Audit Committee Report
The Audit Committee of the Board is responsible for providing independent, objective oversight of the Corporation’s accounting functions and internal controls. The Audit Committee acts under a written charter first adopted and approved by the Board in 2007, and most recently amended in 2016, which is reviewed by the Board annually. Each member of the Audit Committee is “independent” within the meaning of Rule 10A-3 of the Exchange Act and Section 803(B)(2) the NYSE American Company Guide and “independent” and “financially literate” within the meaning of such terms in NI 52-110. In accordance with Section 407 of the United States Sarbanes-Oxley Act of 2002 and Item 407(d)(5)(ii) and (iii) of Regulation S-K, the Board has identified Tracy A. Stevenson as the “Audit Committee Financial Expert.” A copy of the Audit Committee Charter is available on the Corporation’s website at www.vistagold.com.
The responsibilities of the Audit Committee include recommending to the Board an accounting firm to be nominated for Shareholder approval as the Corporation’s independent auditor. The Audit Committee is responsible for recommending to the Board that the Corporation’s financial statements and the related management’s discussion and analysis be included in its Annual Report on Form 10-K. The Audit Committee took a number of steps in making this recommendation for fiscal year 2019.
First, the Audit Committee discussed with Plante Moran those matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board, including information regarding the scope and results of the audit. These communications and discussions are intended to assist the Audit Committee in overseeing the financial reporting and disclosure process.
Second, the Audit Committee discussed with Plante Moran the independence of Plante Moran and received from Plante Moran the letter required by applicable standards of the Public Company Accounting Oversight Board for independent auditor communications with Audit Committees, as may be modified or supplemented, concerning its independence as required under applicable independence standards for auditors of public companies. This discussion and disclosure assisted the Audit Committee in evaluating such independence.
Finally, the Audit Committee reviewed and discussed, with the Corporation’s management and Plante Moran, the Corporation’s audited consolidated balance sheets at December 31, 2019, and consolidated statements of income, cash flows and shareholders’ equity for the fiscal year ended December 31, 2019 and the related management’s discussion and analysis to be included in the Corporation’s Annual Report on Form 10-K.
Based on the discussions with Plante Moran concerning the audit, their independence, the financial statement review, and such other matters deemed relevant and appropriate by the Audit Committee, the Audit Committee recommended to the Board that the Corporation’s financial statements and the related management’s discussion and analysis be included in the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019.
Submitted on behalf of the Audit Committee
Tracy A. Stevenson (Chairman)
Deborah J. Friedman
John M. Clark
Executive Officers
As of March 11, 2020, the executive officers of the Corporation, their ages and their business experience and principal occupation during the past five years were as follows:
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Name, Position and Age
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Held Office Since
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Business Experience During Past Five Years
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Frederick H. Earnest, President, Chief Executive Officer and Director
Age - 58
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August 1, 2007 – January 1, 2012 (President, Chief Operating Officer and Director) January 1, 2012 - present (President, Chief Executive Officer and Director)
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Chief Executive Officer of the Corporation since January 2012; President of the Corporation since August 2007; Director of Midas Gold Corp. from April 2011 to April 2014; Former Chief Operating Officer of the Corporation from August 2007 to January 2012. Mr. Earnest has over 30 years of experience in the mining industry where he has worked in the development, construction, operation and turnaround of gold, base metal, and industrial minerals operations. He has extensive international experience with more than 10 years in Latin America. Mr. Earnest holds a B.S. in mining engineering from the Colorado School of Mines.
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Douglas L. Tobler
Chief Financial Officer
Age - 61
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July 1, 2019
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Chief Financial Officer of the Corporation since July 1, 2019. Mr. Tobler has more than 35 years of corporate financial management experience gained as a chief financial officer, CPA and corporate advisor. He has extensive experience with growth-stage resource companies, including most recently as CFO of Lydian International from April 2014 to June 2019. Prior to Lydian, Mr. Tobler was CFO of Alacer Gold Corp. from April 2004 to May 2012, throughout the development and early years of operations of the Çöpler Gold Mine in Turkey. While a CPA and advisor, Mr. Tobler assisted numerous mining clients with strategic financial and corporate accounting objectives. He was also a fellow with Coopers & Lybrand’s National Accounting and SEC Directorate. Mr. Tobler holds a B.S. in Business Administration (Accounting) from the University of Colorado.
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John W. Rozelle, Senior Vice President Age - 65
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August 1, 2012
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Senior Vice President of the Corporation since August 2012; Vice President of Technical Services of the Corporation from May 2011 to August 2012. Manager of the Mineral Resource Division of Tetra Tech from September 2007 to May 2011. Mr. Rozelle has more than 39 years of experience as an economic geologist in the mining industry with both operating and consulting companies. Mr. Rozelle has experience with a large number of gold deposits worldwide, having been involved with the estimation and quantification of mineral resources, as well as management of economic studies as a project manager. Mr. Rozelle has a B.A. in geology from State University of New York Platsburg and a M.Sc. in geochemistry from the Colorado School of Mines. Mr. Rozelle is a “Qualified Person” under Canadian National Instrument 43-101 guidelines.
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Pamela A. Solly
Vice President of Investor Relations
Age - 55
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April 1, 2019
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Vice President of Investor Relations of the Corporation since April 1, 2019; Ms. Solly has more than has 25 years of public company experience strategically developing, coordinating and executing investor relations and corporate communications programs. Prior to joining Vista, Ms. Solly was Vice President of Investor Relations of Lydian International from December 2016 to March 2019. Ms. Solly was Director of Investor Relations at Thompson Creek Metals Company from May 2010 to November 2016. Ms. Solly holds a Bachelor of Science degree in Business Administration from Regis University and a Master of International Management degree from the University of Denver. She is a Director of the Denver Gold Group.
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To our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant to which the officer was selected to serve as an officer.
Executive Compensation
Compensation Discussion and Analysis
Compensation Program Objectives
The Corporation’s compensation programs and policies are designed to be competitive with similar mining companies and to recognize and reward executive performance consistent with the achievement of the Corporation’s objectives. The programs and policies are intended to provide the Corporation with the means to attract and retain capable and experienced executive talent. The Compensation Committee’s role and philosophy is to ensure that the Corporation’s compensation practices, as applied to the actual compensation paid to the Corporation’s executive officers, are aligned with the Corporation’s overall business objectives and with Shareholder interests.
The Compensation Committee considers a variety of factors when determining compensation policies and programs and individual compensation levels. These factors include the long-range interests of the Corporation and its Shareholders, overall technical, professional and experience needs of the Corporation, the competitive requirements to attract and retain key employees, and the Compensation Committee’s assessment of the position requirements for each executive’s role in the Corporation. The Compensation Committee does not weigh any of these factors more heavily than others and does not use any formula to assess these factors, but rather considers each factor in its judgment and discretion.
The Compensation Committee has the authority to engage and compensate, at the expense of the Corporation, any outside advisor that it determines necessary to permit it to carry out its duties. Commencing on May 25, 2018, the Compensation Committee engaged Hugessen Consulting Inc. (“Hugessen”), an independent compensation advisor, to review director and executive officer compensation. Fees billed to the Corporation by Hugessen during 2018 in connection with the review of director and executive officer compensation were C$36,789. The Corporation did not pay any fees to Hugessen or engage them or any other compensation consultant for any other services in 2019. During 2018, the Compensation Committee was assisted by Hugessen in determining appropriate levels of compensation for the Corporation’s directors and executive officers. Hugessen compiled data from publicly available information for all categories of compensation (directors’ fees, executive base salaries, share-based incentives, and short term incentives) from a peer group of companies in the mining sector. Hugessen’s peer group of companies was developed using one or more of the following selection criteria:
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Canadian and/or U.S. listed;
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market capitalization substantially similar to the Corporation;
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gold, diversified metals and mining, or precious metals/minerals industry; and/or
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stage of development, complexity of operation/business strategy similar to the Corporation.
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Based upon considerations of the selection criteria, the following peer group of companies was used by Hugessen for its compensation review, (collectively, the “Peer Group”).
Belo Sun Mining Corp.
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Liberty Gold Corp.
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Excelsior Mining Corp.
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Midas Gold Corp.
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Gabriel Resources Ltd.
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NuLegacy Gold Corporation
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Golden Minerals Company
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Orezone Gold Corporation
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Goldquest Mining Corp.
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Pershing Gold Corporation
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International Tower Hill Mines Ltd.
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Star Diamond Corporation
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INV Metals Inc.
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Victoria Gold Corp.
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In 2013, consistent with the principle of aligning corporate compensation with corporate objectives and Shareholders’ interests, all members of senior management, in consultation with the Compensation Committee, accepted a 20% reduction to base compensation together with the elimination of discretionary incentive payments under the Corporation’s Short Term Incentive Plan (“STIP”). These changes to management compensation took effect August 1, 2013. In July 2015, with an effective date of August 1, 2015, the Board restored one-half of these compensation reductions, resulting in all members of senior management remaining at a 10% reduction to base compensation. In addition, at the same time, the Board authorized a one-time payment to each member of senior management, equal to 10% of each respective senior manager’s base salary, to be paid in cash or the equivalent value in RSUs, or a combination thereof, at the recipient’s option. Similarly, in 2016, the Board authorized a one-time payment to each member of senior management, equal to 10% of each respective senior manager’s base salary, to be paid in cash or the equivalent value in RSUs, or a combination thereof, at the recipient’s option. In July 2017, with an effective date of August 1, 2017, the Board restored the remaining 10% reduction to base compensation. In addition, a one-time payment equal to 7/10 of 10% of each respective manager’s base salary was paid in cash to each member of senior management.
The Board determines when it is appropriate to grant annual discretionary incentive awards. No annual incentive awards were granted in years 2012-2017. Based on the achievement of goals and objectives in 2017 an incentive award was paid in March 2018. No incentive awards were paid in 2019.
Role of Executive Officers in Determining Compensation
The Compensation Committee reviews and recommends to the Board the compensation policies and programs of the Corporation, as well as salary and benefit levels for individual executives. The President and Chief Executive Officer of the Corporation may not be present during meetings of the Compensation Committee when his compensation is being discussed. The executive officers prepare and present to the Compensation Committee, such surveys, analyses, reports and recommendations, as the Compensation Committee may request, including independent industry surveys. The Board makes the final determination regarding the Corporation’s compensation programs and practices.
Elements of the Corporation’s Compensation Program for Fiscal Year 2019
The 2019 compensation plan for executive officers was comprised of the following components: base salary, cash-based awards under the STIP, awards of Phantom Units (defined below) and share-based awards under the Corporation’s stock option plan (the “Stock Option Plan”) and the Corporation’s long term equity incentive plan (the “LTIP”). Directors are eligible to receive share-based awards under the Stock Option Plan and the Corporation’s deferred share unit plan (the “DSU Plan”).
There is no set policy or target regarding allocation between cash and non-cash elements of the Corporation’s compensation program. The Compensation Committee reviews annually the total compensation package of the Corporation’s executives on an individual basis, against the backdrop of the compensation goals and objectives and the industry compensation data described above, and makes recommendations to the Board concerning the individual components of compensation.
Base Salary
As a general rule for establishing base salaries, the Compensation Committee periodically reviews competitive market data for each executive position and determines placement of the employee at an appropriate level in a range. Compensation levels are typically negotiated with the candidate for the position prior to his or her final selection as an executive officer. Salaries for the Corporation’s executive officers are reviewed at least annually to reflect external factors such as market and inflation as well as overall corporate performance and the results of internal performance reviews.
Short Term Incentive Plan (STIP)
The STIP is intended to allow executive officers and management personnel to earn discretionary incentive payments based on a percentage of base salary. All executive officers and management personnel participate in the STIP. Mr. Earnest, the President and Chief Executive Officer of the Corporation, is entitled to earn a discretionary incentive payment in an amount determined annually by the Board. The performance of the President and Chief Executive Officer is, however, generally evaluated using the same performance objectives applied to other executive officers and management personnel.
The Compensation Committee determines executive incentive compensation considering three primary factors: (1) corporate liquidity; (2) achievement of overall corporate goals, which are typically established early in each year; and, (3) individual performance.
The following table summarizes the criteria and weighting used to evaluate the performance of the executive officers. It summarizes the target and maximum discretionary incentive payments contemplated under the STIP.
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Performance Objectives and Relative Importance
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Target Bonus as a
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Maximum Bonus as a
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Bonus paid in 2019 as a
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Corp. Performance
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Financial
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Project Advance
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Compliance
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Leadership Succession
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percentage of salary
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percentage of salary
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percentage of salary
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Frederick H. Earnest, President and Chief Executive Officer
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High
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High
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High
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High
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High
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50%
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100%
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0%
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Douglas L. Tobler, Chief Financial Officer
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High
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High
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Medium
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High
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Medium
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50%
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75%
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0%
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John W. Rozelle, Senior Vice President
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High
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Medium
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High
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High
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Medium
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50%
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75%
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0%
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In 2018 and 2019, the Corporation granted awards under the STIP to incentivize and reward the achievement of corporate goals and objectives. During 2012 to 2017 and in 2019, the Corporation did not grant annual cash awards under the STIP. During such time, RSUs (defined below) were granted to incentivize and reward the achievement of corporate goals and objectives. See “Summary Compensation Table” below.
Phantom Units
Commencing 2018, the Corporation introduced a phantom unit compensation program for employees as a tool to link employee cash compensation to the Corporation’s share price performance. The Corporation granted 265,000 phantom units of the Corporation (each, a “Phantom Unit”) to certain employees during the year ended December 31, 2018 and has a total of 144,000 Phantom Units outstanding. The value of each Phantom Unit is equal to the Corporation’s share price on the vesting date and is payable in cash. The Phantom Units vest on fixed future dates provided the recipient continues to be affiliated with Vista on those dates.
Share-Based Incentive Awards
The Corporation provides share-based incentives to employees and directors under three separate share-based incentive plans, the Stock Option Plan, the LTIP, and the DSU Plan (collectively, the “Plans”), which are designed to align compensation with the enhancement of shareholder value. The Plans are administered by the Compensation Committee (as delegated by the Board).
The Stock Option Plan provides for grants of options to purchase Common Shares (“Options”) to directors, officers, employees and consultants of the Corporation or its subsidiaries (each, an “Optionee”).
The LTIP provides for grants of RSUs and Restricted Stock to officers, employees and consultants of the Corporation or its subsidiaries (each, an “LTIP Participant”). Effective May 2, 2019, non-employee directors are no longer eligible for grants of RSUs and Restricted Stock under the LTIP. The Plans are designed to be complementary.
The DSU Plan, which received shareholder approval on May 2, 2019, provides for grants of deferred share units (“DSUs”) to non-employee directors.
The following table sets out the maximum number of Common Shares issuable pursuant to the terms of the Plans and applicable securities laws.
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Maximum Number of Common Shares Issuable:
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Under Each Plan(1)
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Under the Plans in Aggregate (1)(2)
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To Non-Employee Directors
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At any Time to Insiders of the Corporation (1)(2)
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Issued to Insiders Within a Calendar Year(1)(2)
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To Any One Individual (1)(2)
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To Any One Individual Within a Calendar Year
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Stock Option Plan
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10%
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10%
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The lesser of: 1%(1) and an annual value of $150,000
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10%
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10%
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5%
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3,000,000 Common Shares
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LTIP
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5%
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10%
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N/A
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10%
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10%
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N/A
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3,000,000 Common Shares
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DSU Plan
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3%
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10%
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The lesser of: 1%(1) and an annual value of $150,000
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10%
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10%
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N/A
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N/A
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Notes:
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(1)
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To be calculated based on the aggregate number of issued and outstanding Common Shares on a non-diluted basis.
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(2)
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Together with all other security based compensation of the Corporation.
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As of March 9, 2020, the total number of Common Shares issuable under the Stock Option Plan, DSU Plan and LTIP was comprised (i) 1,387,000 Common Shares (or 1.4% of the total number of issued and outstanding Common Shares) issuable upon the due exercise of vested Options granted under the Stock Option Plan, (ii) 726,000 Common Shares (or 0.7% of the total number of issued and outstanding Common Shares) issuable upon the vesting of DSUs granted under the DSU Plan and (iii) 3,100,301 Common Shares (or 3.1% of the total number of issued and outstanding Common Shares) issuable upon the vesting of RSUs granted under the LTIP. The maximum number of Common Shares which may be reserved, set aside and made available for issue under the Stock Option Plan, DSU Plan, and LTIP combined is a variable number equal to 10% of the issued and outstanding Common Shares on the date of the grant on a non-diluted basis.
As of March 9, 2020, an aggregate of 5,213,301 Common Shares (or 5.2% of the total number of issued and outstanding Common Shares) are issuable under the Stock Option Plan, the DSU Plan and the LTIP pursuant to outstanding Options, DSUs and RSUs and 4,856,511 Common Shares (or 4.8% of the total number of issued and
outstanding Common Shares) in aggregate remain available for future grants under the Stock Option Plan, DSU Plan and LTIP.
As of March 9, 2020, 8,682,812 Common Shares (or 8.6% of the total number of issued and outstanding Common Shares) remain available for future grants under the Stock Option plan, 2,294,944 Common Shares (or 2.3% of the total number of issued and outstanding Common Shares) remain available for future grants under the DSU Plan, and 1,934,605 Common Shares (or 1.9% of the total number of issued and outstanding Common Shares) will remain available for future grants under the LTIP. Each amount of Common Shares remaining available for future grants set out above is subject to the maximum aggregate of grants under the Stock Option Plan, DSU Plan and LTIP combined of 10% of the issued and outstanding Common Shares on the date of the grant on a non-diluted basis.
Annual Burn Rates of Options and LTIP Awards
In accordance with the requirements of section 613 of the TSX Company Manual, the following table sets out the burn rate of Options and LTIP Awards as of the end of the financial year ended December 31, 2019 and for the two preceding financial years. As the DSU Plan is in its first fiscal year since adoption, the DSU Plan burn rate has been omitted. The burn rate is calculated by dividing the number of Options or LTIP Awards, as applicable, granted under the Plans during the relevant fiscal year by the weighted average number of securities outstanding for the applicable financial year.
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Year ended December
31, 2019
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Year ended December
31, 2018
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Year ended December
31, 2017
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Number of Options granted under the Stock Option Plan
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350,000
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1,142,000
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Nil
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Number of LTIP Awards granted under the LTIP
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1,412,500
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319,000
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966,003
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Weighted average of outstanding securities
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100,533,448
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99,738,461
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98,627,255
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Annual Burn Rate: Options
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0.3%
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1.1%
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Nil
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Annual Burn Rate: LTIP
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1.4%
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0.3%
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1.0%
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Further details of the objectives and operations of each of the Plans are discussed in the sections below.
Stock Option Plan
The Compensation Committee has discretion to determine (i) the total number of optioned shares made available under the Stock Option Plan, (ii) the directors, officers, employees and consultants of the Corporation or its subsidiaries who are eligible to receive Options, (iii) the time when and the price at which Options will be granted and exercised, and (iv) the conditions and restrictions on the exercise of Options.
The exercise price of an Option must not be less than the closing price of the Common Shares on (i) in the case of Options with an exercise price in U.S. dollars, the NYSE American, or (ii) in the case of Options with an exercise price in Canadian dollars, the TSX, in either case, on the last trading day preceding the date of grant.
Options become exercisable only after they vest in accordance with the respective option agreement and must expire no later than ten years from the date of grant; provided that, if the expiry date of an Option occurs during a blackout period, such expiry date will be extended pursuant to the terms of the Stock Option Plan. An Optionee has no rights whatsoever as a Shareholder in respect of unexercised Options. Options are subject to withholding taxes at the discretion of the Corporation.
Causes of Cessation of Options
Pursuant to the terms of the Stock Option Plan, if any Optionee ceases to be a director, officer or employee of the Corporation or its subsidiaries, as a result of termination for “cause” (as defined in the Stock Option Plan), all unexercised Options will immediately terminate. If an Optionee ceases to be a director, officer or employee of the Corporation, or its subsidiaries, or ceases to be a consultant to the Corporation, for any reason other than termination for cause, his or her Options may be exercised up to, but not after, the earlier of 30 days from the date of ceasing to be a director, officer, employee or consultant, or the expiry date of the Option to the extent they were exercisable. In the event of death of an Optionee, the legal representatives of such Optionee have the right to exercise the Options at any time up to, but not after, the earlier of 90 days from the date of death or the expiry date of such Option.
No Assignment or Transfer of Options
An Option is not transferable or assignable other than by will or other testamentary instrument or the laws of succession or administration and may be exercisable during the lifetime of the Optionee only by such Optionee.
Long Term Equity Incentive Plan (LTIP)
The Compensation Committee determines the persons to whom LTIP Awards are to be made; determines the type, size, terms and conditions of LTIP Awards; determines the prices to be paid for LTIP Awards; interprets the LTIP; adopts, amends and rescinds administrative guidelines and other rules and regulations relating to the LTIP; and makes all other determinations and takes all other actions it believes are necessary or advisable for the implementation and administration of the LTIP.
The LTIP provides that the Compensation Committee may, in its sole discretion, grant awards of RSUs and/or Restricted Stock to any LTIP Participant. All grants of LTIP Awards are subject to the terms and conditions of an LTIP Award agreement entered into between the Corporation and the LTIP Participant at the time the LTIP Award is granted.
RSUs are not Common Shares, but rather represent a right to receive from the Corporation at a future date Common Shares. The Compensation Committee has the authority to make the receipt of Common Shares under the RSUs conditional upon the expiry of a time-based vesting period, the attainment of specified performance goals or such other factors as the Compensation Committee determines in its discretion. Common Shares issuable pursuant to the vesting of RSUs will be registered in the name of the LTIP Participant and upon such issuance of Common Shares the vested RSUs will be cancelled. RSUs are settled in Common Shares, unless (i) the Company withholds shares equivalent to the value of employee withholding tax obligations which result from RSUs vesting; or (ii) the Corporation offers the LTIP Participant the option to receive cash in lieu of Common Shares based on the Fair Market Value (as defined in the LTIP) at the time of settlement.
Restricted Stock are Common Shares which are subject to such restrictions as the Compensation Committee may impose, such as forfeiture conditions, transfer restrictions or a restriction on, or prohibition against, the right to receive any dividend or other right or property with respect thereto. The Compensation Committee has the authority to establish the terms for the lapse of restrictions applicable to Restricted Stock conditional upon the expiry of a time-based vesting period, the attainment of specified performance goals or such other factors as the Compensation Committee may determine in its discretion. Upon grant of Restricted Stock, the Corporation issues and holds share certificates registered in the name of such LTIP Participants. The share certificates bear a legend referring to the LTIP Award agreement and the possible forfeiture of such shares of Restricted Stock.
The duration of the vesting period and other vesting terms applicable to grants of RSUs or Restricted Stock is determined at the time of the grant by the Compensation Committee and such vesting period must be a minimum of one year in duration. Notwithstanding certain provisions that allow the Compensation Committee to accelerate vesting of an award under the LTIP, the Compensation Committee cannot use this discretion to accelerate the vesting of an award under the LTIP to a period of less than one year in duration.
In administering the LTIP, the Compensation Committee conducts annual reviews of corporate performance and the LTIP Participants’ performance to determine whether performance goals have been achieved. The Compensation Committee also takes into consideration past LTIP Award grants and existing unvested LTIP Awards when considering whether to grant new LTIP Awards. The Compensation Committee typically sets goals for the LTIP Participant, which are aligned with items of corporate strategy. Performance goals in the past included items such as attainment of certain regulatory permits relating to Mt Todd; completion of economic and technical feasibility studies on Mt Todd, including the preliminary feasibility study for Mt Todd updated on September 9, 2019; and the achievement of certain share price performance criteria.
In 2019, overall corporate goals were divided into three broad categories:
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1.
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Corporate: achieve cost control and financing objectives, maintain compliance with all securities regulations, and conduct the Corporation’s business in an ethical and environmentally sound manner while ensuring all operations are conducted to protect employee safety and health.
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2.
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Strategic: increase shareholder value by achieving a valuation for Common Shares that reasonably reflects the fair value of the Mt Todd gold project.
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3.
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Mt Todd: attain project permitting and optimization, including identifying and completing optimization initiatives.
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Causes of Cessation of LTIP Awards
Except as otherwise determined by the Compensation Committee, upon a Termination Date (as defined in the LTIP) that occurred as a result of the death or disability of the LTIP Participant, all vested LTIP Awards will enure to the benefit of the LTIP Participant’s heirs, executors and administrators. Except as otherwise determined by the Compensation Committee, if an LTIP Participant’s employment, term of office or engagement is terminated for cause or in the case of a consultant participant, for breach of contract, any LTIP Awards held by the LTIP Participant (whether vested or not) are forfeited to the Corporation. The LTIP provides for a number of instances that permit the Compensation Committee to accelerate the vesting of any outstanding LTIP Awards.
Unless otherwise determined by the Compensation Committee or the Board at or after the date of grant, if an LTIP Participant ceases to be employed or engaged by the Corporation or its subsidiaries within 12 months following a Change in Control (as defined in the LTIP) for any reason other than for cause, voluntary resignation (other than for good reason (as defined by the LTIP)), retirement, death or disability, each LTIP Award held by that LTIP Participant that is not fully vested on the date at which such person ceases to be a director, officer or consultant shall become free of all restrictions, conditions and limitations, and become fully vested.
The Board shall have the discretion to authorize such steps to be taken as it may consider to be equitable and appropriate in the event of any Share Reorganization, Corporate Reorganization or Special Distribution (each of such terms as defined in the LTIP), including the acceleration of vesting in order to preserve proportionately the rights, value and obligations of the LTIP Participants holding LTIP Awards in such circumstances.
No Assignment or Transfer of LTIP Awards
No assignment or transfer of LTIP Awards, whether voluntary, involuntary, by operation of law or otherwise, vests any interest or right in such LTIP Awards whatsoever in any assignee or transferee. Immediately upon any assignment or transfer, or any attempt to make the same, such LTIP Awards will terminate, provided that any LTIP Awards held by a LTIP Participant that have vested at the Termination Date will enure to the benefit of the LTIP Participant’s heirs, executors and administrators.
Amendments to the Plans, Options, LTIP Award Agreements and DSUs
Subject to the rules, regulations and policies of the TSX, the NYSE American and applicable law, the Compensation Committee may, without notice or Shareholder approval, make certain amendments to the Plans or a specific Option, LTIP Award or DSU for the purposes of: (i) altering, extending or accelerating the terms of vesting; (ii)
amending the general vesting provisions; (iii) changing termination provisions; (iv) accelerating the expiry date of Options or LTIP Awards; (v) amending termination of employment provisions under the LTIP; (vi) making amendments to protect LTIP Participants; (vii) curing or correcting any ambiguity, defect, inconsistent provision or manifest error; (viii) amending definitions; (ix) making amendments of a “housekeeping” or administrative nature; (x) effecting amendments necessary to comply with the provisions of applicable laws, or desirable for any advantages of any tax law; and (xi) any other amendment, whether fundamental or otherwise, not requiring Shareholder approval under applicable law. No amendment of the Plans may contravene applicable laws, including the rules, regulations, and policies of the TSX and the NYSE American.
Shareholder approval must be obtained for amendments to the Plans that: (i) increase the maximum number of Common Shares issuable under the Plans; (ii) reduce the exercise price of an Option held by a non-insider of the Corporation; (iii) extend the term of any Options held by a non-insider of the Corporation, other than an extension during a Black Out Period; (iv) increase the number of Common Shares issuable to insiders of the Corporation or to non-employee director participants, as applicable; (v) permit Options or DSUs to be transferrable or assignable; (vi) to add categories of persons eligible to participate in the DSU Plan; (vii) amend the amendment provisions in the Plans; (viii) add any form of financial assistance to an LTIP Participant; or (ix) where approval is required by the Exchanges (whether it be Exchange or shareholder approval).
Approval by disinterested Shareholders is required for amendments that: (i) could result in the number of Common Shares issuable to insiders of the Corporation exceeding 10% of the issued and outstanding Common Shares; (ii) reduce the exercise price of an Option (including cancellation and reissuance at a lower exercise price) held by insiders of the Corporation; (iii) extend the term of any Option, LTIP Award or DSU held by insiders of the Corporation, other than an extension during a Black Out Period; and (iv) require disinterested Shareholder approval under applicable law (including rules of the Exchanges).
Perquisites and Other Personal Benefits
The Corporation’s named executive officers are not generally entitled to significant perquisites or other personal benefits not offered to the Corporation’s employees. The Corporation does sponsor a qualified tax-deferred savings plan in accordance with the provisions of Section 401(k) of the Tax Code, which is described further below under the heading “Executive Compensation - Pension and Retirement Savings Plans”.
Compensation for the Corporation’s Named Executive Officers in 2019
The Corporation’s named executive officers (defined below) for the fiscal year ended December 31, 2019 were Frederick H. Earnest, who served as the Corporation’s President and Chief Executive Officer, Douglas L. Tobler who served as the Corporation’s Chief Financial Officer commencing July 1, 2019 and John W. Rozelle, who served as the Corporation’s Senior Vice President.
The Corporation’s employment agreements with our named executive officers are described below under the heading “Executive Compensation - Executive Employment Agreements”. The compensation paid to the Corporation’s named executive officers is described below under the heading “Executive Compensation - Summary Compensation Table”.
Effects of Regulatory Requirements on Executive Compensation
Section 409A of the Tax Code generally affects the granting of most forms of deferred compensation which were not earned and vested prior to 2005. The Corporation’s compensation program is designed to comply with the final regulations of the U.S. Internal Revenue Service and other guidance with respect to Section 409A of the Tax Code, and we anticipate that the Compensation Committee will continue to design and administer the Corporation’s compensation programs accordingly.
Various rules under current generally accepted accounting practices impact the manner in which the Corporation accounts for grants of Options to employees, including executive officers, on its financial statements. While the Compensation Committee reviews the effect of these rules (including FAS 123(R)) when determining the form and
timing of grants of Options to the Corporation’s employees, including executive officers, this analysis is not necessarily the determinative factor in any such decision regarding the form and timing of these grants.
Compensation Committee Interlocks and Insider Participation
No executive officer of the Corporation is or has been a director or a member of the Compensation Committee of another entity having an executive officer who is or has been a director or a member of the Compensation Committee of the Corporation.
Compensation Committee Report on Executive Compensation
The Compensation Committee has reviewed and discussed this Compensation Discussion and Analysis with management and, based on such review and discussions, the Compensation Committee recommended to the Board of the Corporation that this Compensation Discussion and Analysis be included in this Information Circular.
Submitted on behalf of the Compensation Committee
John M. Clark (Chairman)
W. Durand Eppler
Tracy A. Stevenson
The above filed report of the Compensation Committee will not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference in any of the Corporation’s filings under the United States Securities Act of 1933 or the Exchange Act, each as amended, except to the extent that we specifically so incorporate the same by reference.
Summary Compensation Table
The table below sets forth, for the fiscal years indicated, all compensation awarded to, paid to or earned by (i) those individuals who, during the fiscal year ended December 31, 2019, served as the Corporation’s Chief Executive Officer, (ii) Chief Financial Officer and (iii) the Corporation’s three other most highly compensated executive officers whose total compensation was, individually, more than C$150,000 during the fiscal year ended December 31, 2019. These officers are referred to in this Information Circular as the Corporation’s “named executive officers”.
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Name and Principal Position
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Year
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Salary(1) ($)
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Bonus(2)
($)
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Stock Awards(3)
($)
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Option Awards(3)(4)
($)
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All Other Compensation(5)(6)
($)
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Total(7)
($)
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Frederick H. Earnest,
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2019
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325,000
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–
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227,430
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–
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11,200
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563,630
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President and Chief Executive
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2018
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325,000
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75,000
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164,160
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104,139
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10,900
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679,199
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Officer
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2017
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325,000
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–
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231,681
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–
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10,800
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567,481
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Douglas L. Tobler
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2019
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137,500
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–
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49,220
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42,969
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5,500
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235,189
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Chief Financial Officer
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John W. Rozelle,
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2019
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225,000
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–
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74,784
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–
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10,810
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310,594
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Senior Vice President
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2018
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225,000
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50,000
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45,800
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28,859
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8,250
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357,909
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2017
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225,000
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–
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64,367
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–
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10,800
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300,167
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_____________________________
(1)Effective on August 1, 2013, senior management accepted a 20% reduction to base salary. Effective on August 1, 2015, the Board authorized: (i) restoration of one-half of the 20% reduction in base salary, resulting in a remaining 10% reduction to base salary; and (ii) a one-time payment equal to 10% of base salary, of which Mr. Earnest was paid in the equivalent value in RSUs, while Mr. Rozelle was paid in cash. Similarly, in 2016, a one-time payment equal to 10% of base salary, of which Mr. Earnest was paid in the equivalent value in RSUs, while Mr. Rozelle was paid in cash. In July 2017, with an effective date of August 1, 2017, the Board restored the remaining 10% reduction to base compensation. In addition, a one-time payment equal to 7/10 of 10% of each respective manager’s base salary was paid in cash to each member of senior management.
(2)In first quarter of 2018, the Corporation paid a cash bonus pursuant to the STIP to each named executive officer based on achievement of performance goals.
(3)For assumptions regarding the valuation of LTIP Awards, phantom units and Options, see note 6 to the Corporation’s audited annual financial statements for the year ended December 31, 2019 as filed with the Corporation’s Annual Report on Form 10-K on February 27, 2020.
(4)The amounts in this column represent the dollar amounts for the aggregate grant-date fair value computed in accordance with FASB ASC Topic 718, of Options granted pursuant to the Stock Option Plan.
(5)Perquisites and other personal benefits for the most recently completed financial year do not exceed $10,000 for any of the named executive officers unless otherwise noted.
(6)Represents the Corporation’s contribution under the Corporation’s Retirement Savings Plan, except where otherwise indicated. The named executive officers of the Corporation participate in this plan on the same basis as all other employees of the Corporation. See “Pension and Retirement Savings Plans”.
(7)Mr. Tobler was appointed as CFO of the Corporation effective July 1, 2019 to replace John F. (Jack) Engele upon his retirement effective as of the same date. Mr. Tobler’s salary on an annualized basis is $275,000.
Executive Employment Agreements
Employment Agreement with Frederick H. Earnest. Frederick H. Earnest has been engaged under an employment contract effective September 22, 2006, pursuant to which he was initially engaged to serve as Senior Vice President of Project Development of the Corporation and Vista Gold U.S., Inc., its wholly-owned subsidiary. From August 1, 2007 to January 1, 2012, Mr. Earnest served as President and Chief Operating Officer of the Corporation and of Vista Gold U.S., Inc., which was reflected in an employment agreement dated March 17, 2009. Since January 1, 2012, Mr. Earnest has served as President and Chief Executive Officer of the Corporation and Vista Gold U.S., Inc. Effective March 17, 2009, Mr. Earnest’s employment agreement was amended and restated, and it was further
amended effective January 1, 2012. On November 1, 2012, Mr. Earnest entered a new employment agreement, which was amended effective March 12, 2014, January 1, 2016 and March 8, 2019.
Pursuant to the terms of his amended employment contract, Mr. Earnest is to receive an annual base salary of $325,000 and annual discretionary incentive payments. The grant of any incentive payment shall be in the sole discretion of the Board and shall be earned only after the grant thereof by the Board. Mr. Earnest’s eligibility to receive such incentive payment is conditioned upon his continued employment, both at the time the Board considers the grant of incentive payments and at the time such incentive payments are actually granted and paid. Mr. Earnest is also eligible to receive other benefits made available to the Corporation’s senior executive officers, including participation in any benefit plans and policies. Effective August 1, 2013, Mr. Earnest received a 20% reduction to his salary and elimination of discretionary incentive payments under the STIP. In July 2015, with an effective date of August 1, 2015, the Board restored one-half of the 20% compensation reduction, resulting in a remaining 10% reduction to Mr. Earnest’s base compensation. In addition, at the same time, the Board authorized a one-time payment equal to 10% of Mr. Earnest’s base salary, which was paid in the equivalent value in RSUs, at Mr. Earnest’s option. Similarly, in 2016, the Board authorized a one-time payment equal to 10% of Mr. Earnest’s base salary, which was paid in the equivalent value in RSUs, at Mr. Earnest’s option. In July 2017, with an effective date of August 1, 2017, the Board restored the remaining 10% reduction to base compensation for Mr. Earnest. In addition, a one-time payment equal to 7/10 of 10% Mr. Earnest’s base salary was paid in cash. For the year ended December 31, 2018, in addition to his annual salary, Mr. Earnest received a cash bonus of $75,000 pursuant to the STIP based on achievement of performance goals.
On July 24, 2018, the Corporation granted Mr. Earnest 114,000 phantom units. The phantom units vest in three equal parts: 1/3 at 12 months from grant, 1/3 at 24 months from grant, and 1/3 at 36 months from grant. If Mr. Earnest is no longer employed by or contractually affiliated with Vista at the vesting date, he will forfeit the right to his phantom units. At each vesting date, each phantom unit will be settled in cash at an amount equal to Vista’s closing share price on that day.
In addition, in 2017, the Corporation granted to Mr. Earnest 277,000 RSUs to receive 277,000 Common Shares under the LTIP. In 2018, the Corporation granted to Mr. Earnest 126,000 RSUs to receive 126,000 Common Shares under the LTIP. In 2019, the Corporation granted to Mr. Earnest 473,000 RSUs to receive 473,000 Common Shares under the LTIP. See “Executive Compensation - Outstanding Equity Awards and Options Exercised as at December 31, 2019 Table” below for a description of vesting and other terms applicable to Mr. Earnest’s Options.
Employment Agreement with Douglas L. Tobler. Douglas L. Tobler has been engaged under an employment contract effective July 1, 2019, pursuant to which he was engaged to serve as Chief Financial Officer of the Corporation and Vista Gold U.S., Inc., its wholly-owned subsidiary.
Pursuant to the terms of his employment contract, Mr. Tobler is to receive an annual base salary of $275,000 and annual discretionary incentive payments. The grant of any incentive payment shall be in the sole discretion of the Board and shall be earned only after the grant thereof by the Board. Mr. Tobler’s eligibility to receive such incentive payment is conditioned upon his continued employment, both at the time the Board considers the grant of incentive payments and at the time such incentive payments are actually granted and paid. Mr. Tobler is also eligible to receive other benefits made available to the Corporation’s senior executive officers, including participation in any benefit plans and policies.
In 2019, the Corporation granted to Mr. Tobler 63,500 RSUs to receive 63,500 Common Shares under the LTIP. See “Executive Compensation - Outstanding Equity Awards and Options Exercised as at December 31, 2019 Table” below for a description of vesting and other terms applicable to Mr. Tobler’s Options.
Employment Agreement with John W. Rozelle. John W. Rozelle has been engaged under an employment contract effective May 16, 2011, pursuant to which he was initially engaged to serve as Vice President Technical Services of the Corporation and Vista Gold U.S., Inc., its wholly-owned subsidiary. Mr. Rozelle entered into a new employment agreement on August 1, 2012, Mr. Rozelle has served as Senior Vice President of the Corporation and Vista Gold U.S., Inc. Effective November 1, 2012, Mr. Rozelle entered a new employment agreement, which was amended effective January 1, 2016.
Pursuant to the terms of his amended employment contract, Mr. Rozelle is to receive an annual base salary of $225,000 and annual discretionary incentive payments. The grant of any such incentive payment shall be in the sole discretion of the Board and shall be earned only after the grant thereof by the Board. Mr. Rozelle’s eligibility to receive such incentive payment is conditioned upon his continued employment, both at the time the Board considers the grant of incentive payments and at the time such incentive payments are actually granted and paid. Mr. Rozelle is also eligible to receive other benefits made available to the Corporation’s senior executive officers, including participation in any benefit plans and policies. Effective August 1, 2013, Mr. Rozelle received a 20% reduction to his salary and elimination of discretionary incentive payments under the STIP. In July 2015, with an effective date of August 1, 2015, the Board restored one-half of the 20% compensation reduction, resulting in a remaining 10% reduction to Mr. Rozelle’s base compensation. In addition, at the same time, the Board authorized a one-time payment equal to 10% of Mr. Rozelle’s base salary, which was paid in cash, at Mr. Rozelle’s option. Similarly, in 2016, the Board authorized a one-time payment equal to 10% of Mr. Rozelle’s base salary, which was paid in cash, at Mr. Rozelle’s option. In July 2017, with an effective date of August 1, 2017, the Board restored the remaining 10% reduction to base compensation for Mr. Rozelle. In addition, a one-time payment equal to 7/10 of 10% Mr. Rozelle’s base salary was paid in cash. For the year ended December 31, 2018, in addition to his annual salary, Mr. Rozelle received a cash bonus of $50,000 pursuant to the STIP based on achievement of performance goals.
On July 24, 2018, the Corporation granted Mr. Rozelle 32,000 phantom units. The phantom units vest in three equal parts: 1/3 at 12 months from grant, 1/3 at 24 months from grant, and 1/3 at 36 months from grant. If Mr. Earnest is no longer employed by or contractually affiliated with Vista at the vesting date, he will forfeit the right to his phantom units. At each vesting date, each phantom unit will be settled in cash at an amount equal to Vista’s closing share price on that day.
In addition, in 2017, the Corporation granted Mr. Rozelle 77,000 RSUs to receive 77,000 Common Shares under the LTIP. In 2018, the Corporation granted to Mr. Rozelle 35,000 RSUs to receive 35,000 Common Shares under the LTIP. In 2019, the Corporation granted to Mr. Rozelle 158,000 RSUs to receive 158,000 Common Shares under the LTIP. See “Executive Compensation - Outstanding Equity Awards and Options Exercised as at December 31, 2019 Table” below for a description of vesting and other terms applicable to Mr. Rozelle’s Options.
Grants of Plan Based Awards as at December 31, 2019 Table
A summary of plan-based awards granted during the year ended December 31, 2019 to named executive officers is set out in the table below. All grants are of RSUs under the LTIP.
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Name
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Grant Date
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All Other Stock Awards: Number of Shares of Stock or Units
|
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Grant Date Fair Value of Stock and Option Awards(1) ($)
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Frederick H. Earnest,
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5/2/2019
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473,000
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227,430
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President and Chief Executive Officer
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|
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|
|
|
|
|
|
|
|
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Douglas L. Tobler
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|
7/30/2019
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63,500
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49,220
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Chief Financial Officer
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|
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|
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|
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|
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John W. Rozelle,
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|
|
5/2/2019
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|
158,000
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74,784
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Senior Vice President
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|
|
|
|
|
|
|
________________________________
(1) The base price for Common Shares underlying grants of RSUs awarded under the LTIP is the closing market price of the Common Shares on the NYSE American on the day prior to the date of the grant. Pursuant to the terms of the Stock Option Plan, the exercise price for Common Shares underlying grants awarded under the Stock Option Plan is not less than the closing market price of the Common Shares on either the TSX or the NYSE American as of the day prior to the date of the grant.
The reported high and low trading prices of the Common Shares on the NYSE American for the 30 days prior to the date of the grants of RSUs referred to above are set out in the table below.
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NYSE American
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High
|
|
Low
|
4/1/2019 – 5/1/2019 (RSUs)
|
|
$0.73
|
|
$0.58
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6/29/2019 – 7/29/2019 (RSUs)
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|
$0.96
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|
$0.71
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Outstanding Equity Awards and Options Exercised as at December 31, 2019 Table
A summary of the number and the value of the outstanding equity awards at December 31, 2019 held by the named executive officers is set out in the table below.
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Option Awards
|
|
Stock Awards(1)
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Name
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Number of Securities Underlying Unexercised Options (#) Exercisable
|
|
Option Exercise Price ($)
|
|
Option Expiration Date
|
|
Value of unexercised in-the-money options ($)
|
|
Number of Shares or Units of Stock That Have Not Vested (#)
|
|
Market Value of Shares or Units of Stock That Have Not Vested ($)
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Frederick H. Earnest,
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66,666
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0.75
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|
3/9/2023
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|
—
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|
25,333(2)
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|
18,493
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President and
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|
98,000
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|
0.62
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7/24/2023
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|
10,780
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|
473,000(3)
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|
345,290
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Chief Executive Officer
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|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
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|
Douglas L. Tobler
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|
75,000
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|
0.77
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|
6/27/2024
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|
—
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|
63,500(4)
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|
46,355
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Chief Financial Officer
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|
|
|
|
|
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|
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|
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|
|
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John W. Rozelle,
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33,333
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0.75
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3/9/2023
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|
—
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|
7,067(5)
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|
5,159
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Senior Vice President
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|
8,667
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|
0.62
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|
7/24/2023
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|
953
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|
158,000(6)
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|
115,340
|
________________________________
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(1)
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Each RSU represents a contingent right to receive one Common Share.
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(2)
|
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RSUs vest on August 3, 2020.
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(3)
|
|
165,000 of the RSUs vest May 2, 2020 provided share price performance of the Common Shares meets certain criteria and based on achievement of certain goals and objectives. 185,000 of the RSUs vest on May 2, 2021 provided share price performance of the Common Shares meets certain criteria; 41,000 vest on May 2, 2020, 41,000 vest on May 2, 2021, and 41,000 vest on May 2, 2022.
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(4)
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21,500 of the RSUs vest July 30, 2020 provided share price performance of the Common Shares meets certain criteria and based on achievement of certain goals and objectives. 25,000 of the RSUs vest on July 30, 2021 provided share price performance of the Common Shares meets certain criteria; 5,666 vest on July 30, 2020, 5,667 vest on July 30, 2021, and 5,667 vest on July 30, 2022.
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(5)
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RSUs vest on August 3, 2020.
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(6)
|
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46,000 of the RSUs vest May 2, 2020 provided share price performance of the Common Shares meets certain criteria and based on achievement of certain goals and objectives. 67,000 of the RSUs vest on May 2, 2021 provided share price performance of the Common Shares meets certain criteria; 15,000 vest on May 2, 2020, 15,000 vest on May 2, 2021, and 15,000 vest on May 2, 2022.
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In 2019, the following Options were exercised by named executive officers: 25,000 Options were exercised by Mr. Earnest and 25,000 Options were exercised by Mr. Rozelle. In 2019, the following RSUs held by named executive officers vested: 119,866 RSUs held by Mr. Earnest, and 33,267 RSUs held by Mr. Rozelle.
Pension and Retirement Savings Plans
The Corporation sponsors a qualified tax-deferred savings plan in accordance with the provisions of Section 401(k) of the Tax Code, which is available to permanent US-based employees. Under the terms of this plan, the Corporation makes contributions of up to 4% of eligible employees’ salaries, subject to statutory maximums. The Corporation has no plans to provide pension or other retirement benefits.
Nonqualified Deferred Compensation
The Corporation has no plans that provide for deferred compensation to its executive officers.
Termination of Employment, Change in Responsibilities and Employment Contracts
Payments Upon Termination or Change in Responsibilities
The employment agreements with Frederick H. Earnest, Douglas L. Tobler and John W. Rozelle contain provisions which entitle each of them to payments following termination or alteration of their respective employment with the Corporation in the event of a material adverse change, or termination of employment following a change of control or termination of employment by the Corporation without just cause. Each individual, depending on the nature of the termination, will be entitled to continuation of salary, accrued vacation pay, and employer-paid fringe benefits, for a stated period of time. Alternatively, each individual may elect to receive a lump sum payment of these amounts. In the event of termination following a change in control, each individual would also receive payment of amounts due under the STIP program. The total continuation period and lump sum benefit payment amounts between which the executives can choose are set out below.
“Material adverse change” means the assignment of any duties that are substantially inconsistent with or materially diminish his respective position; a material reduction in base salary or other compensation; or the relocation of the primary work location to any location more than 50 miles away from the primary work location as of the date of his applicable agreement.
“Just cause” includes any of his failure to perform assigned responsibilities that continues unremedied after written notice from the Corporation; death or permanent disability; breach of any fiduciary duty owed to the Corporation; or conviction in a criminal proceeding.
“Change of control” means any consolidation, merger, reorganization or other transaction of the Corporation that results in the Shareholders owning less than the majority of the aggregate voting power; sale or disposition of all or substantially all of the Corporation’s assets; or any transaction which results in the current Board ceasing to constitute the majority of the Board.
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Material adverse change:
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Name
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Period
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Total benefit amount
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Mr. Earnest
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24 months
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$
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735,229
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Mr. Tobler
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24 months
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$
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624,870
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Mr. Rozelle
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18 months
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$
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400,350
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Without just cause:
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Name
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Period
|
|
Total benefit amount
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Mr. Earnest
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|
24 months
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$
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735,229
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Mr. Tobler
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|
12 months
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$
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312,435
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Mr. Rozelle
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|
12 months
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$
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266,900
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|
|
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|
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Change of control:
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Name
|
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Period
|
|
Total benefit amount
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Mr. Earnest
|
|
24 months
|
$
|
735,229
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Mr. Tobler
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|
24 months
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$
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624,870
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Mr. Rozelle
|
|
18 months
|
$
|
400,350
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For a description of the treatment of outstanding Options held by named executive officers upon termination, see “Executive Compensation - Compensation Discussion and Analysis - Elements of the Corporation’s Compensation Program for Fiscal Year 2019 - Stock Incentive Awards - Stock Option Plan” above.
Other than as described above, the Corporation has no plan or arrangement in respect of compensation received or that may be received by named executive officers to compensate such officers in the event of the termination of their
employment, resignation or retirement, following a change of control of the Corporation, or in the event of a change in responsibilities following any such change of control.
Compensation of Directors
The following table sets forth a summary of the compensation earned by the directors of the Corporation during fiscal year ended December 31, 2019(1).
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|
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|
|
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|
|
|
|
|
|
|
|
Name
|
|
Fees Earned ($)
|
|
DSU Awards ($)
|
|
Option Awards ($)
|
|
Total ($)
|
Michael B. Richings
|
|
56,800
|
|
34,770
|
|
–
|
|
91,570
|
John M. Clark
|
|
36,467
|
|
34,770
|
|
–
|
|
71,237
|
W. Durand Eppler
|
|
39,800
|
|
34,770
|
|
–
|
|
74,570
|
Deborah J. Friedman(2)
|
|
23,600
|
|
34,770
|
|
31,243
|
|
89,613
|
C. Thomas Ogryzlo
|
|
34,800
|
|
34,770
|
|
–
|
|
69,570
|
Tracy A. Stevenson
|
|
39,467
|
|
34,770
|
|
–
|
|
74,237
|
________________________________
Notes:
|
(1)
|
|
Directors did not receive any compensation as non-equity incentive plan compensation, through pensions or any other form of compensation, including any agreement to make charitable donations in the director’s name, except for compensation disclosed in the table.
|
|
(2)
|
|
On March 13, 2019, Deborah J. Friedman was appointed to the board as an additional director of the Corporation. As such, her compensation only reflects a partial year of service.
|
In 2019, each director earned a fee of $24,000. In addition, the Chair of the Board earned $24,000 in 2019. The Chairman of the Audit Committee earned an additional $6,667 in 2019. The Chair of the Compensation Committee earned an annual fee of $3,667 in 2019. The Chair of the Corporate Governance and Nominating Committee earned an annual fee of $2,000 in 2019. The Chair of the Health, Safety, Environmental and Social Responsibility Committee earned an annual fee of $2,000 in 2019. The directors also earned a fee ranging from $400 to $1,200 per meeting held during 2019. In addition, during the fiscal year ended December 31, 2019, Deborah J. Friedman was granted 100,000 stock options at the start of her board service. On May 2, 2019, each member of the Board was awarded 61,000 DSUs valued at $34,770 at the time of issuance. The Common Shares issuable pursuant to these DSUs will be issued at the time each director leaves their position on the Board. The Corporation also reimburses directors for out-of-pocket expenses related to their attendance at meetings. W. Durand Eppler earned an additional $5,000 as Chairman of a special Mt Todd Strategy committee of the Board. No other amounts were paid or are payable to directors of the Corporation for committee participation or special assignments.
The total aggregate cash remuneration paid or payable by the Corporation and its subsidiaries during the financial year ended December 31, 2019 (i) to the directors of the Corporation, in their capacity as directors of the Corporation and any of its subsidiaries, was $ 230,933, and (ii) to the executive officers of the Corporation and any of its subsidiaries who received in their capacity as officers or employees of the Corporation aggregate remuneration in excess of C$150,000, was $1,170,117. This sum includes compensation paid to executive officers pursuant to retirement savings plan of $29,881.
Deferred Share Unit Plan (DSU Plan)
The purpose of the DSU Plan is to assist the Corporation in attracting, retaining and motivating non-employee directors of the Corporation and to more closely align the personal interests of such persons with Shareholders, thereby advancing the interests of the Corporation and its Shareholders and increasing the long-term value of the Corporation. Any individual who is a non-employee director of the Corporation (an “Eligible Director”) is eligible to participate in the DSU Plan.
The DSU Plan is administered by the Board, which, from time to time in its sole discretion, will cause the Corporation to enter into agreements effecting grants of DSUs to Eligible Directors (“DSU Plan Participants”), pursuant to which the Corporation will agree to pay, and the DSU Plan Participant will have the right to receive, Common Shares (the “Payment Shares”). In respect of each grant of DSUs, the Board will determine, among other
things, the number of DSUs allocated to the DSU Plan Participant and such other terms and conditions of the DSUs applicable to each grant.
Deferred Share Units are fully vested upon being granted and credited to an account maintained by the Corporation for each DSU Plan Participant by means of book keeping entry (“DSU Account”). Notwithstanding the vesting of DSUs, the DSU Plan Participants receive payment shares only after they have ceased to be a director of the Corporation.
The term during which a DSU may be outstanding will, subject to the provisions of the DSU Plan (which require or permit the acceleration or the extension of the term), be such period as may be determined from time to time by the Board, but subject to the rules of any stock exchange or other regulatory body having jurisdiction over the Corporation.
Notwithstanding any other provision of the DSU Plan, the maximum number of Common Shares issuable pursuant to outstanding DSUs at any time is limited to 3% of the aggregate number of issued and outstanding Common Shares on a non-diluted basis. Also, the maximum number of Common Shares available for issuance pursuant to outstanding DSUs under the DSU Plan, together with all other security based compensation arrangements, which include the Stock Option Plan and the LTIP, may not exceed 10% of the Common Shares outstanding from time to time, on a non-diluted basis.
In addition, the number of Common Shares issuable to insiders of the Corporation, at any time, within any one-year period pursuant to DSUs together with any other security based compensation arrangements, may not exceed 10% of the issued and outstanding Common Shares on a non-diluted basis. The number of Common Shares issued to Eligible Directors shall not exceed the lesser of; (i) 1% of the issued and outstanding Common Shares per Eligible Director; and (ii) an annual DSU value of $150,000 per Eligible Director.
DSUs that are cancelled, terminated or expire result in the Common Shares that were reserved for issuance thereunder being available for a subsequent grant of DSUs pursuant to the DSU Plan. Any increase in the issued and outstanding Common Shares (whether as a result of the issue of Common Shares pursuant to DSUs or otherwise) will result in an increase in the number of Common Shares that may be issued pursuant to DSUs outstanding at any time. Further, if the acquisition of Common Shares by the Corporation for cancellation should result in the above tests no longer being met, this will not constitute non-compliance with the above limitations for any awards outstanding prior to such purchase of Common Shares for cancellation.
Causes of Cessation of DSU Plan Awards
Upon the death of a DSU Plan Participant prior to the distribution of the DSUs credited to the DSU Account of such DSU Plan Participant under the DSU Plan, Payment Shares shall be issued or paid to the estate of such DSU Plan Participant on or about the thirtieth (30th) day after the Corporation is notified of the death of the DSU Plan Participant or on a later date elected by the DSU Plan Participant’s estate in the form prescribed for such purposes by the Corporation and delivered to the Chief Financial Officer of the Corporation not later than twenty (20) days after the Corporation is notified of the death of the DSU Plan Participant, provided that such elected date is no later than the last business day of the calendar year following the calendar year in which the DSU Plan Participant dies so that payment can be made on or before such last business day. Notwithstanding the above, upon the death of a U.S. DSU Plan Participant, the DSU Account shall be distributed to the estate of such U.S. DSU Plan Participant on the first business day following ninety (90) days after the U.S. DSU Plan Participant’s date of death.
If the Board terminates or suspends the DSU Plan, previously credited DSUs may, at the Board’s election, be distributed to DSU Plan Participants or may remain outstanding and in effect in accordance with the terms of the DSU Plan. The Board will not require the consent of any affected DSU Plan Participant in connection with a termination of the DSU Plan in which Payment Shares are issued to the DSU Plan Participant in respect of all such DSUs.
No Assignment or Transfer of DSU Plan Awards
Except as required by law, the rights of a DSU Plan Participant under the DSU Plan are not capable of being assigned, transferred, alienated, sold, encumbered, pledged, mortgaged or charged and are not capable of being subject to attachment or legal process for the payment of any debts or obligations of the DSU Plan Participant.
For information about amendments to the DSU Plan or to grants of DSUs, see “Amendments to the Plans, Options, LTIP Award Agreements and DSUs”.
Securities Authorized For Issuance Under Equity Compensation Plans
The following table sets out information relating to the Corporation’s equity compensation plans as at December 31, 2019. The Corporation’s equity compensation plans as of December 31, 2019 were the Stock Option Plan, the DSU Plan and the LTIP.
|
|
|
|
|
|
|
Plan Category
|
|
Number of securities to be issued upon exercise/conversion of outstanding options and rights
|
|
Weighted-average exercise price of outstanding options and rights
|
|
Number of securities remaining available for future grants under equity compensation plans (excluding securities reflected in column (a))
|
|
|
(a)
|
|
(b)
|
|
(c)
|
Equity compensation plans approved by securityholders
|
|
3,294,301
|
|
0.32
|
|
6,775,511
|
Equity compensation plans not approved by securityholders
|
|
N/A
|
|
N/A
|
|
N/A
|
Total
|
|
3,294,301
|
|
0.32
|
|
6,775,511
|
As of March 9, 2020, 3,100,301 RSUs are outstanding under the LTIP, 726,000 DSUs are outstanding under the DSU Plan, and 1,387,000 Options are outstanding under the Stock Option Plan to acquire in aggregate 5,213,301 Common Shares, which RSUs, DSUs, and Options have been granted to the directors, officers, employees and consultants of the Corporation, as applicable.
Exchange Controls
There are no governmental laws, decrees or regulations in Canada that restrict the export or import of capital, including foreign exchange controls, or that affect the remittance of dividends, interest or other payments to non-resident holders of the securities of Vista Gold, other than Canadian withholding tax. See “Certain Canadian Federal Income Tax Considerations for U.S. Residents” below.
Certain Canadian Federal Income Tax Considerations for U.S. Residents
The following summarizes certain Canadian federal income tax consequences generally applicable under the Income Tax Act (Canada) and the regulations enacted thereunder (collectively, the “Canadian Tax Act”) and the Canada-United States Income Tax Convention (1980) (the “Convention”) to the holding and disposition of Common Shares.
Comment is restricted to holders of Common Shares each of whom, at all material times for the purposes of the Canadian Tax Act and the Convention,
|
(i)
|
|
is resident solely in the United States,
|
|
(ii)
|
|
is entitled to the benefits of the Convention,
|
|
(iii)
|
|
holds all Common Shares as capital property,
|
|
(iv)
|
|
holds no Common Shares that are “taxable Canadian property” (as defined in the Canadian Tax Act) of the holder,
|
|
(v)
|
|
deals at arm’s length with and is not affiliated with the Corporation,
|
|
(vi)
|
|
does not and is not deemed to use or hold any Common Shares in a business carried on in Canada, and
|
|
(vii)
|
|
is not an insurer that carries on business in Canada and elsewhere,
|
(each such holder, a “U.S. Resident Holder”).
Certain U.S.-resident entities that are fiscally transparent for United States federal income tax purposes (including limited liability companies) may not in all circumstances be regarded by the Canada Revenue Agency (the “CRA”) as entitled to the benefits of the Convention. Members of or holders of an interest in such an entity that holds Common Shares should consult their own tax advisers regarding the extent, if any, to which the CRA will extend the benefits of the Convention to the entity in respect of its Common Shares.
Generally, a holder’s Common Shares will be considered to be capital property of the holder provided that the holder is not a trader or dealer in securities, did not acquire, hold or dispose of the Common Shares in one or more transactions considered to be an adventure or concern in the nature of trade (i.e. speculation), and does not hold the Common Shares as inventory in the course of carrying on a business.
Generally, a holder’s Common Shares will not constitute “taxable Canadian property” of the holder at a particular time at which the Common Shares are listed on a “designated stock exchange” (which currently includes the TSX and NYSE American) unless both of the following conditions are true at any time during the 60 month period immediately preceding the particular time:
|
(i)
|
|
the holder, any one or more persons with whom the holder does not deal at arm’s length, or any partnership in which the holder or persons with whom the holder did not deal at arm’s length holds a membership interest directly or indirectly through one or more partnerships, alone or in any combination, owned 25% or more of the issued shares of any class of the capital stock of the Corporation; and
|
|
(ii)
|
|
more than 50% of the fair market value of the Common Shares was derived directly or indirectly from, or from any combination of, real or immovable property situated in Canada, “Canadian resource properties” (as defined in the Canadian Tax Act), “timber resource properties” (as defined in the Canadian Tax Act), or options in respect of or interests in such properties whether or not such properties exist.
|
In certain circumstances, a Common Share may be deemed to be “taxable Canadian property” for purposes of the Canadian Tax Act.
This summary is based on the current provisions of the Canadian Tax Act and the Convention in effect on the date hereof, all specific proposals to amend the Canadian Tax Act and Convention publicly announced by or on behalf of the Minister of Finance (Canada) on or before the date hereof, and the current published administrative and assessing policies of the CRA. It is assumed that all such amendments will be enacted as currently proposed, and that there will be no other material change to any applicable law or administrative or assessing practice, although no assurance can be given in these respects. Except as otherwise expressly provided, this summary does not take into
account any provincial, territorial or foreign tax considerations, which may differ materially from those set out herein.
This summary is of a general nature only, is not exhaustive of all possible Canadian federal income tax considerations, and is not intended to be and should not be construed as legal or tax advice to any particular U.S. Resident Holder. U.S. Resident Holders are urged to consult their own tax advisers for advice with respect to their particular circumstances. The discussion below is qualified accordingly.
A U.S. Resident Holder who disposes or is deemed to dispose of one or more Common Shares generally should not thereby incur any liability for Canadian federal income tax in respect of any capital gain arising as a consequence of the disposition.
A U.S. Resident Holder to whom the Corporation pays or is deemed to pay a dividend on the holder’s Common Shares will be subject to Canadian withholding tax, and the Corporation will be required to withhold the tax from the dividend and remit it to the CRA for the holder’s account. The rate of withholding tax under the Canadian Tax Act is 25% of the gross amount of the dividend (subject to reduction under the provisions of an applicable tax treaty). Under the Convention, a U.S. Resident Holder who beneficially owns the dividend will generally be subject to Canadian withholding tax at the rate of 15% (or, if the U.S. Resident Holder who beneficially owns the dividend is a company which owns at least 10% of the voting stock of the Corporation, 5%) of the gross amount of the dividend.
Indebtedness of Directors and Executive Officers
None of the current or former directors, executive officers or employees, nor any associates or affiliates of the foregoing persons is, as of the date hereof, indebted to the Corporation or any of its subsidiaries.
Orders, Penalties and Settlement Agreements
To the knowledge of the Corporation, no proposed director of the Corporation is, as at the date of this Information Circular, or was within 10 years before the date of this Information Circular, a director, chief executive officer or chief financial officer of any company (including the Corporation), that:
(a)was subject to an order that was issued while the proposed director was acting in the capacity as director, chief executive officer or chief financial officer, or
(b)was subject to an order that was issued after the proposed director ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer.
For the purposes of paragraph (a), above, “order” means: (i) a cease trade order; (ii) an order similar to a cease trade order; or (iii) an order that denied the relevant company access to any exemption under securities legislation that was in effect for more than 30 consecutive days.
To the knowledge of the Corporation, no proposed director of the Corporation is, as at the date of this Information Circular, or has been within the 10 years before the date of this Information Circular, a director or executive officer of any company (including the Corporation) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets.
To the knowledge of the Corporation, no proposed director of the Corporation has, within 10 years before the date of this Information Circular, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the proposed director of the Corporation.
To the knowledge of the Corporation, no proposed director of the Corporation has been subject to (a) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or (b) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable shareholder in deciding whether to vote for a proposed director.
Interest of Certain Persons in Matters to be Acted Upon
Except as described in this Information Circular, no (i) person who has been a director or executive officer of the Corporation at any time since the beginning of Corporation’s the last financial year, (ii) proposed nominee for director, or (iii) associate or affiliate of any of the foregoing persons, has any material interest, direct or indirect by way of beneficial ownership of securities or otherwise, in any matter to be acted upon at the Meeting (other than the election of directors).
Interest of Informed Persons in Material Transactions
Except as described in this Information Circular, no (i) informed person of the Corporation, (ii) proposed director of the Corporation, or (iii) associate or affiliate of any of the foregoing persons, has had any material interest, direct or indirect, in any transaction since the commencement of the Corporation’s most recently completed financial year or in any proposed transaction which has materially affected or would materially affect the Corporation or its subsidiaries.
Review, Approval or Ratification of Transactions with Related Parties
The Corporation has adopted a written policy for the review of transactions with related persons which is available on the Corporation’s website at www.vistagold.com. The policy requires review, approval or ratification of all transactions in which (i) the aggregate amount involved will or may be expected to exceed $100,000 in any calendar year; (ii) the Corporation is a participant; and (iii) any directors, executive officers, significant shareholders and any immediate family member of the foregoing persons has or will have a direct or indirect material interest subject to certain categories of transactions that are deemed to be pre-approved under the policy. As set forth in the policy, the pre-approved transactions include, among others, employment of executive officers, director compensation (in general, where such transactions are required to be reported in the Corporation’s proxy statement pursuant to the SEC compensation disclosure requirements), as well as certain transactions where the amounts involved do not exceed specified thresholds, certain charitable contributions and transactions where all shareholders receive proportional benefits. All related party transactions must be reported for review by the Corporate Governance and Nominating Committee of the Board. Transactions deemed to be pre-approved are not required to be reported to the Committee, except for certain pre-approved transactions, a summary of which must be submitted to the Corporate Governance and Nominating Committee for review at its next following meeting.
In determining whether to approve or ratify related party transactions, the Corporate Governance and Nominating Committee will take into consideration, among other factors it deems appropriate, whether the transactions are on terms no less favorable to the Corporation than those available to unaffiliated third-parties under the same or similar circumstances and the extent of the related person’s interest in the transaction. If a related party transaction is to be ongoing, the Corporate Governance and Nominating Committee may establish guidelines for the Corporation’s management to follow in its ongoing dealings with the related person.
Management Contracts
There are no management functions of the Corporation which are to any substantial degree performed by persons other than the directors, senior officers or managers of the Corporation. The Corporation has entered into employment agreements with Frederick H. Earnest, President and Chief Executive Officer, Douglas L. Tobler, Chief Financial Officer, John Rozelle, Senior Vice President, and Pamela A. Solly, Vice President of Investor Relations as set forth above under the heading “Executive Compensation - Executive Employment Agreements”.
Shareholder Proposals
Under the Exchange Act, the deadline for submitting Shareholder proposals for inclusion in the management information and proxy circular for an annual general meeting of the Corporation is calculated in accordance with Rule 14a-8(e) of Regulation 14A to the Exchange Act. If the proposal is submitted for a regularly scheduled annual general meeting, the proposal must be received at the Corporation’s principal executive offices not less than 120 calendar days before the anniversary date of the Corporation’s management information and proxy circular released to the Shareholders in connection with the previous year’s annual general meeting. However, if the Corporation did not hold an annual general meeting the previous year, or if the date of the current year’s annual general meeting has been changed by more than 30 days from the date of the previous year’s meeting, then the deadline is a reasonable time before the Corporation begins to print and mail its proxy materials. Accordingly, unless the date of the next annual general meeting is changed by more than 30 days from the date of this year’s meeting the deadline for submitting Shareholder proposals for inclusion in the management information and proxy circular for the next annual general meeting of the Corporation will be November 20, 2020. If a Shareholder proposal is not submitted to the Corporation by November 20, 2020, the Corporation may still grant discretionary proxy authority to vote on a Shareholder proposal, if such proposal is received by the Corporation by February 3, 2021 in accordance with Rule 14a-4(c)(1) of Regulation 14A of the Exchange Act.
In addition, there are (i) certain requirements relating to Shareholder proposals contained in the Business Corporations Act (British Columbia); and (ii) certain requirements relating to the nomination of directors contained the Articles of the Corporation. A Shareholder wishing to make a proposal for consideration at an annual general meeting of the Corporation or wishing to nominate a person to act as a director of the Corporation should ensure they follow the applicable procedures set forth in the Business Corporations Act (British Columbia) and the Articles of the Corporation.
Other Matters
Management of the Corporation knows of no other matters which will be brought before the Meeting other than those set forth in the Notice of Meeting. Should any other matters properly come before the Meeting, the Common Shares represented by the proxies solicited hereby will be voted on those matters in accordance with the best judgement of the persons voting such proxies.
Dissenters’ Rights of Appraisal
No action is proposed herein for which the laws of the British Columbia or the Articles of the Corporation provide a right of a Shareholder to dissent and obtain appraisal of or payment for such Shareholder’s Common Shares.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires the Corporation’s officers and directors, and persons who own more than 10% of the Common Shares, to file reports of ownership and changes of ownership of such securities with the SEC.
Based solely on a review of the reports received by the SEC, furnished to the Corporation, or written representations from reporting persons that all reportable transactions were reported, management believes that, during the fiscal year ended December 31, 2019, other than as set forth below, the Corporation’s officers, directors and greater than ten percent owners timely filed all reports they were required to file under Section 16(a).
|
|
|
|
Name
|
Late Filings
|
Number of Transactions Not Timely Reported
|
Missing Filings
|
Fred Earnest, Chief Executive Officer and Director
|
One – Form 4
|
One
|
None
|
John Engele, Chief Financial Officer
|
One – Form 4
|
One
|
None
|
John Rozelle, Senior Vice President
|
One – Form 4
|
One
|
None
|
Multiple Shareholders Sharing the Same Address
The regulations regarding the delivery of copies of proxy materials and annual reports to Shareholders permit the Corporation and brokerage firms to send one annual report and proxy statement to multiple Shareholders who share the same address under certain circumstances. Shareholders who hold their shares through a broker may have consented to reducing the number of copies of materials delivered to their address. In the event that a Shareholder wishes to revoke such a consent previously provided to a broker, the Shareholder must contact the broker to revoke the consent. In any event, if a shareholder wishes to receive a separate Information Circular and accompanying materials for the Meeting, or the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2019, the Shareholder may receive copies by contacting the Corporate Secretary at (720) 981-1185, 7961 Shaffer Parkway, Suite 5, Littleton, Colorado 80127. Shareholders receiving multiple copies of these documents at the same address can request delivery of a single copy of these documents by contacting the Corporation in the same manner. Persons holding Common Shares through a broker can request a single copy by contacting the broker.
Board of Directors Approval
The undersigned hereby certifies that the contents and sending of this Information Circular to the Shareholders have been approved by the Board.
DATED at Littleton, Colorado, this 20th day of March, 2020.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Frederick H. Earnest
Frederick H. Earnest
President and Chief Executive Officer
APPENDIX “A”
FORM OF PROXY
APPENDIX “B”
VISTA GOLD CORP.
(the “Company”)
MANDATE OF THE BOARD OF DIRECTORS
|
I.
|
|
STEWARDSHIP OF THE COMPANY
|
The Board of Directors of the Company (the “Board”) is responsible for:
|
1.
|
|
The stewardship of the business and affairs of the Company;
|
|
2.
|
|
Supervising the management of the business and affairs of the Company;
|
|
3.
|
|
Providing leadership to the Company by practicing responsible, sustainable and ethical decision making;
|
|
4.
|
|
Ensuring that all major issues affecting the Company are given proper consideration, including the identification and management of risks relating to the business and affairs of the Company; and
|
|
5.
|
|
Directing management to ensure that legal, regulatory and stock exchange requirements applicable to the Company have been met.
|
Each Director has the responsibility to:
|
1.
|
|
Attend all regularly scheduled meetings of the Board and all of the Committees on which they serve and to be prepared for such meetings by reviewing materials provided in advance of meetings;
|
|
2.
|
|
Act honestly and in good faith with a view to the best interests of the Company; and
|
|
3.
|
|
Exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.
|
A majority of the Board will, at all times, be independent directors as defined in then- current laws applicable to the Company.
The Board shall appoint a chair of the Board. Where it is not appropriate for the chair to be an independent director, the Board should consider whether it should appoint an independent director to act as a lead director. The Board shall develop a written position description delineating the chair’s role.
To be considered for nomination and election to the Board, directors must demonstrate integrity and high ethical standards in their business dealings, their personal affairs, and in the discharge of their duties to and on behalf of the Company.
|
IV.
|
|
NOMINATION OF DIRECTORS
|
Prior to nominating or appointing individuals as directors, the Board will consider what competencies and skills the Board, as a whole, should possess and assess what competencies and skills each existing director possesses. The Board will consider the appropriate size of the Board, with a view to facilitating effective decision making. In addition, the Board will consider diversity in the selection criteria of new Board members. In carrying out each of
these functions, the Board will consider the advice and input of the Corporate Governance and Nominating Committee.
The Board is responsible to meet in person, or by telephone conference call (or by other means permitted by applicable laws), at least once each quarter and otherwise as often as required to discharge the duties of the Board.
The independent members of the Board shall hold regular meetings at which non-independent members of the Board and members of management are not in attendance.
|
VI.
|
|
COMMITTEES OF THE BOARD
|
The Board discharges its responsibilities directly and through its committees. Accordingly, the Board shall:
|
1.
|
|
Establish such committees of the Board (“Committees”) as are required by applicable laws and stock exchange requirements and as are necessary to effectively discharge the duties of the Board, which Committees shall include an audit committee (the “Audit Committee”);
|
|
2.
|
|
Appoint directors, including independent directors when applicable, to serve as members of each Committee;
|
|
3.
|
|
Appoint a chair of each Committee to:
|
(i)provide leadership to the Committee,
(ii)manage the affairs of the Committee, and
(iii)ensure that the Committee functions effectively in fulfilling its duties to the Board and the Company; and
|
4.
|
|
Regularly receive and consider reports and recommendations of each Committee, including, in particular, the Audit Committee reports and recommendations, particularly with respect to the Company’s annual audit and annual and quarterly reports and financial statements.
|
|
VII.
|
|
SUPERVISION OF MANAGEMENT
|
The Board is responsible to:
|
1.
|
|
Select and appoint the Chief Executive Officer (“CEO”), establish CEO goals and objectives, and evaluate CEO performance and develop a written position description for the CEO which includes delineating management’s responsibilities;
|
|
2.
|
|
Assist the CEO to select and appoint executive officers, establish executive officers’ goals and objectives, and monitor their performance;
|
|
3.
|
|
Determine the compensation of the CEO, and in conjunction with the CEO, set the compensation of the other executive officers of the Company; and
|
|
4.
|
|
Maintain a succession plan for the replacement of the CEO and other executive officers.
|
|
VIII.
|
|
CORPORATE GOVERNANCE
|
The Board is responsible to:
|
1.
|
|
Develop the Company’s approach to corporate governance and annually review and either approve or require revisions to the mandate of the Board and the charters of each Committee, position descriptions, the code of business conduct and ethics (the “Code”) and all other policies of the Company (collectively the “Governance Documents”);
|
|
2.
|
|
Take reasonable steps to satisfy itself that each director, the CEO and the executive officers are:
|
(i)performing their duties ethically;
(ii)conducting business on behalf of the Company in accordance with the requirements and the spirit of the Governance Documents; and
(iii)fostering a culture of integrity throughout the Company;
|
3.
|
|
Arrange for the public disclosure of the Governance Documents required by law to be publicly disclosed;
|
|
4.
|
|
Ensure that all new directors receive a comprehensive orientation and that all new directors fully understand: (i) the role of the Board, its Committees and its directors; (ii) the commitment of time and resources that the Company expects; and (iii) the nature and extent of the Company’s business and operations; and
|
|
5.
|
|
Provide continuing education opportunities for all directors, so that individuals may maintain or enhance their skills and abilities as directors, as well as to ensure their knowledge and understanding of the Company’s business and operations remains current.
|
The Board is responsible to:
|
1.
|
|
Approve and implement a disclosure policy which provides for disclosure and communications practices governing the Company; and
|
|
2.
|
|
Approve and maintain a process for the Company’s stakeholders to contact the independent directors directly with concerns and questions regarding the Company.
|
The Board is responsible for:
|
1.
|
|
Monitoring compliance with the Code and reviewing departures from the Code;
|
|
2.
|
|
Providing or denying waivers from the Code; and
|
|
3.
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|
Disclosing departures from the Code that constitute a material change (including material departures from the Code by directors or executive officers) and filing the required material change reports containing:
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(i)the date of the departure;
(ii)the parties involved;
(iii)the reason why the Board has or has not sanctioned the departure; and
(iv)any measures taken to address or remedy the departure.
The Board has the duty to:
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1.
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Adopt a strategic planning process, annually approve a strategic plan taking into account, among other things, the opportunities and risks of the Company’s business and operations, and regularly monitor the Company’s performance against its strategic plan;
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2.
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Approve capital and operating budgets to implement the strategic plan;
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3.
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Conduct periodic reviews of the Company’s resources, risks, and regulatory constraints and opportunities to facilitate the strategic plan; and
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4.
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Evaluate management’s analysis of the strategies of existing and potential competitors and their impact, if any, on the Company’s strategic plan.
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The Board has the duty to:
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1.
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Adopt a process to identify business risks and ensure appropriate systems to manage risks;
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2.
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Ensure that appropriate internal controls and management information systems are in place;
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3.
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Together with the Audit Committee, ensure policies and procedures are in place and are effective to maintain the integrity of the Company’s:
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(i)disclosure controls and procedures;
(ii)internal control over financial reporting; and
(iii)management information systems.
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XIII.
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FINANCIAL MANAGEMENT
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The Board has the duty to:
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1.
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Review and, on the advice of the Audit Committee, approve, prior to their public dissemination:
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(i)interim and annual financial statements and notes thereto;
(ii)management’s discussion and analysis of financial condition and results of operations;
(iii)relevant sections of the Annual Report on Form 10-K and management information circular containing financial information;
(iv)forecasted financial information and forward-looking statements; and
(v)all press releases and other documents in which financial statements, earnings forecasts, results of operations or other financial information is disclosed (this is currently delegated by the Board to the Chair of the Audit Committee); and
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2.
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Approve dividends and distributions, material financings, transactions affecting authorized capital or the issue and repurchase of shares and debt securities, and all material divestitures and acquisitions.
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The Board shall have access to all books, records, facilities and personnel of the Company necessary for the discharge of its duties.
The Board has the power, at the expense of the Company, to retain, instruct, compensate and terminate independent advisors to assist the Board in the discharge of its duties.
Vista Gold (AMEX:VGZ)
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Vista Gold (AMEX:VGZ)
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Von Jul 2023 bis Jul 2024