MERIDIAN GOLD INC.
NOTICE OF MEETING
The Annual Meeting of Shareholders (the "Meeting") of Meridian Gold Inc. (the
"Corporation") will be held at 4:00 p.m. on Tuesday, May 2, 2000 at the TSE
Conference Centre located on street level of The Exchange Tower, 130 King Street
West (NE corner of King and York Streets) (business attire required), for the
following purposes:
1. to receive the consolidated financial statements of the Corporation for the
financial year ended December 31, 1999 and the auditors' report on the
financial statements;
2. to elect directors of the Corporation;
3. to reappoint KPMG LLP as auditors of the Corporation and to authorize the
Board of Directors to fix their remuneration;
4. consideration of one shareholder proposal, if presented to the meeting; and
5. to transact any other business that may properly come before the Meeting.
Only shareholders of record at March 14, 2000 will be entitled to notice of and
to vote at the Meeting. If you cannot attend the Meeting in person, please
complete and return the enclosed proxy in the envelope provided. Proxies must be
received by the Corporation's registrar and transfer agent, The Trust Company of
Bank of Montreal, 129 St. Jacques Street West, Level B North, Montreal, Quebec
H2Y 1L6, by 5:00 p.m. (Eastern Standard Time) on April 28, 2000. If a return
envelope is not enclosed with your proxy form, please mail your proxy form to
The Trust Company of Bank of Montreal, P. O. Box/CP 6002, Montreal, Quebec H2Y
9Z9.
Toronto, March 24, 2000
BY ORDER OF THE BOARD
Edward H. Colt
Secretary
<PAGE>
MERIDIAN GOLD INC.
MANAGEMENT PROXY CIRCULAR
This Management Information Circular and Proxy Statement (the "Circular") is
furnished in connection with the solicitation of proxies by the management of
Meridian Gold Inc. (the "Corporation") for use at the Annual Meeting of
Shareholders (or any adjournments thereof) of the Corporation (the "Meeting") to
be held at 4:00 p.m. on Tuesday, May 2, 2000, at the TSE Conference Centre
located on street level of The Exchange Tower, 130 King Street West, NE corner
of King and York Streets) (business attire required) for the purposes set forth
in the accompanying Notice of Meeting. The solicitation will be primarily by
mail, but proxies may also be solicited personally by regular employees of the
Corporation for which no additional compensation will be paid. The cost of
preparing, assembling and mailing this Circular, the Notice of Meeting, form of
proxy and any other material relating to the Meeting has been or will be borne
by the Corporation. It is anticipated that copies of this Circular and
accompanying proxy will be distributed to shareholders on or about March 24,
2000.
Shareholders who are not able to attend the Meeting in person should complete
and sign the enclosed proxy and return it to The Trust Company of Bank of
Montreal, the Corporation's registrar and transfer agent, in the pre-addressed
envelope. Please ensure that your completed proxy is received no later than 5:00
p.m. (Eastern Standard Time) on April 28, 2000. To be effective, proxies must be
received before 5:00 p.m. (Eastern Standard Time) on April 28, 2000 by The Trust
Company of Bank of Montreal, 129 St. Jacques Street West, Level B North,
Montreal, Quebec H2Y 1L6.
Appointment of Proxyholder
- --------------------------
Any shareholder has the right to appoint a person (who need not be a
shareholder) other than the persons designated in the enclosed form of proxy to
attend and to vote and to act for and on behalf of the shareholder at the
Meeting. In order to do so, the shareholder may insert the name of such other
person in the blank space provided in the proxy, or use another form of proxy.
Exercise of Vote by Proxy
- -------------------------
The shares represented by the proxy which is hereby solicited will be voted or
withheld from voting in accordance with the instructions of the shareholder on
any ballot that may be called for and, if the shareholder specifies a choice
with respect to any matter to be acted upon, the shares shall be voted
accordingly. Where a shareholder fails to specify a choice with respect to any
matter referred to in the Notice of Meeting in a proxy appointing a management
nominee (the nominees specified in the proxy enclosed with this Circular) as
proxyholder, the shares represented by the proxy will be voted for or in favor
of management's position.
The enclosed proxy confers discretionary authority with respect to any
amendments or variations to the matters referred to in the Notice of Meeting and
any other matters which may properly come before the Meeting.
Revocation of Proxy
- -------------------
In addition to revocation in any other manner permitted by law, a shareholder
who has executed a proxy has the power to revoke it by depositing an instrument
in writing executed by the shareholder (or the shareholder's attorney authorized
in writing): (i) at the registered office of the Corporation at any time up to
and including the last business day preceding the day of the Meeting (or any
adjournment of the Meeting), or (ii) with the Chairman of the Meeting on the day
of the Meeting (or any adjournment of the Meeting).
<PAGE>
Voting Shares and Principal Holders
- -----------------------------------
At March 14, 2000, there were outstanding 74,018,077 common shares of the
Corporation. Holders of record of common shares at the close of business on
March 14, 2000 are entitled to one vote for each common share held, except to
the extent that subsequent transferees become entitled to vote by complying with
the Canada Business Corporations Act.
The following table shows, as of March 14, 2000, each person who, to the
knowledge of the Corporation, its directors or officers, beneficially owns,
directly or indirectly, or exercises control or direction over, in excess of 10%
of any class of voting securities of the Corporation:
<TABLE>
Name and Address of Amount and Nature of
Class of Securities Beneficial Owner Beneficial Ownership Percent of Class
------------------- ------------------- -------------------- ----------------
<S> <C> <C> <C>
Common Royal Trust Investment 12,405,000 16.80%
Management Holdings Inc. Shared Voting and
P. O. Box 7500 Dispositive Power
Station A
Toronto, Ontario
Common Fidelity Management and 8,978,225* 12.13%
Research Corporation Sole Dispositive Power
82 Devonshire Street
Boston, MA *Total shares owned is
7,327,425, which includes
the sole voting power
shares of 1,650,800
</TABLE>
Election of Directors
- ---------------------
Under the Articles of the Corporation, the Board of Directors consists of a
minimum of three directors and a maximum of ten directors; the number of
directors within this range is determined by the Board. The number of directors
is currently fixed at six.
The persons named in the enclosed form of proxy intend to vote for the election
of the six nominees listed in the following table, all of whom are now members
of the Board of Directors and have been for the periods indicated. It is not
anticipated that any of these nominees will be unable to serve as directors, but
if that should occur for any reason prior to the Meeting, the persons named in
the enclosed form of proxy shall be entitled to vote for any other nominees in
their discretion.
Each director elected will hold office until the next Annual Meeting of
Shareholders or until his or her successor is elected or appointed.
<PAGE>
Nominees for Election to the Board of Directors
- -----------------------------------------------
Name Age Director Since Shares Owned(1)
- ---- --- -------------- ---------------
John A. Eckersley(3) 55 1996 4,500
West Vancouver, British Columbia
Mr. Eckersley is a private investor. Prior to October 1995, he was
Vice-President, Secretary and General Counsel of Placer Dome Inc., a mining
company.
Brian J. Kennedy(4) 56 1996 53,000
Reno, Nevada
Mr. Kennedy has been President and Chief Executive Officer of the Corporation
since April 1996. He was President of FMC Gold Company, a predecessor of the
Corporation, from May 1987 until June 1996. Mr. Kennedy is also a director and
officer of certain subsidiaries of the Corporation.
Christopher R. Lattanzi(2) 63 1999 nil
Toronto, Ontario
Mr. Lattanzi, elected to the Board of Directors in February 1999, is currently a
mining engineer and President of Micon International Limited, mineral industry
consultants.
Malcolm W. MacNaught(2) 62 1997 nil
Duxbury, Massachusetts
In 1996, Mr. MacNaught culminated his career with Fidelity Investments where he
managed the Fidelity Select Precious Metals and Minerals fund and the Fidelity
Select American Gold Portfolio fund. He also acted as Manager of Fidelity
Advisor Global Resources. Mr. MacNaught is a private investor.
Robert G. Matthews(3) 64 1999 nil
Toronto, Ontario
Mr. Matthews, elected to the Board of Directors in February 1999, retired in
1990 as Vice President and Director, Corporate Finance with RBC Dominion
Securities where he specialized in mine financing, mergers and acquisitions. Mr.
Matthews is a private investor.
David S. Robertson(2)(3) 76 1996 10,000
North York, Ontario
Dr. Robertson is an independent consultant in the mineral industry.
Notes
- -----
(1) Information as to shares beneficially owned, directly or indirectly, or
over which control or direction is exercised, is not within the knowledge
of management and has been furnished by the respective nominees, as of
March 3, 1999.
(2) Member of Compensation Committee.
(3) Member of Audit Committee.
(4) Includes 48,300 of restricted shares vested as follows: 16,100 shares on
October 26, 2000; 16,100 shares on October 26, 2001; and 16,100 shares on
October 26, 2002.
<PAGE>
Statement of Corporate Governance Practices
- -------------------------------------------
The Board of Directors
The Board of Directors is responsible for the supervision of the management of
the Corporation's business and affairs. It has the statutory authority and
obligation to protect and enhance the assets of the Corporation in the interest
of all shareholders. The Board of Directors believes in the principles of
maintaining an independent and effective board of directors, assumption by the
board of stewardship of the Corporation and compliance, to the extent
practicable for the Corporation, with the guidelines adopted by the Toronto
Stock Exchange Committee on Corporate Governance (the "TSE Guidelines").
While management is responsible for day-to-day operations, the Board of
Directors has assumed the stewardship of the Corporation. This includes
responsibility for (i) adoption of a strategic planning process, (ii)
identifying principal risks of the Corporation's business and ensuring
implementation of appropriate systems to manage those risks, (iii) succession
planning, including appointing and monitoring senior management, (iv) a
communications policy, and (v) integrity of the Corporation's internal control
and management information systems.
New directors are provided with substantial reference material relating to the
Corporation's strategies, business plan and recent performance, as well as their
responsibilities as directors. Specific briefing sessions from appropriate
senior management personnel take place regularly at meetings of the Board of
Directors.
The Board of Directors met five times in 1999.
Board Composition and Independence from Management
The Corporation's policy is that a majority of the members of the Board of
Directors be "unrelated", within the meaning of the TSE Guidelines, meaning
independent of management and free from any interest and any business or other
relationship which could, or could be perceived to, interfere with a director's
independence. In its determination as to whether a particular director is a
"related director", the Board of Directors examines the individual circumstances
of each director and the relationship of the director to management and to the
Corporation. The Board is of the view that five of the six present directors are
independent of management and unrelated for purposes of the TSE Guidelines, the
exception being Mr. Brian J. Kennedy, the President and Chief Executive Officer
of the Corporation. At the Meeting, a slate of six individuals is being proposed
for election by the shareholders. Five of the nominees qualify as unrelated
directors.
The Corporation's policy is to maintain a non-executive Chairman of the Board of
Directors, to ensure that the Board can function independently of management.
The current Chairman of the Board of Directors, David S. Robertson, qualifies as
an unrelated director.
The current composition of the Board of Directors reflects a breadth of
background and experience that are important for effective governance of a
company in the mining industry. Additional nominees to the Board of Directors
would be expected to possess backgrounds and/or experience to complement that of
the Board.
Board Committees
The Corporation does not have an Executive Committee but is required to have an
Audit Committee. The Audit Committee, on behalf of the Board, has responsibility
for: (a) reviewing the financial statements of the Corporation and recommending
whether such statements should be approved by the Board; (b) reviewing interim
financial statements of the Corporation; (c) recommending to the Board annually
or as they may otherwise determine, a duly qualified auditor; (d) reviewing the
scope of the audit to be conducted by the external and internal auditors of the
Corporation; (e) reviewing the auditors' fees and assessing the performance of
external and internal auditors and the nature and cost of other services
<PAGE>
provided by such auditors; (f) reviewing all public disclosure documents
containing financial information before release; (g) reviewing all post-audit or
management letters containing material recommendations of the external auditor
and management's response in respect of any identified material weakness; and
(h) having such other duties, powers and authorities as the Board may delegate
to the Committee from time to time. The members of the Committee have the right,
for the purpose of performing their duties, of inspecting all the books and
records of the Corporation and its affiliates and of discussing such accounts
and records and any matters relating to the financial position or condition of
the Corporation with the auditors of the Corporation or its affiliates.
The Committee is composed of three (3) directors. This Committee has the
following members: John A. Eckersley (Chairman), David S. Robertson, and Robert
G. Matthews. Mr. Matthews joined the Committee in March 1999.
The Compensation Committee has responsibility for: (a) fixing the compensation
of the President and Chief Executive Officer and approving the compensation of
the other officers of the Corporation; (b) exercising the powers conferred on it
by the Board with respect to option and share purchase plans; and (c) reviewing
annually, or more often if it deems appropriate, succession for key executives,
performance appraisal (having regard to the criteria referred to under
"Executive Annual Incentive Plan") and development of senior officers, senior
management organization and reporting structure, contingency plans in the event
of the unexpected disability of key executives, and performance and funding of
pensions and other benefits.
The Committee is composed of three (3) directors. This Committee has the
following members: David S. Robertson (Chairman), Malcolm W. MacNaught, and
Christopher R. Lattanzi. Mr. Lattanzi joined the Committee in March 1999.
As additional members join the Board of Directors and as the needs of the
Corporation change, the Board will review the need for, and establish as
appropriate, additional committees.
Decisions Requiring Board Approval
Approval of annual budgets and major acquisitions, investments and expenditures,
as well as all significant matters outside the ordinary course of business and
matters requiring such approval under applicable law, are subject to review and
approval by the Board of Directors.
Board Performance
The Chairman of the Board of Directors provides leadership to the effective
performance of the Board of Directors.
Shareholder Communications
The Corporation maintains shareholder communications through an investor
relations program.
The Board's Expectations of Management
The Board of Directors through the Compensation Committee conducts an annual
performance evaluation of the President and Chief Executive Officer and
establishes a list of objectives for the ensuing year.
The Board of Directors expects management to provide information and maintain
processes which enable the Board of Directors to identify issues, challenges,
and opportunities for the Corporation and otherwise discharge its
responsibilities.
This statement of corporate governance practices has been developed and approved
by the Board of Directors.
<PAGE>
Statement of Executive Compensation
- -----------------------------------
Summary Compensation
The following table sets forth, for the periods indicated, information
concerning compensation earned during such periods by the Corporation's Chief
Executive Officer and by the Corporation's four other most highly compensated
executive officers who were serving as executive officers on December 31, 1999
(the "Named Executives").
<TABLE>
Summary Compensation Table(1)
-----------------------------
Annual Compensation Long-Term Compensation
-------------------------------------- ------------------------------
($) ($)
($) Securities Restricted ($)
Name and ($) ($) Other Annual under Options Shares All Other
Principal Position Year Salary Bonus Compensation(2)(5) Granted(6) Granted(4)(6) Compensation
- ----------------------------- ------- -------- ---------- ------------------- ---------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Brian J. Kennedy(3) 1999 283,976 194,524 10,000 75,400 329,044 69,635
President and 1998 283,976 260,548 4,000 274,250 nil nil
Chief Executive Officer 1997 283,976 105,000 7,099 235,000 nil nil
- ----------------------------- ------- -------- ---------- ------------------- ---------------- ------------- ----------------
Edward H. Colt(2) 1999 162,504 97,567 8,125 28,400 128,756 nil
Vice President, Finance and 1998 141,667 103,474 3,542 59,500 nil nil
Chief Financial Officer 1997 127,083 81,333 51,510 55,000 nil nil
- ----------------------------- ------- -------- ---------- ------------------- ---------------- ------------- ----------------
1999 141,537 72,976 5,282 24,700 112,406 nil
Richard C. Lorson 1998 141,537 101,907 2,654 61,250 nil nil
Vice President, Exploration 1997 134,797 69,286 3,370 55,000 nil nil
- ----------------------------- ------- -------- ---------- ------------------- ---------------- ------------- ----------------
1999 130,000 80,080 57,430 22,700 103,550 nil
Gonzalo F. Tufino(2) 1998 120,000 84,768 49,567 56,250 nil nil
Vice President, Development 1997 27,500 11,069 12,583 100,000 nil nil
- ----------------------------- ------- -------- ---------- ------------------- ---------------- ------------- ----------------
Edgar A. Smith(2) 1999 130,000 67,236 5,742 22,700 103,550 nil
Vice President and General 1998 54,167 37,917 nil 156,250 nil nil
Manager, El Penon 1997 nil nil nil nil nil nil
- ----------------------------- ------- -------- ---------- ------------------- ---------------- ------------- ----------------
</TABLE>
Notes:
- ------
(1) All figures, other than numbers of options granted, are expressed in U.S.
dollars.
(2) Consists of matching payments to a 401(k) Thrift Plan established by a
subsidiary of the Corporation. Excludes any perquisites and other benefits not
greater than the lesser of Cdn. $50,000 and 10% of the Named Executive Officer's
total annual salary and bonus. In the case of Mr. Tufino, also includes premiums
associated with his expatriate agreement. Mr. Tufino was hired by the
Corporation on October 1, 1997. Mr. Smith was hired by the Corporation on August
3, 1998.
(3) All Other Compensation includes taxes associated with 10,000 non-voting
preferred shares that the Company redeemed during 1999.
(4) Stated in terms of the dollar value (net of consideration paid by the Named
Executives) of Restricted Shares (calculated by multiplying the closing market
price of the Corporation's unrestricted shares on the date of grant by the
number of Restricted Shares awarded). At the end of the most recently completed
financial year, the total number and value of the aggregate holdings of
Restricted Shares, calculated in accordance with the foregoing is 160,900 and
$1,096,131, respectively. 107,267 of Restricted Shares will vest in whole or in
part in less than three (3) years and the vesting schedule is as follows: a
third vested at each of the first, second and third anniversaries. No dividends
or dividend equivalents were declared payable during the most recently completed
financial year on the Restricted Shares disclosed.
(5) Any amount of salary or bonus earned in any covered year that was foregone
at the election of the Named Executive under a program of the Corporation under
which stock, stock-based or other forms of non-cash compensation may be received
in lieu of a portion of annual compensation is reflected in the appropriate
column of the table corresponding to the relevant year.
(6) None of the securities under Options Granted or Restricted Shares carry a
right to receive dividends of a preferential or above-market rate.
<PAGE>
Long-Term Incentive Plan
There were no awards or payouts to the Named Executive Officers during the
financial year ended December 31, 1999 under any arrangements of the Corporation
which would constitute a long-term incentive plan.
Grants of Options/Restricted Shares
The following table provides information concerning grants of stock options and
restricted shares under the Corporation's 1999 Share Incentive Plan to the Named
Executive Officers during the financial year ended December 31, 1999.
<TABLE>
Stock Options Restricted Shares Stock Options and Restricted Shares
--------------- ----------------- --------------------------------------------
# % of # % of Exercise Value at
Name Granted Total Granted Total Price(1) Grant Date(2) Expiration Date
- ---- ------- ----- ------- ----- ----- ---------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Brian J. Kennedy 75,400 24.0% 48,300 30.0% 6.6875 6.6875 October 26, 2009
Edward H. Colt 28,400 9.1% 18,900 11.8% 6.6875 6.6875 October 26, 2009
Richard C. Lorson 24,700 7.9% 16,500 10.3% 6.6875 6.6875 October 26, 2009
Gonzalo F. Tufino 22,700 7.2% 15,200 9.5% 6.6875 6.6875 October 26, 2009
Edgar A. Smith 22,700 7.2% 15,200 9.5% 6.6875 6.6875 October 26, 2009
</TABLE>
Notes:
- ------
(1) Exercise Price per security is expressed in U.S. dollars. All exercise
prices are the closing price of the Common Shares of the Corporation on the New
York Stock Exchange on the trading day prior to the grant.
(2) The figure is the closing price per Common Share of the Corporation on the
New York Stock Exchange on the trading day prior to the grant.
Option Exercises and Year-End Option Values
The following table provides information concerning (i) options exercised by any
Named Executive Officer during the financial year ended December 31, 1999; and
(ii) the number and the value at December 31, 1999 of unexercised options held
by the Named Executive Officers. In the table, "exercisable" options are those
for which the vesting period or conditions, if any, have been met, and "in the
money" options are those where the exercise price was less than the market price
of the Common Shares of the Corporation at the close of business on December 31,
1999.
<TABLE>
Value of Unexercised
Options Exercised Unexercised Options In-the-money Options(1)
---------------------- ------------------------- -------------------------
Securities Aggregate Not Not
Name Acquired Value(1) Exercisable Exercisable Exercisable Exercisable
- ---- -------- --------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Brian J. Kennedy nil nil 305,601 589,649 877,443 1,392,498
Edward H. Colt nil nil 93,867 162,333 220,270 312,302
Richard C. Lorson nil nil 94,468 160,382 286,012 347,771
Gonzalo F. Tufino nil nil 33,334 145,616 62,335 250,352
Edgar A. Smith nil nil nil 178,950 nil 431,687
</TABLE>
Note:
- -----
(1) All figures relating to "value" are expressed in U.S. dollars.
<PAGE>
Restricted Share Exercises and Year-End Restricted Share Values
The following table provides information concerning (i) restricted shares
exercised by any Named Executive Officer during the financial year ended
December 31, 1999; and (ii) the number and the value at December 31, 1999 of
unexercised restricted shares held by the Named Executive Officers. In the
table, "exercisable" restricted shares are those for which the vesting period or
conditions, if any, have been met, and "in the money" options are those where
the exercise price was less than the market price of the Common Shares of the
Corporation at the close of business on December 31, 1999. Holders of Restricted
Shares are entitled to rights equivalent to common share rights.
<TABLE>
Restricted Shares Unexercised Restricted Value of Unexercised
Exercised Shares In-the-money Options(1)
----------------------- ------------------------- -------------------------
Securities Aggregate Not Not
Name Acquired Value(1) Exercisable Exercisable Exercisable Exercisable
- ---- ---------- --------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Brian J. Kennedy nil nil nil 48,300 nil 6,038
Edward H. Colt nil nil nil 18,900 nil 2,363
Richard C. Lorson nil nil nil 16,500 nil 2,063
Gonzalo F. Tufino nil nil nil 15,200 nil 1,900
Edgar A. Smith nil nil nil 15,200 nil 1,900
</TABLE>
Note:
- -----
(1) All figures relating to "value" are expressed in U.S. dollars.
Pension Plans
The Named Executive Officers are participants in a defined benefit pension plan
of Meridian Gold Company, the Corporation's principal operating subsidiary. The
following table provides information concerning the total annual retirement
benefit payable under these arrangements at retirement (normally age 65).
<TABLE>
Final Earnings Years of Service
- -------------- ------------ ------------ ------------ ------------ ------------
10 15 20 25 30
-- -- -- -- --
<S> <C> <C> <C> <C> <C>
$100,000 $13,245 $19,868 $26,490 $33,113 $39,735
150,000 20,745 31,118 41,490 51,863 62,235
200,000 28,245 42,368 56,490 70,613 84,735
250,000 35,745 53,618 71,490 89,363 107,235
300,000 43,245 64,868 86,490 108,113 129,735
400,000 58,245 87,368 116,490 145,613 174,735
500,000 73,245 109,868 146,490 183,113 219,735
600,000 88,245 132,368 176,490 220,613 264,735
</TABLE>
All figures are expressed in U.S. dollars.
Compensation covered by this plan includes only the remuneration appearing in
the "Salary" and "Bonus" columns in the Summary Compensation Table. Benefits are
not subject to any deduction for social security or other offset amounts. The
Named Executive Officers have the following number of years of service credited:
Mr. Kennedy, 26, Mr. Colt, 9, Mr. Lorson, 18, Mr. Tufino, 2, and Mr. Smith, 2.
Credited years of service, in the case of Messers. Colt, Kennedy and Lorson,
include service with FMC Gold Company, the Corporation's predecessor.
<PAGE>
Employment Contracts
Each of the Named Executive Officers has entered into an employment contract
with the Corporation or Meridian Gold Company. Each of these contracts has a
term of five years, with an automatic renewal for five years. Compensation is
comprised of base salary, bonus and stock options, generally at the discretion
of the Board of Directors of the Corporation, together with certain benefits.
The employment contracts also provide for certain payments to the employee upon
certain defined events of termination of employment (including termination or a
change of responsibility after a change of control of the Corporation). These
payments range from 18 months to 36 months of the employee's regular monthly
compensation.
Composition of the Compensation Committee
In 1999, the Compensation Committee of the Corporation performed the functions
of determining compensation of the Corporation's executive officers, including
the Named Executive Officers. In 1999, the Compensation Committee was comprised
of David S. Robertson, Malcolm W. MacNaught, and Christopher R. Lattanzi. The
report of the Compensation Committee on these matters is set forth below:
As noted elsewhere above, Brian J. Kennedy, one of the directors, is President
and Chief Executive Officer. Mr. Kennedy always absented himself from the voting
of the board which related to his compensation and did not participate in the
board's determinations in respect of his compensation. None of the other members
of the Board of Directors of the Corporation are or were officers or employees
of the Corporation or its subsidiaries (with the exception of the Chairman of
the Board of Directors, who is deemed to be an officer of the Corporation).
Report on Executive Compensation
Compensation Philosophy
The Corporation's principal goal is to create value for its shareholders. The
Corporation believes that directors, officers and employees should have their
benefits aligned with both the short and long term interests of the
shareholders.
The compensation of the Corporation's executive officers is comprised of three
components; base salary, annual cash bonus, and long-term incentive in the form
of stock options. It is structured to be competitive with a select group of
comparative North American gold mining companies. A portion of the annual cash
bonus is directly related to the overall performance of the Corporation with
respect to relative share price performance, cost factors and reserve/resource
expansion.
Cash bonuses and stock options are directly related to company performance and
the individual's contribution. The Corporation strongly believes that annual
incentives and stock options play an important role in increasing shareholder
value.
Base Salary
To ensure that the Corporation is capable of attracting, motivating and
retaining individuals with exceptional executive skills, cash compensation is
reviewed and adjusted annually, based primarily on individual and corporate
performance, as well as compensation practices of similar gold mining companies.
The Board of Directors approved salaries and a bonus plan (based on the board's
own determination and discussion, and a report commissioned in 1998 by an
independent consultant) for the Corporation's executives for 1999 and subsequent
years, based on the recommendations of management and the Compensation Committee
of the Board (which recommendations were endorsed by the Board of Directors),
which were in turn based on enumerated and weighted objectives for each. In all
such cases, Mr. Kennedy absented himself from the Board's determinations of
compensation of the Corporation's President and Chief Executive Officer.
<PAGE>
Stock Options and Restricted Shares
The purpose of the Corporation's stock option and restricted shares plan is to
develop the interest and incentive of eligible employees, officers and directors
in the Corporation's growth and development by giving an opportunity to purchase
Common Shares on a favorable basis, thereby advancing the interests of the
Corporation, enhancing the value of the Common Shares for the benefit of all
shareholders and increasing the ability of the Corporation to attract and retain
skilled and motivated individuals.
Stock options and restricted shares are granted in accordance with the stock
option plan approved by the shareholders at not less than the closing price of
the Common Shares on the business day immediately prior to the date of grant.
President and Chief Executive Officer
In 1999, Mr. Brian Kennedy provided leadership and strategic direction that has
enabled the Corporation to position itself for future growth. In determining Mr.
Kennedy's compensation, the Compensation Committee and the Board of Directors
relied on the 1998 report of an independent consultant comparing compensation
practices of similar gold mining companies. The Compensation Committee and the
Board of Directors also considered other factors, such as Mr. Kennedy's
contribution to the business performance and anticipated future performance of
the Corporation.
The overall performance of the Corporation with respect to relative share price
performance, cost factors and resource/reserve expansion is the determinate of
75 percent of the variable compensation of the President and CEO. An additional
25 percent of the variable compensation of the President and CEO is based on
achievement of specific objectives agreed by the Board on an annual basis and
personal contribution as determined by the Compensation Committee.
In consideration of Mr. Kennedy's contribution to the Corporation, Mr. Kennedy
received a salary of $283,976, was awarded a cash bonus of $194,524, received
options to purchase 75,400 Common Shares, and received options to purchase
48,300 Restricted Common Shares.
The Compensation Committee has also approved those executive officers of the
Corporation and its subsidiaries who will be eligible to participate in the
Bonus Plan in 2000, together with enumerated and weighted objectives for each of
these executive officers for 2000. Each of these sets of objectives includes a
component of the Corporation's share performance, which will be calculated by
comparing the trading prices of the Corporation's common shares against a
weighted basket of shares of a list of comparable companies.
Going forward, the Compensation Committee and, as appropriate, the Board of
Directors, will address other issues relating to executive compensation,
including the relative emphasis on the components of executive compensation,
including compensation for the Corporation's President and Chief Executive
Officer.
Presented by the Compensation Committee: D.S. Robertson (Chairman), M.W.
MacNaught, and C.R. Lattanzi.
<PAGE>
Performance Graph
- -----------------
The following graph charts performance of an investment in the common shares of
the Corporation against the TSE 300 Stock Index and the TSE Gold and Precious
Metals Sub-Index, assuming an investment of $100 on July 31, 1996. No dividends
were paid by the Corporation during this period.
[chart goes here]
Compensation of Directors
- -------------------------
The non-executive Chairman of the Board of Directors receives an annual retainer
of U.S. $50,000; other directors of the Corporation who are not employees of the
Corporation or its affiliates receive an annual retainer of U.S. $20,000, plus
an additional U.S. $2,500 for each committee for which such director serves as
chairman. All directors of the Corporation receive a fee of (a) U.S. $1,000 for
attending in person each meeting of the Board of Directors or a committee
thereof, and (b) U.S. $500, which amount may be adjusted at the discretion of
the Chairman of the Corporation or Committee, as applicable, but shall not
exceed U.S. $1,000, for participation at each meeting of the Board of Directors
or a Committee held by telephone conference, plus reimbursement of expenses in
each case. Directors are also eligible to receive grants under the Corporation's
1999 Share Incentive Plan. The aggregate compensation paid to the directors of
the Corporation during 1999 was U.S. $163,000, and directors Messers. Matthews
and Lattanzi were each granted a stock option in the amount of 10,000 shares.
Directors' and Officers' Insurance
- ----------------------------------
The Corporation maintains directors' and officers' liability insurance for the
benefit of the directors and officers of the Corporation and certain
subsidiaries. The current annual policy limit is U.S. $25,000,000. Protection is
provided to directors and officers for wrongful acts or omissions done or
committed during the course of their duties as such. Under the insurance
coverage, the Corporation is reimbursed for payments which it is required or
permitted to make to its directors and officers to indemnify them, subject to a
deductible of U.S. $250,000 per loss. Individual directors and officers are
reimbursed for losses incurred in their capacities as such, which are not
subject to a deductible. The annual premium for the period January 1, 1999 to
December 31, 1999 was U.S. $231,312, all of which was paid by the Corporation.
Indebtedness of Directors and Officers
- --------------------------------------
None of the directors or officers of the Corporation, nor any proposed nominees
for election as directors, nor any associate or affiliate of any such person,
has been indebted to the Corporation or any of its subsidiaries at any time
since January 1, 1999, or is indebted to another entity or since the beginning
of the most recently completed financial year was indebted to another entity,
and that indebtedness was the subject of a guarantee, support agreement, letter
of credit or other similar arrangement or understanding in respect thereof
provided by the Corporation of any of its subsidiaries, other than amounts owing
for purchases subject to usual trade terms, for ordinary travel and expense
advances and for other transactions in the ordinary course of business.
Interests in Material Transactions
- ----------------------------------
None of the directors or officers of the Corporation, nor any proposed nominees
for election as directors, nor any associate or affiliate of any such person,
had any direct or indirect material interest, since January 1, 1999, in respect
of any matter that has materially affected or will materially affect the
Corporation or any of its subsidiaries.
Appointment of Auditors
- -----------------------
Unless otherwise instructed, the persons named in the enclosed form of proxy
intend to vote such proxy in favor of the reappointment of KPMG LLP as auditors
of the Corporation to hold office until the next annual meeting of shareholders
and the authorization of the Board of Directors to fix their remuneration. KPMG
LLP have been auditors of the Corporation since July 1996.
Representatives of KPMG LLP will attend the Meeting, will have the opportunity
to make a statement if they desire to do so, and will respond to any appropriate
questions.
The Board of Directors recommends that shareholders vote in favor of the
appointment of KPMG LLP as auditors of the Corporation.
Shareholder Proposal
- --------------------
The Corporation has been notified that the following shareholder of the
Corporation intends to present the proposal set forth below for consideration at
the Meeting. Unless provided below, the address and stock ownership of the
proponent will be furnished by the Secretary of the Corporation to any person,
orally or in writing as requested, promptly upon receipt of any oral or written
request therefore.
Proposal - Donation of [Corporation] Revenue to the Foundation for the
Advancement of Monetary Education, Ltd. ("FAME")
The Tocqueville Gold Fund has submitted the following proposal:
"I, John C. Hathaway, on behalf of The Tocqueville Gold Fund, of 1675 Broadway,
New York, NY 10019, being the owner of 80,000 shares of [Corporation] stock,
held over one year and to be held beyond the meeting date, present the following
Proxy Proposal:
"I request that management, for this year and the five years following,
undertake to donate 0.1% (one-tenth of a percent) of the [Corporation]'s annual
gold revenues to FAME; after the sixe-year period, if management, in its sole
discretion, deems that FAME's program is not beneficial to the [Corporation],
then the [Corporation] would cease making any further donations to FAME."
<PAGE>
"Statement of Support:
"WHEREAS:
(1) "almost all of the [Corporation]'s revenues derive from gold production,
and its profits are tightly linked to the price of gold;
(2) "the use of gold-as-money would require people to save gold for future
payment, thereby driving substantial additional demand for gold and a
concomitant increase in its price; and,
(3) "the Foundation for the Advancement of Monetary Education, Ltd.(`FAME'), a
501(c)(3) U.S. public charity, has as its mission to raise public awareness
about the benefits of honest monetary weights and measures (gold-as-money);
"Since 1981, relative to the S&P Index, gold-related investments are down 99%.
"Part of the reason for this miserable performance is that gold producers have
been badly served by those advising them for the past twenty years.
"Most telling, so-called `industry experts' cannot provide a credible - or, in
almost all cases, any - explanation for the seminal event for gold in this
century: that for forty years it was a felony for Americans to own monetary
gold. Other fundamental and related issues these `experts' cannot properly make
clear are:
(1) "why is it that there is an above ground supply of gold of more than 50
years' worth of production while for no other commodity, save silver, is
there even a single year's production supply above ground?
(2) "why is it that gold almost never goes into backwardation against the
dollar? and,
(3) "why is it that the International Monetary Fund prohibits its member
countries from linking their currencies to gold?
"Not understanding the primary use for gold, these `experts' have misdirected
producers to waste their treasure, and, more importantly, their most valuable
resource - top management time - pursuing ineffective strategies such as
advertising jewelry, and, now, lobbying central banks.
"For the gold industry - and the [Corporation] - to prosper, gold producers
require intellectual support for gold-as-money so that they have a basis for
exploiting their principal opportunity: pressing for a monetary system based on
honest monetary weights and measures.
"These are compelling arguments that:
o "the principal use for gold is money;
o "banks and central banks, have acted and continue to act to denigrate and
marginalize gold; and,
o "if promoted as money, the purchasing power equivalent for gold will be
substantially greater thaN $1,000 per ounce.
"The gold-as money issue can be placed on the national agenda.
"Intellectuals legitimatize ideas.
"However, their work must be paid for, and it cost money to disseminate their
findings.
"FAME will make its major focus recruiting intellectuals, mostly labor
economists, who will help make credible a return to honest monetary weights and
measures, which has always been, and - for persuasive reasons - will be again,
gold-as-money.
<PAGE>
"FAME will then engage in extensive promotion of their works including arranging
publication, sponsoring speaking/radio/television tours for authors,
seminars/conferences/luncheons in major cities where selected experts will
appear and to which the press will be invited, and a much more extensive
Internet presence (in addition to its present Internet efforts).
"As the public becomes aware of the benefits of honest monetary weights and
measures (gold-as-money) and the problems with our current
irredeemable-paper-ticket monetary systems, the gold-as-money issue will be
added to the national agenda and will become a topic for politicians, the market
for gold will increase greatly, the [Corporation]'s profits will increase, and
shareholder value will increase. It is for these reasons - and because an honest
monetary system works to the benefit of ordinary people - that this resolution
should be supported."
The Board of Directors of the Corporation recommends a vote "AGAINST" this
proposal for the following reason:
The Corporation is in support of all efforts to increase the price of gold,
although the Board advises that it is not prudent to commit a percentage of the
Corporation's revenue to any organization for a six-year period.
Discretion should be left with the Corporation as to any donations.
Under these circumstances, the Board believes that this proposal would do a
disservice to the interests of the Corporation and its shareholders.
Accordingly, the Board of Directors recommends that you vote "AGAINST" this
proposal, and your proxy will be so voted if the proposal is presented unless
you specify otherwise.
General
- -------
The information contained in this Circular is given as of March 24, 2000 and is
expressed in United States dollars, except as otherwise indicated.
Management knows of no matters to come before the Meeting other than the matters
referred to in the Notice of Meeting. If any matters which are not known should
properly come before the Meeting, proxies will be voted on matters in accordance
with the best judgment of the person voting.
The Corporation's 1999 Annual Report is being mailed to shareholders with the
Notice of Meeting and this Circular. The Corporation will provide to any person,
upon written request, a copy of the Corporation's latest Annual Information Form
("AIF"), any documents incorporated in the AIF by reference, interim financial
statements for periods after December 31, 1999 (when available), as well as a
copy of this Circular. Written requests for these documents should be addressed
to Investor Relations, Meridian Gold Inc., 9670 Gateway Drive, Suite 200, Reno,
Nevada 89511-8997. If the person requesting the documents is not a shareholder,
he or she may be required to pay a reasonable charge for the document.
The Corporation's registered office is located c/o Donahue & Partners, Ernst &
Young Tower, 222 Bay Street, Suite 1800, Toronto, Ontario, Canada M5K 1H6.
Director's Approval
- -------------------
The contents and sending of this circular have been approved by the Board of
Directors of the Corporation.
/S/ Edward H. Colt
- ----------------------
Edward H. Colt
Secretary
<PAGE>
Appendix 1
MERIDIAN GOLD INC.
PROXY
This proxy is solicited on behalf of management of Meridian Gold Inc. (the
"Corporation") for use at the Annual Meeting of Shareholders (the "Meeting") of
the Corporation to be held on May 2, 2000.
The undersigned shareholder hereby appoints Dr. David S. Robertson, Chairman of
the Board of Directors, or in his absence, Mr. Brian J. Kennedy, President and
Chief Executive Officer of the Corporation, or instead of either of them,
_________________________________________ (see note 1 below), as shareholder of
the undersigned, with full power of substitution, to attend, vote and act for
the undersigned at the Meeting, and at any adjournment or adjournments of the
Meeting. The undersigned undertakes to ratify and confirm all of the actions of
the shareholder pursuant to this proxy, and revokes any proxy previously given.
The shareholder designated above is specifically directed to vote (or withhold
from voting) all of the shares registered in the name of the undersigned as
specified below (see note 2 below):
MANAGEMENT RECOMMENDS SHAREHOLDERS VOTE FOR ITEMS 1 AND 2 BELOW.
---
1. TO VOTE |_| TO WITHHOLD FROM VOTING |_|
in the election of the nominees proposed by management as directors of the
Corporation;
2. TO VOTE |_| TO WITHHOLD FROM VOTING |_|
in the appointment of KPMG LLP as auditors of the Corporation and to
authorize the Board of Directors to fix their remuneration;
MANAGEMENT RECOMMENDS SHAREHOLDERS VOTE AGAINST ITEM 3 BELOW.
-------
3. FOR |_| AGAINST |_|
the stockholder proposal with respect to donation of Company revenue to
FAME
Please see the Notice of Annual Meeting and Management Proxy Circular
accompanying this proxy for further information. See note 3 below for
instructions on completing this proxy.
Dated this ______________________ day of __________________________, 2000.
Name of Shareholder (please print) _______________________________________
Signature of Shareholder _________________________________________________
NOTES:
- ------
1. A shareholder has the right to appoint, as his or her shareholder, a
person (who need not be a shareholder) other than the nominees designated
above by inserting the name of that other person in the space above.
2. In the event that no choice is specified with respect to voting or
withholding from voting in respect of items (1.) and (2.) above, the
nominee designated above is instructed to vote for that item(s),
respectively. In the event that no choice is specified with respect to
voting for or against the matter referred to in item (3.) above, the
nominee designated above is instructed to vote the shares represented by
this proxy against such matter. If any amendments or variations to the
matters referred to above or to any other matters identified in the Notice
of Meeting are proposed at the Meeting (or any adjournment) or if any
other matters which are not now known to management should properly come
before the Meeting (or any adjournment), this proxy confers discretionary
authority on the shareholder to vote on such amendments, variations or
other matters in the best judgment of the shareholder.
3. Please complete, date and sign this proxy and return it as soon as
possible in the envelope provided. Executors, administrators, trustees,
attorneys or guardians should so indicate when signing and provide proof
of appointment. Where shares are held in the names of two or more persons,
each person must sign. If the shareholder is a corporation, this proxy
must be signed by an authorized officer or attorney of the corporation
with clear indication of his/her title. If this proxy is not dated, it
shall be deemed to bear the date on which it was mailed. Any resident of
Quebec who signs this proxy confirms the express wish that this proxy and
the documents relating to this proxy be drawn up in English.
4. Properly executed forms of proxy must be deposited no later than 5:00 p.m.
(Eastern Standard Time) on April 28, 2000 with the Corporation's registrar
and transfer agent, The Trust Company of Bank of Montreal, 129 St. Jacques
Street West, Level B North, Montreal, Quebec H2Y 1L6.
