<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 5, 1997
REGISTRATION NO. 333---------------
- ------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
FORM S-8
REGISTRATION UNDER THE SECURITIES ACT OF 1933
----------------------------------
PEGASUS GOLD INC.
-----------------
(Exact name of registrant as specified in its charter)
BRITISH COLUMBIA, CANADA NONE
------------------------ ------
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
601 WEST FIRST STREET, SUITE 1500, SPOKANE, WASHINGTON 99204
------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
PEGASUS GOLD INC. 1997 STOCK PLAN
---------------------------------
(Full title of plan)
ROBERT A. LONERGAN, GENERAL COUNSEL AND SECRETARY
-------------------------------------------------
601 WEST FIRST STREET, SUITE 1500, SPOKANE, WASHINGTON 99204
------------------------------------------------------------
(Name and address of agent for service)
(206) 624-8300
--------------
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
---------------------------------------------------------------------------
<TABLE>
<CAPTION>
Proposed
Proposed maximum maximum
Title of Amount offering aggregate Amount of
securities to be to be price offering registration
registered registered(1) per share(2) price(2) fee
---------- ------------- ------------ -------- ---
<S> <C> <C> <C> <C>
Common shares, 4,000,000 $6.90625 $27,625,000 $8,371.21
without par value
</TABLE>
---------------------------------------------------------------------------
NOTES:
1. Represents Common Shares without par value ("Common Shares") being
registered under the 1997 Stock Plan ("Plan") of Pegasus Gold Inc.
("Registrant"), together with an indeterminate number of additional
shares which may be necessary to adjust the number of shares reserved
for issuance under the Plan as a result of a future stock split, stock
dividend or similar adjustment, as permitted by Rule 416.
2. Estimated solely for the purpose of calculating the amount of the
registration fee. Pursuant to Rules 457(c) and (h) under the
Securities Act of 1933, as amended ("Act"), the price per share is
estimated to be $6.90625 based upon the average of the high ($7.00)
and low ($6.8125) per share trading prices of Registrant's Common
Shares, as quoted on the American Stock Exchange on April 30, 1997.
<PAGE>
PART II. INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are incorporated by reference in the
Registration Statement:
(a) The Registrant's Annual Report of Form 10-K for the year ended
December 31, 1996, filed pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended ("Exchange Act"), which contains audited
financial statements for the most recent fiscal year for which such statements
have been filed.
(b) All other reports filed by the Registrant pursuant to Section
13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by
the Annual Report on Form 10-K referred to in (a) above.
(c) The description of the shares of the Common Shares contained in
(i) the Registration Statement on Form S-1 (Registration No. 33-14910); (ii) the
Registrant's Form 8-A filed April 13, 1988; and (iii) the Registrant's Form 8-A
filed April 29, 1989, including any amendments or reports filed for the purpose
of updating such description.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 128 of the Company Act of British Columbia provides in part that:
(1) A company, with the approval of the court, may indemnify a
person who is a director or former director of the company or is a director
or former director of a corporation of which the Company is or was a
shareholder, and the person's heirs and personal representatives, against all
costs, charges and expenses, including an amount paid to settle an action or
satisfy a judgment, actually and reasonably incurred by the person, including
an amount paid to settle an action or satisfy a judgment in a civil, criminal
or administrative action or proceeding to which the person is made a party
because of being or having been a director, including an action brought by
the company or corporation, if:
(a) the person acted honestly and in good faith with a view
to the best interests of the corporation of which the person is or was a
director; and
(b) in the case of a criminal or administrative action or
proceeding, the person had reasonable grounds for believing that the person's
conduct was lawful.
<PAGE>
Part 19 of the Articles of the Registrant provides for the
indemnification of an officer or director to the extent provided above. In
addition, the Registrant maintains directors' and officers' liability
insurance for persons acting in the capacity of officers and directors of the
Registrant and its subsidiaries.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Exhibit
Number Description
------ -----------
4.1 1997 Stock Plan, effective as of January 8, 1997.
5.1 Opinion of Lawson Lundell Lawson & McIntosh as to legality
of securities.
23.1 Consent of Lawson Lundell Lawson & McIntosh (included in
Exhibit 5.1)
24.1 Power of Attorney (see Signature Page).
ITEM 9. UNDERTAKINGS.
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
<PAGE>
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) of
this section do not apply if the Registration Statement is on Form S-3, Form S-8
or Form F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the Registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer of controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Vancouver, Province of British Columbia, Canada, on
April 30, 1997.
PEGASUS GOLD INC.
By: /s/ Werner G. Nennecker
------------------------
Werner G. Nennecker
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes and
appoints Werner G. Nennecker, Philip S. Baker and Robert A. Lonergan and each of
them, with full power of substitution and full power to act without the other,
as his true and lawful attorney-in-fact and agent to act in his name, place and
stead and to execute in the name and on behalf of each person, individually and
in each capacity stated below, and to file any and all amendments to this
Registration Statement, including any and all post-effective amendments.
Pursuant to the requirements of the Securities Act, this Power of Attorney
has been signed by the following persons in the capacities indicated, on April
30, 1997.
SIGNATURE TITLE
/s/ Werner G. Nennecker President and Chief Executive Officer
- ------------------------
Werner G. Nennecker (Principal Executive Officer)
/s/ Philip S. Baker Vice President and Chief Financial Officer
- --------------------
Philip S. Baker (Principal Financial and Accounting Officer)
/s/ Fred C. Schulte Chairman of the Board
- -------------------
Fred C. Schulte
/s/ Peter M. D. Bradshaw Director
- ------------------------
Peter M. D. Bradshaw
<PAGE>
/s/ Lawrence I. Bell Director
- ---------------------
Lawrence I. Bell
/s/ Douglas R. Cook Director
- -------------------
Douglas R. Cook
/s/ Michael A. Grandin Director
- ----------------------
Michael A. Grandin
/s/ Peter R. Kutney Director
- -------------------
Peter R. Kutney
/s/ Lindsay D. Norman Director
- ---------------------
Lindsay D. Norman
/s/ Anthony J. Petrina Director
- -----------------------
Anthony J. Petrina
<PAGE>
PEGASUS GOLD INC.
1997 STOCK PLAN
EFFECTIVE JANUARY 8, 1997
1. ESTABLISHMENT, DURATION AND PURPOSE.
(a) Pegasus Gold Inc., a British Columbia company, (the "Corporation"),
hereby adopts the Pegasus Gold Inc. 1997 Stock Plan (the "Plan"),
effective January 8, 1997 ("Effective Date").
(b) No Award granted to an employee or a director shall become exercisable
until the Plan is approved by shareholders at a shareholders' meeting
held within twelve months of the Effective Date. Any Awards granted
under the Plan prior to such approval shall be contingent upon such
approval.
(c) The purpose of the Plan is to promote the long-term success of the
Corporation by encouraging directors and employees of the Corporation
and its Subsidiaries to focus on long-range objectives, by attracting
and retaining employees and by aligning the financial interests of
directors and employees with the interests of shareholders. The Plan
provides a means whereby:
(1) employees of the Corporation and its Subsidiaries may be given an
opportunity to purchase Stock pursuant to options which may
qualify as incentive stock options under Section 422 of the Code
(referred to as "incentive stock options");
(2) directors and employees of the Corporation and its Subsidiaries
may be given an opportunity to purchase Stock pursuant to options
which do not qualify as incentive stock options (referred to as
"nonqualified stock options");
(3) directors and employees of the Corporation and its Subsidiaries
may acquire Stock for such consideration and subject to such
restrictions (if any) as the Committee determines appropriate,
provided, however, that prior to the issuance of such Stock, the
Corporation will have received from the director or employee the
consideration established for the Stock issued to him;
(4) directors and employees of the Corporation and its Subsidiaries
may be awarded Stock pursuant to the terms of incentive plans
established from time to time by such entities, provided,
however, that prior to the issuance of such Stock, the
Corporation will have
- --------------------------------------------------------------------------------
PEGASUS GOLD INC. -1- February 7, 1997
1997 STOCK PLAN
<PAGE>
received from the director or employee the consideration
established for the Stock issued to him; and
(5) directors and employees of the Corporation and its Subsidiaries
may be granted rights or units the value of which is based on the
value of the Stock.
2. DEFINITIONS. The following terms when capitalized in this Plan have the
following meanings.
(a) "Awards" refers collectively to Stock Awards (see para. 8, INFRA),
stock appreciation rights (see para. 7, INFRA), Stock Options (see
para. 6, INFRA), and Unit Awards (see para. 9, INFRA) made pursuant to
this Plan.
(b) "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
(c) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(d) "Non-Employee Director" means a director who (1) is not currently an
officer (as defined in 17 CFR 260.16a-1(f)) of the Corporation or a
Subsidiary, or otherwise currently employed by the Corporation or a
Subsidiary; (2) is not a former employee of the Corporation who
receives compensation during the taxable year for prior services, (3)
does not receive compensation, either directly or indirectly, from the
Corporation or a Subsidiary, for services rendered as a consultant or
in any other capacity except as a director, except for services that
do not require, or in such amount that does not require, disclosure
under Item 404(a) of Regulation S-K issued by the Securities and
Exchange Commission; (4) does not possess an interest in any other
transaction for which disclosure would be required pursuant to Item
404(a) of such Regulation; (5) is not engaged in a business
relationship for which disclosure would be required pursuant to Item
404(b) of such Regulation; and (6) is an outside director within the
meaning of Treasury Regulation 1.162-27(e)(3).
(e) "Participant" refers to the recipient of an Award.
(f) "Stock" means the Corporation's Common Shares without par value.
Shares under the Plan may be authorized and unissued shares or
reacquired shares.
(g) "Stock Award" means Stock issued to eligible persons pursuant to
paragraph 8 of this Plan.
- --------------------------------------------------------------------------------
PEGASUS GOLD INC. -2- February 7, 1997
1997 STOCK PLAN
<PAGE>
(h) "Stock Option" means options to purchase Stock granted to eligible
persons pursuant to paragraph 6 of this Plan.
(i) "Subsidiaries" refers to subsidiary corporations, as defined in
Section 424(f) of the Code (but substituting "the Corporation" for
"employer corporation") and as defined in the Securities Act (of
British Columbia), including entities which become Subsidiaries after
adoption of the Plan.
(j) "Unit Awards" means the units issued to eligible persons pursuant to
paragraph 9 of this Plan as compensation for services rendered or to
be rendered to the Corporation or its Subsidiaries.
3. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by the Compensation Committee (the
"Committee") of the Board of Directors of the Corporation (the
"Board").
(b) The Committee shall consist solely of two or more Non-Employee
Directors.
(c) The Committee shall determine which employees and directors of the
Corporation or its Subsidiaries shall be granted (subject to Board
approval for Awards to CEO) Awards under the Plan, the timing of such
Awards, the terms thereof, and the number of shares of Stock subject
to each Award.
(d) The Committee shall have the sole authority, in its absolute
discretion, to adopt, amend, and rescind such rules and regulations
as, in its option, may be advisable in the administration of the Plan,
to construe and interpret the Plan, the rules and regulations, and the
instruments evidencing Awards granted under the Plan and to make all
other determinations deemed necessary or advisable for the
administration of the Plan. All decisions, determinations, and
interpretations of the Committee shall be binding on all Participants.
(e) During periods of time and in amounts approved by the Committee,
eligible persons may elect to swap compensation for Stock, Stock
Options, stock appreciation rights or Unit Awards. Such elections,
once made, will be irrevocable.
(f) The Plan is intended to meet the requirements of Rule 16b-3
promulgated by the Securities and Exchange Commission under Section
16(b) of the Exchange Act and the requirements of Section 162(m)(4)(C)
of the Code and shall be administered and construed accordingly.
- --------------------------------------------------------------------------------
PEGASUS GOLD INC. -3- February 7, 1997
1997 STOCK PLAN
<PAGE>
4. STOCK SUBJECT TO THE PLAN; LIMITATIONS ON AWARDS.
(a) Awards containing rights to acquire Stock may be granted under the
Plan to eligible persons (as set forth in para. 5, INFRA) for an
aggregate of not more than four (4) million (4,000,000) shares of
Stock, plus any shares that (i) are available for grant under the
Corporation's 1987 Stock Option Plan or 1989 Non-Employee Directors'
Stock Option Plan on the date the shareholders approve this Plan, or
(ii) may subsequently become available for grant under such plans
through the expiration, termination, forfeiture or cancellation of
awards under such plans. If an Award granted under this Plan expires,
terminates, or is forfeited or canceled, the unissued shares of Stock
subject to such Award shall again be available for Awards under this
Plan.
(b) If there is any change in the Stock subject to the Plan or the Stock
subject to any Award granted under the Plan (through merger,
amalgamation, arrangement, consolidation, reorganization, spin-off,
recapitalization, reincorporation, stock split, dividend issued in
stock or other change in the corporate structure of the Corporation),
appropriate adjustments may be made by the Committee in order to
preserve but not to increase the benefits to the Participants. These
adjustments may include adjustments to the aggregate number of shares
of Stock subject to the Plan, the number of shares of Stock and the
price per share subject to outstanding Awards and the limitations in
subparagraph (c) below.
(c) The Corporation shall not grant, issue or sell to any employee in any
calendar year;
(1) Stock Options pursuant to paragraph 6 to purchase more than two
hundred fifty thousand (250,000) shares of Stock, or
(2) stock appreciation rights pursuant to paragraph 7 with respect to
more than two hundred fifty thousand (250,000) shares of Stock.
(d) Notwithstanding anything to the contrary in this Plan, the Company
will not, at any time while the Stock is listed on The Toronto Stock
Exchange or the Montreal Exchange (i) grant Stock Options to insiders
in respect of Stock exceeding an aggregate at any time of 10 percent
of the outstanding issue, (ii) issue to insiders, within a one (1)
year period, a number of shares of Stock exceeding 10 percent of the
Company's outstanding issue, (iii) issue to any one insider and his
associates, within a one (1) year period, a number of shares of Stock
exceeding 5 percent of the Company's outstanding issue, or (iv) grant
Stock Options to any one person in respect of shares of Stock
exceeding 5 percent of the Company's outstanding issue, other than (in
any such case) as may be
- --------------------------------------------------------------------------------
PEGASUS GOLD INC. -4- February 7, 1997
1997 STOCK PLAN
<PAGE>
permitted by the rules of The Toronto Stock Exchange and/or the
Montreal Exchange, as the case may be. For the purposes of this
subsection (d), the terms "insiders," "outstanding issue" and
"associates" shall have the meanings ascribed to them under the rules
of The Toronto Stock Exchange.
5. ELIGIBILITY.
Persons who shall be eligible to have Awards granted to them shall be such
employees or directors of the Corporation or its Subsidiaries as the
Committee, in its discretion, shall designate from time to time.
6. TERMS AND CONDITIONS OF STOCK OPTIONS.
(a) The exercise price of the Stock covered by each Stock Option granted
under the Plan shall be not less than the per share fair market value,
as determined by reference to the closing share price on a recognized
stock exchange, of such Stock on the date the option is granted.
Notwithstanding the foregoing, in the case of an incentive stock
option granted to a person possessing more than ten percent (10%) of
the combined voting power of the Corporation or any Subsidiary, the
exercise price shall not be less than one hundred ten percent (110%)
of the fair market value of the Stock on the date the option is
granted. The exercise price of an outstanding Stock Option shall be
subject to adjustment to the extent provided in paragraph 4, above.
(b) Notwithstanding anything in the Plan to the contrary, the aggregate
fair market value (determined at the time of grant of an incentive
stock option) of Stock with respect to which incentive stock options
are exercisable for the first time by any Participant during any
calendar year (under all plans of the Corporation and its
Subsidiaries) shall not exceed $100,000.
(c) Each Stock Option granted pursuant to the Plan shall be evidenced by a
written stock option agreement executed by the Corporation and the
person to whom such option is granted.
(d) The Committee shall determine the term of each Stock Option granted
under the Plan, but the term of each Stock Option shall be for no more
than ten (10) years provided, however, that in the case of an
incentive stock option granted to a person possessing more than ten
percent (10%) of the combined voting power, of the Corporation or any
Subsidiary, the term shall be for no more than five (5) years.
(e) The stock option agreement may contain such other terms, provisions,
and conditions as may be determined by the Committee (not inconsistent
- --------------------------------------------------------------------------------
PEGASUS GOLD INC. -5- February 7, 1997
1997 STOCK PLAN
<PAGE>
with this Plan) including, without limitation, stock appreciation
rights with respect to Stock Options granted under this Plan. If a
Stock Option, or any part thereof, is intended to qualify as an
incentive stock option, the stock option agreement shall contain those
terms and conditions which are necessary to so qualify it.
7. STOCK APPRECIATION RIGHTS.
The Committee may, under such terms and conditions as it deems appropriate,
authorize the surrender by an optionee of all or part of an unexercised
Stock Option and authorize a payment in consideration therefor in an amount
equal to the difference obtained by subtracting the option price of the
shares then subject to exercise under such option from the fair market
value of the Stock represented by such shares on the date of surrender,
provided that the Committee determines that such settlement is consistent
with the purpose of the Plan. Such payment may be made in shares of Stock
valued at their fair market value on the date of surrender of such option
or in cash, or partly in shares and partly in cash. Acceptance of
surrender and the manner of payment shall be in the discretion of the
Committee. Any payments of cash under this paragraph shall be from the
general assets of the Corporation.
8. STOCK AWARDS
The Committee may, in its discretion, issue Stock to eligible persons on
whatever basis and subject to such performance requirements, terms and
conditions as the Committee determines, subject to compliance with the
applicable provisions of the Company Act (of British Columbia). The terms
and conditions of such Stock Award shall be evidenced by a written
agreement executed by the Corporation and the Participant.
9. UNIT AWARDS
The Committee may, in its discretion, issue units to eligible persons as
compensation for services rendered or to be rendered to the Corporation or
its Subsidiaries, the value of such units to be measured by increases or
decreases (during all or a portion of the term of the Unit Award) in the
Corporation's value, including, but not limited to, a formula based on
operating cash flow, production and reserves, fair market value per share
of Stock, or such other measure specified by the Committee prior to grant
of the applicable Unit Award. Unit Awards shall be subject to whatever
performance requirements, terms and conditions the Committee determines
appropriate. The terms of a Unit Award, shall be evidenced by a written
agreement executed by the Corporation and the Participant.
- --------------------------------------------------------------------------------
PEGASUS GOLD INC. -6- February 7, 1997
1997 STOCK PLAN
<PAGE>
10. (a) GENERAL PROHIBITION ON TRANSFERS. Unless otherwise expressly provided
in this paragraph 10 or by the Award Agreement, as either may be
amended, or by applicable law or the rules of the stock exchanges on
which the Stock is listed, (i) a Participant may not transfer
(including assign, pledge, or encumber) any of Participant's interest
in an Award; (ii) only a Participant may exercise an Award; and (iii)
the Corporation may deliver amounts payable or shares issuable
pursuant to Awards only to (or for the account of) the Participant.
(b) COMMITTEE-APPROVED TRANSFERS. Subject to applicable law, the
Committee may permit Awards to be exercised by and paid to such
persons or entities as The Committee may approve, pursuant to such
conditions and procedures as the Committee may establish, and subject
to the condition that the Committee receive evidence satisfactory to
it that the transfer is being made for estate and/or tax planning
purposes on a gratuitous or donative basis and without consideration
(other than nominal consideration). Notwithstanding the foregoing,
incentive stock options shall be subject to any additional transfer
restrictions as required for such options under the Internal Revenue
Code.
(c) PERMITTED TRANSFERS. The following transactions are permitted under
this Plan without the restrictions imposed by this paragraph 10,
subject to the rules of the stock exchanges on which the Stock is
listed:
For all Awards:
(1) transfers to the Corporation;
(2) the designation of a beneficiary to receive benefits in the event
of the Participant's death or, if the Participant has died,
transfers to or exercise by the Participant's beneficiary, or, in
the absence of a validly designated beneficiary, transfer by will
or the laws of decent and distribution; and
For all Awards except incentive stock options:
(3) transfers pursuant to a domestic relations order;
(4) if the Participant has suffered a disability, permitted transfers
or exercises on behalf of the Participant by his or her legal
representative; or
(5) the authorization by the Committee of "cashless exercise"
procedures with third parties who provide financing for the
purpose of (or who otherwise facilitate) the exercise of Awards
consistent
- --------------------------------------------------------------------------------
PEGASUS GOLD INC. -7- February 7, 1997
1997 STOCK PLAN
<PAGE>
with applicable laws and stock exchange rules and the express
authorization of the Committee.
(d) Awards granted or Stock acquired under the Plan shall be subject to
such restrictions and agreements regarding performance, vesting, sale,
assignment, encumbrance, or other transfer as the Committee deems
appropriate at the time of making an Award.
11. USE OF PROCEEDS.
Any cash proceeds realized from the sale of Stock pursuant to the Plan or
from the exercise of options granted under the Plan shall constitute
general funds of the Corporation.
12. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN
(a) The Board may at any time amend, suspend or terminate the Plan as it
deems advisable; provided, however, except as set forth in paragraph
4, above, the Board shall not amend the Plan in the following respects
without the consent of the shareholders of the Corporation then
sufficient to approve the Plan in the first instance and the approval
of all stock exchanges on which the Stock is then listed, if, and to
the extent required, by such exchanges:
(1) to increase the maximum number of shares of Stock subject to the
Plan; or
(2) to change the designation or class of persons eligible to receive
Awards under the Plan.
(b) No Award may be granted during any suspension or after the termination
of the Plan, and no amendment, suspension or termination of the Plan
shall, without the Participant's consent, alter or impair any rights
or obligations under any Award previously made under the Plan,
(c) This Plan shall terminate 10 years from the date of adoption of the
plan, unless previously terminated by the Board pursuant to this
paragraph 12.
13. CONSIDERATION.
Payment of the exercise price of a Stock Option or payment of any
consideration required for a Stock Award granted under this Plan shall be
made in cash or check; or with the consent of the Committee, in shares of
Stock already owned by the Participant; or with the Committee's consent
partly in cash and partly in Stock provided, however, that the Committee,
in its sole discretion, may establish
- --------------------------------------------------------------------------------
PEGASUS GOLD INC. -8- February 7, 1997
1997 STOCK PLAN
<PAGE>
procedures which permit a Participant to pay the exercise or purchase price
in whole or in part by delivery (on a form prescribed by the Committee) of
an irrevocable direction to a securities broker approved by the Committee
to sell shares and deliver all or a portion of the proceeds to the
Corporation for and on behalf of a participant in payment for the Stock.
The Committee may also establish procedures for the sale of shares of Stock
to cover withholding taxes or the withholding of shares of Stock issuable
upon exercise of an option to satisfy applicable withholding taxes to the
extent permitted by applicable law. Notwithstanding any provision in this
paragraph 13 to the contrary, no share of Stock shall be issued by the
Corporation until the Corporation has received the full consideration for
it as required by the Company Act (of British Columbia).
Dated Adopted by Corporation:
Date Approved By Shareholders:
- --------------------------------------------------------------------------------
PEGASUS GOLD INC. -9- February 7, 1997
1997 STOCK PLAN
<PAGE>
[LETTERHEAD]
April 30, 1997
Pegasus Gold Inc.
Suite 1500 - 601 West First Avenue
Spokane, Washington
U.S.A. 99204
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C.
U.S.A. 20549
Dear Sirs:
PEGASUS GOLD INC.
We are the Canadian solicitors for Pegasus Gold Inc. (the "Company") and have
been requested by it to provide the opinions expressed herein in connection with
the authorization for issuance of an aggregate of an additional 4,000,000 Common
Shares without par value (the "Shares") under and in accordance with the
Company's 1997 Stock Plan (the "Plan"), to be registered under the Registration
Statement on Form S-8 (the "Registration Statement") with the Securities and
Exchange Commission pursuant to the Securities Act of 1993, as amended.
In this regard and for the purpose of the opinions expressed herein, we have
examined the Certificate of Incorporation, Memorandum and Articles of the
Company and such corporate records, such certificates of public officials and
governmental bodies and authorities, such certificates of officers or
representatives of the Company and such other documents, and have made such
investigations and searches and considered such matters of law, as we believe
necessary and relevant to enable us to give, and as the basis for, the
opinions expressed herein. We have, without making an independent
investigation, assumed the conformity to originals of telecopied, certified
and photographically reproduced documents which we have examined and the
proper authority of all signatories, other than those on behalf of the
Company, to and the authenticity of all signatures on documents that have
been examined by us.
As to various questions of fact material for the opinions expressed herein,
information with respect to which is in the possession of the Company, we have
relied upon certificates, reports, opinions or representations of or by an
officer or officers of the Company.
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We express no opinion as to laws other than the laws of the Province of British
Columbia and the federal laws of Canada applicable therein and we have assumed
that there is nothing in any other law that affects our opinions expressed
herein.
Based upon and subject to the foregoing, we are of the opinion that the issuance
of the Shares pursuant to the provisions of the Plan has been duly authorized by
the Company and, when such Shares have been duly issued and paid for in
accordance with the terms of the Plan, they will be validly issued and fully
paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Yours very truly,
/s/ Lawson Lundell Lawson & McIntosh
