<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K/A
AMENDMENT NO. 1
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Fiscal Year ended December 31, 1998
Commission file number 0-21708
GOLDEN STAR RESOURCES LTD.
(Exact Name of Registrant as Specified in Its Charter)
Canada 98-0101955
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1660 Lincoln Street, Suite 3000
Denver, Colorado 80264-3001
(Address of Principal Executive Office) (Zip Code)
(303) 830-9000
(Registrant's telephone number, including area code)
Securities registered or to be registered pursuant to Section 12(b) of the
Act:
Name of Exchange
Title of Each Class on which Registered
------------------- -------------------
Common Shares American Stock Exchange
Toronto Stock Exchange
Securities registered or to be registered pursuant to Section 12(g) of the
Act: NONE
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days Yes X No
-- --
Indicate by check mark if disclosure of delinquent filers pursuant to item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form l0-K. ______
The aggregate market value of the voting stock held by non-affiliates of
the Registrant was approximately $24.5 million as of March 12, 1999, based
on the closing price of the shares on the American Stock Exchange of $0.81
per share.
Number of Common Shares outstanding as at March 12, 1999: 30,292,249
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- -------- --------------------------------------------------
Directors of the Registrant
---------------------------
(as of March 12, 1999)
The directors of the Company, their ages and their business experience and
principal occupation during the past five years are:
<TABLE>
<CAPTION>
Name Age Office and Experience Director
---- --- --------------------- --------
since
-----
<S> <C> <C> <C>
DAVID K. FAGIN 61 Mr. Fagin has been Chairman and Chief Executive Officer of Western 1992
Exploration and Development since July 1997. Mr. Fagin was Chairman
and Chief Executive Officer of the Company from May 1992 until May
1996. On May 1, 1996, Mr. Fagin resigned as Chief Executive
Officer of the Company and on December 31, 1997, he resigned as
Chairman of the Board.
PIERRE GOUSSELAND 77 Mr. Gousseland was Chairman and Chief Executive Officer of AMAX, 1996
Inc. from 1975 until 1984. Mr. Gousseland has been a director of
Guyanor Ressources since May 13, 1994, a director of the Company
since June 11, 1996 and Chairman of the Board of the Company since
January 1, 1998. He was also acting CEO for the Company from
October 27, 1998 until March 8, 1999. Mr. Gousseland also serves as
a director of Royal Gold, Inc.
PHILIP MARTIN 54 Mr. Martin is currently an independent Business Executive, 1997
President of Tobago Land and Development L.L.C. as well as a
Director of Sahelian Goldfields Inc. Mr. Martin was a Partner of
Gordon Capital Company since 1986 and Director and Managing Partner
of the same company from 1995 until March 31, 1998.
ERNEST MERCIER 66 Mr. Mercier was employed from 1970 to January 1993 by The 1995
Toronto-Dominion Bank, most recently as Executive Vice President,
Corporate & Investment Banking and as Co-Chairman, Toronto-Dominion
Securities Inc. Mr. Mercier retired from The Toronto-Dominion Bank
in 1993 and currently serves as a director of the Cascade
Corporation, Oxford Properties Group Inc., Camvec Ltd., Pencor
Petroleum Ltd. and International Comfort Products Ltd.
ROGER MORTON 63 Dr. Morton was a professor of Economic Geology at the University of
Alberta from 1967 until 1995. He is now Professor Emeritus at the
University of Alberta and President of Polar Star Diamonds Ltd.
Currently Dr. Morton serves as a director of Texas Star Resources 1992
Inc., Roraima Gold Corporation, Solitario Resources, Canadian
Entech Research Corp., Takla Star Resources Ltd., International
Capri Ltd., Layfield Resources Ltd., Uraguay Gold Fields, Mindoro
Resources and Arian Resources and acts as a private consultant to
mining companies.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
RICHARD STARK 78 Mr. Stark was first an associate and then a partner in the New 1992
York law firm of Milbank, Tweed, Hadley & McCloy from 1948 to 1990,
and has been a fiduciary trustee since 1980, and a managing partner
in several real estate ventures for more than 10 years.
ROBERT STONE 56 Mr. Stone was employed from 1973 until 1997 by Cominco Ltd., most 1997
recently as Vice-President, Finance, Chief Financial Officer and
Director. Mr. Stone retired from Cominco Ltd. in 1997 and
currently serves as a director of Boliden Limited, Manhattan
Minerals Corp., United Bolero Development Corp. and TVI Pacific Inc.
</TABLE>
Messrs. Donald Mazankowski and Robert Minto resigned as directors of the Company
as of March 1, 1999.
EXECUTIVE OFFICERS
Executive Officers of the Registrant
------------------------------------
(as of March 12, 1999)
The executive officers of the Company, their ages and their business experience
and principal occupation during the past five years are:
<TABLE>
<CAPTION>
Name Age Office and Experience Director
---- --- --------------------- --------
since
-----
<S> <C> <C> <C>
James E. Askew 50 President and Chief Executive Officer of the Company since March 1999
1999; prior thereto President and Chief Executive Officer of
Rayrock Resources from September 1998 to March 1999; from 1997 to
present, President and Chairman of International Mining and
Finance Corporation; from 1986 to 1996, President and Chief
Executive Officer of Golden Shamrock.
GORDON J. BELL 41 Vice President and Chief Financial Officer of the Company since 1995
November 1995; prior thereto, Vice President and Director, RBC
Dominion Securities Inc. from October, 1994; Vice President, RBC
Dominion Securities Inc. from December, 1991 to October 1994.
CARLOS H. BERTONI 47 President of Guyanor Ressources S.A. since December 1998; Vice 1993
President, Brazil of the Company since June 1997, prior thereto
Vice President, Exploration (Eastern Division) of the Company
since 1993.
LOUIS O. PELOQUIN 41 Vice President, General Counsel and Secretary of the Company since 1993
June 1993.
HILBERT N. SHIELDS 43 Vice President, Guyana since June 1997 and prior thereto Vice 1993
President, Exploration (Western Division) since 1993.
RICHARD A. WINTERS 36 Vice President, Corporate Development since August 1995; prior 1995
thereto Senior Analyst, Robertson Stephens & Co. from August 1994;
prior thereto Senior Engineer, Phelps Dodge Mining Co. from
January 1993 to August 1994.
</TABLE>
3
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There are no family relationships between any of the directors or executive
officers of the Company.
Compliance with Section 16(A) of the Securities Act of 1934
To the Company's knowledge, based on a review of reports filed by our directors,
executive officers and beneficial holders of 10% or more of our outstanding
shares, and upon representations from those persons, all reports required to be
filed by our reporting persons during 1998 were filed on time.
ITEM 11. EXECUTIVE COMPENSATION
- -------- ----------------------
The following table sets forth in summary form the compensation received during
each of the Company's last three fiscal years by the Chief Executive Officer of
the Company and by the five most highly compensated officers during the fiscal
year ended December 31, 1998 (collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long-Term Compensation (1)
-------------------------------------------------------------------------------------------------------
Awards
=============================================================
Number of
Securities Number of
Underlying Securities
Other Options Underlying
Annual Granted Options
Salary Bonus Compen- by the Granted by All Other
Name and Principal (US$) (US$) sation Company Guyanor Compensation
Position Year (2) (3) (US$) (#) (#) (US$)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
David A. Fennell 1998 215,250 32,804 189,279 (4) 0 0 600,225 (7,10)
President and 1997 258,300 40,000 206,477 (4) 150,000 100,000 17,364 (7)
Chief Executive 1996 246,000 40,000 204,917 (4) 150,000 375,000 17,912 (7)
Officer (8)
- --------------------------------------------------------------------------------------------------------------------------------
Pierre Gousseland 1998 33,600 N/A N/A 50,000 0 0
Chairman and Chief 1997 N/A N/A N/A 30,000 0 0
Executive Officer 1996 N/A N/A N/A 40,000 0 0
(9)
- --------------------------------------------------------------------------------------------------------------------------------
Carlos Bertoni 1998 190,000 0 (5) 0 0 0
Vice President, 1997 190,000 0 (5) 35,000 18,000 0
Brazil 1996 185,000 0 (5) 25,000 50,000 0
- --------------------------------------------------------------------------------------------------------------------------------
Hilbert Shields 1998 190,000 0 (5) 0 0 0
Vice President, 1997 190,000 0 (5) 35,000 18,000 0
Guyana 1996 185,000 0 (5) 25,000 50,000 0
- --------------------------------------------------------------------------------------------------------------------------------
Gordon J. Bell 1998 186,500 0 (5) 0 0 2,569 (7)
Vice-President and 1997 186,500 10,000 (5) 40,000 20,000 1,364 (7)
Chief Financial 1996 180,000 0 14,571 30,000 85,000 740 (7)
Officer
- --------------------------------------------------------------------------------------------------------------------------------
Louis O. Peloquin 1998 160,000 0 (5) 0 0 2,321 (7)
Vice-President, 1997 160,000 10,000 (5) 40,000 20,000 1,174 (7)
General Counsel 1996 135,000 15,000 (5) 25,000 50,000 271 (7)
and Secretary
- --------------------------------------------------------------------------------------------------------------------------------
Adrian W. Fleming 1998 183,333 0 (5) 0 0 77,695 (7,11)
Executive 1997 200,000 10,000 (5) 40,000 20,000 1,461 (7)
Vice-President, 1996 230,000 0 (5) 150,000 125,000 0 (7)
Exploration (8)
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
(1) There were no long-term incentive plan payouts during the periods indicated.
(2) The dollar value of base salary (cash and non-cash) earned.
(3) The dollar value of bonuses (cash and non-cash) earned. The 1997 bonuses
were declared December 16, 1997 and the 1996 bonuses were declared January
1, 1997.
(4) Pertains to deemed taxable benefit of interest free loans from the Company.
See "Indebtedness of Directors and Officers."
(5) Other annual compensation, including perquisites and other personal
benefits, securities or property, did not exceed 10% of the total of the
annual salary and bonus, if applicable.
(6) Upon exercise of the options granted prior to March 14, 1995, the holder
will receive one-fifth of one Class B share of Guyanor for each one Common
Share acquired.
(7) These amounts are in respect of premiums paid for life insurance for the
benefit of these executives.
(8) Mr. David Fennell resigned as of October 27, 1998 and Mr. Adrian Fleming
resigned as of November 27, 1998.
(9) Mr. Pierre Gousseland, Chairman of the Company, was appointed Acting Chief
Executive Officer for the interim period after the resignation of Mr. David
Fennell and the appointment of its successor Mr. James Askew on March 8,
1999. The compensation was paid to Mr. Gousseland as non-executive Chairman.
(10)For 1998, it also includes $597,000 paid pursuant to a Separation Agreement
and Release.
(11)This amount includes $75,000 paid in February 1999 pursuant to a Separation
Agreement and Release, in connection with Mr. Fleming's November 27, 1998
resignation.
Employment Contracts and Termination Arrangements
The Company has entered into employment agreements with Messrs. Bell and
Peloquin (the "Executives"). The terms of the agreements are substantially the
same. The agreements are for a three-year term unless terminated as provided
hereinafter. After the expiration of the three-year term, the agreements are
automatically renewed on a year-to-year basis unless terminated as follows. In
the event the agreements are terminated by the employee for "good reason" or by
the Company "without cause", Messrs. Bell and Peloquin would be entitled to a
lump sum payment equal to the salary, bonus and benefits to which he would have
been entitled to receive for a period of one year after the termination and all
stock options granted to them would become immediately vested and would remain
exercisable for a period of one year from the termination date. Messrs. Bell and
Peloquin's current base annual salaries are $186,500 and $160,000 respectively.
The Company also has employment agreements with Messrs. Carlos Bertoni and
Hilbert Shields, the terms of which are substantially the same. The two
contracts were executed as of January 1, 1994 for an initial term of three
years. They have been automatically renewed from year to year in accordance the
agreements. Messrs. Bertoni and Shields are paid a base salary of $154,000 per
year. As Messrs. Bertoni and Shields are based in South America, each is also
entitled to a living allowance of $36,000 per year. The Company may terminate
either of Mr. Bertoni's or Mr. Shields' employment without cause on twelve
months' written notice. If either Mr. Bertoni or Mr. Shields' employment is
terminated upon the occurrence of a change in control of the Company, he would
be entitled to receive his salary for a period of twelve months.
In December 1997, the Company entered into a change of control agreement with
Messrs. Bell and Peloquin. A "change of control" is deemed to have occurred if:
(i) any "Person" (as defined in Sections 13(d) and 14(d) of the Exchange Act)
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), of securities of the Company representing fifty percent (50%) or more of
the combined voting power of the Company's then outstanding securities; (ii)
within any period of two consecutive years there shall cease to be a majority of
the Board comprised of individuals who at the beginning of such period
constitute the Board and of any new director(s) whose election was approved by a
vote of at least two-thirds (2/3) of the directors then still in office; (iii)
the shareholders of the Company approve a merger of, or consolidation or
amalgamation involving, the Company in which (A) the Company's Common Shares are
converted into shares or securities of another Company, or into cash or other
property, or (B) the Common Shares of the Company are not converted but in which
more than forty percent (40%) of the Common Shares of the surviving corporation
in the merger or amalgamation is owned by shareholders other than those
shareholders of the Company who owned such amount prior to the merger; (iv) the
shareholders of the Company approve a plan of complete liquidation of the
Company, or an agreement for the sale or disposition by the Company of all or
substantially all the Company's assets, either of which is followed by a
distribution of all or substantially all of the proceeds to the shareholders. In
the event an
5
<PAGE>
Executive's employment is terminated within 24 months of a change of control,
(unless such termination was (i) because of the death or disability of such
Executive, (ii) by the Company for cause, or (iii) by such Executive without
"good reason"), such Executive will be entitled to (A) a lump sum severance
payment equal to two times such Executive's base annual salary and annual bonus
paid for the prior year, (B) all the outstanding stock options previously
granted to such Executive will become fully exercisable and vested, and (C) full
benefits such as health, dental, disability and life insurance for a period of
24 months from the termination date (except if such Executive starts full time
employment with another company).
See "Report on Executive Compensation" below for discussion about amendments to
the Executives' employment and change of control agreements described
hereinafter.
On October 28, 1998, the Company entered into a Separation Agreement and Release
with David A. Fennell, its then President and Chief Executive Officer. Mr.
Fennell's resignation in such capacity became effective as of October 27, 1998.
Under this agreement, the Company paid to Mr. Fennell $597,000, the equivalent
of two years of salary. Mr. Fennell is also entitled to reimbursement of
certain expenses for up to $81,200, $10,000 of which were paid so far.
The Company also entered into a Separation Agreement and Release with Adrian
Fleming as of February 9, 1999. This agreement confirmed Mr. Fleming's
resignation as of November 27, 1998. Under this agreement, Mr. Fleming
received a gross payment of $75,000, the equivalent of 4 1/2 months of salary.
Report on Executive Compensation
The Compensation Committee first established in 1992 was abolished in December
1998. The Compensation Committee had always been comprised of non-employee
directors and its members in 1998 were Messrs. Martin (Chairman), Mazankowski,
Minto, Morton and Gousseland (ex-officio). The Board of Directors which is
currently comprised of non-employee directors only has taken over the
responsibility of the Compensation Committee. Their responsibility includes
approving compensation arrangements for all executive officers of the Company
and of Guyanor, its controlled subsidiary (subject to the approval of the Board
of Directors of Guyanor). Cash and benefits compensation is provided for in
employment agreements which have been negotiated and entered into with the
President and Chief Executive Officer and the Vice-Presidents of the Company. At
the time such agreements were entered into, the Compensation Committee
considered the compensation levels for such positions to be comparable to those
of other public gold exploration companies. Subsequent adjustments have
reflected, among other things, merit, cost of living and special living
conditions. Executive salaries are reviewed on a yearly basis and are set for
individual executive officers based on the level of responsibility, scope and
complexity of the executive's position and a subjective evaluation of each
individual's role and performance in advancing the successful development of the
Company, the officer's performance in general, the Company's performance and a
comparison of salary ranges for executives of other similar companies in the
mining industry.
During 1998, executive compensation consisted of base salary and living
allowances (for executives working overseas). One executive officer received a
stock bonus. The base salaries of the Executives have not been increased since
December 1996. In addition, in response to continuing weak gold prices and to
conserve cash, the Board is currently negotiating with the executive officers of
the Company for a reduction in their benefits under their employment and change
of control agreements, including a reduction in their base salaries.
Because the Company is in an early stage mineral development business, the Board
(and prior to December 1998, the Compensation Committee) considers an essential
element of its compensation arrangements for executive officers to consist of
options to purchase Common Shares and stock bonuses in order to provide
appropriate incentive for individual and group effort. In determining the amount
of stock options and stock bonuses to be granted, the Board considers, among
other things, the officer's position, salary, and previous and anticipated
accomplishments. There were no stock option grants to executive officers in
1998. The Board, however, approved in January 1999 amendments to stock options
that would, if approved by the shareholders at their June 1999 Annual Meeting,
substantially reduce the exercise price of the executive officers' stock
options and reduce the number of their outstanding options by 20%.
6
<PAGE>
Submitted by the Board of Directors: Pierre Gousseland (Chairman), David K.
Fagin, Philip S. Martin, Ernest Mercier, Roger D. Morton, Richard Stark and
Robert Stone
Compensation of Directors
Directors' Fees
During the year ended December 31, 1998, the Company paid a total of $134,400 to
its non-employee directors in respect of Board and committee participation. Mr.
Pierre Gousseland, as non-executive Chairman, was receiving a monthly payment of
$3,000, Mr. Richard A. Stark as Chairman of the Audit and Governance Committee
was receiving $2,000 a month, and all other non-employee directors were
receiving $1,000 a month. On September 1, 1998, the Board decided to reduce all
payments to non-employee directors by 20%. The non-employee directors are also
reimbursed for transportation and other out-of-pocket expenses reasonably
incurred for attendance at Board and committee meetings and in connection with
the performance of their duties as directors.
Stock Options
The Company's 1997 Stock Option Plan (the "Plan") provides for an automatic
grant of an option to purchase 40,000 Common Shares to each person who becomes
non-employee director, as of the date such person first becomes non-employee
director, provided that, within the previous year, such person was not granted
any other stock options by the Company. In addition, on each anniversary of his
appointment to the Board, a non-employee director is entitled to receive an
automatic stock option to purchase 10,000 Common Shares. The Board may, at its
discretion, grant additional options to non-employee directors from time to
time. 1,220,000 Common Shares were reserved for issuance under options granted
to non-employee directors under the Plan as of March 12, 1999. The Board
approved in January 1999 amendments to stock options that would, if approved by
the shareholders at their June 1999 Annual Meeting, substantially reduce the
exercise price of the directors' stock options and reduce the number of their
outstanding options by 20%. All options granted to the non-employee directors
vested immediately and have a ten-year term. See "Stock Option Plan" below for
other particulars of the Plan.
Because the non-employee directors of the Company are not employed by Guyanor,
they are not eligible to participate in Guyanor's Stock Option Plan. Therefore,
once a year, the Company grants to its non-employee directors options to
purchase Class B shares of Guyanor from the Class B shares that the Company
owns. The term of each option is ten years and the options granted so far
vested immediately.
Stock Option Grants
The following table sets forth information with respect to options granted
during the financial year ended December 31, 1998 to the Company's non-employee
directors as a group under the Plan as well as options granted by the Company to
purchase Guyanor Class B shares.
7
<PAGE>
OPTION GRANTS DURING LAST FISCAL YEAR
(all $ amounts in Canadian dollars)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Market Value of
Group Exercise or Securities Underlying
___________________ Securities Under Base Price Options on the Date of
Non-executive directors as Options Granted ($/Security) Grant ($/Security) Expiration Date
a group (#)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
10,000 6.65 6.65 January 30, 2008
Company Company 20,000 4.50 4.50 May 15, 2008
Whose 10,000 3.80 3.80 June 11, 2008
Shares are 10,000 3.50 3.50 June 20, 2008
Subject of 10,000 1.55 1.55 September 1, 2008
Options 20,000 1.66 1.66 September 30, 2008
Granted 107,000 1.65 1.65 December 8, 2008
-------------------------------------------------------------------------------------------------------------
Guyanor 90,000 1.05 1.05 December 8, 2008
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
Stock Option Exercises
The following table sets forth information with respect to the exercise during
the financial year ended December 31, 1998, by the non-employee directors as a
group, of options granted under the Plan, or options granted by the Company to
acquire Guyanor Class B shares as of December 31, 1998 as well as the value of
their outstanding options as of December 31, 1998.
AGGREGATED OPTION EXERCISES DURING LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
(all $ amounts in Canadian dollars)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Unexercised Options at FY- Value of Unexercised
Group End in-the-money Options
__________________ Securities Aggregate (#) at FY-End ($)
Non-executive directors as Acquired on Value Exercisable/ Exercisable/
a group Exercise Realized Unexercisable Unexercisable (2)
(#) ($)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Company Company 0 N/A Exercisable (1) 1,220,000 0
Whose
Shares are
Subject of ----------------------------------------------------------------------------------------------------------------
Options Guyanor 0 N/A Exercisable 846,958 0
Granted Unexercisable 3,300
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Upon exercise of stock options granted prior to March 14, 1995, the holder
will receive one-fifth of one Class B share of Guyanor and one Common Share.
(2) For all unexercised options held as of December 31, 1998, the aggregate
dollar value of the excess of the market value of the shares underlying
those options over the exercise price of those unexercised options. On
December 31, 1998, the closing prices of the Common Share and the Guyanor
Class B share on the TSE were Cdn.$ 1.55 and Cdn.$ 0.60, respectively. On
March 12, 1999, the closing prices of the Common Shares and the Guyanor
Class B shares on the TSE was Cdn$ 1.25 and Cdn$ 0.52, respectively.
8
<PAGE>
STOCK INCENTIVES
Stock Option Plan
The Company has adopted a stock option plan (referred to herein as the "Plan")
which provides to certain key employees, consultants and directors of the
Company and its subsidiaries an incentive to maintain and to enhance the long-
term performance of the Company through the acquisition of Common Shares
pursuant to the exercise of stock options. The Plan consists of two components:
(i) a discretionary component, under which options may be granted to employees,
consultants and directors (including non-employee directors), and (ii) a non-
discretionary component, under which options are automatically granted, on an
annual basis, to non-employee directors.
The Plan is currently administered by the Board of Directors. The Board has the
authority, subject to the terms of the Plan, to determine when and to whom to
make grants under the Plan, the number of shares to be covered by the grants,
the terms of options granted and the exercise price of options, and to
prescribe, amend and rescind rules and regulations relating to the Plan.
Subject to certain other limitations, the maximum number of shares that can be
issued under the Plan is 5,600,000.
Under the terms of the non-discretionary component of the Plan, each person who
is first elected, appointed or otherwise first becomes a non-employee director
(an "Eligible Director") generally will be granted an option to purchase 40,000
Common Shares as of the date on which such person first becomes an Eligible
Director (an "Initial Option"), and each such person who remains an Eligible
Director will generally receive an option to purchase 10,000 Common Shares (an
"Annual Option") on each anniversary date of such person becoming an Eligible
Director. With respect to any non-discretionary option, each option is
exercisable for a period of ten years from the date of the grant. Each Initial
Option and Annual Option vests and becomes fully exercisable on the date of
grant and the exercise price of such options may not be less than the fair
market value of the Common Shares on the date of the grant.
Options granted under the discretionary component of the Plan are exercisable
over a period determined by the Board, but not to exceed ten years from the date
of grant, and the exercise price of an option may not be less than the fair
market value of the Common Shares on the date of grant. In addition, such
options may be subject to vesting conditions established by the Board and
provided in the option agreement evidencing the grant of such option.
Provision is made in the Plan for interest-free non-recourse loans to employee
participants. The loans are secured by a pledge to the Company of the Common
Shares acquired through the exercise of an option and are repayable prior to the
earliest of the date which is five years from the date of the loan, ten years
from the date of grant of the particular option and 30 days after the optionee
ceases to be employed by the Company for any reason other than death.
Stock Option Grants
No stock option or SAR were granted to the Named Executive Officers in the last
fiscal year.
Stock Option Exercises and Year-End Option Values
The following table sets forth information concerning the fiscal year-end value
of unexercised options held by the Named Executive Officers. There were no
exercises of stock options to purchase Common Shares or Class B shares of
Guyanor during the fiscal year ended December 31, 1998 by the Named Executive
Officers.
9
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AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Common Shares Number of Securities Underlying Value of Unexercised
Name of Optionee and Acquired on Aggregate Value Unexercised Options at Fiscal In-the-money Options at Fiscal
Company Whose Shares Exercise Realized Year End Year End (CDN$)
are Subject of (#) (CDN$) (2)
Options Granted
=======================================================================
Exercisable Un- Exercisable Un-
exercisable exercisable
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
David A. Fennell
Company 0 N/A 353,400 (1) 49,500 0 0
Guyanor 0 N/A 1,040,052 33,000 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
Adrian W. Fleming
Company 0 N/A 206,800 13,200 0 0
Guyanor 0 N/A 148,400 6,600 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
Gordon J. Bell
Company 0 N/A 306,800 13,200 0 0
Guyanor 0 N/A 126,451 6,600 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
Louis O. Peloquin
Company 0 N/A 166,800 (1) 13,200 0 0
Guyanor 0 N/A 103,400 6,600 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
Carlos Bertoni
Company 0 N/A 163,450 11,550 0 0
Guyanor 0 N/A 412,060 5,940 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
Hilbert Shields
Company 0 N/A 138,450 11,550 0 0
Guyanor 0 N/A 102,060 5,940 0 0
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Upon exercise of options granted prior to March 14, 1995, the holder will,
in addition, be entitled to receive one-fifth of one Class B share of
Guyanor for each Common Share acquired.
(2) For all unexercised options held as of December 31, 1998, the aggregate
dollar value of the excess of the market value of the shares underlying
those options over the exercise price of those unexercised options. On
December 31, 1998, the closing price of the Common Shares was CDN$ 1.55 on
the TSE and the closing price of the Guyanor Class B shares was CDN$0.60 on
the TSE. On March 12, 1999, the closing price of the Common Shares was CDN$
1.25 on the TSE and the closing sale price of the Guyanor Class B shares was
CDN$ 1.52 on the TSE.
Stock Bonus Plan
In December 1992, the Company established an Employees' Stock Bonus Plan (the
"Bonus Plan") for any full-time or part-time employee (whether or not a
director) of the Company or any of its subsidiaries who has rendered meritorious
services that contributed to the success of the Company or any of its
subsidiaries. The Bonus Plan provides that a specifically designated committee
of the Board (currently the Compensation Committee) may grant bonus Common
Shares on terms that the Compensation Committee may determine, within the
limitations of the Bonus Plan and subject to the rules of applicable regulatory
authorities. The maximum number of Common Shares issuable under the Bonus Plan
is limited to 320,000 Common Shares. In addition, in any calendar year such
reservation is limited to 1% of the total number of Common Shares which were
issued and outstanding at the end of the preceding fiscal year (with no more
than 0.5% being issuable to insiders of the Company).
A total of 32,783 Common Shares were issued under the Bonus Plan in 1998. Of
these bonus Common Shares, 18,608 were issued to David A. Fennell, a Named
Executive Officer.
10
<PAGE>
ITEM 12. SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- -------- ----------------------------------------------------------------
The following table sets forth information, as of March 12, 1999, with respect
to beneficial ownership of the Company's Common Shares by each person known to
the Company or its directors or senior officers to be the beneficial owner of
more than 5% of its outstanding Common Shares, by each director of the Company,
by each executive officer named in the table titled "Summary Compensation Table"
which appears elsewhere in this Form 10K/A, and by all officers and directors of
the Company as a group. Unless otherwise noted, each shareholder has sole
investment and voting power over the Common Shares owned.
<TABLE>
<CAPTION>
Number of Common Shares Beneficially Percent of Common Shares
Owned
-------------------------------------------------------------------------------
<S> <C> <C>
Snyder Capital Management Inc. 4,478,000 (1) 14.8%
350 California Street, Suite 1460
San Francisco, CA 94104
- ------------------------------------------------------------------------------------------------------------------------------
David K. Fagin (3) 1,032,987 (2) 3.3%
Englewood, CO 80110
- ------------------------------------------------------------------------------------------------------------------------------
Roger D. Morton 312,500 (2) 1%
Edmonton, Alberta, Canada T6G 2V2
- ------------------------------------------------------------------------------------------------------------------------------
Gordon J. Bell (3) 297,604 (2) *
- ------------------------------------------------------------------------------------------------------------------------------
Carlos Bertoni 202,606 (2) *
Brazilia, Brazil
- ------------------------------------------------------------------------------------------------------------------------------
Louis O. Peloquin (3) 166,800 (2) *
- ------------------------------------------------------------------------------------------------------------------------------
Richard A. Stark 158,501 (2) *
Vero Beach, FL 32963
- ------------------------------------------------------------------------------------------------------------------------------
Hilbert Shields 149,509 (2) *
Georgetown, Guyana
- ------------------------------------------------------------------------------------------------------------------------------
Pierre Gousseland 123,040 (2) *
Greenwich, CT 06830
- ------------------------------------------------------------------------------------------------------------------------------
Ernest C. Mercier 63,300 (2) *
Toronto, Ontario, Canada M5N 1S8
- ------------------------------------------------------------------------------------------------------------------------------
Robert R. Stone 75,000 (2) *
Vancouver, British Columbia, Canada V6C 2G7
- ------------------------------------------------------------------------------------------------------------------------------
Philip S. Martin 77,000 (2) *
Oakville, Ontario, Canada L6J 4N2
- ------------------------------------------------------------------------------------------------------------------------------
Directors and Executive Officers as a group (4) 3,135,834 (2) 10%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Indicates less than one percent.
(1) This information was taken from the most current Schedule 13-G provided to
the Company by this beneficial owner.
(2) Includes Common Shares subject to options exercisable within 60 days of
March 12, 1999 as follows: Gordon Bell: 283,700; Carlos Bertoni: 163,450;
David Fagin: 453,000; Pierre Gousseland 120,000; Philip S. Martin: 77,000;
Ernest Mercier: 60,000; Roger Morton: 140,000; Louis O. Peloquin: 166,800;
Hilbert Shields: 138,450; Richard Stark: 150,000; Robert R. Stone: 70,000;
and Directors and Executive Officers as a group: 2,444,413. As a result of a
plan of arrangement completed on March 14, 1995 between the Company and its
shareholders, upon exercise of each option to purchase Common Shares granted
prior to March 14, 1995, the holder thereof will, in addition, be entitled
to receive one-fifth of one Class B common share of Guyanor Ressources S.A.,
a subsidiary of the Company ("Guyanor"), for each Common Share acquired
thereunder.
(3) Address is c/o Golden Star Resources Ltd., 1660 Lincoln Street, Suite 3000,
Denver, CO 80264.
(4) Includes the executive officers listed above and two other executive
officers.
11
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -------- ----------------------------------------------
Certain directors and officers of the Company are and may continue to be
involved in the mining and mineral exploration industry through their direct and
indirect participation in corporations, partnerships or joint ventures which are
potential competitors. Situations may arise in connection with potential
acquisitions and investments where the other interests of these directors and
officers may conflict with the interests of the Company. As required by law,
each of the directors of the Company is required to disclose any potential
conflict of interest and to act honestly, in good faith and in the best
interests of the Company.
Except as otherwise disclosed herein, since January 1, 1998, no insider of the
Company, nor any associate or affiliate of an insider, has had any material
interest in any transaction or proposed transaction which has materially
affected or would materially affect the Company or any of its subsidiaries, nor
has any director of the Company been involved, directly or indirectly, in any
business or professional relationship with the Company in connection with the
provision by the director or the Company of property, services or financing to
the other.
Indebtedness of Directors and Officers
At March 12, 1999, the total amount of indebtedness outstanding to the Company
which was entered into in connection with a purchase of securities of the
Company by directors, officers and employees of the Company or any of its
subsidiaries was Cdn.$ 4,462,371. The following table sets forth information
with respect to indebtedness incurred by any director or officer of the Company
in connection with an acquisition by such officer or director of Common Shares.
The loans indicated were granted pursuant to the Company's 1997 Stock Option
Plan. See "Stock Option Plan" for a description of the terms of the loans.
TABLE OF INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS
AND SENIOR OFFICERS UNDER SECURITIES PURCHASE PROGRAMS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Largest Amount Financially Assisted
Outstanding During Amount Securities Purchases
the Financial Year Outstanding as During the
Involvement Ended at Financial Year
Name and of Issuer or Dec. 31, 1998 March 12, 1999 Ended Security for
Principal Position Subsidiary (CDN$) (CDN$) Dec. 31, 1998 (#) Indebtedness
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
David A. Fennell (1) Lender 4,359,932 4,359,932 0 Common
President and Chief Shares
Executive Officer
- ---------------------------------------------------------------------------------------------------------------------------------
Richard A. Winters Lender 102,439 102,439 0 Common
Vice-President, Shares
Corporate
Development
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Mr. Fennell resigned on October 27, 1998. The loan became due on November
27, 1999. No amounts were reimbursed. On April 5, 1999, the loan was
forgiven and the 667,792 common shares that were pledged to the Company
were canceled.
At March 12, 1999, the total amount of indebtedness outstanding to the Company
which was entered into other than in connection with a purchase of securities of
the Company by directors, officers and employees of the Company or any of its
subsidiaries was $998,833. The following table sets forth information with
respect to such indebtedness incurred by any director or officer of the Company.
12
<PAGE>
TABLE OF INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS
OTHER THAN UNDER SECURITIES PURCHASE PROGRAMS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Largest Amount
Outstanding During the
Financial Year Ended Amount Outstanding as
Involvement of issuer December 31, 1998 at March 12, 1999
Name and Principal Position or Subsidiary (US$) (US$)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Louis O. Peloquin (1) Lender 32,833 33,205
Vice-President, General Counsel and
Secretary
- ------------------------------------------------------------------------------------------------------------------------------
David K. Fagin (2) Lender 966,000 966,000
Director
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The loan to Mr. Peloquin was made for the purpose of purchasing a residence
at the time of his relocation to Denver, Colorado. The loan bears interest
at the prime rate and is repayable in August 1999.
(2) The loan to Mr. Fagin was made when he was an employee of the Company in
connection with different exercises of option under the Stock Option Plan.
Mr. Fagin ceased to be an employee on December 31, 1997 and the loan became
due 30 days later in accordance with the Plan. The Board granted him a one-
year extension for the repayment of the Loan. The loan became due and
payable on January 31, 1999. The Board is currently negotiating with Mr.
Fagin the terms for the repayment of the loan. The loan does not bear
interest. As security for the repayment of the loan, 350,000 common shares
of the Company and 20,000 Class B shares of Guyanor were pledged in favor of
the Company.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
GOLDEN STAR RESOURCES LTD.
Registrant
By: /s/ James E. Askew
-------------------
President and Chief Executive Officer
Date: April 30, 1999
--------------
14
