for Shares against
--------------- ---------- --------------
1. | The name of the corporation is: “Coeur d’Alene Mines Corporation.” |
2. | The text of the amendment is as follows: |
Article II is amended by replacing paragraph (a) of Article II with the following: |
(a) The corporation is authorized to issue two classes of shares of capital stock to be designated, respectively, “common stock” and “preferred stock”. The total number of such shares which the corporation shall have the authority to issue shall be 510 million. The total number of shares of common stock authorized to be issued shall be 500 million shares, $1.00 par value per share, and the total number of shares of preferred stock authorized to be issued shall be 10 million, $1.00 par value per share. |
3. | The date of adoption of the amendment(s) was: May 20, 2004. |
4. | Manner of adoption: |
|_| The amendment consists exclusively of matters which do not require shareholder action pursuant to section 30-1-1002, Idaho Code, and was, therefore, adopted by the board of directors |
|_| None of the corporation's shares have been issued and was, therefore, adopted by the |
|_| incorporator |_| board of directors. |
|X| | The number of shares outstanding and entitled to vote was ____________________. |
The number of shares cast for and against each amendment was: |
Amended article | Shares for | Shares against |
Article II |
Dated: September ___, 2002
-----------------------------
May______, 2004
Signed:
------------------------------------------------------------
___________________________________
Name: Dennis E. Wheeler
------------------------------------------------------------
Capacity: Chairman of the Board The undersigned appoints Dennis E. Wheeler or, in his absence, James A. Sabala, proxy of the undersigned, with full power of substitution, to vote all shares of Coeur d’Alene Mines Corporation common stock the undersigned is entitled to vote at the Annual Meeting of Shareholders to be held on Thursday, May 20, 2004, or at any adjournment thereof, with all powers the undersigned would have if personally present. The shares will be voted as directed, and with respect to other matters of business properly before the meeting as the Proxies shall decide. If no direction is provided is made, this Proxy will be voted FOR Proposals 1 and 2. Address Change/Comments (Mark the corresponding box on the reverse side) Signature(s)________________________________________________________ Name(s)___________________________________________ Dated: __________, 2004 Sign exactly as your name appears hereon. When signing in a representative or fiduciary capacity, indicate the title. If shares are held jointly, each holder should sign.President and Chief Executive Officer
------------------------------------------------------------
COEUR D'ALENE MINES CORPORATION
400 Coeur d'Alene Mines Building, 505 Front Avenue, P.O. Box I
Coeur d'Alene, Idaho 83814
COMMON STOCK PROXY
This proxy is solicited by the Board of Directors for the
ANNUAL MEETING OF SHAREHOLDERS on September 17, 2002, 9:30 A.M., local time
The undersigned appoints Dennis E. Wheeler or, in his absence, Geoffrey A. Burns, proxy of the undersigned, with full power of
substitution, to vote all shares of Coeur d'Alene Mines Corporation common stock the undersigned is entitled to vote at the Annual
Meeting of Shareholders to be held September 17, 2002,COEUR D’ALENE MINES CORPORATION
400 Coeur d’Alene Mines Building, 505 Front Avenue, P.O. Box I
Coeur d’Alene, Idaho 83814COMMON STOCK PROXY
This proxy is solicited by the Board of Directors for the
ANNUAL MEETING OF SHAREHOLDERS on May 20, 2004, 9:30 A.M., local timeThe Shares will be voted as directed, and with respect to other matters of business properly before the meeting as the | | Please mark Proxies shall decide. If no direction is provided is made, this Proxy will be voted FOR Proposals 1, 2, 3, 4 and 5.
- -----------------------------------------------------------------------------------------------------------------------------------
The Shares will be voted as directed, and with respect to other matters of [X] Please mark
business properly before the meeting as the Proxies shall decide. If no Your votes like direction is provided, this Proxy will be voted FOR Proposals 1 through 5. this in blue or
black ink.
and 2.here for address The Board of Directors recommends voting FOR the following proposals:
- ----------------------------------------------------- ----------------------------------------------------------------------
change or comments. See reverse side 1. ELECTION OF DIRECTORS 2. PROPOSAL REGARDING AMENDMENT TO FOR AGAINST ABSTAIN
RESTATED AND AMENDED ARTICLES OF INCORPORATION
FOR all nominees listed WITHHOLD AUTHORITY AUTHORIZING INCREASE IN NUMBER OF SHARES [ ] [ ] [ ]OF COMMON STOCK TO 500 MILLION SHARES.FOR
|_|AGAINST
|_|ABSTAIN
|_|
FOR all nominees
listed below (except as marked
WITHHOLD AUTHORITY
To vote for all OF COMMON STOCKnominees
listed below
|_|
3. IN THEIR DISCRETION, THE PROXIES ARE
AUTHORIZED TO 250 MILLION.VOTE UPON SUCH OTHER BUSINESS AS MAY COME BEFORE THE MEETING.
FOR
|_|
AGAINST
|_|
ABSTAIN
|_|(except as
marked to the
contrary below) nominees listed below
[ ] [ ] 3. PROPOSAL REGARDING INCREASE IN FOR AGAINST ABSTAIN
AUTHORIZED SHARES OF COMMON STOCK UNDER
EXECUTIVE COMPENSATION PLAN. [ ] [ ] [ ]
4. PROPOSAL REGARDING INCREASE IN FOR AGAINST ABSTAIN
AUTHORIZED SHARES OF COMMON STOCK UNDER
NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN. [ ] [ ] [ ]
(INSTRUCTION;
|_|(INSTRUCTION; To withhold authority to vote for 5. IN THEIR DISCRETION, THE PROXIES ARE FOR AGAINST ABSTAIN any individual nominee, strike a line through the AUTHORIZED TO VOTE UPON SUCH OTHER
nominee's name on the list below.) BUSINESS AS MAY COME BEFORE THE MEETING. [ ] [ ] [ ]
C.D.Nominees: Cecil D. Andrus, J.J.James. J. Curran, J.A.James. A. McClure, R.E.Robert E. Mellor, J.H.John H. Robinson, D.T. Salido, J. Kenneth Thompson, X.G.
Topete, Timothy R. Winterer and Dennis E. Wheeler
- ----------------------------------------------------- ----------------------------------------------------------------------
Wheeler.Y I plan to attend the meeting E [ ] |_|N [ ]
|_|S O PLEASE COMPLETE, SIGN, DATE AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE
Signature Signature Dated: , 2002
------------------------------------------ ------------------------------------------ -----------
Sign exactly as your name appears hereon. When signing in a representative or fiduciary capacity, indicate the title. If shares are
held jointly, each holder should sign.