<PAGE>
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VISTA GOLD CORP.
NOTICE OF MEETING
AND
MANAGEMENT INFORMATION
AND PROXY CIRCULAR
for the
Annual General Meeting
to be held on
Monday, May 10, 1999
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<PAGE>
March 24, 1999
Dear Shareholder:
It is my pleasure to invite you to attend the Corporation's 1999 annual
general meeting of shareholders. The meeting will be held on Monday, May 10,
1999 at 9:30 a.m., Vancouver time, at Suite 1200, 200 Burrard Street, Vancouver,
British Columbia.
If you are unable to attend the meeting in person, please complete, date,
sign and return the enclosed form of proxy to ensure that your vote is counted.
The Notice of Meeting, Management Information and Proxy Circular, and form
of proxy for the annual general meeting, and a reply card for use by
shareholders who wish to receive the Corporation's interim financial statements,
are all enclosed. These documents contain important information and I encourage
you to read them carefully.
Yours truly,
(signed) MICHAEL B. RICHINGS
President and Chief Executive Officer
<PAGE>
VISTA GOLD CORP.
NOTICE OF MEETING
NOTICE IS HEREBY GIVEN THAT an annual general meeting (the "Meeting") of
the shareholders of Vista Gold Corp. (the "Corporation") will be held at Suite
1200, 200 Burrard Street, Vancouver, British Columbia on Monday, May 10, 1999,
at 9:30 a.m., Vancouver time, for the following purposes:
1. to receive the annual report to shareholders and the consolidated financial
statements of the Corporation, together with the auditor's report thereon,
for the fiscal year ended December 31, 1998;
2. to elect directors to hold office until the next annual general meeting;
3. to appoint PricewaterhouseCoopers, Chartered Accountants, as auditor to
hold office until the next annual general meeting at a remuneration to be
fixed by the directors;
4. to consider, and if thought appropriate, to pass an ordinary resolution
approving certain cancellations and grants of incentive stock options to
the directors and certain officers and employees of the Corporation. The
full text of such ordinary resolution is set out in Schedule "A" to the
attached Management Information and Proxy Circular;
5. to consider, and if thought appropriate, to pass an ordinary resolution
approving certain amendments to the Corporation's Stock Option Plan. The
full text of such ordinary resolution is set out in Schedule "B" to the
attached Management Information and Proxy Circular;
6. to consider, and if thought appropriate, to pass an ordinary resolution
confirming Amended By-Law No. 1 of the Corporation. The full text of such
ordinary resolution and the full text of Amended By-Law No. 1 are set out
in Schedule "C" and Schedule "D", respectively, to the attached Management
Information and Proxy Circular; and
7. to transact such other business as may properly come before the Meeting or
any adjournment or adjournments thereof.
Accompanying this Notice of Meeting are (i) a Management Information and
Proxy Circular, (ii) a form of proxy and notes thereto, and (iii) a reply card
for use by shareholders who wish to receive the Corporation's interim financial
statements.
If you are a REGISTERED SHAREHOLDER of the Corporation and are unable to
attend the Meeting in person, please date and execute the accompanying form of
proxy for the Meeting and deposit it with Montreal Trust Company of Canada at
Montreal Trust Centre, 510 Burrard Street, Vancouver, British Columbia, V6C 3B9,
Attention: Proxy Department, before 9:30 a.m., Vancouver time, on Thursday,
May 6, 1999, or no later than 48 hours (excluding Saturdays, Sundays and
holidays) before any adjournment of the Meeting.
If you are a NON-REGISTERED SHAREHOLDER of the Corporation and receive
these materials through your broker or another intermediary, please complete and
return the materials in accordance with the instructions provided to you by your
broker or such other intermediary.
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This Notice of Meeting, the Management Information and Proxy Circular, the
form of proxy and notes thereto for the Meeting, and the reply card are first
being sent to shareholders of the Corporation on or about April 1, 1999.
DATED at Vancouver, British Columbia, this 24th day of March, 1999.
BY ORDER OF THE BOARD OF DIRECTORS
(signed) WILLIAM F. SIRETT
Secretary
2
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TABLE OF CONTENTS
<TABLE>
<S> <C>
LETTER TO SHAREHOLDERS
NOTICE OF MEETING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
MANAGEMENT INFORMATION AND PROXY CIRCULAR. . . . . . . . . . . . . . . . . . . . . .4
Solicitation of Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Appointment of Proxyholder. . . . . . . . . . . . . . . . . . . . . . . . . . .4
Revocation of Proxy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Voting of Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Exercise of Discretion by Proxyholders. . . . . . . . . . . . . . . . . . . . .5
Securities Entitled to Vote . . . . . . . . . . . . . . . . . . . . . . . . . .5
Principal Shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Quorum and Percentage of Votes Necessary to Pass Resolutions. . . . . . . . . .6
Particulars of Matters to be Acted Upon . . . . . . . . . . . . . . . . . . . .6
Election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Appointment of Auditors . . . . . . . . . . . . . . . . . . . . . . . . . .8
Approval of Cancellations and Grants of Stock Options . . . . . . . . . . .8
Approval of Amendments to Stock Option Plan . . . . . . . . . . . . . . . .9
Confirmation of Amended By-Law No. 1. . . . . . . . . . . . . . . . . . . 10
Corporate Governance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Mandate of the Board of Directors . . . . . . . . . . . . . . . . . . . . 10
Composition of the Board of Directors . . . . . . . . . . . . . . . . . . 10
Independent Board of Directors. . . . . . . . . . . . . . . . . . . . . . 11
Board of Directors Committees . . . . . . . . . . . . . . . . . . . . . . 11
Decisions Requiring Prior Approval of the Board of Directors. . . . . . . 11
Recruitment of New Directors and Assessment of the Board of Directors'
Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Expectations of Management. . . . . . . . . . . . . . . . . . . . . . . . 12
Executive Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Summary Compensation Table. . . . . . . . . . . . . . . . . . . . . . . . 12
Long-Term Incentive Plan. . . . . . . . . . . . . . . . . . . . . . . . . 13
Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Pension and Retirement Savings Plans. . . . . . . . . . . . . . . . . . . 15
Termination of Employment, Change in Responsibilities and Employment
Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Report of the Compensation Committee. . . . . . . . . . . . . . . . . . . 17
Security Ownership of Directors and Executive Officers. . . . . . . . . . 19
Performance Graph . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Compensation of Directors and Officers. . . . . . . . . . . . . . . . . . 20
Indebtedness of Directors and Senior Officers . . . . . . . . . . . . . . . . 20
Director and Officer Liability Insurance. . . . . . . . . . . . . . . . . . . 20
Interest of Management and Others in Material Transactions. . . . . . . . . . 21
Management Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Interest of Certain Persons in Matters to be Acted Upon . . . . . . . . . . . 21
Shareholder Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Availability of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Board of Director Approval. . . . . . . . . . . . . . . . . . . . . . . . . . 22
SCHEDULE "A" - RESOLUTIONS APPROVING CANCELLATIONS AND GRANTS OF
STOCK OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .A-1
SCHEDULE "B" - RESOLUTIONS APPROVING AMENDMENTS TO STOCK OPTION PLAN . . . . . . .B-1
SCHEDULE "C" - RESOLUTIONS APPROVING AMENDED BY-LAW NO. 1. . . . . . . . . . . . .C-1
SCHEDULE "D" - AMENDED BY-LAW NO. 1. . . . . . . . . . . . . . . . . . . . . . . .D-1
</TABLE>
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MANAGEMENT INFORMATION AND PROXY CIRCULAR
THIS MANAGEMENT INFORMATION AND PROXY CIRCULAR ("INFORMATION CIRCULAR") IS
FURNISHED IN CONNECTION WITH THE SOLICITATION BY THE MANAGEMENT OF VISTA GOLD
CORP. (THE "CORPORATION") OF PROXIES TO BE VOTED AT THE ANNUAL GENERAL MEETING
(THE "MEETING") OF THE SHAREHOLDERS ("SHAREHOLDERS") OF THE CORPORATION TO BE
HELD AT SUITE 1200, 200 BURRARD STREET, VANCOUVER, BRITISH COLUMBIA ON MONDAY,
MAY 10, 1999, AT 9:30 A.M., VANCOUVER TIME, FOR THE PURPOSES SET FORTH IN THE
ACCOMPANYING NOTICE OF MEETING.
It is anticipated that this Information Circular and the accompanying form
of proxy will be first mailed to the shareholders of the Corporation on or about
April 1, 1999. Unless otherwise stated, the information contained in this
Information Circular is given as at March 24, 1999. The executive office of the
Corporation is located at Suite 3000, 370 Seventeenth Street, Denver, Colorado
80202 and its telephone number is (303) 629-2450. The registered and records
office of the Corporation is located at 200 - 204 Lambert Street, Whitehorse,
Yukon Territory, Canada, Y1A 3T2.
Advance notice of the Meeting was published in the Whitehorse Star, The
Province and The Toronto Star newspapers on March 12, 1999.
SOLICITATION OF PROXIES
The solicitation for proxies will be conducted by mail and may be
supplemented by telephone or other personal contact to be made, without special
compensation, by officers and employees of the Corporation. THE CORPORATION MAY
RETAIN OTHER PERSONS OR COMPANIES TO SOLICIT PROXIES ON BEHALF OF MANAGEMENT, IN
WHICH EVENT THE CUSTOMARY FEES FOR SUCH SERVICES WILL BE PAID. THE COST OF THE
SOLICITATION WILL BE BORNE BY THE CORPORATION.
APPOINTMENT OF PROXYHOLDER
THE PERSONS NAMED IN THE ENCLOSED FORM OF PROXY FOR THE MEETING ARE
DIRECTORS OR OFFICERS OF THE CORPORATION AND ARE NOMINEES OF MANAGEMENT. A
SHAREHOLDER HAS THE RIGHT TO APPOINT SOME OTHER PERSON, WHO NEED NOT BE A
SHAREHOLDER, TO REPRESENT SUCH SHAREHOLDER AT THE MEETING BY STRIKING OUT THE
NAMES OF THE PERSONS DESIGNATED IN THE ACCOMPANYING FORM OF PROXY AND BY
INSERTING THAT OTHER PERSON'S NAME IN THE BLANK SPACE PROVIDED. IF A
SHAREHOLDER APPOINTS ONE OF THE PERSONS DESIGNATED IN THE ACCOMPANYING FORM OF
PROXY AS A NOMINEE AND DOES NOT DIRECT THE SAID NOMINEE TO VOTE EITHER FOR OR
AGAINST OR WITHHOLD FROM VOTING ON A MATTER OR MATTERS WITH RESPECT TO WHICH AN
OPPORTUNITY TO SPECIFY HOW THE COMMON SHARES ("COMMON SHARES") IN THE CAPITAL OF
THE CORPORATION REGISTERED IN THE NAME OF SUCH SHAREHOLDER SHALL BE VOTED, THE
PROXY SHALL BE VOTED IN FAVOUR OF SUCH MATTER OR MATTERS.
The instrument appointing a proxyholder must be in writing and signed by
the shareholder, or such shareholder's attorney authorized in writing, or if the
shareholder is a corporation, by a duly authorized officer, or attorney, of the
corporation. An instrument of proxy will only be valid if it is duly completed,
signed, dated and received at the office of the Corporation's registrar and
transfer agent, Montreal Trust Company of Canada at Montreal Trust Centre,
510 Burrard Street, Vancouver, British Columbia, V6C 3B9, Attention: Proxy
Department before 9:30 a.m., Vancouver time, on Thursday, May 6, 1999, or no
later than 48 hours (excluding Saturdays, Sundays and holidays) before any
adjournments thereof, unless the Chairman of the Meeting elects to exercise his
discretion to accept proxies received subsequently.
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REVOCATION OF PROXY
A shareholder may revoke a proxy by delivering an instrument in writing
executed by such shareholder or by the shareholder's attorney authorized in
writing or, where the shareholder is a corporation, by a duly authorized officer
or attorney of the corporation, either to 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 thereof, or with the Chairman of the
Meeting on the day of the Meeting or any adjournment thereof, before any vote in
respect of which the proxy is to be used shall have been taken or in any other
manner permitted by law.
VOTING OF PROXIES
A shareholder may direct the matter in which his or her Common Shares are
to be voted or withheld from voting in accordance with the instructions of the
shareholder by marking the form of proxy accordingly. If the instructions in a
proxy given to management are certain, the Common Shares represented by that
proxy will be voted on any poll and where a choice has been specified in the
proxy, the Common Shares will be voted on any poll in accordance with the
specifications so made. WHERE NO CHOICE IS SO SPECIFIED WITH RESPECT TO ANY
RESOLUTION OR IN THE ABSENCE OF CERTAIN INSTRUCTIONS, THE COMMON SHARES
REPRESENTED BY A PROXY GIVEN TO MANAGEMENT WILL BE VOTED IN FAVOUR OF THE
RESOLUTION. IF MORE THAN ONE DIRECTION IS MADE WITH RESPECT TO ANY RESOLUTION,
SUCH COMMON SHARES WILL SIMILARLY BE VOTED IN FAVOUR OF THE RESOLUTION.
EXERCISE OF DISCRETION BY PROXYHOLDERS
The enclosed form of proxy when properly completed and delivered and not
revoked confers discretionary authority upon the proxyholders named therein with
respect to amendments or variations of matters identified in the accompanying
Notice of Meeting and other matters not so identified which may properly be
brought before the Meeting. At the date of this Information Circular, the
management of the Corporation knows of no such amendments, variations or other
matters to come before the Meeting. If any other matter comes before the
Meeting, the persons named in the proxy will vote in accordance with their
judgment on such matter.
SECURITIES ENTITLED TO VOTE
The authorized share capital of the Corporation is divided into an
unlimited number of Common Shares, of which 90,715,040 Common Shares are issued
and outstanding, and an unlimited number of preferred shares, none of which are
issued. The Board of Directors of the Corporation has fixed the close of
business on March 24, 1999 as the record date for the purpose of determining the
shareholders entitled to receive notice of the Meeting, but the failure of any
shareholder to receive notice of the Meeting does not deprive such shareholder
of the entitlement to vote at the Meeting.
Every shareholder who is present in person and entitled to vote at the
Meeting shall have one vote on a show of hands and on a poll shall have one vote
for each Common Share of which the shareholder is the registered holder and such
shareholder may exercise such vote either in person or by proxyholder.
PRINCIPAL SHAREHOLDERS
To the knowledge of the directors and officers of the Corporation, as of
March 24, 1999, no person beneficially owns, directly or indirectly, or
exercises control or direction over, more than 10% of the issued and outstanding
Common Shares, and the only person who beneficially owns, directly or
indirectly, or exercises control or direction over, more than 5% of the issued
and outstanding Common
5
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Shares is Ross J. Beaty, a director of the Corporation. Mr. Beaty
beneficially owns 6,994,616 Common Shares, which represent 7.7% of the
outstanding Common Shares.
QUORUM AND PERCENTAGE OF VOTES NECESSARY TO PASS RESOLUTIONS
Under the Corporation's Articles, the quorum for the transaction of
business at the Meeting consists of two shareholders, or two proxyholders
representing shareholders.
The ordinary resolutions approving (i) the amendments to the terms of the
Corporation's Stock Option Plan described under "Particulars of Matters to be
Acted Upon - Approval of Amendments to Stock Option Plan", and (ii) confirming
Amended By-Law No. 1 of the Corporation Plan as described under "Particulars of
Matters to be Acted Upon - Confirmation of Amended By-law No. 1", must be
approved by a majority of more than 50% of the votes cast by the holders of
Common Shares who vote in person or by proxy in respect of such resolutions at
the Meeting.
The ordinary resolution approving the cancellations and grants of incentive
stock options to the directors and certain officers and employees of the
Corporation described under "Particulars of Matters to be Acted Upon - Approval
of Cancellations and Grants of Stock Options", must be approved by a majority of
more than 50% of the votes cast by the holders of Common Shares who vote in
person or by proxy in respect of such resolution at the Meeting, other than
votes attaching to Common Shares beneficially owned by those optionees who are
"insiders" of the Corporation or associates thereof within the meaning of
Canadian securities legislation. As at the date of this Information Circular,
the Corporation understands that a total of 7,117,583 votes, representing the
votes of insiders of the Corporation and their associates, will not be counted
for the purposes of determining whether this majority has been obtained.
PARTICULARS OF MATTERS TO BE ACTED UPON
ELECTION OF DIRECTORS
The directors of the Corporation are elected at each annual general meeting
and hold office until the close of the next annual general meeting or until
their successors are duly elected or appointed. Management proposes to nominate
each of the following eight persons for election as a director of the
Corporation. Proxies cannot be voted for a greater number of persons than the
number of nominees named. IN THE ABSENCE OF INSTRUCTIONS TO THE CONTRARY, THE
ENCLOSED FORM OF PROXY WILL BE VOTED FOR THE NOMINEES LISTED BELOW. All of the
proposed nominees are presently or were in 1998 directors of the Corporation.
Information concerning the eight nominees, as furnished by them
individually, is set forth below.
<TABLE>
<CAPTION>
NAME, RESIDENCE, PRINCIPAL OCCUPATION, NUMBER OF
POSITION AND AGE BUSINESS OR EMPLOYMENT (1) DIRECTOR SINCE SHARES HELD
- ------------------------------ ---------------------------------- ----------------- -------------
<S> <C> <C> <C>
ROSS J. BEATY (2) Geologist; Chairman of Pan November 12, 1996 6,994,616 (3)
Vancouver, British Columbia American Silver Corp., a mining
DIRECTOR AND VICE CHAIRMAN company, 1994 to present;
Age - 47 formerly, President of Equinox
Resources Ltd., a mining company.
WILLIAM M. CALHOUN (2) Mining engineer and geologist; May 1, 1995 Nil
Silverton, Idaho Chief Executive Officer of William
DIRECTOR Calhoun, Inc., mining consultants.
Age - 66
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C. THOMAS OGRYZLO (4) Mechanical engineer; President and March 8, 1996 Nil
Toronto, Ontario Chief Executive Officer of
DIRECTOR Blackhawk Mining Inc., a mining
Age - 59 company, from May 31, 1998 to
present; President and Chief
Executive Officer of Triton Mining
Corporation, a mining company,
from August 1997 to present;
formerly, Chairman of Kilborn SNC-
Lavalin Inc., an engineering
group; formerly, President of the
Kilborn Group of Companies.
MICHAEL B. RICHINGS Mining engineer; President and May 1, 1995 79,967
Littleton, Colorado Chief Executive Officer of the
DIRECTOR Corporation from June 1995 to
Age - 54 present; formerly, President of
Atlas Corporation, a mining
company, from January 1995 to May
1995; Group Executive and
President of Lac Minerals Ltd.
South America, a mining company,
from 1993 to 1995; Vice President
of Operations of Atlas Corporation
from 1990 to 1992.
DAVID R. SINCLAIR (4) (5) Chartered accountant; Corporate May 1, 1995 10,000
Nanoose Bay, British Columbia Director.
DIRECTOR AND CHAIRMAN
Age - 69
KEITH E. STEEVES (5) Self-employed business consultant; September 29, 1995 2,000
Richmond, British Columbia formerly, Senior Vice President,
DIRECTOR Commercial of Teck Corporation, a
Age - 66 mining company.
ALAN G. THOMPSON (2) (4) (5) Businessman; President and Chief December 1, 1989 Nil
West Vancouver, British Columbia Executive Officer of A.G.T.
DIRECTOR Financial Corporation, an
Age - 71 investment company.
PETER WALTON (5) Self-employed business consultant. May 24, 1989 Nil
West Vancouver, British Columbia
DIRECTOR
Age - 69
</TABLE>
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(1) Includes occupations for the five preceding years.
(2) Member of Corporate Governance Committee.
(3) The Common Shares held by Mr. Beaty represent 7.7% of the outstanding
Common Shares. See "Principal Shareholders".
(4) Member of Compensation Committee.
(5) Member of Audit Committee.
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The information as to the municipality of residence, principal occupation
and number of Common Shares owned by the nominees listed in the above table is
not within the knowledge of the management of the Corporation and has been
furnished by the individual appointees as at March 24, 1999.
None of the above directors has entered into any arrangement or
understanding with any other person pursuant to which he was, or is to be,
elected as a director of the Corporation or a nominee of any other person,
except as disclosed herein.
APPOINTMENT OF AUDITORS
Unless otherwise instructed, the proxies given pursuant to this
solicitation will be voted for the re-appointment of PricewaterhouseCoopers,
Chartered Accountants (a firm formed by the merger of Price Waterhouse and
Coopers & Lybrand), of Vancouver, British Columbia, as the auditor of the
Corporation to hold office until the close of the next annual general meeting of
the Corporation or until a successor is appointed. It is proposed that the
remuneration to be paid to the auditor be fixed by the Board of Directors.
PricewaterhouseCoopers (then Coopers & Lybrand) was first appointed the auditor
of the Corporation on June 28, 1985.
Representatives of PricewaterhouseCoopers are expected to be present at the
Meeting and to be available to respond to appropriate questions from persons
present at the Meeting. If representatives of PricewaterhouseCoopers are
present at the Meeting, the Chairman of the Meeting will provide such
representatives with the opportunity to make a statement if they so desire.
APPROVAL OF CANCELLATIONS AND GRANTS OF STOCK OPTIONS
On November 19, 1998, the Board of Directors of the Corporation approved,
subject to the consent of each optionee and the approval by all applicable
regulatory authorities and the shareholders of the Corporation:
(a) the termination and cancellation of all options to purchase Common Shares
outstanding under the Corporation's Stock Option Plan (November 1996) (the
"Stock Option Plan") held by optionees on November 18, 1998 (a total of
2,270,000 options); and
(b) the grant of options to purchase a total of 2,175,000 Common Shares to the
directors and certain officers and employees of the Corporation
("optionees") with an exercise price equal to the closing price of the
Common Shares on The Toronto Stock Exchange on November 18, 1998.
The details of the cancellations and grants of options approved by the Board of
Directors are set out in Schedule "A" to this Information Circular.
The cancellations and grants of options were approved by the Board of
Directors of the Corporation because management and the Board of Directors of
the Corporation were concerned that the outstanding options granted under the
Stock Option Plan had ceased to function as a meaningful incentive to the
employees, officers and directors of the Corporation as a result of significant
changes to the Corporation and the industry in which it operates caused
primarily by the significant drop in the price of gold. In 1996, the
Corporation acquired the Amayapampa project in Bolivia through an amalgamation
with Da Capo Resources Ltd. At gold prices prevailing at the time, it was
anticipated that the Amayapampa project would go into production within 12 to 18
months. It was also anticipated that gold price levels prevailing at the time
would enable the Corporation to expand its minable reserves at the Hycroft mine
in Nevada. The significant decline in the price of gold since then has resulted
in the Corporation halting development of the Amayapampa project and the
cessation of mining at the Hycroft
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mine. These two events have caused a significant downsizing of the
Corporation's operations and personnel, have adversely affected the
Corporation's cash flow and have necessitated salary reductions and the
elimination of annual fees for the directors.
In October 1998, the Corporation successfully completed the purchase of
Mineral Ridge Resources Inc. from Cornucopia Resources Ltd. ("Cornucopia"). The
Corporation was able to make this acquisition because the bank which holds a
significant amount of debt on the Mineral Ridge gold project in Nevada believed
the Corporation has the necessary management and mining skills to solve the
technical problems encountered in the start-up of the mine. The Corporation
believes that there are many similar opportunities in the mining industry that
will enable it to exploit its mine management capabilities for the benefit of
its shareholders and its personnel.
The Board of Directors believes that it is imperative that the employees,
officers and directors of the Corporation have a meaningful incentive to remain
with the Corporation and help it re-establish a sound operating and financial
position. In past years, the Corporation was able to provide incentives through
a cash bonus plan combined with stock options. For the last two fiscal years,
the Corporation has been unable to pay cash bonuses and, as mentioned above,
most of the options granted under the Stock Option Plan no longer provide any
incentive because they were granted at a time when the fundamentals in the
mining industry and the Corporation's operating and financial position and share
price were substantially different.
For these reasons, the Board of Directors believes that it is important to
start afresh with a new grant of options under the Stock Option Plan, provided
that all existing optionees agree to the cancellation of all their outstanding
options and subject to regulatory and shareholder approvals.
The Toronto Stock Exchange has conditionally approved the cancellations and
grants of options subject to, among other things, approval ("disinterested
approval") at the Meeting of the cancellations and grants of options to
"insiders" of the Corporation (within the meaning of Canadian securities
legislation) by a majority of the votes cast by shareholders who vote in person
or by proxy at the Meeting, excluding shareholders who are insiders of the
Corporation or associates thereof. Although the Corporation is only required to
obtain disinterested approval with respect to the cancellations and grants of
options to insiders, the Corporation has elected to obtain disinterested
approval with respect to all cancellations and grants.
Accordingly, at the Meeting shareholders of the Company will be asked to
consider and, if thought appropriate, to pass an ordinary resolution approving
the cancellation of all existing incentive stock options and the grant of new
incentive stock options in their place. The full text of this ordinary
resolution, including full details of the cancellations and grants, is set out
in Schedule "A" to this Information Circular.
APPROVAL OF AMENDMENTS TO STOCK OPTION PLAN
On November 19, 1998, the Board of Directors of the Corporation approved,
subject to approval by all applicable regulatory authorities and the
shareholders of the Corporation, amendments to the Stock Option Plan (i) to
remove the ability of the Board of Directors to delegate its authority over the
Stock Option Plan to a committee of directors by deleting paragraph 3.2 of the
Stock Option Plan, and (ii) to eliminate the automatic grant of options to
directors of the Corporation by deleting section 9 of the Stock Option Plan.
Upon the amendments becoming effective: (i) authority over the Stock Option
Plan will be retained by the full Board of Directors, rather than by a committee
thereof; and (ii) options will be
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granted at the discretion of the Board of Directors, rather than
automatically upon appointment (i.e., in the same manner as options are
granted to officers and employees of the Corporation).
Accordingly, at the Meeting shareholders of the Company will be asked to
consider and, if thought appropriate, to pass an ordinary resolution approving
the amendments to the Stock Option Plan described above. The full text of this
ordinary resolution is attached as Schedule "B" to this Information Circular.
CONFIRMATION OF AMENDED BY-LAW NO. 1
On March 24, 1999, the Board of Directors of the Corporation adopted
Amended By-Law No. 1 of the Corporation, the full text of which is set out in
Schedule "D" to this Information Circular. Amended By-Law No. 1 incorporates
miscellaneous minor amendments to By-Law No. 1 of the Corporation which were
deemed advisable by counsel to the Corporation. Amended By-Law No. 1 is the
by-law to regulate the general business and affairs of the Corporation.
Under the provisions of the BUSINESS CORPORATIONS ACT of the Yukon Territory,
the directors of the Corporation are required to submit a by-law made or
amended by the directors to the shareholders of the Corporation for approval
at the next meeting of shareholders.
Accordingly, at the Meeting shareholders will be asked to consider and, if
thought appropriate, to pass an ordinary resolution confirming Amended By-Law
No. 1 of the Corporation. The full text of this ordinary resolution is attached
as Schedule "C" to this Information Circular.
CORPORATE GOVERNANCE
MANDATE OF THE BOARD OF DIRECTORS
Pursuant to the BUSINESS CORPORATIONS ACT of the Yukon Territory, the Board
of Directors is required to manage or supervise the management of the affairs
and business of the Corporation. The Board of Directors has adopted a written
mandate which defines its stewardship responsibilities in light of this
statutory obligation. The Board of Directors' principal responsibilities are to
supervise and evaluate management, to oversee the conduct of the business, to
set policies appropriate for the business and to approve corporate strategies
and goals. The mandate and responsibilities of the Board of Directors are to be
carried out in a manner consistent with the fundamental objective of protecting
and enhancing the value of the Corporation and providing ongoing benefit to the
shareholders.
COMPOSITION OF THE BOARD OF DIRECTORS
The present Board of Directors consists of eight directors, seven of whom
qualify as unrelated directors who are independent of management and free from
any interest or business relationship which could, or could be perceived to,
materially interfere with their ability to act in the best interest of the
Corporation. Michael B. Richings is a related director because of his
management position with the Corporation. Two directors, William H. Calhoun and
Peter Walton, have undertaken minor consulting work for the Corporation. The
Corporate Governance Committee of the Board of Directors has determined that the
nature of this work does not impair the ability of either director to act with a
view to the best interest of the Corporation and, accordingly, both directors
have been determined to be unrelated directors who are independent of
management.
The current composition of the Board of Directors is in compliance with the
guidelines for corporate governance adopted by The Toronto Stock Exchange, which
recommend that the board of directors of every corporation should be constituted
with a majority of individuals who qualify as unrelated directors.
10
<PAGE>
The Corporation does not have a significant shareholder with the ability to
exercise a majority of the votes for the election of the Board of Directors.
INDEPENDENT BOARD OF DIRECTORS
The Chairman of the Board of Directors is not a member of management of the
Corporation.
The Board of Directors believes that adequate structures and processes are
in place to facilitate the functioning of the Board of Directors independently
of the Corporation's management. The Audit Committee, the Compensation
Committee and the Corporate Governance Committee are entirely composed of
directors who are unrelated to the Corporation's management.
BOARD OF DIRECTORS COMMITTEES
The Board of Directors has established three committees, the Audit
Committee, the Compensation Committee and the Corporate Governance Committee.
AUDIT COMMITTEE
The Audit Committee is composed of four directors, David R. Sinclair, Keith
E. Steeves, Peter Walton and Alan G. Thompson, all of whom are unrelated
directors who are independent of management. The Audit Committee reviews annual
and quarterly financial statements and oversees the annual audit process,
internal accounting controls and the resolution of issues identified by the
Corporation's external auditor.
COMPENSATION COMMITTEE
The Compensation Committee is comprised of three directors, David R.
Sinclair, Alan G. Thompson and C. Thomas Ogryzlo, all of whom are unrelated
directors who are independent of management. The Compensation Committee reviews
and makes recommendations to the Board of Directors in respect of the
compensation levels for the executive officers of the Corporation.
CORPORATE GOVERNANCE COMMITTEE
The Corporate Governance Committee consists of three directors, Alan G.
Thompson, Ross J. Beaty and William H. Calhoun, all of whom are unrelated
directors who are independent of management of the Corporation. The Corporate
Governance Committee reviews the Corporation's governance activities and
policies and reviews proposed nominees for the Board of Directors prior to
approval by the Board of Directors.
DECISIONS REQUIRING PRIOR APPROVAL OF THE BOARD OF DIRECTORS
The Board of Directors has delegated the day to day management of the
business and affairs of the Corporation to the President and Chief Executive
Officer, subject to compliance with capital plans approved from time to time by
the Board of Directors.
RECRUITMENT OF NEW DIRECTORS AND ASSESSMENT OF THE BOARD OF DIRECTORS'
PERFORMANCE
The Corporate Governance Committee, which is required to meet at least once
each year, is required to identify, review the qualifications of and recommend
to the Board of Directors possible nominees for the Board of Directors to be
proposed in management's Information Circular for election or re-election at
each annual meeting of the Corporation and to identify, review the
qualifications of and
11
<PAGE>
recommend to the Board of Directors possible candidates to fill vacancies on
the Board of Directors between annual meetings.
EXPECTATIONS OF MANAGEMENT
The Board of Directors expects management of the Corporation to conduct the
business and affairs of the Corporation in accordance with the Corporation's
ongoing strategic plan and to meet or surpass the annual and long-term goals of
the Corporation set by the Board of Directors in consultation with management.
As a part of its annual strategic planning process, the Board of Directors
specifies its expectations of management both over the next financial year and
in the context of the Corporation's long-term goals. The Board of Directors
will review management's progress in meeting these expectations at Board of
Directors' meetings held at least every quarter.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The table below contains a summary of the compensation paid to, or earned
by, the Corporation's current President and Chief Executive Officer, and the
Corporation's four most highly compensated executive officers (other than the
President and Chief Executive Officer) who were serving as executive officers at
the end of the Corporation's most recently completed financial year and during
such year received, in their capacity as officers of the Corporation and any of
its subsidiaries, in excess of Cdn.$100,000 (collectively, the "Named Executive
Officers"), for each of the Corporation's three most recently completed
financial years ended December 31, 1998, 1997 and 1996. All currency figures
under the heading "Summary Compensation Table" are in United States dollars.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------- -------------
NUMBER OF
OTHER COMMON SHARES ALL OTHER
ANNUAL UNDER OPTIONS COMPEN-
NAME AND SALARY BONUS COMPENSATION (1) GRANTED (2) SATION (3)
PRINCIPAL POSITION YEAR (U.S.$) (U.S.$) (U.S.$) (#) (U.S.$)
- ------------------------- ---- ------- ---------- ---------------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
MICHAEL B. RICHINGS (4) 1998 201,000 nil nil 500,000 (5) 4,525
PRESIDENT AND 1997 200,000 30,000 (1) nil 400,000 (6) 4,750
CHIEF EXECUTIVE OFFICER 1996 200,000 22,419 nil 50,000 (6) 5,333
- ---------------------------------------------------------------------------------------------------------
ROGER L. SMITH (7) 1998 85,000 nil nil 100,000 (5) 3,391
VICE PRESIDENT FINANCE 1997 69,000 3,000 (1) nil 45,000 (6) 2,760
1996 67,000 2,583 nil 15,000 (6) 2,010
- ---------------------------------------------------------------------------------------------------------
RONALD J. MCGREGOR (8) 1998 141,000 nil nil 200,000 (5) 4,112
VICE PRESIDENT OPERATIONS 1997 140,000 14,000 (1) nil 180,000 (6) 4,750
AND DEVELOPMENT 1996 70,000 nil nil 100,000 (6) 1,400
</TABLE>
- -------------------------
(1) Perquisites and other personal benefits for the most recently completed
financial year do not exceed the lesser of $50,000 or 10% of the total
annual salary and bonus for any of the Named Executive Officers unless
otherwise noted.
(2) All securities under option are for Common Shares of the Corporation. No
stock appreciation rights ("SARs") are outstanding.
(3) Represents the Corporation's contribution under the Corporation's
Retirement Savings Plan, except where otherwise indicated. The executive
officers of the Corporation participate in this plan on the same basis as
all other employees of the Corporation. See "Pensions and Retirement
Savings Plans".
(4) Mr. Richings was appointed President and Chief Executive Officer of the
Corporation on June 1, 1995.
12
<PAGE>
(5) On November 19, 1998, these options were granted subject to the
cancellation of all outstanding options held by the optionee as at November
18, 1998, the consent of the optionee, and shareholder and regulatory
approvals. See "Particulars of Matters to be Acted Upon - Approval of
Cancellations and Grants of Stock Options".
(6) On November 19, 1998, these and all other options held by the optionee as
at November 18, 1998 were cancelled subject to the grant of the options
described in note (5), the consent of the optionee, and shareholder and
regulatory approvals. See "Particulars of Matters to be Acted Upon -
Approval of Cancellations and Grants of Stock Options".
(7) Mr. Smith became permanently employed by the Corporation on December 1,
1995 and was appointed Vice President Finance of the Corporation on March
19, 1998.
(8) Mr. McGregor became Vice President Operations and Development on June 1,
1996.
LONG-TERM INCENTIVE PLAN
The Corporation does not presently have a long-term incentive plan for its
Named Executive Officers.
STOCK OPTIONS
The Corporation has established the Stock Option Plan which provides for
grants to directors, officers, employees and consultants of the Corporation, or
its subsidiaries, of options to purchase up to a maximum of 4,500,000 of the
issued and outstanding Common Shares from time to time, provided that no more
than 5% of the issued and outstanding Common Shares may from time to time be
reserved for issuance pursuant to the exercise of stock options granted to any
one individual. Effective upon the amalgamation of Granges Inc. and Da Capo
Resources Ltd. on November 1, 1996, the Corporation, as the amalgamated entity,
adopted the Stock Option Plan of Granges Inc. Under the Stock Option Plan,
options may be exercised by the payment in cash of the option exercise price to
the Corporation. All options are subject to the terms and conditions of an
option agreement entered into by the Corporation and each participant at the
time an option is granted.
The Stock Option Plan is administered by the Board of Directors which has
full and final discretion to determine (i) the total number of optioned shares
to be made available under the Stock Option Plan, (ii) the directors (who are
full-time employees), officers, employees and consultants of the Corporation who
are eligible to receive stock options under the Stock Option Plan ("Optionees"),
(iii) the time when and the price at which stock options will be granted, (iv)
the time when and the price at which stock options may be exercised, and (v) the
conditions and restrictions on the exercise of options. Pursuant to the terms
of the Stock Option Plan, the exercise price must not be less than the closing
price of the Common Shares on The Toronto Stock Exchange on the day preceding
the date of grant. Options become exercisable only after they vest in
accordance with the respective stock option agreement and must expire no later
than ten years from the date of grant.
Under the terms of the original Stock Option Plan, directors who were
not full-time employees of the Corporation automatically received options to
purchase 50,000 Common Shares upon becoming a director, with such options
vesting and becoming exercisable as to 25% on the date of grant and 25% on
each of the first, second and third anniversaries. On November 19, 1998, the
Board of Directors of the Corporation approved, subject to approval by all
applicable regulatory authorities and the shareholders of the Corporation,
amendments to the Stock Option Plan (i) to remove the ability of the Board of
Directors to delegate its authority over the Stock Option Plan to a committee
of directors, and (ii) to eliminate the automatic grant of options to
directors of the Corporation. At the Meeting, shareholders will be asked to
consider and, if thought appropriate, to pass an ordinary resolution
approving the amendments to the Stock Option Plan as described above. See
"Particulars of Matters to be Acted Upon - Approval of Amendments to Stock
Option Plan" above.
If an Optionee ceases to be an officer or employee of the Corporation, or
its subsidiaries, as a result of termination for cause, 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
13
<PAGE>
the Corporation, for any reason other than termination for cause, the
Optionee shall have the right to exercise his or her options at any time 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. 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.
Options granted under the Stock Option Plan are non-transferable and
non-assignable other than on the death of a Participant. An Optionee has no
rights whatsoever as a shareholder in respect of unexercised options.
STOCK OPTION GRANTS
A summary of stock options granted to the Named Executive Officers under
the Stock Option Plan during the financial year ended December 31, 1998 is set
out in the table below. All stock options are for Common Shares of the
Corporation. No stock appreciation rights ("SARs") are outstanding, and it is
currently intended that none be issued. All currency figures under the heading
"Stock Option Grants" are in Canadian dollars.
OPTION GRANTS DURING THE MOST RECENTLY COMPLETED FINANCIAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
% OF REALIZABLE
TOTAL VALUE AT
OPTIONS ASSUMED
GRANTED MARKET ANNUAL RATES
NUMBER TO VALUE OF OF STOCK PRICE
OF EMPLOYEES SECURITIES APPRECIATION
SECURITIES IN UNDERLYING FOR OPTION
UNDER FINANCIAL EXERCISE OR OPTIONS ON THE EXPIRY TERM
OPTION YEAR BASE PRICE DATE OF GRANT DATE 5% / 10%
NAME (#) (%) (CDN.$/SECURITY) (CDN.$/SECURITY) (1) (M/D/Y) (CDN.$)
- --------------------- ------------ ---------- ---------------- -------------------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
MICHAEL B. RICHINGS 71,430 (2) 23.0 0.235 0.235 5/8/05 5,875 / 11,750
107,145 (2) 0.235 0.235 12/12/05
35,715 (2) 0.235 0.235 11/12/06
142,855 (2) 0.235 0.235 2/4/07
142,855 (2) 0.235 0.235 11/9/07
ROGER L. SMITH 11,111 (2) 4.6 0.235 0.235 5/6/06 1,175 / 2,350
7,407 (2) 0.235 0.235 2/4/07
25,926 (2) 0.235 0.235 11/9/07
55,556 (2) 0.235 0.235 8/3/08
75,000 (3) 0.200 0.200 8/3/08
RONALD J. MCGREGOR 71,428 (2) 9.2 0.235 0.235 6/1/06 2,350 / 4,700
71,428 (2) 0.235 0.235 2/4/07
57,144 (2) 0.235 0.235 11/9/07
</TABLE>
- -----------------------
(1) The market value of the Common Shares on the date of grant of the options
is the closing price per share at which the Common Shares were traded on
The Toronto Stock Exchange on the day preceding the date of grant.
(2) On November 19, 1998, these options were granted subject to the
cancellation of all outstanding options held by the optionee as at November
18, 1998, the consent of the optionee, and shareholder and regulatory
approvals. See "Particulars of Matters to be Acted Upon - Approval of
Cancellations and Grants of Stock Options".
(3) On November 19, 1998, these and all other options held by the optionee as
at November 18, 1998 were cancelled subject to the grant of the options
described in note (2), the consent of the optionee, and shareholder and
regulatory approvals. See "Particulars of Matters to be Acted Upon -
Approval of Cancellations and Grants of Stock Options".
14
<PAGE>
The reported high and low trading prices of the Corporation's Common Shares
on The Toronto Stock Exchange and the American Stock Exchange for the 30 days
prior to the date of the grants of the options referred to above are set out in
the table below.
<TABLE>
<CAPTION>
THE TORONTO STOCK EXCHANGE AMERICAN STOCK EXCHANGE
-------------------------- -----------------------
HIGH LOW HIGH LOW
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
July 5 to August 3, 1998 Cdn.$0.25 Cdn.$0.20 U.S.$0.19 U.S.$0.16
October 19 to November 18, 1998 Cdn.$0.32 Cdn.$0.23 U.S.$0.22 U.S.$0.16
</TABLE>
AGGREGATED OPTION EXERCISES AND VALUE OF UNEXERCISED OPTIONS
A summary of the exercise of options by the Named Executive Officers during
the financial year ended December 31, 1998 and the value at December 31, 1998 of
unexercised in-the-money options held by the Named Executive Officers issued is
set out in the table below. No SARs are outstanding. All currency figures
under the heading "Aggregated Option Exercises and Value of Unexercised Options"
are in Canadian dollars.
AGGREGATED OPTION EXERCISES DURING THE MOST RECENTLY COMPLETED FINANCIAL YEAR
AND FINANCIAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
IN-THE-MONEY
UNEXERCISED OPTIONS AT OPTIONS AT FINANCIAL
SECURITIES AGGREGATE FINANCIAL YEAR-END YEAR-END
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE (1)
NAME (#) (CDN.$) (#) (CDN.$)
- ------------------- ----------- --------- ---------------------- --------------------
<S> <C> <C> <C> <C>
MICHAEL B. RICHINGS nil nil 348,214/151,786 (2) nil/nil
nil nil 487,500/212,500 (3) nil/nil
ROGER L. SMITH nil nil 38,889/61,111 (2) nil/nil
nil nil 52,500/82,500 (3) nil/nil
RONALD J. MCGREGOR nil nil 117,858/82,142 (2) nil/nil
nil nil 165,000/115,000 (3) nil/nil
</TABLE>
- -------------------------
(1) Based on the closing trading price of the Common Shares on The Toronto
Stock Exchange on the last trading day of the financial year, being
Cdn.$0.23.
(2) On November 19, 1998, these options were granted subject to the
cancellation of all outstanding options held by the optionee as at November
18, 1998, the consent of the optionee, and shareholder and regulatory
approvals. See "Particulars of Matters to be Acted Upon - Approval of
Cancellations and Grants of Stock Options".
(3) On November 19, 1998, these and all other options held by the optionee as
at November 18, 1998 were cancelled subject to the grant of the options
described in note (2), the consent of the optionee, and shareholder and
regulatory approvals. See "Particulars of Matters to be Acted Upon -
Approval of Cancellations and Grants of Stock Options".
PENSION AND RETIREMENT SAVINGS PLANS
The Corporation sponsors a quantified tax-deferred savings plan in
accordance with the provisions of section 401(K) of the U.S. Internal Revenue
Service Code which is available to permanent U.S.-based employees. Under the
terms of this plan, the Corporation makes contributions of up to 4% of eligible
employees' salaries.
15
<PAGE>
The Corporation also sponsors a retirement savings plan which is available
to permanent Canadian-based employees. Under the terms of this plan, the
Corporation is required to contribute between 2% and 4% of the employee's
salary, depending on length of service, to a maximum of Cdn.$3,500 per year and
provided that the employee also makes the minimum required contribution, as
follows:
<TABLE>
<CAPTION>
CORPORATION'S EMPLOYEE'S
CONTRIBUTION CONTRIBUTION
TERM OF EMPLOYMENT (% OF SALARY) (% OF SALARY)
- ------------------ ------------- -------------
<S> <C> <C>
3 years or less. . . . . . . . . . . . . 2.0% 2.0%
3-4 years. . . . . . . . . . . . . . . . 3.0% 2.0%
4-5 years. . . . . . . . . . . . . . . . 3.5% 2.0%
5 years or more. . . . . . . . . . . . . 4.0% 2.0%
</TABLE>
The retirement savings funds for each employee are deposited in the employee's
registered retirement savings plan ("RRSP") as defined in Canadian income tax
legislation and are held by a trustee. The amounts contributable to an RRSP and
the withdrawal and taxation of RRSP funds both before and after retirement are
governed by Canadian income tax legislation. If funds are withdrawn by the
employee from his or her RRSP, the employee ceases to qualify for contributions
by the Corporation for a period of two years.
TERMINATION OF EMPLOYMENT, CHANGE IN RESPONSIBILITIES AND EMPLOYMENT CONTRACTS
Of the Named Executive Officers of the Corporation, Michael B. Richings,
the President and Chief Executive Officer, and Ronald J. McGregor, the Vice
President Operations and Development, have been engaged under employment
contracts. Each of these contracts provides for base salary, annual
discretionary incentive bonus, four weeks vacation time and various minor
perquisites. The contract between the Corporation and Mr. McGregor is for an
unlimited term, provides for performance bonuses in accordance with the
Corporation's incentive policy, may be terminated by the Corporation or
Mr. McGregor upon 30 days written notice, and provides for severance benefits
described below.
The contract between the Corporation and Mr. Richings is for an unlimited
term, provides for an annual bonus of up to 30% of his base salary at the sole
discretion of the Board of Directors and provides for a severance benefit
described below. Under the terms of this contract, the employment of Mr.
Richings may be terminated by the Corporation without cause, provided that it
continues to pay his base salary for a period of 12 months (or makes a lump sum
payment equal to 12 months of his base salary), and by Mr. Richings upon 60 days
notice to the Corporation. In addition, in the event that Mr. Richings suffers
an injury or illness that renders him permanently incapable of substantially
performing his duties under this contract, the Corporation may terminate Mr.
Richings' employment, provided that it continues to pay his base salary and
other employee benefits for a period of one year following notice of such
termination.
As at March 24, 1999, the Corporation has arrangements with two of the
Named Executive Officers under which each is entitled to receive severance
benefits based upon his monthly salary in the event of termination of his
employment other than for cause. The aggregate compensation payable to the two
Named Executive Officers under this arrangement is U.S.$357,000 and the amount
payable to each Named Executive Officer is as follows:
16
<PAGE>
<TABLE>
<CAPTION>
COMPENSATION
NAME PAYABLE
------------------- ------------
<S> <C>
Michael B. Richings U.S.$210,000
Ronald J. McGregor U.S.$147,000
</TABLE>
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
employment, resignation, retirement, change of control of the Corporation or in
the event of a change in responsibilities following a change of control.
REPORT OF THE COMPENSATION COMMITTEE
COMPOSITION OF THE COMPENSATION COMMITTEE
The Corporation has a Compensation Committee comprised of the following
directors: David R. Sinclair, Alan G. Thompson and C. Thomas Ogryzlo. None of
the members of the Compensation Committee is or has been an executive officer or
employee of the Corporation or any of its subsidiaries or affiliates. 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.
REPORT
It is the responsibility of the Compensation Committee to review and
recommend compensation policies and programs to the Corporation as well as
salary and benefit levels for its executives. The committee makes
recommendations to the Board of Directors which gives final approval on
compensation matters. During 1998, the compensation committee met once.
The Corporation's compensation policies and programs are designed to be
competitive with similar mining companies and to recognize and reward executive
performance consistent with the success of the Corporation's business. These
policies and programs are intended to attract and retain capable and experienced
people.
In addition to industry comparables, the Compensation Committee considers a
variety of factors when determining both compensation policies and programs and
individual compensation levels. These factors include the long-range interests
of the Corporation and its shareholders, overall financial and operating
performance of the Corporation and the committee's assessment of each
executive's individual performance and contribution toward meeting corporate
objectives. Superior performance is recognized through the Corporation's
incentive policy.
The total compensation plan for executive officers is comprised of three
components: base salary, an incentive payment and stock options. As a general
rule for establishing base salaries, the Compensation Committee reviews
competitive market data for each of the executive positions and determines
placement 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. The compensation range for executives
normally moves annually to reflect external factors such as inflation.
The Corporation's incentive policy generally allows executive officers and
management personnel to earn an incentive payment to a maximum of 15% of his or
her base salary, two-thirds of which is based upon individual performance and
one-third of which is based upon the performance of the Corporation. All
executive officers and management personnel participate in this policy, except
the
17
<PAGE>
President and Chief Executive Officer. By contract, he is entitled to earn a
bonus of up to 30% of his base salary. Following the end of each fiscal
year, the Compensation Committee makes a recommendation to the Board of
Directors as to the appropriate incentive payment for the executive officers
and management personnel. No specific performance criteria or objectives are
utilized by the Compensation Committee or the Board of Directors in making
their determinations. In 1998, no incentive payments were paid to any
executive officers or employees of the Corporation.
The third element in the total compensation plan is the Stock Option Plan.
This plan is intended to emphasize management's commitment to growth of the
Corporation and enhancement of shareholders' wealth through, for example,
improvements in net earnings and share price increments. In the past the
Corporation placed less reliance on stock options as management incentives in
comparison to other companies in the mining industry, principally because of the
relative undervaluation of the Corporation's stock and other factors which were
perceived to have interfered with normal market performance of its shares. A
review of the stock option element of executive and management compensation was
undertaken in 1994 and, in August 1994, the Board of Directors adopted the
recommendations of the Compensation Committee with respect to exercising its
discretion in granting options under the Stock Option Plan. These
recommendations, which were designed to improve the value of the plan as an
incentive to management and to encourage long-term service, are as follows:
(a) participation under the Stock Option Plan will continue to be restricted to
senior staff;
(b) the initial grant of options will continue to be upon commencement of
permanent employment, will be at a level commensurate with the seniority of
the position and will be in accordance with current industry standards;
(c) consideration will be given to subsequent grants on an ad hoc basis
dependent upon corporate and individual performance and up to a maximum
level commensurate with the seniority of the position; and
(d) each new grant will have a maximum term of ten years as required under the
Stock Option Plan, but with one quarter of the options exercisable at the
date of grant and the remaining three quarters in equal instalments over
the succeeding three years.
The compensation of Michael B. Richings, the President and Chief Executive
Officer of the Corporation, is determined in the same manner as for other
executive officers (as described above). Under the employment contract between
the Corporation and Mr. Richings, Mr. Richings is entitled to receive a base
salary, an annual discretionary incentive bonus of up to 30% of his base salary,
four weeks vacation time and various minor perquisites. In addition, Mr.
Richings is also entitled to receive incentive stock options under the Stock
Option Plan. During 1998, Mr. Richings did not receive an incentive bonus. On
November 19, 1998, Mr. Richings was granted options to acquire 500,000 Common
Shares, subject to the cancellation of options to acquire 700,000 Common Shares
held by him on November 18, 1998, his consent to such cancellation, and
shareholder and regulatory approvals. This grant and cancellation of options
was approved by the Board of Directors for the reasons outlined above under
"Particulars of Matters to be Acted Upon - Approval of Cancellations and Grants
of Stock Options". Further details regarding the compensation received by Mr.
Richings during 1998 are outlined above under "Executive Compensation - Summary
Compensation Table".
SUBMITTED ON BEHALF OF THE COMPENSATION COMMITTEE
DAVID R. SINCLAIR
ALAN G. THOMPSON
C. THOMAS OGRYZLO
18
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the number of Common Shares beneficially
owned, as of March 24, 1999, by each director of the Corporation, each of the
executive officers named in the Summary Compensation Table, and all directors
and executive officers of the Corporation as a group:
<TABLE>
<CAPTION>
NUMBER OF
NAME OF BENEFICIAL OWNER (1) COMMON SHARES (2)
- ----------------------------------------- -----------------
<S> <C>
ROSS J. BEATY 6,994,616 (3)
DIRECTOR AND VICE CHAIRMAN
WILLIAM M. CALHOUN nil
DIRECTOR
RONALD J. MCGREGOR 15,000
VICE PRESIDENT OPERATIONS AND DEVELOPMENT
C. THOMAS OGRYZLO nil
DIRECTOR
MICHAEL B. RICHINGS 79,967
DIRECTOR, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
DAVID R. SINCLAIR 10,000
DIRECTOR AND CHAIRMAN
ROGER L. SMITH nil
VICE PRESIDENT FINANCE
KEITH E. STEEVES 2,000
DIRECTOR
ALAN G. THOMPSON nil
DIRECTOR
PETER WALTON nil
DIRECTOR
All directors and officers as a group 7,007,583
</TABLE>
- -----------------------
(1) For the purposes of this table, a person is considered to "beneficially
own" any Common Shares (i) over which such person exercises sole or shared
voting or investment power, or (ii) of which such person has the right to
acquire beneficial ownership at any time within 60 days (e.g., through the
exercise of stock options). Unless otherwise indicated, each person has
sole voting and investment power with respect to the Common Shares set
opposite his name.
(2) Unless otherwise indicated, all amounts shown are less than 1% of the
outstanding Common Shares.
(3) The Common Shares held by Mr. Beaty represent 7.7% of the outstanding
Common Shares. See "Principal Shareholders".
19
<PAGE>
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the
Corporation's cumulative total shareholder return on its Common Shares with
the cumulative total return of the TSE 300 Stock Index and the TSE Gold and
Precious Metals Index, assuming the reinvestment of dividends, for the last
five financial years:
[GRAPH]
COMPENSATION OF DIRECTORS AND OFFICERS
On December 30, 1997, the Board of Directors resolved to waive annual
fees for directors of the Corporation effective January 1, 1998 until such
time as the directors determine otherwise. During the financial year ended
December 31, 1998, directors of the Corporation received a fee of Cdn.$600
per meeting of the Board of Directors or any committee thereof (Cdn.$500 for
telephone meetings). The Corporation also reimbursed directors for
out-of-pocket expenses related to their attendance at meetings. No
additional 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, 1998 (i) to
the directors of the Corporation in their capacity as directors of the
Corporation and any of its subsidiaries, and (ii) to the 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
Cdn.$40,000, was U.S.$25,693 and U.S.$456,799, respectively. This sum
includes compensation paid to executive officers pursuant to the cash
incentive plan and retirement savings plan.
INDEBTEDNESS OF DIRECTORS AND SENIOR OFFICERS
None of the directors or senior officers of the Corporation, nor any
individual who was at any time during the most recently completed financial
year a director or senior officer of the Corporation, or any associates or
affiliates of the foregoing persons is indebted to the Corporation.
DIRECTOR AND OFFICER LIABILITY INSURANCE
The Corporation has purchased and maintains insurance in the amount of
U.S.$25 million for the benefit of the directors and officers of the
Corporation against liabilities incurred by such persons as directors and
officers of the Corporation and its subsidiaries, except where the liability
relates to such persons failure to act honestly and in good faith with a view
to the best interests of the Corporation. The annual premium paid by the
Corporation for this insurance in respect of the directors and officers as a
group is U.S.$83,000. No premium for this insurance is paid by the
individual directors and officers.
20
<PAGE>
The insurance contract underlying this insurance does not expose the
Corporation to any liability in addition to the payment of the required
premiums.
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS
No proposed nominee for election as director, no director or senior
officer of the Corporation who has served in such capacity since the
beginning of the last financial year, no person that has direct or indirect
beneficial ownership of more than 10% of the issued Common Shares of the
Corporation, and no associate or affiliate of any such person, had any
material interest, directly or indirectly, in any transaction within the past
three years, or in any proposed transaction, which has affected or would
materially affect the Corporation or any of its subsidiaries.
MANAGEMENT CONTRACTS
There are no management functions of the Corporation which are to any
substantial degree performed by persons other than the directors or senior
officers of the Corporation.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Other than as disclosed herein, no person who has been a director or
officer of the Corporation at any time since the beginning of the last
financial year or any proposed nominee for election as director, nor any
associate or affiliate of such person, has an interest in the matters to be
acted upon at the Meeting.
SHAREHOLDER PROPOSALS
The deadline for submitting shareholder proposals for inclusion in the
management information and proxy circular for the next annual meeting of the
Corporation, calculated in accordance with Rule 14a-8(e) of Regulation 14A to
the United States SECURITIES ACT OF 1933, is January 10, 2000. Under the
BUSINESS CORPORATIONS ACT of the Yukon Territory, the Corporation is not
required to include a shareholder proposal in the management information and
proxy circular for the next annual meeting of the Corporation unless the
proposal is submitted to the Corporation before February 10, 2000.
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 judgment of the persons voting such
proxies.
AVAILABILITY OF DOCUMENTS
The Corporation will provide to any person or corporation, upon request,
one copy of any of the following documents:
(a) the Corporation's latest Form 10-K or annual information form, together
with any document, or the pertinent pages of any document, incorporated
therein by reference;
(b) the comparative financial statements of the Corporation for the
Corporation's most recently completed financial year in respect of which
such financial statements have been issued, together with the report of the
auditors thereon, and any interim financial statements of the Corporation
subsequent to the financial statements for the Corporation's most recently
completed financial year; and
21
<PAGE>
(c) the information circular of the Corporation in respect of the most recent
annual meeting of shareholders of the Corporation which involved the
election of directors.
Copies of the above documents will be provided, upon request to the
Secretary of the Corporation at 1200 Waterfront Centre, 200 Burrard Street,
Vancouver, British Columbia, Canada, V7X 1T2, free of charge to shareholders
of the Corporation. The Corporation may require the payment of a reasonable
charge from any person or corporation who is not a shareholder of the
Corporation and who requests a copy of any such document.
BOARD OF DIRECTOR APPROVAL
The undersigned hereby certifies that the contents and sending of this
Information Circular to the shareholders of the Corporation have been
approved by the Board of Directors.
DATED at Vancouver, British Columbia, this 24th day of March, 1999.
BY ORDER OF THE BOARD OF DIRECTORS
(signed) WILLIAM F. SIRETT
Secretary
22
<PAGE>
SCHEDULE "A"
RESOLUTIONS APPROVING CANCELLATIONS AND GRANTS OF STOCK OPTIONS
Ordinary resolution of the Meeting approving cancellations and grants of
options to the directors and certain officers and employees of the
Corporation:
"BE IT RESOLVED, as an Ordinary Resolution, that the existing options (the
"Old Options") cancelled and the new options (the "New Options") granted by
the board of directors of the Corporation on November 19, 1998 as set out
below are hereby approved:
OLD OPTIONS CANCELLED:
<TABLE>
<CAPTION>
DATE NAME POSITION EXPIRY DATE PRICE NUMBER
- ----------------- ------------------- ---------- ----------------- ----- ---------
<S> <C> <C> <C> <C> <C>
INSIDERS:
November 19, 1998 Warren Bates Officer April 27, 1994 $2.78 10,000
January 23, 1995 $2.28 15,000
December 12, 1995 $2.25 50,000
February 5, 1997 $1.55 50,000
November 9, 1997 $0.37 50,000
---------
175,000
November 19, 1998 Ross J. Beaty Director September 13, 1996 $1.20 100,000
November 12, 1996 $1.83 50,000
---------
150,000
November 19, 1998 William M. Calhoun Director May 8, 1995 $2.70 50,000
November 12, 1996 $1.83 50,000
---------
100,000
November 19, 1998 Henry Lesinski Officer September 28, 1995 $2.78 25,000
December 12, 1995 $2.25 50,000
November 10, 1997 $0.37 50,000
---------
125,000
November 19, 1998 Ronald J. McGregor Officer June 1, 1996 $2.75 100,000
February 5, 1997 $1.55 100,000
November 10, 1997 $0.37 80,000
---------
280,000
November 19, 1998 C. Thomas Ogryzlo Director March 8, 1996 $3.05 50,000
November 12, 1996 $1.83 50,000
---------
100,000
November 19, 1998 Michael B. Richings Director & May 8, 1995 $2.70 100,000
Officer December 12, 1995 $2.25 150,000
November 12, 1996 $1.83 50,000
February 5, 1997 $1.55 200,000
November 10, 1997 $0.37 200,000
---------
700,000
November 19, 1998 David R. Sinclair Director May 8, 1995 $2.70 50,000
November 12, 1996 $1.83 50,000
---------
100,000
</TABLE>
A-1
<PAGE>
<TABLE>
<CAPTION>
DATE NAME POSITION EXPIRY DATE PRICE NUMBER
- ----------------- ------------------- ---------- ----------------- ----- ---------
<S> <C> <C> <C> <C> <C>
November 19, 1998 Roger L. Smith Officer May 6, 1996 $2.51 15,000
February 5, 1997 $1.55 10,000
November 10, 1997 $0.37 35,000
August 4, 1998 $0.20 75,000
---------
135,000
November 19, 1998 Keith E. Steeves Director September 28, 1995 $2.78 50,000
November 12, 1996 $1.83 50,000
---------
100,000
November 19, 1998 Alan G. Thompson Director January 23, 1995 $2.28 40,000
November 12, 1996 $1.83 50,000
---------
90,000
November 19, 1998 Peter Walton Director January 23, 1995 $2.28 50,000
November 12, 1996 $1.83 50,000
---------
100,000
NON-INSIDERS:
November 19, 1998 Alain Cotnoir Employee November 10, 1997 $0.37 25,000
November 19, 1998 William Crabtree Employee September 30, 1991 $1.45 10,000
July 30, 1996 $2.09 15,000
---------
25,000
November 19, 1998 Curt Edwards Employee November 10, 1997 $0.37 10,000
November 19, 1998 Connie Martinez Employee November 10, 1997 $0.37 5,000
November 19, 1998 Romulo Sasamoto Employee August 4, 1998 $0.20 50,000
---------
TOTAL OLD OPTIONS CANCELLED: 2,270,000
---------
---------
</TABLE>
NEW OPTIONS GRANTED:
<TABLE>
<CAPTION>
DATE NAME POSITION EXPIRY DATE PRICE NUMBER
- ----------------- ------------------ ---------- ------------------ ------ ---------
<S> <C> <C> <C> <C> <C>
November 19, 1998 Warren Bates Officer April 27, 2004 $0.235 5,715
January 23, 2005 $0.235 8,572
December 12, 2005 $0.235 28,571
February 4, 2007 $0.235 28,571
November 9, 2007 $0.235 28,571
---------
100,000
November 19, 1998 Ross J. Beaty Director September 13, 1999 $0.235 66,667
November 12, 2006 $0.235 33,333
---------
100,000
November 19, 1998 William M. Calhoun Director May 8, 2005 $0.235 50,000
November 12, 2006 $0.235 50,000
---------
100,000
</TABLE>
A-2
<PAGE>
<TABLE>
<CAPTION>
DATE NAME POSITION EXPIRY DATE PRICE NUMBER
- ----------------- ------------------ ---------- ------------------ ------ ---------
<S> <C> <C> <C> <C> <C>
November 19, 1998 Henry Lesinski Officer September 28, 2005 $0.235 25,000
December 12, 2005 $0.235 50,000
November 9, 2007 $0.235 50,000
November 18, 2008 $0.235 25,000
---------
150,000
November 19, 1998 Ronald J. McGregor Officer June 1, 2006 $0.235 71,428
February 4, 2007 $0.235 71,428
November 9, 2007 $0.235 57,144
---------
200,000
November 19, 1998 C. Thomas Ogryzlo Director March 8, 2006 $0.235 50,000
November 12, 2006 $0.235 50,000
---------
100,000
November 19, 1998 Michael B. Richings Director & May 8, 2005 $0.235 71,430
Officer December 12, 2005 $0.235 107,145
November 12, 2006 $0.235 35,715
February 4, 2007 $0.235 142,855
November 9, 2007 $0.235 142,855
---------
500,000
November 19, 1998 David R. Sinclair Director May 8, 2005 $0.235 50,000
November 12, 2006 $0.235 50,000
---------
100,000
November 19, 1998 Roger L. Smith Officer May 6, 2006 $0.235 11,111
February 4, 2007 $0.235 7,407
November 9, 2007 $0.235 25,926
August 3, 2008 $0.235 55,556
---------
100,000
November 19, 1998 Keith E. Steeves Director September 28, 2005 $0.235 50,000
November 12, 2006 $0.235 50,000
---------
100,000
November 19, 1998 Alan G. Thompson Director January 23, 2005 $0.235 40,000
November 12, 2006 $0.235 50,000
November 18, 2008 $0.235 10,000
---------
100,000
November 19, 1998 Peter Walton Director January 23, 2005 $0.235 50,000
November 12, 2006 $0.235 50,000
---------
100,000
NON-INSIDERS:
November 19, 1998 Alain Cotnoir Employee November 9, 2007 $0.235 25,000
November 19, 1998 William Crabtree Employee September 30, 2001 $0.235 10,000
July 30, 2006 $0.235 15,000
November 18, 2008 $0.235 50,000
---------
75,000
</TABLE>
A-3
<PAGE>
<TABLE>
<CAPTION>
DATE NAME POSITION EXPIRY DATE PRICE NUMBER
- ----------------- ------------------ ---------- ------------------ ------ ---------
<S> <C> <C> <C> <C> <C>
November 19, 1998 Curt Edwards Employee November 9, 2007 $0.235 10,000
November 18, 2008 $0.235 15,000
---------
25,000
November 19, 1998 Robert Folen Employee November 18, 2008 $0.235 25,000
November 19, 1998 Brice Gubler Employee November 18, 2008 $0.235 50,000
November 19, 1998 David Hembree Employee November 18, 2008 $0.235 25,000
November 19, 1998 Steve Johnson Employee November 18, 2008 $0.235 25,000
November 19, 1998 Connie Martinez Employee November 9, 2007 $0.235 5,000
November 18, 2008 $0.235 20,000
---------
25,000
November 19, 1998 John Nachiondo Employee November 18, 2008 $0.235 50,000
November 19, 1998 Robert Putvain Employee November 18, 2008 $0.235 25,000
November 19, 1998 Romulo Sasamoto Employee August 3, 2008 $0.235 50,000
November 18, 2008 $0.235 25,000
75,000
---------
TOTAL NEW OPTIONS GRANTED: 2,175,000
---------
---------
</TABLE>
A-4
<PAGE>
SCHEDULE "B"
RESOLUTIONS APPROVING AMENDMENTS TO STOCK OPTION PLAN
Ordinary resolution of the Meeting approving amendments to the Stock Option
Plan:
"BE IT RESOLVED, as an Ordinary Resolution, that the stock option plan of the
Corporation dated November 1996 be amended as follows:
1. by deleting the following paragraph 3.2 in its entirety:
"3.2 DISINTERESTED ADMINISTRATION
The Board of Directors may delegate any or all of its authority
with respect to the administration of the Plan and any or all of the
rights, powers and discretions with respect to the Plan granted to it
hereunder to a committee of two or more directors of the Corporation who
are each disinterested within the meaning of Rule 16b-3 under the 1934 Act
and upon such delegation such committee shall be entitled to exercise any
or all of the authority, rights, powers and discretions of the Board of
Directors with respect to the Plan. When used hereafter in the Plan,
"Board of Directors" shall be deemed to include such a committee of
directors."; and
2. by deleting the following section 9 in its entirety:
"9. NON-EMPLOYEE DIRECTORS
9.1 Notwithstanding any other provision of the Plan, the Board of
Directors shall have no power to determine eligibility for grants of
Options or the terms of Options granted to directors ("Non-employee
Directors") who are not full time employees of the Corporation or any of
its subsidiaries. Grants of Options to Non-employee Directors shall be
automatic as set forth in section 9.2.
9.2 All Non-employee Directors who are directors of the Corporation
on November 1, 1996 or who become directors after such date shall be
granted automatically, as of November 1, 1996 or, if such person becomes a
director after November 1, 1996, as of the date such person becomes a
director, an Option to purchase 50,000 Optioned Shares at an Exercise Price
equal to the price of an Optioned Share as recorded at the close of
business on The Toronto Stock Exchange on the last trading day preceding
the date of grant, which Option shall vest and become exercisable in four
equal annual instalments as follows: 25% of the Optioned Shares on the date
of grant and 25% of the Optioned Shares on each of the first, second and
third anniversaries of the date of grant.
9.3 Notwithstanding section 7 of the Plan, the provisions of this
section 9 shall not be amended more than once every six months."
B-1
<PAGE>
SCHEDULE "C"
RESOLUTION CONFIRMING AMENDED BY-LAW NO. 1
Ordinary resolution of the Meeting confirming Amended By-Law No. 1 of the
Corporation:
"BE IT RESOLVED, as an Ordinary Resolution, that:
1. Amended By-Law No. 1, in substantially the form attached as Schedule "D"
to the Management Information and Proxy Circular accompanying the notice
of this annual general meeting, is hereby confirmed in all respects; and
2. any director or officer of the Corporation is authorized to do acts and
things, to execute under the common seal of the Corporation or otherwise
and to deliver all agreements, documents and instruments, to give all
notices and to deliver, file and distribute all documents and information
which such director or officer determines to be necessary or desirable in
connection with, or to give effect to or carry out, the foregoing
resolution."
C-1
<PAGE>
SCHEDULE "D"
AMENDED BY-LAW NO. 1
BE IT ENACTED as a By-Law of the Corporation as follows:
1. INTERPRETATION
1.1 DEFINITIONS - In the By-Laws of the Corporation, unless the context
otherwise requires:
"ACT" means the BUSINESS CORPORATIONS ACT, R.S.Y. 1986, c.15, and any statute
that may be substituted therefore, as from time to time amended; marginal
references to sections of the Act herein are not made for the purpose of
modifying or affecting the meaning of any provision of this By-Law in any way
but are inserted only for the purpose of directing attention to provisions of
the Act which may be regarded as relevant;
"APPOINT" includes "elect" and VICE VERSA;
"ARTICLES" means the Articles attached to the Certificate of Continuance dated
the 17th day of December, 1997 of the Corporation as from time to time amended
or restated;
"BOARD" means the Board of Directors of the Corporation;
"BY-LAWS" means this By-Law and all other By-Laws of the Corporation from time
to time in force and effect relating to the transaction of business and affairs
of the Corporation in addition hereto, in amendment hereof, or in substitution
for all or any part of this By-Law;
"CORPORATION" means the corporation incorporated by Certificate of Continuance
under the Act and named: VISTA GOLD CORP.
"NON-BUSINESS DAY" means Saturday, Sunday and any other day that is a holiday as
defined in the INTERPRETATION ACT (Canada), or the INTERPRETATION ACT (Yukon);
"OFFICERS" has the meaning set out in Section 6.1;
"PROHIBITED CORPORATE SHAREHOLDER" means a corporation prohibited from holding
shares in itself or its holding body corporate or a subsidiary corporation
prohibited from holding shares in its parent corporation pursuant to the Act and
not exempted from such prohibited shareholdings by virtue of the Act;
"RECORDED ADDRESS" means in the case of a shareholder his address as recorded in
the securities register; and in the case of joint shareholders the address
appearing in the securities register in respect of such joint holdings
determined under Section 8.10; and in the case of a director, officer, auditor
or member of a committee of directors, his latest address as recorded in the
records of the Corporation;
Except as noted above, words and expressions defined in the Act have the same
meaning when used herein; words importing the singular number include the plural
and vice versa; words
D-1
<PAGE>
importing gender include the masculine, feminine and neuter genders; and
words importing persons include individuals, bodies corporate, partnerships,
trusts and unincorporated organizations.
2. BUSINESS OF THE CORPORATION
2.1 REGISTERED OFFICE - Until changed in accordance with the Act, the
registered office of the Corporation shall be at the City of Whitehorse, in the
Yukon Territory, and at such location therein as the Board may from time to time
determine.
2.2 CORPORATE SEAL - Until changed by the Board, the corporate seal of the
Corporation and any facsimiles thereof adopted by the Board for use in
jurisdictions outside the Yukon Territory shall be in the form approved by the
directors.
2.3 FINANCIAL YEAR - The financial year of the Corporation shall end on the
day in each year that is established by the Board.
2.4 EXECUTION OF INSTRUMENTS - Except as otherwise determined by resolution of
the Board from time to time, all deeds, transfers, assignments, contracts,
obligations, certificates and other instruments required by law or otherwise by
these By-Laws or any resolution of the Board or shareholders of the Corporation
may be signed on behalf of the Corporation by any one or more persons each of
which is either a director of the Corporation or a person who holds the office
of Chief Executive Officer, Chairman of the Board, Vice-Chairman of the Board,
President, Vice-President, Secretary, Assistant Secretary, or any other office
created by by-law or by resolution of the Board and such person or persons may,
where necessary or expedient, affix the corporate seal thereto.
2.5 BANKING ARRANGEMENTS - The banking business of the Corporation including,
without limitation, the borrowing of money and the giving of security therefor,
shall be transacted with such banks, trust companies or other bodies corporate
or organizations as may from time to time be designated by or under the
authority of the Board. Such banking business or any part thereof shall be
transacted under such agreements, instructions and delegations of powers as the
Board may from time to time by resolution prescribe or authorize.
2.6 VOTING RIGHTS IN OTHER BODIES CORPORATE - The signing officers of the
Corporation may execute and deliver proxies and arrange for the issuance of
voting certificates or other evidence of the right to exercise the voting rights
attaching to any securities held by the Corporation. Such instruments,
certificates or other evidence shall be in favour of such person or persons as
may be determined by the officers executing such proxies or arranging for the
issuance of voting certificates or such other evidence of the right to exercise
such voting rights. In addition, the Board may from time to time direct the
manner in which and the person or persons by whom any particular voting rights
or class of voting rights may or shall be exercised.
2.7 WITHHOLDING INFORMATION FROM SHAREHOLDERS - Subject to the provisions of
the Act, no shareholder shall be entitled to discovery of any information
respecting any details or conduct of the Corporation's business which, in the
opinion of the Board, it would be inexpedient in the interests of the
shareholders or the Corporation to communicate to the public. The Board may
from time to time determine whether and to what extent and at what time and
place and under
D-2
<PAGE>
what conditions or regulations the accounts, records and documents of the
Corporation or any of them shall be open to the inspection of shareholders
and no shareholder shall have any right of inspecting any account, record or
document of the Corporation except as conferred by the Act or authorized by
the Board or by resolution passed at a general Meeting of Shareholders.
3. BORROWING AND SECURITIES
3.1 BORROWING POWER - Without limiting the borrowing powers of the Corporation
as set forth in the Act, the Board is authorized from time to time:
(a) to borrow money upon the credit of the Corporation in such amounts and
on such terms as may be deemed expedient by obtaining loans or
advances or by way of overdraft or otherwise;
(b) to issue, re-issue, sell or pledge bonds, debentures, notes or other
evidence of indebtedness or guarantees of the Corporation, whether
secured or unsecured for such sums and at such prices as may be deemed
expedient;
(c) subject to the Act, to issue guarantees on behalf of the Corporation
to secure the performance of the obligations of any person; and
(d) to charge, mortgage, hypothecate, pledge or otherwise create a
security interest in all or any currently owned or subsequently
acquired real or personal, movable or immovable, property and
undertaking of the Corporation, including book debts, rights, powers
and franchises for the purpose of securing any such bonds, debentures,
notes or other evidences of indebtedness or guarantee or any other
present or future indebtedness or liability of the Corporation.
Nothing in this section limits or restricts the borrowing of money by the
Corporation on bills of exchange or promissory notes made, drawn, accepted or
endorsed by or on behalf of the Corporation.
3.2 DELEGATION OF BORROWING POWER - The Board may from time to time delegate
to such one or more of the directors and officers of the Corporation as may be
designated by the Board all or any of the powers conferred on the Board by
Section 3.1 to such extent and in such manner as the Board shall determine at
the time of each such delegation.
4. DIRECTORS
4.1 NUMBER OF DIRECTORS AND QUORUM - Until changed in accordance with the Act,
the Board shall consist of not fewer than three (3) and not more than eight (8)
directors. Subject to Section 4.7, the Articles and the Act, the quorum for the
transaction of business at any meeting of the Board shall consist of a majority
of the directors or such lesser number of directors as the Board may from time
to time determine.
4.2 QUALIFICATION - No person shall be qualified for election as a director if
he is less than nineteen (19) years of age; if he is of unsound mind and has
been so found by a Court in Canada
D-3
<PAGE>
or elsewhere; if he is not an individual; or if he has the status of a
bankrupt. A director need not be a shareholder.
4.3 ELECTION AND TERM - Each director named in the Notice of Directors filed
at the time of continuance of the Corporation under the Act shall hold office
from the date of the Certificate of Continuance until the first Meeting of
Shareholders thereafter. An election of directors shall take place at such
first Meeting of Shareholders and at each annual Meeting of Shareholders
thereafter and all the directors then in office shall retire but, if qualified,
shall be eligible for re-election. A director shall retain office only until
the election of his successor. The number of directors to be elected at any
such meeting shall be the number of directors then in office unless the
directors or the shareholders otherwise determine. The election shall be by
ordinary resolution of the shareholders. If an election of directors is not
held at the proper time, the incumbent directors shall continue in office until
their successors are elected.
4.4 REMOVAL OF DIRECTORS - Subject to the provisions of the Act, the
shareholders may, by ordinary resolution passed at any duly called meeting of
shareholders, remove any director from office and at the same meeting by
ordinary resolution elect another person as director in his or her stead,
failing which the vacancy created by such removal may be filled by the directors
in accordance with Section 4.6.
4.5 VACATION OF OFFICE - A director ceases to hold office when: he dies; he is
removed from office by the shareholders; he ceases to be qualified for election
as a director; or when his written resignation is sent or delivered to the
Corporation or, if a time is specified in such resignation, at the time so
specified, whichever is later.
4.6 VACANCIES - Subject to the Act and the Articles, a quorum of the Board may
fill a vacancy in the Board, except a vacancy resulting from an increase in the
minimum number of directors or from a failure of the shareholders to elect the
minimum number of directors required to be elected from time to time. In the
absence of a quorum of the Board, or if the vacancy has arisen from a failure of
the shareholders to elect the minimum number of directors, the Board shall
forthwith call a special meeting of the shareholders to fill the vacancy. If
the Board fails to call such meeting or if there are no such directors then in
office, any shareholder may call the meeting.
4.7 ACTION BY THE BOARD - The Board shall manage the business and affairs of
the Corporation. The powers of the Board may be exercised by resolution passed
at a meeting at which a quorum is present or by resolution in writing, whether
by document, telegram, telecopy or any method of transmitting legibly recorded
messages or other means, signed by all the directors entitled to vote on that
resolution at a meeting of the Board and any resolution in writing so signed
shall be as valid as if it had been passed at a meeting of directors or a
committee of directors and shall be held to relate to any date therein stated to
be the effective date thereof, and a copy of every such resolution in writing
shall be kept with the minutes of the proceedings of directors or committee of
directors. Where there is a vacancy in the Board, the remaining directors may
exercise all the powers of the Board. Where the Corporation has only one
director, that director may constitute a meeting. An act of a director is valid
notwithstanding any irregularity in his election or appointment or a defect in
his qualifications.
D-4
<PAGE>
4.8 MEETINGS BY TELEPHONE - If all of the directors at a meeting consent, one
or more or all the directors may participate in a meeting of the Board or of a
committee of directors by means of such telephone or other communications
facilities as permit all persons participating in the meeting to hear each
other, and a director participating in such a meeting by such means is deemed to
be present at the meeting. Any such consent shall be effective whether given
before or after the meeting to which it relates and may be given with respect to
all meetings of the Board and of committees of directors held while a director
holds office.
4.9 PLACE OF MEETING - Meetings of the Board may be held at any place in or
outside Canada.
4.10 CALLING OF MEETINGS - Meetings of the Board shall be held from time to
time and at such place as the Board may determine. In addition, each of the
Chairman of the Board, the Vice-Chairman of the Board, the President or any two
directors may convene or direct the convening of a meeting of the Board.
4.11 NOTICE OF MEETING - Except as otherwise provided in Section 4.12, notice
of the time and place of each meeting of the Board shall be given in the manner
provided in Section 11.1 to each director not less than forty-eight (48) hours
before the time when the meeting is to be held, unless a director gives notice
to the Secretary in the manner provided in Section 11.1 within such forty-eight
(48) hour period that he wishes the directors to be physically present at such
meeting, in which case notice shall be given in the manner provided in Section
11.1 to each director not less than seven (7) days before the time when the
meeting is to be held. A notice of a meeting of directors need not specify the
purpose of or the business to be transacted at the meeting except where Section
115(3) of the Act requires such purpose or business to be specified, including
any proposal to:
(a) submit to the shareholders any question or matter requiring approval
of the shareholders;
(b) fill a vacancy among the directors or in the office of auditor;
(c) issue securities;
(d) declare dividends;
(e) purchase, redeem, or otherwise acquire shares of the Corporation;
(f) pay a commission for the sale of shares;
(g) approve a management proxy circular;
(h) approve any annual financial statements; or
(i) adopt, amend or repeal By-Laws.
A director may in any manner waive notice of or otherwise consent to a meeting
of the Board either before or after the convening of the meeting.
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4.12 REGULAR MEETINGS - The Board may by resolution appoint a day or days in
any month or months for regular meetings of the Board at a place and hour to be
named in the resolution. No notice shall be required for any such regular
meeting.
4.13 FIRST MEETING OF NEW BOARD - Provided a quorum of directors is present,
each newly elected Board may without notice hold its first meeting immediately
following the meeting of shareholders at which such Board is elected.
4.14 ADJOURNED MEETING - Notice of an adjourned meeting of the Board is not
required if the time and place of the adjourned meeting is announced at the
original meeting.
4.15 CHAIRMAN - The chairman of any meeting of the Board shall be the first
mentioned of such of the following officers as have been appointed and who is a
director and is present at the meeting: Chairman of the Board, Vice-Chairman of
the Board, Chief Executive Officer, President, or any Vice-President who is a
director. If no such officer is present, the directors present shall choose one
of their number to be chairman.
4.16 VOTES TO GOVERN - At all meetings of the Board every question shall be
decided by a majority of the votes cast on the question. In cases of an
equality of votes the Chairman of the meeting shall not be entitled to a second
or casting vote.
4.17 CONFLICT OF INTEREST - A director or officer who is a party to, or who is
a director or officer of or has a material interest in any person who is a party
to, a material contract or proposed material contract with the Corporation shall
disclose the nature and extent of his interest at the time and in the manner
provided by the Act. Any such contract or proposed contract shall be referred
to the Board or shareholders for approval even if such contract is one that in
the ordinary course of the Corporation's business would not require approval by
the Board or shareholders, and a director interested in a contract so referred
to the Board shall not vote on any resolution to approve the same except as
provided by the Act.
4.18 REMUNERATION AND EXPENSES - The directors shall be paid such remuneration
for their services as the Board may from time to time determine. The directors
shall also be entitled to be reimbursed for travelling and other expenses
properly incurred by them in attending meetings of the Board or any committee
thereof. Nothing herein contained shall preclude any director from serving the
Corporation in any other capacity and receiving remuneration therefore.
5. COMMITTEES
5.1 COMMITTEE OF DIRECTORS
(a) The Board may appoint one or more committees of the directors and may
delegate to each such committee any of the powers of the Board except
those which, under the Act, a committee of directors has no authority
to exercise.
(b) The directors may by resolution appoint an Executive Committee to
consist of such member or members of their body as they think fit,
which committee shall have, and may exercise during the intervals
between the meetings of the Board, all the powers vested in the Board
except the power to fill vacancies in the Board, the
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power to change the membership of, or fill vacancies in, said
committee or any other committee of the Board and such other
powers, if any, as may be specified in the resolution. The said
committee shall keep regular minutes of its transactions and shall
cause them to be recorded in books kept for that purpose, and shall
report the same to the Board of Directors at such times as the
Board of Directors may from time to time require. The Board shall
have the power at any time to revoke or override the authority
given to or acts done by the Executive Committee except as to acts
done before such revocation or overriding and to terminate the
appointment or change the membership of such committee and to fill
vacancies in it. The Executive Committee may make rules for the
conduct of its business and may appoint such assistants as it may
deem necessary. A majority of the members of the Executive
Committee shall constitute a quorum thereof.
(c) The directors may from time to time by resolution constitute, dissolve
or reconstitute standing committees and other committees consisting of
such persons as the Board may determine. Every committee constituted
by the Board shall have the powers, authorities and discretions
delegated to it by the Board (which shall not include the power to
fill vacancies in the Board and the power to change the membership of
or fill vacancies in any committee constituted by the Board or the
power to appoint or remove officers appointed by the Board) and shall
conform to the regulations which may from time to time be imposed upon
it by the Board.
(d) The Executive Committee and any other committee may meet and adjourn
as it thinks proper. Questions arising at any meeting shall be
determined by a majority of votes of the members of the committee
present, and in case of an equality of votes, the chairman shall not
have a second or casting vote. A resolution approved in writing by
all the members of the Executive Committee or any other committee
shall be as valid and effective as if it had been passed at a meeting
of such committee duly called and constituted. Such resolution may be
in two or more counterparts which together shall be deemed to
constitute one resolution in writing. Such resolution shall be filed
with the minutes of the proceedings of the committee and shall be
effective on the date stated thereon or on the latest date stated in
any counterpart.
5.2 AUDIT COMMITTEE - When required by the Act the Board shall, and at any
other time the Board may, elect annually from among its number an audit
committee to be composed of not fewer than three (3) directors of whom a
majority shall not be officers or employees of the Corporation or its
affiliates. The audit committee shall have the powers and duties provided in
the Act and otherwise as determined by the Board.
5.3 PROCEDURE - Unless otherwise determined by the Board or provided under the
Act, each committee of directors shall have the power to fix its quorum at not
less than a majority of its members, to elect its chairman and to regulate its
procedure. Failing such determination, a quorum shall be a majority of the
members of such committee.
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6. OFFICERS
6.1 APPOINTMENT - The Board may from time to time appoint a Chief Executive
Officer, a President, one or more Vice-Presidents (to which title may be added
words indicating seniority or function), a Secretary and such other officers as
the Board may determine, including one or more assistants to any of the officers
so appointed (herein referred to as "officers"). The Board may specify the
duties of and, in accordance with this By-Law and subject to the provisions of
the Act, delegate to such officers powers to manage the business and affairs of
the Corporation as it sees fit. An officer may, but need not, be a director and
one person may hold more than one office.
6.2 CHAIRMAN OF THE BOARD - The Board may from time to time appoint a Chairman
of the Board who shall be a director. The Chairman of the Board shall, when
present, preside at all meetings of the Board and shall have such other powers
and duties as the Board may specify.
6.3 SECRETARY - The Secretary shall attend and be the Secretary of all
meetings of the Board, shareholders and committees of directors and shall enter
or cause to be entered in records kept for that purpose minutes of all
proceedings thereat; he shall give or cause to be given, as and when instructed,
all notices to shareholders, directors, officers, the auditor and members of the
committees of directors; he shall be the custodian of the stamp or mechanical
device generally used for affixing the corporate seal of the Corporation and of
all books, papers, records, documents and instruments belonging to the
Corporation, except when some other officer or agent has been appointed for that
purpose; and he shall have such other powers and duties as the Board may
specify.
6.4 CONFLICT OF INTEREST - An officer shall disclose his interest in any
material contract or proposed material contract with the Corporation in
accordance with Section 4.17.
6.5 AGENTS AND ATTORNEYS - The Board shall have power from time to time to
appoint agents or attorneys for the Corporation in or outside of Canada with
such powers of management or otherwise (including the power to sub-delegate) as
may be thought fit.
7. PROTECTION OF DIRECTORS, OFFICERS AND OTHERS
7.1 LIMITATION OF LIABILITY - No director shall be liable for the acts,
receipts, neglects or defaults of any other director or any officer or employee,
or for any loss, damage or expense happening to the Corporation through the
insufficiency or deficiency of title to any property acquired for or on behalf
of the Corporation, or for the insufficiency or deficiency of any security in or
upon which any of the moneys of the Corporation shall be invested, or for any
loss or damage arising from the bankruptcy, insolvency or tortious acts of any
person with whom any of the moneys, securities or effects of the Corporation
shall be deposited, or for any loss occasioned by any error of judgement or
oversight on his part, or for any other loss, damage or misfortune whatever
which shall happen in the execution of the duties of his office or in relation
thereto, unless the same are occasioned by his own wilful neglect or default;
provided that nothing herein shall relieve any director or officer from the duty
to act in accordance with the Act and the regulations thereunder or from
liability for any breach thereof.
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7.2 INDEMNITY - Subject to the limitations contained in the Act, and to the
extent he is otherwise fairly and reasonably entitled thereto, the Corporation
shall indemnify a director or officer, a former director or officer, or a person
who acts or acted at the Corporation's request as a director or officer of a
body corporate of which the Corporation is or was a shareholder or creditor (or
a person who undertakes or has undertaken any liability on behalf of the
Corporation or any such body corporate) and his heirs and legal representatives,
against all costs, charges and expenses, including an amount paid to settle an
action or satisfy a judgment, reasonably incurred by him in respect of any
civil, criminal or administrative action or proceeding to which he is made a
party by reason of being or having been a director or officer of the Corporation
or such body corporate, if:
(a) he acted honestly and in good faith with a view to the best interests
of the Corporation; and
(b) in the case of a criminal or administrative action or proceeding that
is enforced by a monetary penalty, he had reasonable grounds for
believing that his conduct was lawful.
7.3 INSURANCE - Subject to the limitations contained in the Act, the
Corporation may purchase and maintain such insurance for the benefit of its
directors and officers as the Board may from time to time determine.
8. SHARES
8.1 ALLOTMENT AND ISSUE - The Board may from time to time allot, or grant
options to purchase, the whole or any part of the unissued shares of the
Corporation as are authorized under the Articles at such times and to such
persons and for such consideration as the Board shall determine, provided that
no share shall be issued until it is fully paid as prescribed by the Act.
Subject to the Articles, no holder of any class of share of the capital of the
Corporation shall be entitled as of right to subscribe for, purchase or receive
any part of any new or additional issue of shares of any class, whether now or
hereafter authorized or any bonds, debentures or other securities convertible
into shares of any class.
8.2 COMMISSIONS - The Board may from time to time authorize the Corporation to
pay a reasonable commission to any person in consideration of his purchasing or
agreeing to purchase shares of the Corporation, whether from the Corporation or
from any other person, or procuring or agreeing to procure purchasers for any
such shares.
8.3 SECURITIES REGISTER - The Corporation shall issue shares in registered
form and shall record the names of holders of shares in a securities register in
accordance with the Act.
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8.4 REGISTRATION OF TRANSFER
(a) Subject to the provisions of the Act, no transfer of shares shall be
registered in the securities register except upon presentation of the
certificate representing such shares with a transfer endorsed thereon
or delivered therewith duly executed by the registered holder or by
his attorney or successor duly appointed, together with such
reasonable assurance or evidence of signature, identification and
authority to transfer as the Board may from time to time prescribe,
upon payment of all applicable taxes and any fees prescribed by the
Board, upon compliance with such restrictions on transfer, if any, as
are authorized by the Articles, and upon satisfaction of any lien
referred to in Section 8.6.
(b) The signature of the registered holder of any shares, or of his duly
authorized attorney, upon an authorized instrument of transfer shall
constitute a complete and sufficient authority to the Corporation, its
directors, officers and agents to register, in the name of the
transferee as named in the instrument of transfer, the number of
shares specified therein or, if no number is specified, all the shares
of the registered holder represented by share certificates deposited
with the instrument of transfer. If no transferee is named in the
instrument of transfer, the instrument of transfer shall constitute a
complete and sufficient authority to the corporation, its directors,
officers and agents to register, in the name of the person in whose
behalf any certificate for the shares to be transferred is deposited
with the Corporation for the purpose of having the transfer
registered, the number of shares specified in the instrument of
transfer or, if no number is specified, all the shares represented by
all share certificates deposited with the instrument of transfer.
(c) Neither the Corporation nor any director, officer or agent thereof
shall be bound to inquire into the title of the person named in the
form of transfer as transferee, or, if no person is named therein as
transferee, of the person on whose behalf the certificate is deposited
with the Corporation for the purpose of having the transfer registered
or be liable to any claim by any such person or by any intermediate
owner or holder of the certificate or of any of the shares represented
thereby or any interest therein for registering the transfer, and the
transfer, when registered, shall confer upon the person in whose name
the shares have been registered a valid title to such shares.
(d) Every instrument of transfer shall be executed by the transferor and
left at the registered office of the Corporation or at the office of
its transfer agent or branch transfer agent or registrar for
registration together with the share certificate for the shares to be
transferred and such other evidence if any, as the directors or the
transfer agent or branch transfer agent or registrar or branch
registrar may require to prove the title of the transferor or his
right to transfer the shares and the right of the transferee to have
the transfer registered. All instruments of transfer where the
transfer is registered shall be retained by the Corporation or its
transfer agent or branch transfer agent or registrar or
branch/registrar and any instrument of transfer, where the transfer is
not registered, shall be returned to the person depositing the same
together with the share certificate which accompanied the same when
tendered for registration.
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(e) There shall be paid to the Corporation in respect of the registration
of any transfer such sum, if any, as the directors may from time to
time determine.
8.5 TRANSFER AGENTS AND REGISTRARS - The Board may from time to time appoint a
registrar to maintain the securities register and a transfer agent to maintain
the register of transfers and may also appoint one or more branch registrars to
maintain branch securities registers and one or more branch transfer agents to
maintain branch registers of transfer, but one person may be appointed both
registrar and transfer agent. The Board may at any time terminate any such
appointment.
8.6 LIEN FOR INDEBTEDNESS - If the Articles provide that the Corporation shall
have a lien on shares registered in the name of a shareholder indebted to the
Corporation, such lien may be enforced, subject to any other provision of the
Articles, by the sale of the shares thereby affected or by any other action,
suit, remedy or proceeding authorized or permitted by law or by equity and,
pending such enforcement, may refuse to register a transfer of the whole or any
part of such shares.
8.7 NON-RECOGNITION OF TRUSTS - Subject to the provisions of the Act, the
Corporation shall treat as absolute owner of the share the person in whose name
the share is registered in the securities register as if that person had full
legal capacity and authority to exercise all rights of ownership, irrespective
of any indication to the contrary through knowledge or notice or description in
the Corporation's records or on the share certificate.
8.8 SHARE CERTIFICATES - Every person in whose name a share is registered in
the securities register shall be entitled, at his option, to a share
certificate, or to a non-transferable written acknowledgement of his right to
obtain a share certificate, stating the number and list or series of shares held
by him as shown on the securities register. Share certificates and
acknowledgements of a shareholder's right to a share certificate, respectively,
shall be in such form as the Board shall from time to time approve. Any share
certificate shall be signed in accordance with Section 2.4 and need not be under
the corporate seal provided that, unless the Board otherwise determines,
certificates representing shares in respect of which a transfer agent and/or
registrar has been appointed shall not be valid unless manually countersigned by
or on behalf of such transfer agent and/or registrar. The signature of one or
more officers may be printed or mechanically reproduced in facsimile upon share
certificates and every such facsimile signature shall for all purposes be deemed
to be the signature of the officer whose signature it reproduces and shall be
binding upon the Corporation. A share certificate executed as aforesaid shall
be valid notwithstanding that one or more of the officers whose facsimile
signature appears thereon no longer holds office at the date of issue of the
certificate.
8.9 REPLACEMENT OF SHARE CERTIFICATES - The Board or any officer or agent
designated by the Board may in its or his discretion direct the issue of a new
share certificate in lieu of and upon cancellation of a share certificate that
has been mutilated or in substitution for a share certificate claimed to have
been lost, destroyed or wrongfully taken or which does not comply as to form
with the requirements from time to time of the Act in this regard, on payment of
such fee as the Board may direct and on such terms as to indemnity,
reimbursement of expenses and evidence of loss and of title as the Board may
from time to time prescribe, whether generally or in any particular case.
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8.10 JOINT SHAREHOLDERS - If two or more persons are registered in the
securities register as joint holders of any share, the Corporation shall not be
bound to issue more than one certificate in respect thereof, and delivery of
such certificate to one of such persons shall be sufficient delivery to all of
them. Any one of such persons may give effectual receipts for the certificate
issued in respect thereof or for any dividend, bonus, return of capital or other
money payable or warrant issuable in respect of such share. Joint shareholders
may collectively designate in writing an address as their recorded address for
service of notice and payment of dividends but in default of such designation
the address of the first named joint shareholder shall be deemed to be the
recorded address aforesaid.
8.11 DECEASED SHAREHOLDERS - In the event of the death of a registered holder,
or of one of the joint registered holders, of any share, the Corporation shall
not be required to make any entry in the securities register in respect thereof
or to make payment of any dividends thereon except upon production of all such
documents as may be required by law and upon compliance with the reasonable
requirements of the Corporation and its transfer agents.
9. DIVIDENDS AND RIGHTS
9.1 DIVIDENDS - Subject to the provisions of the Act, the Board may from time
to time declare dividends payable to the shareholders according to their
respective rights and interest in the Corporation. Dividends may be paid in
money or property or by issuing fully paid shares of the Corporation.
9.2 DIVIDEND CHEQUES - A dividend payable in cash shall be paid by cheque
drawn on the Corporation's bankers or one of them to the order of each
registered holder of shares of the class or series in respect of which it has
been declared and mailed by prepaid ordinary mail to such registered holder at
his recorded address, unless such holder otherwise directs. In the case of
joint registered holders the cheque shall, unless such joint registered holders
otherwise direct, be made payable to the order of all of such joint registered
holders and mailed to them at their address in the securities register. The
mailing of such cheque as aforesaid, unless the same is not paid on due
presentation, shall satisfy and discharge the liability for the dividend to the
extent of the sum represented thereby plus the amount of any tax which the
Corporation is required to and does withhold.
9.3 NON-RECEIPT OF CHEQUES - In the event of non-receipt of any dividend
cheque by the person to whom it is sent as aforesaid, the Corporation shall
issue to such person a replacement cheque for a like amount on such terms as to
indemnity, reimbursement of expenses and evidence of non-receipt and of title as
the Board may from time to time prescribe, whether generally or in any
particular case.
9.4 RECORD DATE FOR DIVIDENDS AND RIGHTS - The Board may fix in advance a
date, preceding by not more than fifty (50) days the date for the payment of any
dividend or the date for the issue of any warrant or other evidence of right to
subscribe for securities of the Corporation, as a record date for the
determination of the persons entitled to receive payment of such dividend or to
exercise the right to subscribe for such securities provided that, where the
Corporation is a distributing Corporation for purposes of the Act, notice of any
such record date is given not less than seven (7) days before such record date
by newspaper advertisement and
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otherwise in the manner provided in the Act. Where no record date is fixed in
advance as aforesaid, the record date for the determination of the persons
entitled to receive payment of any dividend or to exercise the right to
subscribe for securities of the Corporation shall be at the close of business
on the day on which the resolution relating to such dividend or right to
subscribe is passed by the Board.
9.5 UNCLAIMED DIVIDENDS - Any dividend unclaimed after a period of six (6)
years from the date on which the same has been declared to be payable shall be
forfeited and shall revert to the Corporation.
10. MEETINGS OF SHAREHOLDERS
10.1 ANNUAL MEETINGS - The annual meeting of shareholders shall be held at such
time in each year and, subject to the Act and Section 10.4, at such place as the
Board may from time to time determine for the purpose of considering the
financial statements and reports required by the Act to be placed before the
annual meeting, electing directors, appointing auditors and for the transaction
of such other business as may properly be brought before the meeting.
10.2 SPECIAL MEETINGS - The Board, the Chairman of the Board, the Vice-Chairman
of the Board, the President or the Chief Executive Officer shall have power to
call a special meeting of shareholders at any time.
10.3 SPECIAL BUSINESS - All business transacted at a special meeting of
shareholders and all business transacted at an annual meeting of shareholders,
except consideration of the financial statements, auditors reports, election of
directors and reappointment of the incumbent auditors, is deemed to be special
business.
10.4 PLACE OF MEETING - Subject to the Articles and the Act, meetings of
shareholders may be held at Vancouver, British Columbia or such other place or
places as the directors in their absolute discretion may determine from time to
time.
10.5 NOTICE OF MEETING - Notice of the time and place of each meeting of
shareholders shall be given in the manner provided in Section 11.1 not less than
twenty-one (21) days nor more than fifty (50) days before the date of the
meeting to each director, to the auditor and to each shareholder who at the
close of business on the record date, if any, for notice is entered in the
securities register as the holder of one or more shares carrying the right to
vote at the meeting. Notice of a meeting of shareholders called for any purpose
other than consideration of the financial statements and auditor's report,
election of directors and reappointment of the incumbent auditor shall state the
nature of such business in sufficient detail to permit the shareholder to form a
reasoned judgment thereon and shall state the text of any special resolution to
be submitted to the meeting. A shareholder and any other person entitled to
attend a meeting of shareholders may in any manner waive notice of or otherwise
consent to a meeting of shareholders.
10.6 LIST OF SHAREHOLDERS ENTITLED TO NOTICE - For every meeting of
shareholders, at any time that the Corporation has more than fifteen (15)
shareholders entitled to vote at the meeting, the Corporation shall prepare a
list of shareholders entitled to receive notice of the meeting, arranged in
alphabetical order and showing the number of shares entitled to vote at the
meeting held by
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each shareholder. If a record date for the meeting is fixed pursuant to
Section 10.7, the shareholders listed shall be those registered or
constructively registered pursuant to the Act at the close of business on the
record date, such list to be prepared on a day not later than ten (10) days
after such record date. If no record date is fixed, the list of shareholders
shall be prepared no later than the close of business on the day immediately
preceding the day on which notice of the meeting is given or, where no such
notice is given, the day on which the meeting is held. The list shall be
available for examination by any shareholder during usual business hours at
the records office of the Corporation or at the place where the central
securities register is kept and at the place where the meeting is held.
10.7 RECORD DATE FOR NOTICE - The Board may fix in advance a record date
preceding the date of any meeting of shareholders by not more than fifty (50)
days and not less than twenty-one (21) days for the determination of the
shareholders entitled to notice of the meeting, provided that notice of any such
record date is given, not less than seven (7) days before such record date, in
the manner provided in the Act. If no record date is so fixed, the record date
for the determination of the shareholders entitled to notice of the meeting
shall be the close of business on the day immediately preceding the day on which
the notice is given or, if no notice is given, the day on which the meeting is
held.
10.8 MEETINGS WITHOUT NOTICE - A meeting of shareholders may be held without
notice at any time and place permitted by the Act:
(a) if all the shareholders entitled to vote thereat are present in person
or represented by proxy or if those not present or represented by
proxy waived notice of or otherwise consented to such meeting being
held; and
(b) if the auditor and the directors are present or waived notice of or
otherwise consented to such meeting being held.
At such meeting any business may be transacted which the Corporation at a
meeting of shareholders may transact. If the meeting is held at a place outside
the Yukon Territory, shareholders not present or represented by proxy, but who
have waived notice of or otherwise consented to such meeting, shall also be
deemed to have consented to the meeting being held at such place.
10.9 MEETINGS BY TELEPHONE - If the shareholders present at a meeting of
shareholders consent, one or more shareholders may participate in the meeting by
means of such telephone or other communications facilities as permit all persons
participating in the meeting to hear each other.
10.10 CHAIRMAN, SECRETARY AND SCRUTINEERS - The chairman of any meeting of
shareholders shall be the first mentioned of such of the following directors or
officers as have been appointed and who is present at the meeting: Chairman of
the Board, Vice-Chairman of the Board, President or a Vice-President. If no
such director or officer is present within fifteen (15) minutes from the time
fixed for holding the meeting, the persons present and entitled to vote shall
choose one of their number to be chairman. If the Secretary of the Corporation
is absent, the chairman of the meeting shall appoint some other person, who need
not be a shareholder, to act as secretary
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of the meeting. If desired, one or more scrutineers, who need not be
shareholders, may be appointed by resolution of the meeting or by the
chairman with the consent of the meeting.
10.11 PERSONS ENTITLED TO BE PRESENT - The only persons entitled to be present
at a meeting of shareholders shall be those entitled to vote thereat, the
directors and auditor of the Corporation and others who, although not entitled
to vote, are entitled or required under any provision of the Act or the Articles
or By-Laws to be present at the meeting. Any other person may be admitted only
on the invitation of the Chairman of the meeting or with the consent of the
meeting.
10.12 QUORUM - Save as herein otherwise provided, a quorum at a meeting of
shareholders shall be two shareholders represented in person or by proxy. The
directors, the Secretary or, in his absence, an assistant Secretary, and the
solicitor of the Corporation shall be entitled to attend at any general meeting
but no such person shall be counted in the quorum or be entitled to vote at any
general meeting unless he is a shareholder or proxyholder entitled to vote
thereat. If a quorum is present at the opening of any meeting of shareholders,
the shareholders present or represented by proxy may proceed with the business
of the meeting notwithstanding that a quorum is not present throughout the
meeting.
10.13 RIGHT TO VOTE - RECORD DATE FOR VOTING - Subject to the provisions of the
Act as to authorized representatives of any body corporate holding shares, at
any meeting of shareholders in respect of which the Corporation has prepared the
list referred to in Section 10.6, every person who is named in such list shall
be entitled to vote the shares shown thereon opposite his name except, where the
Corporation has fixed a record date in respect of such meeting pursuant to
Section 10.7, to the extent that such person has transferred any of his shares
after such record date and the transferee, upon producing properly endorsed
certificates evidencing such shares or otherwise establishing that he owns such
shares, demands not later than ten (10) days before the meeting that his name be
included in such list, in which event the transferee alone shall be entitled to
vote the transferred shares at the meeting. Where no record date for notice has
been fixed and no notice of meeting given, or in the absence of a list prepared
as aforesaid in respect of a meeting of shareholders, every person shall be
entitled to vote at the meeting who at the time is entered in the securities
register as the holder of one or more shares carrying the right to vote at such
meeting.
10.14 PROXIES
(a) Every person entitled to vote at a meeting of shareholders in
accordance with Section 10.13 or the Act, may appoint a proxyholder,
or one or more alternate proxyholders, who need not be shareholders,
to attend and act at the meeting in the manner and to the extent
authorized and with the authority conferred by the proxy. A proxy
shall be in writing executed by the shareholder or his attorney and
shall conform with the requirements of the Act. An instrument of
proxy shall be valid only at the meeting in respect of which it is
given or any adjournment thereof.
(b) Any corporation, other than a Prohibited Corporate Shareholder, which
is a registered holder of shares of the Corporation entitled to vote
at a meeting of shareholders may by resolution of its directors or
other governing body authorize such person as it thinks fit to act as
its representative at such meeting. The person
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so authorized shall be entitled to exercise in respect of and at
such meeting the same powers on behalf of the corporation which he
represents as that corporation could exercise if it were an
individual shareholder of the Corporation personally present
including, without limitation, the right, unless restricted by such
resolution, to appoint a proxyholder to represent such corporation,
and shall, if present at the meeting, be counted for the purpose of
forming a quorum and be deemed to be a shareholder present at the
meeting. The instrument appointing any such representative shall
be in writing and may be sent to the Corporation by any method of
transmitting legibly recorded messages including by facsimile.
10.15 TIME FOR DEPOSIT OF PROXIES - The Board may specify in a notice calling a
meeting of shareholders a time, preceding the time of such meeting by not more
than forty-eight (48) hours exclusive of non-business days, before which proxies
to be used at such meeting must be deposited. A proxy shall be acted upon only
if, prior to the time so specified, it shall have been deposited with the
Corporation or an agent thereof specified in such notice or, if no such time is
specified in such notice, unless it has been received by the Secretary of the
Corporation or by the chairman of the meeting or any adjournment thereof prior
to the commencement of the meeting or any adjournment thereof.
10.16 JOINT SHAREHOLDERS - If two or more persons are registered as the holders
of shares, any one of them present in person or represented by proxy at a
meeting of shareholders may, in the absence of the other or others, vote the
shares but if two or more of those persons are present in person or represented
by proxy and vote, they shall vote as one on the shares jointly held by them and
in the absence of agreement between those so voting the person named first in
the securities register shall vote the shares.
10.17 VOTES TO GOVERN - At any meeting of shareholders every question shall,
unless otherwise required by the Articles or By-Laws or by law, be determined by
the majority of the votes cast on the question. In case of an equality of votes
either upon a show of hands or upon a poll, the chairman of the meeting shall be
entitled to a second or casting vote.
10.18 MOTION - The chairman may propose any motion and no motion or nomination
need be seconded.
10.19 SHOW OF HANDS - Subject to the provisions of the Act, any question at a
meeting of shareholders shall be decided by a show of hands unless a ballot
thereon is required or demanded as hereinafter provided. Upon a show of hands,
every person who is present and entitled to vote shall have one vote. Whenever
a vote by show of hands shall have been taken upon a question, unless a ballot
thereon is so required or demanded, a declaration by the chairman of the meeting
that the vote upon the question has been carried or carried by a particular
majority or not carried shall be conclusive evidence of the fact without proof
of the number or proportion of the votes recorded in favour of or against any
resolution or other proceeding in respect of the said question, and the result
of the vote so taken shall be the decision of the shareholders upon the said
question.
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10.20 BALLOTS
(a) On any question proposed for consideration at a meeting of
shareholders, and whether or not a show of hands has been taken
thereon, the chairman of the meeting or any person or proxyholder
entitled to vote at the meeting may require or demand a ballot. A
ballot so required or demanded shall be taken in such manner as the
chairman shall direct. A requirement or demand for a ballot may be
withdrawn at any time prior to the taking of the ballot. If a ballot
is taken each person present shall be entitled in respect of the
shares which he is entitled to vote at the meeting upon the question
to that number of votes provided by the Act or the Articles, and the
result of the ballot so taken shall be the decision of the
shareholders upon the said question.
(b) No ballot may be demanded on the election of a chairman of the
meeting. A ballot demanded on a question of adjournment shall be
taken forthwith. A ballot demanded on any other question shall be
taken as soon as, in the opinion of the chairman, is reasonably
convenient, but in no event later than seven (7) days after the
meeting and at such time and place and in such manner as the chairman
of the meeting directs. The result of the ballot shall be deemed to
be the resolution of and passed at the meeting at which the ballot was
demanded. Any business other than that upon which the ballot has been
demanded may be proceeded with pending the taking of the ballot. In
any dispute as to the admission or rejection of a vote the decision of
the chairman made in good faith shall be final and conclusive.
10.21 ADJOURNMENT - If a meeting of shareholders is adjourned for less than
thirty (30) days, it shall not be necessary to give notice of the adjourned
meeting, other than by announcement at the earliest meeting that it is
adjourned. If a meeting of shareholders is adjourned by one or more
adjournments for an aggregate of thirty (30) days or more, notice of the
adjourned meeting shall be given as for an original meeting. At any such
adjourned meeting no business shall be transacted other than business left
unfinished at the meeting from which the adjournment took place.
10.22 RESOLUTION IN WRITING - A resolution in writing signed by all the
shareholders entitled to vote on that resolution at a meeting of shareholders is
as valid as if it had been passed at a meeting of the shareholders and shall be
held to relate to any date therein stated to be the effective date thereof.
10.23 ONLY ONE SHAREHOLDER - Where the Corporation has only one shareholder or
only one holder of any class or series of shares, the shareholder present in
person or by proxy constitutes a meeting.
10.24 ONLY TWO SHAREHOLDERS - Where the Corporation has only two shareholders a
quorum for the transaction of business at any meeting of shareholders shall be
one (1) shareholder, present in person or represented by an authorized
representative or by a duly appointed proxyholder, holding not less than ten
percent (10%) of the outstanding shares of the Corporation entitled to vote at
the meeting.
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11. NOTICES
11.1 METHOD OF GIVING NOTICES - Any notice (which term includes any
communication or document) to be given (which term includes sent, delivered
or served) pursuant to the Act, the regulations thereunder, the Articles, the
By-Laws or otherwise to a shareholder, director, officer, auditor or member
of a committee of directors shall be sufficiently given if delivered
personally to or to the recorded address of the person to whom it is to be
given or mailed or otherwise sent to his recorded address by any means of
prepaid transmitted or recorded communication. A notice so delivered shall
be deemed to have been given when it is actually delivered; a notice so
mailed shall be deemed to have been given at the time it would be delivered
in the ordinary course of the mail; and a notice so sent by any means of
transmitted or recorded communication shall be deemed to have been given when
dispatched except where there is evidence of an unsuccessful communication.
Subject to the Act, a notice of any meeting of shareholders shall be deemed
to have been sent to the shareholders on the day on which it is deposited in
the mail. The Secretary may change or cause to be changed the recorded
address of any shareholder, director, officer, auditor or member of a
committee of directors in accordance with any information believed by him to
be reliable.
11.2 NOTICE TO JOINT SHAREHOLDERS - If two or more persons are registered as
joint holders of any share, any notice shall be addressed to all of such joint
holders but notice given to any one or more of such persons at the recorded
address for such joint shareholders shall be sufficient notice to all of them.
11.3 COMPUTATION OF TIME - In computing the date when notice must be given
under any provision requiring a specified number of days notice of any meeting
or other event, the date of giving the notice shall be excluded and the date of
the meeting or other event in respect of which the notice is being given shall
be included.
11.4 UNDELIVERED NOTICES - If any notice given to a shareholder pursuant to
Section 11.1 is returned on three (3) consecutive occasions because he cannot be
found or served or is unknown at his recorded address, the Corporation shall not
be required to give any further notices to such shareholder until he informs the
Corporation in writing of his new recorded address.
11.5 PROOF OF SERVICE - A certificate of the Secretary or other duly authorized
officer of the Corporation in office at the time of the making of the
certificate, or of any agent of the Corporation as to the facts in relation to
the mailing or delivery or sending of any notice to any shareholder, director,
the auditors, is conclusive evidence thereof and shall be binding on every
shareholder, director, the auditors or any officer of the Corporation as the
case may be.
11.6 OMISSIONS AND ERRORS - The accidental omission to give any notice to any
shareholder, director, officer, auditor or member of a committee of directors or
the non-receipt of any notice by any such person or any error in any notice not
affecting the substance thereof shall not invalidate any action taken at any
meeting held pursuant to such notice or otherwise founded thereon.
11.7 PERSONS ENTITLED BY DEATH OR OPERATION OF LAW - Every person who by
operation of law, transfer, death of a shareholder or any other means
whatsoever, shall become entitled to any share, shall be bound by every notice
in respect of such share which shall have been duly given
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to the shareholder from whom he derives his title prior to such person's name
and address being entered on the securities register (whether such notice was
given before or after the happening of the event upon which he became so
entitled) and prior to his furnishing to the Corporation the proof of
authority or evidence of his entitlement prescribed by the Act.
11.8 WAIVER OF NOTICE - Any shareholder (or his duly appointed proxyholder),
director, officer, auditor or member of a committee of directors may at any time
waive the sending of any notice, or waive or abridge the time for any notice,
required to be given to him under any provision of the Act, the regulations
thereunder, the Articles, the By-Laws or otherwise and such waiver or
abridgement shall cure any default in the giving or the time of such notice, as
the case may be. Any such waiver or abridgement shall be in writing except a
waiver of notice of a meeting of shareholders or of the Board which may be given
in any manner.
ENACTED by the Board the 24th day of March, 1999.
(SIGNED) DAVID R. SINCLAIR
- --------------------------------------
Chairman of the Board
CONFIRMED by the shareholders in accordance with the Act the 10th day of May,
1999.
______________________________________
Chairman of the Board
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PROXY
SOLICITED BY MANAGEMENT OF VISTA GOLD CORP.
FOR THE 1999 ANNUAL GENERAL MEETING OF VISTA GOLD CORP.
The undersigned shareholder of Vista Gold Corp. (the "Corporation") hereby
appoints Michael B. Richings, or failing him Roger L. Smith, or failing either
of them _________________________________________________________as the
proxyholder for and on behalf of the undersigned to attend, act and vote for and
on behalf of the undersigned at the annual general meeting (the "Meeting") of
the shareholders of the Corporation to be held at 9:30 a.m. in Vancouver,
British Columbia, on Monday, May 10, 1999 and at any adjournments thereof, to
the same extent and with the same powers as if the undersigned were present at
the said meeting, or any adjournments thereof, and, without limiting the
foregoing, the persons named are specifically directed to vote as indicated
below. For further information regarding the Meeting and the matters that will
be acted on at the Meeting, reference is specifically made to the accompanying
Notice of Meeting and Management Proxy and Information Circular, both dated
March 24, 1999.
The undersigned directs the proxyholder appointed by this proxy to vote as
follows:
1. To elect the following persons as directors of the Corporation until the
next annual general meeting:
Ross J. Beaty.............FOR / / WITHHOLD / /
William Calhoun...........FOR / / WITHHOLD / /
C. Thomas Ogryzlo.........FOR / / WITHHOLD / /
Michael B. Richings.......FOR / / WITHHOLD / /
David R. Sinclair.........FOR / / WITHHOLD / /
Keith Steeves.............FOR / / WITHHOLD / /
Alan G. Thompson..........FOR / / WITHHOLD / /
Peter Walton..............FOR / / WITHHOLD / /
2. To appoint PricewaterhouseCoopers, Chartered Accountants, as auditor of the
Corporation until the next annual general meeting and authorize the
directors to fix the remuneration to be paid to the auditor.
FOR / / WITHHOLD / /
3. To approve an ordinary resolution approving certain cancellations and
grants of incentive stock options to the directors and certain officers and
employees of the Corporation.
FOR / / AGAINST / /
4. To approve an ordinary resolution approving certain amendments to the
Corporation's Stock Option Plan.
FOR / / AGAINST / /
5. To approve an ordinary resolution confirming Amended By-Law No. 1 of the
Corporation.
FOR / / AGAINST / /
EXECUTED on the _____ day of __________________, 1999.
_______________________________________________ ____________________________
Signature of Shareholder (or Authorized Number of Common Shares Held
Attorney or Signatory on behalf of Shareholder)
_______________________________________________________________________________
Name of Shareholder (please print clearly)
_______________________________________________________________________________
Address
_______________________________________________________________________________
City/Province
INSTRUCTIONS:
1. The common shares represented by this proxy will, on any ballot, be voted
as you may have specified by marking an "X" in the spaces provided for that
purpose. IF NO CHOICE IS SPECIFIED AND EITHER OF MICHAEL B. RICHINGS OR ROGER
L. SMITH IS APPOINTED AS PROXYHOLDER, THE COMMON SHARES WILL BE VOTED AS IF YOU
HAD SPECIFIED AN AFFIRMATIVE VOTE.
2. YOU MAY APPOINT AS PROXYHOLDER SOMEONE OTHER THAN THE PERSONS NAMED IN THIS
PROXY BY STRIKING OUT THEIR NAMES AND INSERTING IN THE BLANK SPACE PROVIDED THE
NAME OF THE PERSON HE OR SHE WISHES TO ATTEND AND ACT AS PROXYHOLDER. THAT
PERSON NEED NOT BE A SHAREHOLDER OF THE CORPORATION. IF THE INSTRUCTIONS ON
THIS PROXY ARE CERTAIN, THE COMMON SHARES REPRESENTED BY THE PROXY WILL BE VOTED
ON ANY POLL IN ACCORDANCE WITH SUCH INSTRUCTIONS, AND WHERE YOU SPECIFY A CHOICE
WITH RESPECT TO ANY MATTER TO BE ACTED ON, THE COMMON SHARES WILL BE VOTED ON
ANY POLL IN ACCORDANCE WITH THE SPECIFICATIONS SO MADE.
3. THIS PROXY ALSO CONFERS A DISCRETIONARY AUTHORITY TO VOTE THE SHARES WITH
RESPECT TO:
(a) AMENDMENTS TO OR VARIATIONS OF MATTERS IDENTIFIED IN THE NOTICE OF MEETING;
AND
(b) OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING,
BUT ONLY IF MANAGMENT HAS NOT BEEN MADE AWARE, A REASONABLE TIME PRIOR TO THIS
SOLICITATION, THAT THE AMENDMENTS, VARIATIONS OR OTHER MATTERS ARE TO BE
PRESENTED FOR ACTION AT THE MEETING. NO MATTERS OTHER THAN THOSE STATED IN THE
ATTACHED NOTICE OF MEETING ARE, AT PRESENT, KNOWN TO BE CONSIDERED AT THE
MEETING BUT, IF SUCH MATTERS SHOULD ARISE, PROXIES WILL BE VOTED IN ACCORDANCE
WITH THE INSTRUCTIONS OF THE SHAREHOLDER VOTING BY PROXY, OR, FAILING SUCH
INSTRUCTIONS, IN ACCORDANCE WITH THE BEST JUDGMENT OF THE PROXYHOLDER.
4. In order to be valid this proxy must be dated and signed by the shareholder
or by his or her attorney duly authorized in writing or, in the case of a
corporation, executed under its corporate seal or by an officer or officers or
attorney for the corporation duly authorized. If this proxy is executed by an
attorney for an individual shareholder or joint shareholder or by an officer or
officers or attorney of a corporate shareholder not under its corporate seal,
the instrument so empowering the officer or officers or the attorney, as the
case may be, or a notarial copy thereof, should accompany the proxy. The
signature and name must conform to the name of the shareholder as registered.
Executors, administrators and trustees signing on behalf of the registered
shareholder should so indicate. If shares are jointly held, either of the
registered owners may sign the proxy. If this proxy is not dated in the blank
space provided, it will be deemed to bear the date on which it was mailed by
management of the Corporation.
5. This proxy may not be used at the Meeting unless it is deposited at the
office of Montreal Trust Company of Canada at Montreal Trust Centre, 510 Burrard
Street, Vancouver, British Columbia, V6C 3B9, Attention: Proxy Department before
9:30 a.m., Vancouver time, on Thursday, May 6, 1999, or no later than 48 hours,
excluding Saturdays, Sundays and holidays, before any adjournment of the
Meeting. The Chairman of the Meeting has the discretion to accept proxies
received subsequently.
