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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
------------------------------------
GOLDEN STAR RESOURCES LTD.
(Name of Registrant as specified in its Charter)
--------------------------------------------------------------
(Name of Person(s) filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: _________
(2) Aggregate number of securities to which transaction applies: ____________
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined): ____________________________
_________________________________________________________________________
(4) Proposed maximum aggregate value of transaction: ________________________
(5) Total fee paid: _________________________________________________________
[ ] Fee paid previously with preliminary materials: _____________________
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid: _________________________________________
(2) Form, Schedule or Registration Statement No.: ___________________
(3) Filing Party: ___________________________________________________
(4) Date Filed: _____________________________________________________
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NOTICE OF ANNUAL GENERAL AND SPECIAL MEETING OF SHAREHOLDERS OF
GOLDEN STAR RESOURCES LTD.
LITTLETON, COLORADO
NOTICE IS HEREBY GIVEN that the Annual General and Special Meeting of
Shareholders of Golden Star Resources Ltd. (the "Company") will be held at 10:00
am (Toronto time) on Tuesday, May 28, 2002, in the University Room, at the
Courtyard by Marriott Downtown, 475 Yonge Street, Toronto, Ontario, Canada M4Y
1X7 for the following purposes:
1. to receive the report of the directors to the shareholders and the
consolidated financial statements of the Company, together with the
auditor's report thereon, for the fiscal year ended December 31, 2001;
2. to elect directors until the next annual general meeting;
3. to appoint auditors to hold office until the next annual general meeting at
a remuneration to be fixed by the directors;
4. to consider and, if thought fit, to pass a resolution in the form set out
in the Management Information Circular accompanying this Notice of Meeting
approving the issuance by the Company, in one or more private placements
during the twelve (12) months following approval of the resolution, of up
to 30,000,000 Common Shares;
5. to consider and, if thought fit, to pass a resolution in the form set out
in the Management Information Circular accompanying this Notice of Meeting
approving amendments to the Company's By-Laws;
6. to consider and, if thought fit, to pass a special resolution in the form
set out in the Management Information Circular accompanying this Notice of
Meeting approving an amendment to the Company's Articles of Arrangement to
provide that shareholder meetings may be held at certain places outside of
Canada;
7. to consider and, if thought fit, to pass a resolution in the form set out
in the Management Information Circular accompanying this Notice of Meeting
approving amendments to the Company's Stock Option Plan; and
8. to transact such other business as may properly come before the meeting or
any adjournment of it.
The Board of Directors has fixed the close of business on April 9, 2002, as the
record date for the determination of shareholders entitled to notice of and to
vote at the meeting and at any adjournment thereof. Accompanying this Notice of
Meeting are (i) a proxy statement and management information circular, (ii) a
form of proxy, and (iii) a reply card for use by shareholders who wish to
receive the Company's interim financial statements. The Company's 2001 Annual
Report containing the audited comparative financial statements of the Company as
at and for the year ended December 31, 2001 and the related management's
discussion and analysis thereon also accompanies this Notice of Meeting.
If you are a registered shareholder of the Company and do not expect to attend
the meeting in person, please promptly complete and sign the enclosed proxy form
and return it in the self-addressed envelope for receipt by 10:00 a.m. (Toronto
time) on Friday, May 24, 2002. If you receive more than one proxy form because
you own shares registered in different names or addresses, each proxy form
should be completed and returned.
If you are a non-registered shareholder of the Company and receive these
materials through your broker or another intermediary, please complete and sign
the materials in accordance with the instructions provided to you by such broker
or other intermediary.
Dated at Littleton, Colorado, this 22 day of April, 2002.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Allan J.Marter
Vice President, Chief Financial Officer and Secretary
GOLDEN STAR RESOURCES LTD.
10579 Bradford Road, Suite 103
Littleton, Colorado 80127-4247
PROXY STATEMENT AND MANAGEMENT INFORMATION CIRCULAR
This Management Information Circular is furnished to the shareholders of Golden
Star Resources Ltd. (the "Company") in connection with the solicitation by
management of proxies to be voted at the annual general and special meeting (the
"Meeting") of the shareholders of the Company to be held in the University Room
at the Courtyard by Marriott Downtown, 475 Yonge Street, in Toronto, Canada, at
10:00 am (Toronto time), on Tuesday, May 28, 2002, and at any adjournment
thereof, for the purposes set forth in the accompanying Notice of Meeting.
All dollar ($) amounts referred to herein are to United States dollars unless
otherwise indicated.
The information in this Management Information Circular is as of April 1, 2002
unless otherwise indicated.
SOLICITATION OF PROXIES
THE ENCLOSED PROXY IS SOLICITED BY AND ON BEHALF OF MANAGEMENT OF THE COMPANY.
THE PERSONS NAMED IN THE ENCLOSED PROXY FORM ARE DIRECTORS OR OFFICERS OF THE
COMPANY. A SHAREHOLDER DESIRING TO APPOINT SOME OTHER PERSON (WHO NEED NOT BE A
SHAREHOLDER) TO REPRESENT HIM AT THE MEETING MAY DO SO EITHER BY INSERTING SUCH
OTHER PERSON'S NAME IN THE BLANK SPACE PROVIDED IN THE PROXY FORM OR BY
COMPLETING ANOTHER FORM OF PROXY. To be used at the Meeting, the completed proxy
form must be received by 10:00 a.m. (Toronto time) on Friday, May 24, 2002, at
the address set forth in the accompanying return envelope (Attention: Proxy
Department, CIBC Mellon Trust Company, P.O. Box 12005 STN BRM B, Toronto,
Ontario, Canada M7Y 2K5). Solicitation will be primarily by mail, but some
proxies may be solicited personally or by telephone by regular employees or
directors of the Company at a nominal cost. The cost of solicitation by
management of the Company will be borne by the Company. This Management
Information Circular and the accompanying proxy are expected to be sent to the
shareholders on or about April 25, 2002.
REVOCABILITY OF PROXIES
A shareholder who has given a proxy may revoke it either by (a) signing a proxy
bearing a later date and depositing the same at the registered office of the
Company at 19th floor, 885 West Georgia Street, Vancouver, British Columbia,
Canada V6C 3H4 prior to the close of business on the day preceding the date on
which the Meeting is to be held or any adjournment thereof, or with the chairman
of the Meeting before any votes in respect of which the proxy is to be used
shall have been taken; or (b) attending the Meeting in person and registering
with the scrutineers as a shareholder personally present.
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VOTING OF PROXIES
A shareholder's instructions on his proxy form as to the exercise of voting
rights will be followed in casting such shareholder's votes. IN THE ABSENCE OF
ANY INSTRUCTIONS, THE PROXY AGENT NAMED ON THE PROXY FORM WILL CAST THE
SHAREHOLDER'S VOTES IN FAVOR OF THE PASSAGE OF THE RESOLUTIONS SET FORTH HEREIN
AND IN THE NOTICE OF MEETING.
The enclosed proxy form confers discretionary authority upon the persons named
therein with respect to (a) amendments or variations to matters identified in
the Notice of Meeting and (b) other matters, which may properly come before the
Meeting or any adjournment thereof. At the time of printing of this Management
Information Circular, management of the Company knows of no such amendments,
variations or other matters to come before the Meeting other than the matters
referred to in the Notice of Meeting.
ADVICE TO BENEFICIAL HOLDERS OF COMMON SHARES
THE INFORMATION SET FORTH IN THIS SECTION IS OF SIGNIFICANT IMPORTANCE TO MANY
SHAREHOLDERS OF THE COMPANY AS A SUBSTANTIAL NUMBER OF SHAREHOLDERS DO NOT HOLD
THEIR COMMON SHARES OF THE COMPANY IN THEIR OWN NAMES. Shareholders of the
Company who do not hold their common shares in their own names (referred to
herein as "BENEFICIAL SHAREHOLDERS") should note that only proxies deposited by
shareholders whose names appear on the records of the Company as the registered
holders of common shares can be recognized and acted upon at the Meeting. If
common shares are listed in an account statement provided to a shareholder by a
broker, then, in almost all cases, those shares will not be registered in the
shareholder's name on the records of the Company. Such shares will more likely
be registered under the name of the shareholder's broker or an agent of that
broker. In Canada, the vast majority of such shares are registered under the
name of CDS & Co. (the registration name for The Canadian Depositary for
Securities, which acts as nominee for many Canadian brokerage firms). Common
shares of the Company held by brokers or their agents or nominees can only be
voted (for or against resolutions) upon the instructions of the Beneficial
Shareholder. Without specific instructions, a broker and its agents and nominees
are prohibited from voting shares for the broker's clients. THEREFORE,
BENEFICIAL SHAREHOLDERS SHOULD ENSURE THAT INSTRUCTIONS RESPECTING THE VOTING OF
THEIR COMMON SHARES ARE COMMUNICATED TO THE APPROPRIATE PERSON.
Applicable regulatory rules require intermediaries/brokers to seek voting
instructions from Beneficial Shareholders in advance of shareholders' meetings.
Every intermediary/broker has its own mailing procedures and provides its own
return instructions to clients, which should be carefully followed by Beneficial
Shareholders in order to ensure that their common shares are voted at the
Meeting. Often, the form of proxy supplied to a Beneficial Shareholder by its
broker (or the agent of the broker) is identical to the form of proxy provided
to registered shareholders. However, its purpose is limited to instructing the
registered shareholder (the broker or agent of the broker) how to vote on behalf
of the Beneficial Shareholder. The majority of brokers now delegate
responsibility for obtaining instructions from clients to Independent Investor
Communications Corporation ("IICC"). IICC typically applies a special sticker to
the proxy forms, mails those forms to the Beneficial Shareholders and asks
Beneficial Shareholders to return the proxy forms to IICC. IICC then tabulates
the results of all instructions received and
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provides appropriate instructions respecting the voting of shares to be
represented at the meeting. A BENEFICIAL SHAREHOLDER RECEIVING A PROXY WITH AN
IICC STICKER ON IT CANNOT USE THAT PROXY TO VOTE COMMON SHARES DIRECTLY AT THE
MEETING - THE PROXY MUST BE RETURNED TO IICC WELL IN ADVANCE OF THE MEETING IN
ORDER TO HAVE THEIR COMMON SHARES VOTED.
Although a Beneficial Shareholder may not be recognized directly at the Meeting
for the purposes of voting common shares of the Company registered in the name
of his broker (or an agent of the broker), a Beneficial Shareholder may attend
at the Meeting as proxyholder for the registered shareholder and vote such
common shares in that capacity. Beneficial Shareholders who wish to attend the
Meeting and indirectly vote their common shares as proxyholder for the
registered shareholder, should enter their own names in the blank space on the
instrument of proxy provided to them and return the same to their broker (or the
broker's agent) in accordance with the instructions provided by such broker (or
agent), well in advance of the Meeting.
VOTES NECESSARY TO PASS RESOLUTIONS AT THE MEETING
Under the Company's Bylaws, the quorum for the transaction of business at the
Meeting consists of two persons present in person, each being a shareholder
entitled to vote thereat or a duly appointed proxyholder or representative for a
shareholder so entitled. Pursuant to the Canada Business Corporations Act
("CBCA") and the Company's Bylaws, directors must be elected and resolutions
referred to in the accompanying Notice of Meeting must be passed by a majority
of the votes cast by the shareholders who voted in respect of the particular
matter.
VOTING SHARES AND PRINCIPAL HOLDERS THEREOF
The Company has an authorized capital consisting of an unlimited number of
common shares (the "Common Shares") and an unlimited number of first preferred
shares (the "First Preferred Shares"). As of April 1, 2002, 62,953,859 Common
Shares and no First Preferred Shares were issued and outstanding. The board of
directors of the Company (the "Board") has fixed April 9, 2002, as the record
date for the determination of shareholders entitled to notice of and to vote at
the Meeting and at any adjournment thereof. Each Common Share outstanding on the
record date carries the right to one vote. The Company has caused to be prepared
a list of the holders of its Common Shares on such record date. Each shareholder
named in the list will be entitled to one vote at the Meeting for each Common
Share shown opposite such shareholder's name except to the extent that (a) such
shareholder has transferred the ownership of such Common Share after the date on
which the list was prepared and (b) the transferee of such Common Share produces
a properly endorsed share certificate or otherwise establishes that the
transferee owns such Common Share and demands not later than ten days before the
Meeting that the transferee's name be included in the list in which case the
transferee will be entitled to vote such Common Share at the Meeting. A complete
list of the shareholders entitled to vote at the Meeting will be open to
examination by any shareholder for any purpose germane to the Meeting, during
ordinary business hours for a period of ten days prior to the Meeting, at the
office of CIBC Mellon Trust Company at 1600-1066 West Hastings Street,
Vancouver, British Columbia, Canada V6E 3X1.
3
As of April 1, 2002, based upon information available to the Company, no person
or entity beneficially owns, directly or indirectly, or exercises control or
direction over, shares carrying more than 5% of the voting rights attached to
the Company's issued and outstanding Common Shares, except as noted in the table
under "Security Ownership of Certain Beneficial Owners and Management".
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows the number of Common Shares beneficially owned, as of
April 1, 2002, 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 and director nominees of the Company, by each executive
officer named in the table titled "Summary Compensation Table" and by all
directors and director nominee and executive officers of the Company as a group.
It also shows the number of shares that those beneficial owner, directors,
nominees and executives have a right to acquire on or before June 30, 2002.
Unless otherwise noted, each shareholder has sole investment and voting power
over the Common Shares owned.
TOTAL BENEFICIALLY
NUMBER OF COMMON OWNED AND RIGHT TO
NAME OF BENEFICIAL OWNER AND ADDRESS SHARES RIGHT TO ACQUIRE ACQUIRE COMMON PERCENT OF
IF REQUIRED BENEFICIALLY OWNED COMMON SHARES SHARES COMMON SHARES
-------------------------------------- -------------------- ------------------- -------------------- ----------------
Snyder Capital Management Inc. 10,422,243 (1) 3,371,428 13,793,671 20.8%
350 California Street, Suite 1460
San Francisco, CA 94104
Barnato Exploration Limited 3,333,333 1,333,333 4,666,667 7.3%
28 Harrison Street
Johannesburg, 2001
South Africa
David Fagin 553,187 469,400 1,022,587 1.6%
James Askew 205,000 340,000 545,000 *
Peter Bradford 240,000 813,333 1,053,333 1.6%
Allan Marter 20,500 264,333 284,833 *
Richard Gray 15,000 226,332 241,332 *
Robert Stone 5,000 159,500 164,500 *
Ernest Mercier 3,300 152,000 155,300 *
Ian MacGregor 0 140,000 140,000 *
Directors and Executive Officers as 1,041,987 2,564,898 3,606,885 5.5%
a group
* 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.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on the review of the section 16 (a) reports filed by the directors
and executive officers, and upon representations from those persons, all reports
required to be filed by our reporting persons during 2001 were filed on time.
ELECTION OF DIRECTORS
The term of office of the current directors of the Company will expire at the
Meeting or when their successor are duly elected or appointed. The Articles of
the Company provides that the number of directors shall consist of a minimum of
three and a maximum of 15 directors. The Board is currently composed of six
directors, three of whom are Canadian residents. Prior to November 30, 2001 the
CBCA required that a majority of the directors must be Canadian residents but
section 105 (4) of CBCA provided an exemption "if the holding corporation earns
in Canada directly or through subsidiaries less than 5% of the gross revenues of
the holding corporation and all its subsidiary bodies corporate together as
shown in the most recent consolidated financial statements". In the past, it was
determined that the Company met the requirement of section 105 (4) and, as a
result, only one third of the directors of the Company must be resident
Canadians. Subsequent to November 30, 2001 the CBCA was amended and now only
requires at least 25% of the directors of the Company to be resident Canadians.
The Company's By-Laws still require that a majority of the Board be resident
Canadian. Therefore management is proposing changes to the Company's By-laws.
See "Approval of Amendments to the Company's By-Laws".
It is proposed to nominate the six persons listed below for election as
directors of the Company to hold office until the next annual meeting of the
shareholders or until his successor is elected or appointed pursuant to relevant
provisions of the Bylaws of the Company or the Company's governing statute. All
such proposed nominees are currently directors of the Company.
It is the intention of the persons named as proxyholders in the enclosed proxy
form to vote for the election to the Board of those persons hereinafter
designated as nominees for election as directors. The Board does not contemplate
that any of such nominees will be unable to serve as a director; however, if for
any reason any of the proposed nominees do not stand for election or are unable
to serve as such, PROXIES IN FAVOR OF MANAGEMENT DESIGNEES WILL BE VOTED FOR
ANOTHER NOMINEE IN THE DISCRETION OF THE PROXY AGENT UNLESS THE SHAREHOLDER HAS
SPECIFIED IN THE PROXY FORM THAT THE SHAREHOLDER'S COMMON SHARES ARE TO BE
WITHHELD FROM VOTING IN THE ELECTION OF DIRECTORS.
The following table sets forth the name of each of the persons proposed to be
nominated for election as a director; all positions and offices in the Company
presently held by him; his present principal occupation or employment; the date
of his first appointment as a director; his municipality of residence and his
age. See "Security Ownership of Certain Beneficial Owners and Management" for
the number of Common Shares of the Company that each nominee has
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advised are beneficially owned by him, directly or indirectly, or over which
control or direction is exercised.
NAME, MUNICIPALITY OF DATE OF FIRST
RESIDENCE AND POSITION APPOINTMENT
WITH COMPANY PRESENT AND PRINCIPAL OCCUPATION FOR THE PAST FIVE YEARS AS DIRECTOR AGE
------------------------------ --------------------------------------------------------------- ------------------- -------
JAMES E. ASKEW Mr. Askew has been Managing Director and Chief Executive June 15, 1999 53
Sydney, Australia Officer of Black Range Minerals NL since November 1999. He
Director also serves as a director of Ausdrill Limited and Semafo
Ltd. Prior thereto, Mr. Askew was President and Chief
Executive Officer of the Company from March 1999 to October
1999 and President and Chief Executive Officer of Rayrock
Resources Inc. from September 1998 to March 1999. Mr. Askew
has also been President and Chairman of International Mining
and Finance Company since 1997. From 1986 to 1996, Mr. Askew
was President and Chief Executive Officer of Golden Shamrock
Mines Ltd.
PETER J. BRADFORD Mr. Bradford has been President and Chief Executive Officer August 8, 2000 43
Littleton, Colorado of the Company since November 1999. Mr. Bradford has also
Director been a director of Anvil Mining N.L. since 1998. Prior
thereto, Mr. Bradford was Managing Director of Anvil Mining
from May 1998 to October 1999, Managing Director of Strategic
Planning & New Business of Ashanti Goldfields Company Ltd.
from October 1996 to April 1998, and General Manager West
Africa of Golden Shamrock Mines Ltd. from 1991 to 1996.
DAVID K. FAGIN Mr. Fagin currently serves as a director on the boards of May 15, 1992 (4) 64
Englewood, Colorado Dayton Mining Company, Canyon Resources Corporation and
Director (1, 2) Miranda Mining Co. and of various public mutual funds of T.
Rowe Price Associates, Inc. Mr. Fagin was Chairman and Chief
Executive Officer of Western Exploration from July 1997 to
January 2000. Prior thereto, Mr. Fagin was Chairman and
Chief Executive Officer of the Company from May 1992 until
May 1996 and then Chairman of the Board of the Company from
May 1996 until December 31, 1997.
IAN A. MacGREGOR Mr. MacGregor has been counsel with Fasken Martineau DuMoulin April 3, 2000 67
Toronto, Ontario LLP (Barristers and Solicitors) since February 2000. Prior
Director (1, 2) thereto, Mr. MacGregor was a partner of Fasken Martineau
DuMoulin LLP and a predecessor firm.
ERNEST C. MERCIER Mr. Mercier is a businessman and professional director. He January 30, 1995 69
Toronto, Ontario currently serves as a director of Cascade Corporation and
Director (1, 2) Toreador Resources Inc. Mr. Mercier retired as Executive
Vice President, Corporate & Investment Banking, and as
Co-Chairman, Toronto-Dominion Securities Inc. in 1993.
ROBERT R. STONE Mr. Stone has been non-executive Chairman of the Company September 30, 1997 59
Vancouver, British Columbia since June 1999. He also serves as a director of Chell
Director (1, 2, 3) Corporation and Mainsborne Communications International Inc.
(Deputy Chairman). Prior thereto, Mr. Stone was employed
from 1973 until 1997 by Cominco Ltd., most recently as
Vice-President, Finance, Chief Financial Officer and
Director. Mr. Stone retired from Cominco Ltd. in 1997.
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(1) Member of the Audit Committee.
(2) Member of the Compensation and Corporate Governance Committee.
(3) Chairman of the Board.
(4) May 15, 1992 represents the date of the Company's formation upon the
amalgamation of Golden Star Resources Ltd. ("Golden Star") and South
American Goldfields Inc. Mr. Fagin was, prior to the amalgamation, director
of Golden Star serving since February 3, 1992.
(5) The Company does not have an Executive Committee.
There are no family relationships among any of the director nominees or
directors or executive officers of the Company.
See "Statement of Corporate Governance Practices" for information on Board
committees and directors' meeting attendance.
COMPENSATION OF DIRECTORS
During the year ended December 31, 2001, the Company paid a total of $105,500 to
its non-employee directors.
The Company pays an annual fee of:
o $24,000 to its non-executive Chairman;
o $12,000 to the Chairman of the Audit Committee;
o $8,000 to the Chairman of the Compensation and Corporate Governance
Committee; and
o $6,000 to the other directors.
The Company also pays the following fees for attending a meeting in person or by
telephone:
o $1,500 to its non-executive Chairman for attending a Board meeting;
o $750 to its non-executive directors for attending a Board meeting; and
o $500 to its non-executive directors for attending a committee meeting.
The non-executive 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.
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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 a
non-employee director, as of the date such person first becomes a non-employee
director, provided that, within the previous year, such person was not granted
any other stock options by the Company.
In addition, the Company automatically grants each non-employee director stock
options to purchase 10,000 Common Shares, as of the date of the first Board
meeting after the end of each financial year, provided that in respect of the
first additional option to be granted, at least eight months shall have elapsed
since the initial automatic option grant of 40,000 common shares. The Board may,
at its discretion, grant additional options to non-employee directors from time
to time. All options granted to the non-employee directors vest immediately and
have a ten-year term.
Because the non-employee directors of the Company are not employed by Guyanor
Ressources S.A. ("Guyanor"), they are not eligible to participate in Guyanor's
Stock Option Plan. Therefore, the Company has occasionally granted, as
additional compensation 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 vested immediately. During the fiscal
year ended December 31, 2001, the Company granted to its non-employee directors
options to purchase a total of 50,000 Class B shares of Guyanor at an exercise
price of Cdn$0.25.
During the financial year ended December 31, 2001, the Company granted to its
non-employee directors options to purchase a total of 125,000 Common Shares at
an exercise price of Cdn$1.02.
Stock Option Grants
The following table sets forth information with respect to options granted
during the financial year ended December 31, 2001 to the Company's non-employee
directors as a group under the Plan.
OPTION GRANTS DURING LAST FISCAL YEAR
(ALL $ AMOUNTS IN CANADIAN DOLLARS)
MARKET VALUE OF
SECURITIES UNDER EXERCISE OR SECURITIES UNDERLYING
OPTIONS GRANTED BASE PRICE OPTIONS ON THE DATE OF EXPIRATION
GROUP (#) ($/SECURITY) GRANT ($/SECURITY) DATE
------------------------------------ ---------------------- ---------------- -------------------------- --------------
NON-EXECUTIVE Company 125,000 1.02 1.02 06/27/11
DIRECTORS AS A --------------- ---------------------- ---------------- -------------------------- --------------
GROUP Guyanor 50,000 0.25 0.25 06/27/11
8
Stock Option Exercises
The following table sets forth information with respect to the exercise, during
the financial year ended December 31, 2001, 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, 2001 as well as the value of
their outstanding options as of December 31, 2001.
AGGREGATED OPTION EXERCISES DURING LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
(ALL $ AMOUNTS IN CANADIAN DOLLARS)
UNEXERCISED OPTIONS AT VALUE OF UNEXERCISED
GROUP SECURITIES AGGREGATE FISCAL YEAR-END IN-THE-MONEY OPTIONS
--------------------- ACQUIRED ON VALUE (#) AT FISCAL YEAR-END ($)
NON-EXECUTIVE DIRECTORS EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
AS A GROUP (#) ($) UNEXERCISABLE UNEXERCISABLE (3)
------------------------------------------------------------------------------------------------------------------------
Company Whose Company 0 N/A Exercisable 1,055,900/0 (1, 2) 0/0
Shares are
Subject of
Options ------------------------------------------------------------------------------------------------------
Granted Guyanor 0 N/A Exercisable 210,000/0 (2) 0/0
(1) Upon the 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) Include options granted to Messrs. David Fagin and James Askew when they
were employees of the Company.
(3) For all unexercised options held as of December 31, 2001, 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, 2001, the closing price on The Toronto Stock Exchange ("TSE")
of each of the Common Shares and the Guyanor Class B shares was Cdn$0.90
and Cdn$0.10, respectively.
STATEMENT OF CORPORATE GOVERNANCE PRACTICES
The by-laws of the TSE require each listed company incorporated in Canada to
disclose on an annual basis its approach to corporate governance with reference
to the TSE guidelines. The Company's Board and executive management consider
good corporate governance to be central to the effective and efficient operation
of the Company, and the well-being of the Company and its shareholders. The
Board has approved the corporate governance statement described below.
MANDATE OF BOARD
The Board is required to supervise the management of the business and affairs of
the Company. It establishes overall policies and standards for the Company. The
Board expects management to conduct the business of the Company in accordance
with the Company's ongoing strategic plan as adopted by the Board. The Board
regularly reviews management's progress in meeting these expectations. The
directors are kept informed of the Company's operations at meetings of the Board
and its Committees and through reports and analyses and discussions with
management. The Board normally meets once every two months in person or by
telephone conference, with
9
additional meetings being held as needed. In 2001, there were a total of seven
meetings of which four were held in person and three by telephone conference.
All incumbent directors attended at least 85% of the aggregate number of
meetings of the Board, while serving on the Board and on the Committees of the
Board on which they served.
The following is a summary of how the Board handles matters pertaining to
strategic planning, risk management, communication and control systems, and
management and succession:
1. Each year the Board reviews and approves planning assumptions and detailed
monthly budgets for the following year and annual projections for the
following five years. The Board monitors performance against budget through
reporting by management in the form of monthly reports and Board's papers.
2. The Board seeks to identify principal risks of the Company's business which
are wide-ranging because of the nature of the Company's business, including
risks associated with operating in developing countries, maintaining
control of the Company's assets and funds, political risks, exchange
controls, environmental and safety risks, government regulation problems,
title uncertainties, civil unrest, the availability of skilled management
and labour, to name only a few.
3. The Board annually considers the overall performance of management to
identify areas where additional skills may be required and to consider the
measures required to ensure sufficient management depth for the management
of the Company in the event of the loss of any of the Company's executive
management team.
4. The President and the Chief Financial Officer provide shareholder
communication on behalf of the Company.
5. The Board has the responsibility to periodically review the environmental
and safety policies adopted by the Company and its affiliates. In May 2000,
the Environmental Committee of the Company was abolished and all
environmental matters have since been handled by the Board. In November
2000, the Board adopted an amended Policy on Safety, Community Relations
and Environment.
DECISIONS REQUIRING BOARD APPROVAL
The Board considers that certain decisions are sufficiently important that
management should seek prior approval of the Board. The Board has adopted
Policies on Corporate Control with respect to annual budgets, financial and
budget reporting, activities reporting, acquisitions and dispositions of assets,
joint ventures, spending authorities, contracts and investment banking services.
Therefore, in addition to those matters that must by law be approved by the
Board, the Board approves, among other things, the terms of acquisitions and
dispositions of the mineral properties of the Company and its subsidiaries as
well as joint venture agreements on such properties. Operating and capital
budgets also require the Board's approval. The Board receives monthly reports on
operational, financial and business development matters and full Board meetings
are held approximately every two months to review and approve the corporate
10
activities. Finally, because of its relatively small size, the Board is very
flexible and management has been able to liaise regularly with the Board to seek
approval for activities which management felt advisable including any activities
outside the normal course of business of the Company.
COMPOSITION OF THE BOARD AND INDEPENDENCE FROM MANAGEMENT
The Board is currently composed of six directors, all of whom are being
nominated for election as directors at the Meeting. Except for Mr. Peter
Bradford, President and Chief Executive Officer of the Company, the members of
the Board are unrelated or outside members with no other affiliation with the
Company. Mr. David Fagin was Chairman and Chief Executive Officer from May 15,
1992 to May 1, 1996, and non-executive Chairman until December 31, 1997. Mr.
James Askew was the President and Chief Executive Officer from March 8 to
October 1, 1999.
The non-management members have a variety of experience and skills, including
the areas of accounting, banking, investment banking, mining, metallurgy, and
law. No formal program has been adopted to date to assess Board members
individually or the effectiveness of the Board as a whole or of its Committees.
The education of new members is managed informally through furnishing records
and reports and through meeting with executives as desired.
The Board periodically reviews the adequacy and form of compensation of
directors in relation to the responsibilities and risks involved in being an
effective director. The form and amount of compensation to be paid to the
non-employee directors was revised in 1999. See "Compensation of Directors"
above. In addition to the cash compensation, the directors receive options under
the Plan and have also received options on shares of Guyanor, the Company's
publicly traded subsidiary. The Board believes the emphasis on compensation
through options is particularly appropriate in a resource business where
increasing shareholder value is perhaps the only relevant measure of progress.
BOARD COMMITTEES
Audit Committee
The integrity of the Company's internal controls and management information
systems is monitored through the Audit Committee and through expenditure control
policies established by the Board. The Audit Committee is currently comprised of
Messrs. David Fagin (Chairman), Ian MacGregor, Ernest Mercier and Robert Stone.
The primary duties and responsibilities of the Audit Committee are to review the
financial reporting process, the system of internal control, the audit process,
the Corporate Control Policy and the Company's process for monitoring compliance
with laws and regulations. In performing its duties, the Audit Committee
maintains effective working relationships with the Board, management and the
external auditors. To effectively perform his role, each committee member must
obtain and maintain an understanding of the detailed responsibilities of
committee membership as well as the Company's business, operations, and risks.
The Audit Committee also recommends to the Board the auditors to be appointed
and approves their compensation. In addition, the Audit Committee recommends to
the Board for approval the annual and quarterly financial statements, the annual
and quarterly
11
reports and certain other documents required by regulatory authorities. In
connection with risk assessment, the Audit Committee reviews among other things
the nature and adequacy of insurance coverage. The Audit Committee met three
times in person and four times by telephone conference during 2001.
Compensation and Corporate Governance Committee
The Compensation Committee of the Board abolished on December 7, 1998 was
reinstated in June 1999 as the Compensation and Corporate Governance Committee
(the "Compensation Committee"). The Compensation Committee is composed of four
non-employee directors, Messrs. Ernest Mercier (Chairman), David Fagin, Ian
MacGregor and Robert Stone. The Compensation Committee, subject to Board
approval, supervises the selection, evaluation and determination of compensation
of top executives, sets corporate-wide policy with respect to compensation and
benefits, and administers the Company's 1997 Stock Option Plan and the
Employee's Stock Bonus Plan. The Compensation Committee also established
descriptions, definitions and limits to management's authorities and approval of
objectives and goals for top management in general terms. The Compensation
Committee met three times in 2001 to discuss compensation matters. In addition,
several compensation matters were approved by way of consent resolutions.
The responsibilities for corporate governance matters were transferred from the
Audit Committee to the Compensation Committee in June 1999. The Compensation
Committee has the general responsibility to authorize and monitor corporate
conduct, compliance and disclosure policies. The Compensation Committee is also
responsible for recommending nominees to the Board for eventual proposal as
candidates for election as directors at the annual meeting of shareholders. The
Compensation Committee also advises the Board on matters concerning the size and
composition of the Board, the responsibilities of the Board Committees and the
selection of the Chairman.
Applications and communications relating to candidates for director may be sent
to the Secretary of the Company at the head office in Littleton, Colorado.
SHAREHOLDER COMMUNICATIONS
The Company believes that it is important to maintain good shareholder
relations. The President and the Chief Financial Officer are responsible for
shareholder communications and investor relations. In 2000, the Company set up a
web site to facilitate shareholder communications. The Company attempts to deal
with the few concerns or complaints expressed to it by shareholders in an
effective and timely manner.
EXECUTIVE OFFICERS
As of April 1, 2002, the executive officers of the Company, their ages and their
business experience and principal occupation during the past five years were as
follows:
12
NAME AGE OFFICE AND EXPERIENCE OFFICER SINCE
---- --- --------------------- -------------
PETER J. BRADFORD 43 President and Chief Executive Officer of the Company since 1999
November 1999 and a member of the Board of Directors of the
Company since August 2000. Mr. Bradford has also been a
director of Anvil Mining N.L. since 1998; prior thereto,
Managing Director of Anvil Mining from May 1998 to October
1999; Managing Director of Strategic Planning & New
Business of Ashanti Goldfields Company Ltd. from October
1996 to April 1998; General Manager West Africa of Golden
Shamrock Mines Ltd. from 1991 to 1996.
PETER G. DONALD 67 General Manager, Suriname since 1993 to present and Vice 2000
President from May 2000. In addition, Dr. Donald manages the
Company's activities in Guyana and Suriname. Dr. Donald has
a PhD in mineral economics, an MS in geology and over 30
years experience as a mining geologist and mineral economist
in both field and corporate executive positions in mining
companies active throughout the Americas and southern
Africa.
RICHARD Q. GRAY 43 Vice President and Chief Operating Officer since June 2001, 2000
Vice President, Ghana of the Company since January 2000 and
Managing Director of Bogoso Gold Limited since November
1999; from March 1998 to October 1999, General Manager of
Bogoso Gold Mine; from April 1996 to February 1998,
Operations Director of Gencor International Gold; prior
thereto, held various positions from 1983 to 1996 for
Gencor Ltd. including Manager of Mining at Oryx Gold Mine.
ALLAN J. MARTER 54 Vice President and Chief Financial Officer of the Company 1999
since November 1999; from 1996 to 1999, principal of Waiata
Resources, Littleton (mining financial advisory services);
from 1992 to 1996, Director of Endeavour Financial Inc.,
Denver (mining financial advisory services).
13
COMPENSATION OF EXECUTIVE OFFICERS
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
years ended December 31 (collectively, the "Named Executive Officers"). Messrs.
Peloquin and Bertoni are no longer employed by the Company.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION (1)
------------------------------------ -------------------------------
AWARDS
-------------------------------
NUMBER OF
SECURITIES NUMBER OF
UNDERLYING SECURITIES
OTHER OPTIONS UNDERLYING
ANNUAL GRANTED OPTIONS
COMPEN- BY THE GRANTED BY ALL OTHER
NAME AND SALARY BONUS SATION COMPANY GUYANOR COMPENSATION
PRINCIPAL POSITION YEAR (US$) (2) (US$) (3) (US$) (#) (5) (#) (US$)
---------------------- -------- ------------ ----------- ----------- ---------------- -------------- -----------------
Peter Bradford 2001 175,050 0 (4) 250,000 75,000 1,697 (8)
President and Chief 2000 175,000 0 (4) 0 0 1,717 (8)
Executive Officer 1999 119,167 (6) 0 (4) 600,000 0 0
---------------------- -------- ------------ ----------- ----------- ---------------- -------------- -----------------
Allan Marter 2001 133,450 0 (4) 75,000 50,000 4,823 (9)
Vice President and 2000 133,750 0 (4) 75,000 0 1,120 (9)
Chief Financial 1999 17,784 0 (4) 150,000 0 0
Officer
---------------------- -------- ------------ ----------- ----------- ---------------- -------------- -----------------
Louis Peloquin 2001 177,792 (13) 0 (13) (4) (13) 0 (13) 0 (13) 1,532 (10, 13)
Vice-President, 2000 150,000 50,000 (4) 81,000 0 5,438 (10)
General Counsel 1999 151,669 25,000 (4) 144,000 (7) 10,000 5,704
and Secretary
---------------------- -------- ------------ ----------- ----------- ---------------- -------------- -----------------
Richard Gray 2001 150,000 0 (4) 200,000 0 1,650 (8)
Vice President and 2000 150,000 7,500 (4) 150,000 0 1,700 (8)
Chief Operating 1999 37,500 0 (4) 0 0 425
Officer
---------------------- -------- ------------ ----------- ----------- ---------------- -------------- -----------------
Carlos Bertoni 2001 85,325 (12) 0 (12) (4, 12) 0 (12) 0 (12) 0 (12)
Vice President, 2000 120,000 0 (4) 0 0 3,600 (11)
Exploration 1999 125,000 0 (4) 140,000 (7) 10,000 4,625
---------------------- -------- ------------ ----------- ----------- ---------------- -------------- -----------------
Peter Donald 2001 123,500 0 (4) 25,000 0 3,705 (11)
General Manager, 2000 104,500 0 (4) 50,800 0 3,135 (11)
Suriname 1999 115,800 0 (4) 0 0 2,008 (11)
---------------------- -------- ------------ ----------- ----------- ---------------- -------------- -----------------
(1) There were no long-term incentive plan pay-outs 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.
(4) 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.
(5) 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.
(6) This amount includes the salary and other benefits paid to Mr. Bradford
for his services in connection with the acquisition of Bogoso Gold Limited
between May 1999 and October 1999.
(7) Includes repriced options.
(8) This amount represents premiums paid for life insurance for the benefit of
this executive.
(9) This amount includes $4,050 ($338 in 2000) for contribution to this
executive's 401(k) Plan and $773 ($782 in 2000) for premiums paid for life
insurance for the benefit of this executive.
14
(10) This amount includes $1,050 ($4,200 in 2000) for contribution to this
executive's 401(k) Plan and $482 ($1,238 in 2000) for premiums paid for
life insurance for the benefit of this executive.
(11) This amount represents the Company's contribution to this executive's
401(k) Plan.
(12) After July 19, 2001 Mr. Bertoni was no longer employed with the Company.
(13) After May 25, 2001 Mr. Peloquin was no longer employed with the Company.
EMPLOYMENT, CHANGE OF CONTROL AGREEMENTS AND OTHER AGREEMENTS
All the Named Executive Officers currently employed by the Company have
agreements with the Company in respect of their employment with the Company. The
base salary amounts payable under these employment agreements are reviewed
annually by the Compensation Committee.
The employment agreement with Mr. Bradford is for an indefinite term and may be
terminated by the Company without cause provided that the Company pays in cash
to Mr. Bradford in a lump sum at the time of termination six months of salary
and benefits plus one additional month of salary and benefits for each
additional full month worked for the Company up to a maximum of 24 months of
salary and benefits.
If Mr. Bradford' s employment is terminated as a result of a change in control
of the Company, the Company shall pay in cash to Mr. Bradford in a lump sum at
the time of termination a sum equal to 24 months of salary and benefits. A
change in control includes: (i) the acquisition by any person of a sufficient
number of the outstanding voting securities of the Company to materially affect
the control of the Company; (ii) a majority of the Board of the Company shall be
individuals who are not nominated by the Board of the Company; (iii) the Company
is merged or consolidated with any person (and the Company is not the surviving
corporation); (iv) all or substantially all of the assets of the Company are
acquired by another person; or (v) Mr. Bradford's office, station or duties are
materially reduced or adversely changed as a result of the occurrence of one of
the events mentioned above in this paragraph in (i), (ii), (iii) and (iv).
In the case of Mr. Marter, his employment can be terminated by the Company upon
a three-month written notice or, at the Company's option, by paying in cash to
Mr. Marter a lump sum equivalent to three months of salary. The employment of
Mr. Marter can also be terminated as a result of a change in control (as defined
above) by paying him a lump sum equal to three months of salary plus one
additional month of salary for each additional full year worked for the Company
up to a maximum of 12 months.
Mr. Gray is employed by the Company's subsidiary, Bogoso Gold Limited ("BGL").
Mr. Gray's employment can be terminated by the Company upon a three-month
written notice or, at the Company's option, by paying in cash to Mr. Gray a lump
sum equivalent to three months of salary. The employment of Mr. Gray can also be
terminated as a result of a change in control (as defined above) by paying him a
lump sum equal to three months of salary plus one additional month of salary for
each additional full year worked for the Company up to a maximum of 12 months.
Mr. Donald is employed by the Company. Mr. Donald's employment can be
terminated upon three months written notice.
15
Effective July 19, 2001, Mr. Bertoni terminated his employment relationship with
the Company to take up a new position with another public company, although he
continued as a consultant and non-executive director of Guyanor.
Effective May 25, 2001, in response to the continuing weak gold prices and the
need to reduce costs and conserve cash, the Company and Mr. Peloquin reached a
separation agreement pursuant to which the Company agreed, amongst other things,
to pay Mr. Peloquin the equivalent of six months of salary and other benefits.
STOCK OPTION PLAN
The Company's 1997 Stock Option Plan, as amended, (referred to herein as the
"Plan") 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, upon
appointment or election and on an annual basis, to non-employee directors.
The Plan is currently administered by the Compensation Committee. The
Compensation Committee 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 Common
Shares that can be issued under the Plan is 5,600,000. As at April 1, 2002 out
of the total of 5,600,000 Common Shares reserved for issuance under the Plan
only 400,000 Common Shares remain available for grant. The Board believes
additional shares will be needed under the Plan to provide appropriate
incentives to key employees and others. Accordingly, on April 3, 2002 the Board
approved an amendment to the Plan, subject to shareholder approval, to reserve
an additional 3,400,000 shares for the Plan, thereby increasing the total number
of shares reserved for issuance under the Plan from 5,600,000 to 9,000,000
shares. Other provisions of the Plan remain unchanged. Certain provisions of the
Plan are described below.
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
will generally be automatically granted an option to purchase 40,000 Common
Shares as of the date on which such person first becomes a non-employee
director. At the first meeting of the Board following the completion of each
financial year, a non-employee director will generally be automatically granted
then an additional option to purchase 10,000 Common Shares. 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. Also see "Election of Directors - Compensation of Directors -
Stock Options".
16
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
The following table sets forth the options granted to the Named Executive
Officers during the last fiscal year.
OPTION GRANTS IN LAST FISCAL YEAR
(ALL $ AMOUNTS IN CANADIAN DOLLARS)
POTENTIAL
REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
INDIVIDUAL GRANTS APPRECIATION FOR
OPTION TERM
------------------------------------------------------------------------------------------ -------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES OR BASE
GRANTED IN FISCAL PRICE EXPIRATION
NAME GRANTED BY (#) YEAR (4) ($/SH) DATE 5% ($) 10% ($)
------------------------- ------------ ------------ ------------- ----------- ------------ -------- ----------
>
Peter Bradford Company 250,000 26.7% 1.02 06/27/11 160,000 407,500
------------ ------------ ------------- ----------- ------------ -------- ----------
Guyanor 75,000 20.8% 0.25 06/27/11 0 0
------------------------- ------------ ------------ ------------- ----------- ------------ -------- ----------
Allan Marter Company 75,000 8.0% 1.02 06/27/11 48,000 122,250
------------ ------------ ------------- ----------- ------------ -------- ----------
Guyanor 50,000 13.9% 0.25 06/27/11 0 0
------------------------- ------------ ------------ ------------- ----------- ------------ -------- ----------
Richard Gray Company 200,000 21.4% 1.02 06/27/11 128,000 326,000
------------------------- ------------ ------------ ------------- ----------- ------------ -------- ----------
Carlos Bertoni Guyanor 20,000 5.6% 0.25 06/27/11 0 0
------------------------- ------------ ------------ ------------- ----------- ------------ -------- ----------
Peter Donald Company 25,000 3.7% 1.02 06/27/11 16,000 40,750
------------------------ ------------ ------------ ------------- ------------ ------------ -------- ----------
STOCK OPTION EXERCISES AND YEAR-END OPTION VALUES
The following table sets forth information concerning the fiscal year-end value
of unexercised options held by the Named Executive Officers. There were no
exercises of stock options to purchase Common Shares or Class B shares of
Guyanor during the fiscal year ended December 31, 2001 by the Named Executive
Officers.
17
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
COMMON VALUE OF UNEXERCISED
SHARES NUMBER OF SECURITIES IN-THE-MONEY OPTIONS AT
ACQUIRED REALIZED UNDERLYING UNEXERCISED FISCAL YEAR END
ON VALUE OPTIONS AT FISCAL YEAR END (CDN$) (2)
EXERCISE REALIZED ============================= =============================
NAME GRANTED BY (#) (CDN$) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
-------------------- ------------ ----------- ----------- --------------- ------------- -------------- --------------
Peter Bradford Company 0 N/A 683,333 166,667 0 0
------------ ----------- ----------- --------------- ------------- -------------- --------------
Guyanor 0 N/A 25,000 50,000 0 0
-------------------- ------------ ----------- ----------- --------------- ------------- -------------- --------------
Allan Marter Company 0 N/A 225,000 75,000 0 0
------------ ----------- ----------- --------------- ------------- -------------- --------------
Guyanor 0 N/A 16,667 33,333 0 0
-------------------- ------------ ----------- ----------- --------------- ------------- -------------- --------------
Richard Gray Company 0 N/A 166,667 183,333 0 0
-------------------- ------------ ----------- ----------- --------------- ------------- -------------- --------------
Louis Peloquin (3) Company 0 N/A 225,000 (1) 0 0 0
------------ ----------- ----------- --------------- ------------- -------------- --------------
Guyanor 0 N/A 120,000 0 0 0
-------------------- ------------ ----------- ----------- --------------- ------------- -------------- --------------
Carlos Bertoni (4) Company 0 N/A 140,000 (1) 0 0 0
------------ ----------- ----------- --------------- ------------- -------------- --------------
Guyanor 0 N/A 448,000 0 0 0
-------------------- ------------ ----------- ----------- --------------- ------------- -------------- --------------
Peter Donald Company 0 N/A 141,000 33,600 0 0
------------ ----------- ----------- --------------- ------------- -------------- --------------
Guyanor 0 N/A 0 0 0 0
-------------------- ------------ ----------- ----------- --------------- ------------- -------------- --------------
(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, 2001, 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, 2001, the closing price of the Common Shares was Cdn$0.90 on
the TSE and the closing price of the Guyanor Class B shares was Cdn$0.10 on
the TSE. On April 1, 2002, the closing price of the Common Shares was
Cdn$2.56 on the TSE and the closing sale price of the Guyanor Class B
shares was Cdn$0.25 on the TSE.
(3) After May 25, 2001 Mr. Peloquin was no longer employed with the Company.
(4) After July 19, 2001 Mr. Bertoni was no longer employed with the Company.
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. In 2000, an amendment was approved by the Shareholders to increase
the maximum number of Common Shares issuable under the Bonus Plan to 900,000
Common Shares. The Bonus Plan is currently administered by the Board and
provides that the Board may grant bonus Common Shares on terms that the Board
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 currently limited to 900,000 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 201,007 Common Shares have been issued under the Bonus Plan to date.
No Common Shares were issued in 2001.
18
REPORT ON REPRICING OF OPTIONS
On January 15, 1999, the Board approved a resolution amending certain
outstanding stock options held by non-employee directors, executive officers and
employees. The amendments to the options provided for (i) a reduction of the
exercise price of each repriced option from its original price to Cdn$1.80 (the
closing price of the Common Shares on the TSE on January 14, 1999) and (ii) a
20% reduction of the number of shares that can be purchased under each repriced
option. The other terms of the repriced options were not changed. On March 10,
1999, the TSE consented to the amendments of all such options granted to
non-employee directors and to executive officers, subject to receiving the
approval of disinterested shareholders at the Meeting. The resolution was
approved by a majority of the votes cast by the disinterested holders of Common
Shares at the June 15, 1999 Annual General Meeting of the shareholders of the
Company.
The following table sets forth any repricing of options held by any executive
officer during the last ten completed fiscal years, excluding any options which
have expired.
TEN-YEAR OPTION REPRICINGS
NUMBER OF MARKET PRICE LENGTH OF
SECURITIES OF STOCK AT EXERCISE NEW NUMBER ORIGINAL OPTION
UNDERLYING TIME OF PRICE AT TIME NEW OF TERM REMAINING
OPTIONS REPRICING OR OF REPRICING EXERCISE SECURITIES AT DATE OF
REPRICED OR AMENDMENT OR AMENDMENT PRICE UNDERLYING REPRICING OR
NAME DATE AMENDED (#) (CDN$) (CDN$) (CDN$) OPTIONS (#) AMENDMENT
--------------------- ---------- --------------- -------------- --------------- ---------- ------------- -----------------
Louis Peloquin (1) 1/15/99 50,000 1.80 13.05 1.80 40,000 4 yrs 5 mths
25,000 1.80 16.20 1.80 20,000 5 yrs 8 mths
40,000 1.80 7.63 1.80 32,000 6 yrs 11 mths
25,000 1.80 18.45 1.80 20,000 7 yrs 11 mths
40,000 1.80 3.40 1.80 32,000 8 yrs 11 mths
--------------------- ---------- --------------- -------------- --------------- ---------- ------------- -----------------
Carlos Bertoni (2) 1/15/99 25,000 1.80 5.50 1.80 20,000 3 yrs 11 mths
25,000 1.80 12.15 1.80 20,000 4 yrs 9 mths
25,000 1.80 16.20 1.80 20,000 5 yrs 8 mths
40,000 1.80 7.63 1.80 32,000 6 yrs 11 mths
25,000 1.80 18.45 1.80 20,000 7 yrs 11 mths
35,000 1.80 3.40 1.80 28,000 8 yrs 11 mths
--------------------- ---------- --------------- -------------- --------------- ---------- ------------- -----------------
(1) After May 25, 2001 Mr. Peloquin was no longer employed with the Company.
(2) After July 19, 2001 Mr. Bertoni was no longer employed with the Company.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Company was first established in 1992. In
December 1998, given the fact that the Board was comprised exclusively of
non-employee directors, the Board decided to abolish the Compensation Committee.
The committee was reinstated in June 1999 and is comprised of four non-employee
directors. Its members are Messrs. Ernest Mercier (Chairman), Robert Stone,
David Fagin, and Ian MacGregor.
19
The responsibility of the Compensation Committee includes approving
compensation arrangements for all executive officers of the Company and its
controlled subsidiaries (subject to the approval of the board of directors of
the subsidiaries, if required). Cash and benefits compensation is provided for
in agreements that 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 and the Company's
cost-reduction effort. 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. In February 2000, the Board, upon recommendation of the
Compensation Committee, adopted a remuneration matrix based essentially on these
criteria, which remained unchanged in 2001.
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 Compensation Committee considers, among other
things, the officer's position, salary, and performance both overall and against
specific objectives, which relates to the officer's accomplishments and the
Company's performance. In addition, stock options can be granted to new
executive officers as an incentive to join the Company. In February 2000, the
Board, upon recommendation of the Compensation Committee, adopted a new guide
for determining option awards based on multiples that are function of the
Company's and the executive's performance. The Company granted stock options to
three executive officers in 2001 based on this new guide.
THE COMPENSATION COMMITTEE
Ernest Mercier, Chairman
David Fagin
Ian MacGregor
Robert Stone.
AUDIT COMMITTEE REPORT
The Committee has reviewed and discussed with management of the Company the
audited financial statements of the Company for the fiscal year ended December
31, 2001 (the "Audited Financial Statements").
The Committee has discussed with PricewaterhouseCoopers LLP, independent
accountants for the Company, the matters required to be discussed by Statement
on Auditing Standards No. 61.
20
The Committee has received the written disclosures and the letter from
PricewaterhouseCoopers LLP required by the Independence Standards Board Standard
No. 1, and has discussed with PricewaterhouseCoopers LLP its independence and
has considered the compatibility of the non-audit services which it provides
with maintenance of that independence.
Based on the reviews and discussions described above, the Committee recommended
to the Board that the Audited Financial Statements be included in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2001 for
filing with the Securities and Exchange Commission.
On May 18, 2000 the Board adopted a charter of the Audit Committee, a copy of
which can be obtained by contacting the Secretary of the Company at 10579
Bradford Road, Suite 103, Littleton, Colorado 80127-4247, U.S.A.
THE AUDIT COMMITTEE
David Fagin, Chairman
Ian MacGregor
Ernest Mercier
Robert Stone
PRINCIPAL ACCOUNTING FIRM FEES
The Company incurred the following fees for services performed by its principal
accounting firm, PricewaterhouseCoopers LLP, during fiscal 2001:
AUDIT FEES
Fees for the fiscal year 2001 audit and reviews of quarterly financial
statements: $101,500, of which $44,000 has been billed to December 31, 2001.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
PricewaterhouseCoopers LLP did not render any services related to financial
information systems design and implementation for the fiscal year ended December
31, 2001.
ALL OTHER FEES
Aggregate fees billed for all other services rendered by PricewaterhouseCoopers
LLP for fiscal year 2001 are $4,750 (includes fees for tax consulting and
compliance).
LIABILITY INSURANCE
The Company has purchased insurance and has, in addition, agreed to indemnify
directors and officers of the Company against all costs, charges and expenses
reasonably incurred by them in respect of certain proceedings to which they may
be made party by reason of their status as a director or officer of the Company.
The indemnification is extended to directors and officers provided that they
have acted honestly and in good faith with a view to the best interests of the
Company and, in the case of a criminal or administrative action or proceeding
that is enforced by
21
a monetary penalty, on the condition that the director or officer had reasonable
grounds for believing his conduct was lawful. The amount of the premium paid in
respect of directors and officers as a group was $70,000; the policy coverage is
$5,000,000 per claim and in aggregate in any policy year. Expenses for the
Company per claim not covered by the policy range between nil and $250,000.
INDEBTEDNESS OF DIRECTORS AND OFFICERS
No directors, nominees for election as directors, executive officers or members
of their immediate family were indebted, directly or indirectly, at any time
since the beginning of the Company's last fiscal year in an amount in excess of
Cdn$25,000.
PERFORMANCE GRAPH
The following graph shows the cumulative total shareholder return on the Common
Shares for the fiscal years ended December 31, 1997 through 2001, together with
the total shareholder return of the TSE 300 Composite Index and the TSE Gold and
Precious Metals Index. The graph assumes an initial investment of CDN$100 at
December 31, 1996 and is based on the trading prices of the Common Shares on the
TSE for the dates indicated. Because the Company did not pay dividends on its
Common Shares during the measurement period, the calculation of the cumulative
total shareholder return on the Common Shares does not include dividends.
[PERFORMANCE GRAPH]
22
12/31/96 12/31/97 12/31/98 12/31/99 12/29/00 12/31/01
---------------------------------- ------------- ------------ ------------- ------------- -------------- -------------
Golden Star Resources Ltd.
Dollar Value 100 27.70 8.59 7.53 3.66 4.99
Annual Return -72.3% -91.4% -92.5% -96.3% -95.0%
---------------------------------- ------------- ------------ ------------- ------------- -------------- -------------
TSE 300 Composite Index
Dollar Value 100 113.03 109.43 141.97 150.73 129.72
Annual Return 13% 9.4% 42% 51% 29.7%
---------------------------------- ------------- ------------ ------------- ------------- -------------- -------------
TSE Gold and Precious Metals
Index 100 56.44 52.39 43.13 38.4 44.91
Dollar Value -43.6% -47.6% -56.9% -61.6% -55.1%
Annual Return
---------------------------------- ------------- ------------ ------------- ------------- -------------- -------------
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
RELATIONSHIPS
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 as director or otherwise 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.
When the Company acquired its initial 70% interest in Bogoso Gold Limited
("BGL") in September 1999, Mr. Peter Bradford, President and Chief Executive
Officer of the Company, was Managing Director of Anvil Mining NL ("Anvil").
Anvil acquired a 20% interest in BGL. In 2001, Anvil severed its business
relationship with Golden Star by selling its 20% interest in BGL to Golden Star.
Since joining the Company, Mr. Bradford has continued to serve as a director on
the board of directors of Anvil.
Mr. MacGregor, counsel with Fasken Martineau DuMoulin LLP, a law firm based in
Toronto, Canada which has provided certain legal services to the Company during
2001, serves as a director of the Company.
RELATED TRANSACTION
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 since January 1, 2001 other than as set forth
herein or as previously disclosed and for the following transactions:
1. On January 8, 2002, Mr. Peter Bradford, President, Chief Executive Officer
and a director of the Company (as joint tenant with Mrs. Vicki Bradford),
acquired 200,000
23
units of the Company at a price of $0.49 per unit for gross proceeds of
$98,000. Each unit was comprised of one Common Share of the Company and
one-half of one common share purchase warrant. Each whole warrant upon
exercise entitles the holder to acquire one additional Common Share of the
Company upon the payment of $0.70 per warrant share at any time until 5:00
p.m. on the 24th month anniversary of the closing date. This was part of a
larger private placement of 11,516,000 units.
2. On January 8, 2002 Snyder Capital Management Inc. acquired 4,100,000 units
of the Company at a price of $0.49 per unit for gross proceeds of
$2,009,000. Each unit was comprised of one Common Share of the Company and
one-half of one common share purchase warrant. Each whole warrant upon
exercise entitles the holder to acquire one additional Common Share of the
Company upon the payment of $0.70 per warrant share at any time until 5:00
p.m. on the 24th month anniversary of the closing date. This was part of a
larger private placement of 11,516,000 units.
APPOINTMENT OF AUDITOR
The persons named in the enclosed proxy form intend to vote for the
re-appointment of PricewaterhouseCoopers LLP, Chartered Accountants (a firm
formed by the merger of PriceWaterhouse and Coopers & Lybrand) as auditor of the
Company to hold office until the next annual general meeting of shareholders and
to authorize the directors of the Company to fix the auditor's remuneration.
PricewaterhouseCoopers LLP (then Coopers & Lybrand) was first appointed the
auditor of the Company on May 16, 1992.
ADVANCE SHAREHOLDER APPROVAL FOR PRIVATE PLACEMENTS
The Company from time to time investigates opportunities to raise financing on
advantageous terms and may effectuate private placements of its common shares.
The Company expects to undertake one or more financings over the next year and
expects some of them to be structured as private placements.
Under the rules of the TSE the aggregate number of shares of a listed company
which are issued or made subject to issuance (i.e. issuable under a share
purchase warrant or option or other convertible security) by way of one or more
private placement transactions during any particular six-month period must not
exceed 25% of the number of shares outstanding (on a non-diluted basis) prior to
giving effect to such transactions (the "TSE 25% Rule"), unless there has been
shareholder approval of such transactions.
The application of the TSE 25% Rule may restrict the availability to the Company
of funds which it may wish to raise in the future by private placement of its
securities.
Management of the Company considers it to be in the best interests of the
Company to raise funds by private placement to finance business opportunities,
fund work programs on its mining properties and increase its working capital.
The TSE has a working practice that it will accept
24
advance approval by shareholders in anticipation of private placement
transactions that may exceed the TSE 25% Rule, provided such private placement
are completed within 12 months of the date such advance shareholder approval is
given.
As at April 1, 2002, the Company had issued and outstanding 62,953,859 Common
Shares. The Company proposes that the maximum number of Common Shares which
either would be issued or made subject to issuance under one or more private
placement transactions within the 12-month period following the date of the
Meeting would not exceed 30,000,000 Common Shares in the aggregate, or 48% of
the Company's issued and outstanding Common Shares as at April 1, 2002.
Any private placement transactions proceeded with by the Company under the
advance approval being sought at the Meeting will be subject to the following
additional restrictions:
(a) each must be substantially with parties at arm's length to the Company;
(b) each cannot materially affect control of the Company;
(c) each must be completed within a 12-month period following the date the
shareholder approval is given; and
(d) each must comply with the TSE's pricing rules for private placements which
currently require that the issue price per Common shares must not be lower
than the closing market price of the Common Shares on the TSE on the
trading day prior to the date the notice of private placement is given to
the TSE (the "Market Price"), less the applicable discount, as follows:
MARKET PRICE MAXIMUM DISCOUNT
---------------------------- ---------------------------
$0.50 or less 25%
---------------------------- ---------------------------
$0.51 to $2.00 20%
---------------------------- ---------------------------
Above $2.00 15%
---------------------------- ---------------------------
In addition, the terms of the Common Shares to be issued in any private
placement transaction will be determined by the Board and no further
authorization for any such issuance by a vote of the Company's shareholders will
be solicited prior to such issuance. The TSE will, however, retain the
discretion to decide whether or not a particular private placement is
"substantially" at arm's length or will materially affect control in which case
specific shareholder approval may be required.
In anticipation that the Company may wish to enter into one or more Private
Placement Transactions in the next 12 months that will result in it issuing
and/or making issuable such number of its Common Shares, taking into account any
shares that may be issued upon exercise of any warrants, options or other rights
granted in connection with Private Placement Transactions, that will exceed the
TSE 25% Rule, at the Meeting, shareholders will be asked to consider and, if
deemed advisable, approve, with or without amendment, an ordinary resolution in
the following terms:
25
"RESOLVED THAT THE ISSUANCE BY THE COMPANY IN ONE OR MORE PRIVATE PLACEMENT
TRANSACTIONS DURING THE 12-MONTH PERIOD COMMENCING MAY 29, 2002 OF SUCH
NUMBER OF SECURITIES THAT WOULD RESULT IN THE COMPANY ISSUING OR MAKING
ISSUABLE 30,000,000 COMMON SHARES OF THE COMPANY, AS IS MORE PARTICULARLY
DESCRIBED IN THE COMPANY'S MANAGEMENT INFORMATION CIRCULAR DATED APRIL 22,
2002, IS HEREBY APPROVED."
To become effective, the resolution must be approved by a majority of the votes
cast in respect thereof.
APPROVAL OF AMENDMENTS TO THE COMPANY'S BY-LAWS
The Company wishes to make certain amendments to By-law No. 1 relating generally
to the business and affairs of the Company (the "Amended By-law"). Adoption of
these amendments is anticipated to provide greater flexibility to the Board in
procedural matters. The substantive changes resulting from the Amended By-law
are namely to provide that shareholder meetings may be held in such places
outside of Canada as are provided in the Articles, and, further to recent
amendments to the CBCA, remove the requirement that Board membership and
committees be comprised of a majority of Canadian residents. The Amended By-law
will provide flexibility to address future developments, which may be permitted
by governing legislation, such as the use of new and emerging technologies.
Pursuant to the CBCA, the Board has the authority to adopt amendments to the
Company's by-laws and is required to submit the Amended By-law to the
Shareholders at their next meeting. The Shareholders may, by ordinary
resolution, confirm, reject or amend the Amended By-law. The Amended By-law, if
confirmed by the Shareholders, shall be effective from the date of the
resolution of the Board approving such Amended By-law.
The Amended By-law is available for review at the offices of Field Atkinson
Perraton LLP located at 1900, 350 - 7th Avenue S.W., Calgary, Alberta, and at
the offices of the Company during normal business hours.
At the Meeting, Shareholders will be asked to consider, and if deemed
appropriate, adopt an ordinary resolution confirming the Amended By-law. The
Board and management are recommending that the Shareholders vote FOR the
approval of the following resolution that requires an affirmative vote of a
majority of the votes cast in order to be adopted. UNLESS CONTRARY INSTRUCTIONS
ARE INDICATED ON THE PROXY FORM OR THE VOTING INSTRUCTION CARD, THE PERSONS
DESIGNATED IN THE ACCOMPANYING FORM OF PROXY OR VOTING INSTRUCTION CARD INTEND
TO VOTE FOR THE APPROVAL OF THE FOLLOWING RESOLUTION.
26
"RESOLVED THAT AMENDMENTS TO BY-LAW NO. 1, APPROVED BY THE BOARD OF
DIRECTORS OF THE COMPANY PURSUANT TO A RESOLUTION OF THE BOARD OF DIRECTORS
DATED APRIL 3, 2002 REPLACING SECTIONS: 4.02 - QUALIFICATION; 4.07 - ACTION
BY THE BOARD; 4.08 - CANADIAN MAJORITY AT MEETINGS; 4.09 - MEETING BY
TELEPHONE; 4.18 - CONFLICT OF INTEREST; 5.01 - COMMITTEES OF DIRECTORS;
7.02 - INDEMNITY; 7.03 - INSURANCE; 8.03 - PLACE OF MEETINGS; 8.12 -
PROXYHOLDERS AND REPRESENTATIVES; 8.16 - SHOW OF HANDS; 8.17 - BALLOTS;
8.19 - RESOLUTION IN WRITING; 11.01 - NOTICES, IN THEIR ENTIRETY WITH THE
FOLLOWING IS HEREBY CONFIRMED:
4.02 QUALIFICATION
THE FOLLOWING PERSONS ARE DISQUALIFIED FROM BEING A DIRECTOR OF THE
CORPORATION:
(a) ANYONE WHO IS LESS THAN 18 YEARS OF AGE;
(b) ANYONE WHO HAS BEEN FOUND TO BE OF UNSOUND MIND BY A COURT IN CANADA OR
ELSEWHERE;
(c) A PERSON WHO IS NOT AN INDIVIDUAL; OR
(d) A PERSON WHO HAS THE STATUS OF BANKRUPT.
A DIRECTOR IS NOT REQUIRED TO HOLD SHARES ISSUED BY THE CORPORATION.
SUBJECT TO THE ACT, NOT LESS THAN TWENTY-FIVE PERCENT OF THE DIRECTORS
SHALL BE RESIDENT CANADIANS.
4.07 ACTION BY THE BOARD
SUBJECT TO THE ACT, THE BOARD SHALL MANAGE, OR SUPERVISE THE MANAGEMENT OF,
THE BUSINESS AND AFFAIRS OF THE CORPORATION. THE POWERS OF THE BOARD MAY BE
EXERCISED AT A MEETING (SUBJECT TO SECTIONS 4.08 AND 4.09) AT WHICH A
QUORUM IS PRESENT OR BY RESOLUTION ASSENTED TO BY ALL THE DIRECTORS
ENTITLED TO VOTE ON THAT RESOLUTION AT A MEETING OF THE BOARD. WHERE THERE
IS A VACANCY IN THE BOARD, THE REMAINING DIRECTORS MAY EXERCISE ALL THE
POWERS OF THE BOARD SO LONG AS A QUORUM REMAINS IN OFFICE. WHERE THE
CORPORATION HAS ONLY ONE DIRECTOR, THAT DIRECTOR MAY CONSTITUTE A MEETING.
4.08 DIRECTORS MEETINGS
THE BOARD SHALL NOT TRANSACT BUSINESS AT A MEETING, OTHER THAN FILLING A
VACANCY IN THE BOARD, UNLESS AT LEAST TWENTY-FIVE PERCENT OF THE DIRECTORS
PRESENT ARE RESIDENT CANADIANS, EXCEPT WHERE
(a) A RESIDENT CANADIAN DIRECTOR WHO IS UNABLE TO BE PRESENT APPROVES IN
WRITING, BY TELEPHONE, ELECTRONIC, OR OTHER COMMUNICATION FACILITIES
THE BUSINESS TRANSACTED AT THE MEETING; AND
27
(b) THE RESIDENT CANADIAN DIRECTORS IN ATTENDANCE WOULD HAVE BEEN AT LEAST
TWENTY-FIVE PERCENT HAD THAT ABSENT DIRECTOR BEEN PRESENT.
4.09 MEETING BY TELEPHONE, ELECTRONIC OR OTHER COMMUNICATION
IF ALL THE DIRECTORS OF THE CORPORATION CONSENT, A DIRECTOR MAY PARTICIPATE
IN A MEETING OF THE BOARD OR OF A COMMITTEE OF THE BOARD BY MEANS OF SUCH
TELEPHONE, ELECTRONIC OR OTHER COMMUNICATION FACILITIES AS PERMIT ALL
PERSONS PARTICIPATING IN THE MEETING TO COMMUNICATE ADEQUATELY WITH EACH
OTHER, AND A DIRECTOR PARTICIPATING IN THE 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 THE BOARD.
4.18 CONFLICT OF INTEREST
A DIRECTOR OR OFFICER WHO:
(a) IS A PARTY TO A MATERIAL CONTRACT OR MATERIAL TRANSACTION OR PROPOSED
MATERIAL CONTRACT OR TRANSACTION WITH THE CORPORATION; OR
(b) IS A DIRECTOR OR AN OFFICER OF OR AN INDIVIDUAL ACTING IN A SIMILAR
CAPACITY, OR HAS A MATERIAL INTEREST IN ANY PERSON WHO IS A PARTY TO A
MATERIAL CONTRACT OR MATERIAL TRANSACTION OR PROPOSED MATERIAL CONTRACT
OR MATERIAL TRANSACTION WITH THE CORPORATION,
MUST DISCLOSE THE NATURE AND EXTENT OF SUCH INTEREST AT THE TIME AND IN THE
MANNER PROVIDED BY THE ACT. ANY SUCH CONTRACT OR TRANSACTION OR PROPOSED
CONTRACT OR TRANSACTION MAY BE REFERRED TO THE BOARD OR SHAREHOLDER 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
SHAREHOLDER. SUCH A DIRECTOR WILL NOT VOTE ON ANY RESOLUTION TO APPROVE THE
SAME EXCEPT AS PROVIDED BY THE ACT.
5.01 COMMITTEES OF DIRECTORS
THE BOARD MAY APPOINT COMMITTEES OF DIRECTORS, HOWEVER DESIGNATED, AND
DELEGATE TO SUCH COMMITTEE ANY OF THE POWERS OF THE BOARD EXCEPT THOSE
WHICH PERTAIN TO ITEMS WHICH, UNDER THE ACT, A COMMITTEE OF DIRECTORS HAS
NO AUTHORITY TO EXERCISE.
7.02 INDEMNITY
SUBJECT TO THE ACT, THE CORPORATION SHALL INDEMNIFY A DIRECTOR OR OFFICER
OF THE CORPORATION, A FORMER DIRECTOR OR OFFICER OF THE CORPORATION OR
ANOTHER INDIVIDUAL WHO ACTS OR ACTED AT THE CORPORATION'S REQUEST AS A
DIRECTOR OR OFFICER, OR AN INDIVIDUAL ACTING IN A SIMILAR CAPACITY, OF
ANOTHER ENTITY (THE "INDEMNIFIED PARTY(IES)", AGAINST ALL COSTS, CHARGES
AND EXPENSES, INCLUDING AN AMOUNT PAID TO SETTLE AN ACTION OR SATISFY A
JUDGMENT, REASONABLY INCURRED BY
28
THE INDIVIDUAL IN RESPECT OF ANY CIVIL, CRIMINAL, ADMINISTRATIVE,
INVESTIGATIVE OR OTHER PROCEEDING IN WHICH THE INDIVIDUAL IS INVOLVED
BECAUSE OF THAT ASSOCIATION WITH THE CORPORATION OR OTHER ENTITY, IF:
(a) THE INDEMNIFIED PARTY ACTED HONESTLY AND IN GOOD FAITH WITH A VIEW TO
THE BEST INTERESTS OF THE CORPORATION OR, AS THE CASE MAY BE, TO THE
BEST INTERESTS OF THE OTHER ENTITY FOR WHICH THE INDIVIDUAL ACTED AS
DIRECTOR OR OFFICER OR IN A SIMILAR CAPACITY AT THE CORPORATION'S
REQUEST; AND
(b) IN THE CASE OF A CRIMINAL OR ADMINISTRATIVE ACTION OR PROCEEDING THAT
IS ENFORCED BY A MONETARY PENALTY, THE INDEMNIFIED PARTY HAD REASONABLE
GROUNDS FOR BELIEVING THAT THE INDEMNIFIED PARTY'S CONDUCT WAS LAWFUL.
SUBJECT TO THE ACT, THE CORPORATION SHALL ADVANCE MONEYS TO AN INDEMNIFIED
PARTY FOR THE COSTS, CHARGES AND EXPENSES OF A PROCEEDING REFERRED TO IN
THE PARAGRAPH ABOVE. HOWEVER, THE INDEMNIFIED PARTY SHALL REPAY THE MONEYS
IF THE INDEMNIFIED PARTY DOES NOT FULFILL THE CONDITIONS OF (A) AND (B)
ABOVE.
THE CORPORATION SHALL INDEMNIFY AN INDEMNIFIED PARTY IN ANY OTHER
CIRCUMSTANCES THAT THE ACT PERMITS OR REQUIRES. NOTHING IN THIS BY-LAW
LIMITS THE RIGHT OF A PERSON ENTITLED TO INDEMNITY TO CLAIM INDEMNITY APART
FROM THE PROVISIONS OF THIS BY-LAW.
7.03 INSURANCE
SUBJECT TO THE ACT, THE CORPORATION MAY PURCHASE AND MAINTAIN INSURANCE FOR
THE BENEFIT OF AN INDIVIDUAL REFERRED TO IN SECTION 7.02 AGAINST ANY
LIABILITY INCURRED BY THE INDIVIDUAL:
(A) IN THE INDIVIDUAL'S CAPACITY AS A DIRECTOR OR OFFICER OF THE
CORPORATION; OR
IN THE INDIVIDUAL'S CAPACITY AS A DIRECTOR OR OFFICER, OR SIMILAR CAPACITY,
OF ANOTHER ENTITY, IF THE INDIVIDUAL ACTS OR ACTED IN THAT CAPACITY AT THE
CORPORATION'S REQUEST.
8.03 PLACE AND MANNER OF MEETINGS
MEETINGS OF SHAREHOLDERS SHALL BE HELD AT SUCH TIME AND PLACE AS THE BOARD
SHALL DETERMINE IN ACCORDANCE WITH THE ACT AND THE ARTICLES.
THE BOARD MAY DETERMINE THE MANNER IN WHICH MEETINGS SHALL BE HELD (EITHER
AT A SPECIFIED PHYSICAL PLACE, OR BY MEANS OF A TELEPHONE, ELECTRONIC OR
OTHER COMMUNICATION FACILITY THAT PERMITS ALL PARTICIPANTS TO COMMUNICATE
ADEQUATELY WITH EACH OTHER, OR A COMBINATION OF THE FOREGOING), AS
PERMITTED BY THE ACT AND THE ARTICLES, AND WHEN CALLING A MEETING OF
SHAREHOLDERS, THE BOARD MAY DETERMINE THAT SUCH MEETING WILL BE HELD
ENTIRELY BY MEANS OF SUCH TELEPHONE, ELECTRONIC OR OTHER COMMUNICATION
FACILITY. PERSONS PARTICIPATING IN A MEETING OF SHAREHOLDERS HELD BY SUCH
TELEPHONE, ELECTRONIC OR OTHER COMMUNICATION FACILITY ARE DEEMED TO BE
PRESENT IN PERSON AT THE MEETING AND WILL HAVE THE OPPORTUNITY TO
PARTICIPATE TO THE SAME EXTENT AS IF THEY WERE ATTENDING IN PERSON AND IN
FULL PURVIEW OF OTHER SHAREHOLDERS.
8.12 PROXYHOLDERS AND REPRESENTATIVES
EVERY SHAREHOLDER ENTITLED TO VOTE AT A MEETING OF SHAREHOLDERS MAY APPOINT
A PROXYHOLDER, OR ONE OR MORE ALTERNATE PROXYHOLDERS, TO ATTEND AND ACT AS
HIS REPRESENTATIVE AT THE MEETING IN THE MANNER AND TO THE EXTENT
AUTHORIZED AND WITH THE AUTHORITY CONFERRED BY THE PROXY. A PROXY SHALL BE
EXECUTED BY THE SHAREHOLDER OR HIS ATTORNEY AND SHALL CONFORM WITH THE
REQUIREMENTS OF THE ACT. ALTERNATIVELY, EVERY SUCH SHAREHOLDER WHICH IS A
BODY CORPORATE OR ASSOCIATION MAY AUTHORIZE BY RESOLUTION OF ITS DIRECTORS
OR GOVERNING BODY AN INDIVIDUAL TO REPRESENT IT AT A MEETING OF
SHAREHOLDERS AND SUCH INDIVIDUAL MAY EXERCISE ON THE SHAREHOLDER'S BEHALF
ALL THE POWERS IT COULD EXERCISE IF IT WERE AN INDIVIDUAL SHAREHOLDER. THE
AUTHORITY OF SUCH AN INDIVIDUAL SHALL BE ESTABLISHED BY DELIVERING OR
TRANSMITTING TO THE CORPORATION A CERTIFIED COPY OF SUCH RESOLUTION, OR IN
SUCH MANNER AS MAY BE SATISFACTORY TO THE SECRETARY OF THE CORPORATION OR
THE CHAIRMAN OF THE MEETING. ANY SUCH PROXYHOLDER OR REPRESENTATIVE NEED
NOT BE A SHAREHOLDER.
8.16 MANNER OF VOTING
SUBJECT TO THE ACT, ANY VOTING AT A MEETING OF SHAREHOLDERS SHALL BE BY A
SHOW OF HANDS OF THOSE PRESENT IN PERSON OR REPRESENTED BY PROXY OR BY A
VERBAL POLL OF THOSE PRESENT BY TELEPHONE, ELECTRONIC OR OTHER
COMMUNICATION FACILITIES. EVERY PERSON WHO IS PRESENT AND ENTITLED TO VOTE
SHALL HAVE ONE VOTE, SUBJECT TO ANY PROVISION OF THE ACT RESTRICTING THE
ABILITY OF A PROXYHOLDER OR ALTERNATE PROXYHOLDER TO VOTE BY
29
WAY OF A SHOW OF HANDS WHERE SUCH PERSON HAS CONFLICTING INSTRUCTIONS FOR
MORE THAN ONE SHAREHOLDER. WHEN A VOTE BY A SHOW OF HANDS HAS BEEN TAKEN
UPON A QUESTION, A DECLARATION BY THE CHAIRPERSON OF THE MEETING THAT THE
VOTE HAS BEEN CARRIED, CARRIED BY A PARTICULAR MAJORITY OR NOT CARRIED, AN
ENTRY TO THAT EFFECT IN THE MINUTES OF THE MEETING IS CONCLUSIVE EVIDENCE
OF THE FACT WITHOUT PROOF OF THE NUMBER OF VOTES RECORDED IN FAVOUR OF OR
AGAINST ANY RESOLUTION OR OTHER PROCEEDING IN RESPECT OF THE QUESTION.
8.17 BALLOTS
IF A BALLOT IS REQUIRED BY THE CHAIRPERSON OF THE MEETING OR IS DEMANDED BY
A SHAREHOLDER OR PROXY HOLDER ENTITLED TO VOTE AT THE MEETING, EITHER
BEFORE OR ON THE DECLARATION OF THE RESULT OF A VOTE BY A SHOW OF HANDS OR
VERBAL POLL, VOTING MUST BE BY BALLOT. A DEMAND FOR A BALLOT MAY BE
WITHDRAWN AT ANY TIME BEFORE THE BALLOT IS TAKEN. IF A BALLOT IS TAKEN ON A
QUESTION, A PRIOR VOTE ON THAT QUESTION BY A SHOW OF HANDS OR VERBAL POLL
HAS NO EFFECT. WHERE ONE OR MORE SHAREHOLDERS PARTICIPATE IN THE MEETING BY
WAY OF TELEPHONE, ELECTRONIC OR OTHER COMMUNICATION FACILITIES THE
CORPORATION SHALL PROVIDE THAT THOSE SHAREHOLDERS ARE ABLE TO TRANSMIT OR
OTHERWISE CONVEY TO THE MEETING THE RESULTS OF THEIR BALLOT. IF A BALLOT IS
TAKEN, EACH PERSON PRESENT SHALL BE ENTITLED, IN RESPECT OF THE SHARES
WHICH HE IS ENTITLE TO VOTE AT THE MEETING UPON THE QUESTION, TO THAT
NUMBER OF VOTES PROVIDED BY SHAREHOLDERS UPON THE SAID QUESTION.
8.19 RESOLUTION
A RESOLUTION IN WRITING OR OTHER PRINTED FORM CAPABLE OF BEING PRINTED OR
RETAINED ASSENTED TO 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 SHAREHOLDERS. A RESOLUTION TAKES EFFECT ON THE DATE
IT IS EXPRESSED TO BE EFFECTIVE.
A RESOLUTION MAY BE SIGNED IN ONE OR MORE COUNTERPARTS, ALL OF WHICH
TOGETHER CONSTITUTE THE SAME RESOLUTION. A COUNTERPART ASSENTED TO BY A
SHAREHOLDER AND TRANSMITTED BY FACSIMILE OR OTHER ELECTRONIC MEANS, WHICH
CAN BE PRINTED OR RETAINED IS AS VALID AS AN ORIGINALLY SIGNED COUNTERPART.
11.01 METHOD OF GIVING NOTICES
A NOTICE OR DOCUMENT REQUIRED TO BE SENT PURSUANT TO THE ACT, TO A
SHAREHOLDER, DIRECTOR, OFFICER OR AUDITOR OF THE CORPORATION MAY BE GIVEN
BY PERSONAL DELIVERY, PREPAID TRANSMITTED OR RECORDED COMMUNICATION,
PREPAID MAIL ADDRESSED TO THE RECIPIENT OR BY FACSIMILE OR ELECTRONIC
COMMUNICATION WHICH CAN BE PRINTED OR RETAINED AT THE RECIPIENT'S RECORDED
ADDRESS (INCLUDING FACSIMILE NUMBER OR ELECTRONIC MAIL ADDRESS). A NOTICE
OR DOCUMENT SENT BY PERSONAL DELIVERY IS DEEMED TO BE GIVEN WHEN IT IS
ACTUALLY DELIVERED. A NOTICE OR DOCUMENT SENT BY MEANS OF PREPAID
TRANSMITTED OR RECORDED COMMUNICATION IS DEEMED TO BE GIVEN WHEN DISPATCHED
OR DELIVERED TO THE APPROPRIATE COMMUNICATION COMPANY OR AGENCY OR ITS
REPRESENTATIVE FOR DISPATCH. A NOTICE OR DOCUMENT SENT BY MAIL IS DEEMED TO
BE GIVEN WHEN DEPOSITED AT A POST OFFICE OR IN A PUBLIC LETTER BOX. A
NOTICE OR DOCUMENT SENT BY FACSIMILE OR ELECTRONIC COMMUNICATION WHICH CAN
BE PRINTED OR RETAINED IS SENT WHEN CONFIRMATION OF ITS TRANSMISSION IS
RECEIVED. THE SECRETARY MAY CHANGE OR CAUSE TO BE CHANGED THE RECORDED
ADDRESS OF ANY SHAREHOLDER, DIRECTOR, AUDITOR, OR
30
MEMBER OF A COMMITTEE OF THE BOARD IN ACCORDANCE WITH ANY INFORMATION
BELIEVED BY HIM TO BE RELIABLE."
AMENDMENT TO THE COMPANY'S ARTICLES
In 1992, the Company was amalgamated with South American Goldfields Inc.
pursuant to a Plan of Arrangement under the Canada Business Corporations Act
("CBCA"). The first substantial amendments to the CBCA since 1975 came into
force on November 24, 2001. The changes to the CBCA are enabling rather than
restricting in that they allow conduct not permitted under the prior
legislation.
In order to dispense with the requirement to obtain unanimous shareholder
approval to hold a shareholder meeting outside of Canada, the CBCA now allows
the Company to provide in the Articles places outside of Canada where
shareholder meetings can be held. Accordingly, the Company wishes to seek
amendment to the Articles of Arrangement to provide for the holding of
shareholder meetings outside of Canada at New York, New York, Denver, Colorado,
or Littleton, Colorado in the United States and London, England and any other
place, as determined from time to time by the Board.
Accordingly, the Board and management are recommending that the shareholders
vote FOR the approval of the following special resolution that requires an
affirmative vote of not less than two-thirds of the votes cast in order to be
adopted. UNLESS CONTRARY INSTRUCTIONS ARE INDICATED ON THE PROXY FORM OR THE
VOTING INSTRUCTION CARD, THE PERSONS DESIGNATED IN THE ACCOMPANYING FORM OF
PROXY OR VOTING INSTRUCTION CARD INTEND TO VOTE FOR THE APPROVAL OF THE SPECIAL
RESOLUTION.
"RESOLVED, AS A SPECIAL RESOLUTION:
1. THAT THE COMPANY IS HEREBY AUTHORIZED TO APPLY FOR A CERTIFICATE OF
AMENDMENT UNDER SECTION 173 OF THE CANADA BUSINESS CORPORATIONS ACT
("CBCA") AMENDING THE ARTICLES OF ARRANGEMENT OF THE COMPANY TO ADD THE
FOLLOWING SENTENCE UNDER "OTHER PROVISIONS, IF ANY": "MEETINGS OF
SHAREHOLDERS MAY BE HELD OUTSIDE OF CANADA AT ANY OF THE FOLLOWING
PLACES IN THE UNITED STATES: IN THE GREATER URBAN AREAS OF DENVER,
COLORADO, LITTLETON, COLORADO AND NEW YORK, NEW YORK, IN LONDON,
ENGLAND AND ANY OTHER PLACE, AS DETERMINED FROM TIME TO TIME BY THE
BOARD OF DIRECTORS."
2. THAT ANY DIRECTOR OR OFFICER OF THE COMPANY IS HEREBY AUTHORIZED AND
DIRECTED, FOR AND ON BEHALF OF THE COMPANY, TO SIGN AND DELIVER ALL
SUCH DOCUMENTS AND TO DO ALL SUCH OTHER ACTS AS MAY BE CONSIDERED
DESIRABLE OR NECESSARY TO GIVE EFFECT TO THIS SPECIAL RESOLUTION
(INCLUDING, WITHOUT LIMITATION, THE DELIVERY OF ARTICLES OF ARRANGEMENT
IN THE PRESCRIBED FORM TO THE DIRECTOR UNDER THE CBCA), THE EXECUTION
OF ANY SUCH DOCUMENT OR THE DOING OF ANY SUCH ACT BEING CONCLUSIVE
EVIDENCE OF SUCH DETERMINATION.
31
3. THAT SUCH RESOLUTION MAY BE RESCINDED BY THE BOARD OF DIRECTORS BEFORE
IT IS ACTED UPON."
APPROVAL OF AMENDMENT TO THE COMPANY'S STOCK OPTION PLAN
As stated above in "Compensation of Executive Officers - Stock Option Plan" the
Directors of the Company have adopted a stock option plan (the "Plan") the
purpose of which is to afford the persons who provide services to the Company,
whether directors, officers, employees or consultants of the Company or its
subsidiaries, an opportunity to obtain a proprietary interest in the Company by
permitting them to purchase Common Shares of the Company and to aid in
attracting, as well as retaining and encouraging the continued involvement of
such persons with the Company. Currently, the maximum number of shares to be
delivered upon exercise of all options granted under the Plan has been set at
5,600,000 Common Shares. On April 3, 2002 the Board approved an amendment to the
Plan, subject to shareholder approval, to reserve an additional 3,400,000 shares
for the Plan, thereby increasing the total number of shares reserved for
issuance under the Plan from 5,600,000 to 9,000,000 shares. Under the TSE's
policy respecting stock options, shareholder approval is required where the
number of common shares reserved for issuance under a stock option plan could,
at any time, exceed 10% of the outstanding shares of a company. An application
has been made to the TSE for conditional approval of the amendment to the Plan
and the amendment is subject to regulatory approval. The amendment to the Plan
will permit the Board of Directors to reserve an additional 3,400,000 common
shares which, together with the common shares currently reserved for issuance,
represent approximately 14.3% of the currently issued and outstanding shares of
the Corporation. The Company is seeking the approval of the shareholders to
amend the Plan to allow for the increase of the maximum number of Common Shares
to be delivered upon exercise of all options granted under the Plan from
5,600,000 to 9,000,000.
The Plan is available for review at the offices of Field Atkinson Perraton LLP
located at 1900, 350 - 7th Avenue S.W., Calgary, Alberta, and at the offices of
the Company, during normal business hours.
At the Meeting, the shareholders will be asked to consider and, if thought fit,
approve by ordinary resolution, the amendment to the Plan to increase the
maximum number of Common Shares to be delivered upon exercise of all options
granted under the Plan from 5,600,000 to 9,000,000.
In order to be effective, an ordinary resolution requires the approval of a
majority of the votes cast by shareholders who vote in respect of the
resolution.
The text of the resolution approving the amendment to the Plan to be considered
at the meeting will be substantially as follows:
32
"BE IT RESOLVED THAT:
1. THE FOLLOWING AMENDMENT TO THE STOCK OPTION PLAN OF THE COMPANY
APPROVED BY THE BOARD OF DIRECTORS ON APRIL 3, 2002, AND SET FORTH
BELOW:
PARAGRAPH 4.1(a) UNDER THE HEADING "NUMBER OF SHARES RESERVED
UNDER THE PLAN" BE AND IS HEREBY DELETED AND REPLACED WITH THE
FOLLOWING:
"(a) THE MAXIMUM NUMBER OF SHARES ISSUABLE PURSUANT TO THE
EXERCISE OF OPTIONS GRANTED UNDER THE PLAN SHALL BE 9,000,000
(INCLUDING SUCH NUMBER OF SHARES ISSUABLE UPON EXERCISE OF
OPTIONS GRANTED UNDER THE 1992 PLAN AS OF THE EFFECTIVE DATE
OF THE PLAN) PROVIDED, HOWEVER, IF, AFTER THE EFFECTIVE DATE
OF THE PLAN, ANY SHARES COVERED BY AN OPTION GRANTED UNDER
THE PLAN, OR TO WHICH SUCH AN OPTION RELATES, ARE FORFEITED,
OR IF AN OPTION HAS EXPIRED, TERMINATED OR BEEN CANCELLED FOR
ANY REASON WHATSOEVER (OTHER THAN BY REASON OF EXERCISE),
THEN THE SHARES COVERED BY SUCH OPTION SHALL AGAIN BE, OR
SHALL BECOME, SHARES WITH RESPECT TO WHICH OPTIONS MAY BE
GRANTED HEREUNDER;"
BE AND IS HEREBY APPROVED, CONFIRMED AND RATIFIED;
2. THE MAKING BY THE BOARD OF DIRECTORS OF SUCH ADDITIONS, DELETIONS AND
MODIFICATIONS TO THE PLAN AS MAY BE NECESSARY OR ADVISABLE TO GIVE
EFFECT TO THESE RESOLUTIONS OR AS MAY BE REQUIRED BY APPLICABLE
REGULATORY AUTHORITIES, BE AND IS HEREBY APPROVED;
3. ANY OFFICER OR DIRECTOR OF THE COMPANY BE AND IS HEREBY AUTHORIZED TO
EXECUTE ALL SUCH DEEDS, DOCUMENTS AND OTHER WRITINGS AND PERFORM SUCH
ACTS AS MAY BE NECESSARY IN ORDER TO GIVE EFFECT TO THE AMENDMENT OF
THE PLAN AND THE BOARD OF DIRECTORS FROM TIME TO TIME IS AUTHORIZED TO
GRANT OPTIONS IN THE CAPITAL STOCK OF THE COMPANY PURSUANT TO AND IN
ACCORDANCE WITH THE PLAN AS AMENDED;
4. THE COMPANY IS AUTHORIZED TO RESERVE AND ISSUE UP TO 3,400,000
ADDITIONAL COMMON SHARES IN THE CAPITAL OF THE COMPANY FOR ISSUANCE
UPON EXERCISE OF STOCK OPTIONS PURSUANT TO THE PLAN, AS AMENDED."
UNLESS OTHERWISE INDICATED IN THE PROXY, IT IS MANAGEMENT'S INTENTION TO VOTE
THE PROXIES IN FAVOUR OF THE RESOLUTION APPROVING THE AMENDMENT TO THE PLAN.
33
AVAILABILITY OF DOCUMENTS
The following documents, filed or to be filed with various securities
commissions or similar authorities in various provinces of Canada, may be
obtained, after filing, by shareholders of the Company on request without charge
from the Secretary of Golden Star Resources Ltd., 10579 Bradford Road, Suite
103, Littleton, Colorado, USA 80127-4247 (Tel.: (303) 830-9000; Toll Free: (800)
553-8436; Fax: (303) 830-9094):
a) the Company's Annual Report on Form 10-K or Annual Information Form for
the year ended December 31, 2001, as may be amended, together with any
document, or the pertinent pages of any document, incorporated by
reference therein; and
b) comparative audited consolidated financial statements of the Company
and the notes thereto as at and for the fiscal years ended December 31,
2001, 2000 and 1999, together with the report of the auditors thereon,
and any interim financial statements of the Company that may be
subsequently filed.
ACCOMPANYING FINANCIAL INFORMATION AND INCORPORATION BY REFERENCE
The following financial statements and information of the Company accompany and
form part of, and are specifically incorporated by reference into, this
Management Information Circular: (a) Consolidated Balance Sheets as of December
31, 2001 and 2000, and Consolidated Statements of Operations, Consolidated
Statement of Changes in Shareholders' Equity, and Consolidated Statements of
Cash Flows for the years ended December 31, 2001, 2000 and 1999; (b) the Notes
to the Consolidated Financial Statements; (c) the Auditors' Report on such
financial statements; (d) the report on Management's Responsibility for
Financial Information; and (e) Management's Discussion and Analysis of Financial
Condition and Results of Operations.
The Securities and Exchange Commission allows the Company to "incorporate by
reference" in this Management Information Circular information the Company is
required to disclose to its shareholders, which means that the Company can
disclose such information to its shareholders by referring you to those
documents. The information incorporated by reference is an important part of
this proxy statement. We incorporate by reference the documents listed above
under clause (a) (as to the Annual Report on Form 10-K) and clause (b) of
"Availability of Documents". Shareholders may request a copy of these filings
without cost by writing to the Company at the above address or fax (303)
830-9094.
34
2002 ANNUAL REPORT
The Annual Report for the fiscal year ended December 31, 2001 accompanies this
Management Information Circular. The consolidated financial statements of the
Company, the accompanying notes and report of the independent auditors, the
selected financial data for each of the years ended December 31, 2001, 2000 and
1999 and management's discussion and analysis of the Company's financial
condition and results of operations are included in the Annual Report.
2003 SHAREHOLDER PROPOSALS
To be eligible for inclusion in the Company's proxy statement, shareholder
proposals for the year 2003 Annual Meeting of Shareholders must be received at
the Company's corporate office, 10579 Bradford Road, Suite 103, Littleton,
Colorado 80127, Attention: Corporate Secretary, on or before January 21, 2003.
OTHER MATTERS
Management of the Company is not aware of any other matters to come before the
Meeting other than as set forth in the Notice of the Meeting. If any other
matter properly comes before the Meeting, it is the intention of the persons
named in the enclosed proxy form to vote the shares represented thereby in
accordance with their best judgment on such matter.
DIRECTORS' APPROVAL
The contents and the sending of this Management Information Circular to holders
of the Common Shares, to each director of the Company, to the auditors of the
Company and to the appropriate regulatory authorities have been approved by the
directors of the Company.
35
CERTIFICATE
The foregoing contains no untrue statement of a material fact and does not omit
to state a material fact that is required to be stated or that is necessary to
make a statement not misleading in the light of the circumstances in which it
was made.
DATED this 22nd day of April, 2002.
ON BEHALF OF THE MANAGEMENT OF GOLDEN STAR RESOURCES LTD.
"PETER J.L. BRADFORD" "ALLAN J. MARTER"
------------------------------------- ------------------------------------------
PETER J.L. BRADFORD ALLAN J. MARTER
PRESIDENT AND CHIEF EXECUTIVE OFFICER VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
GOLDEN STAR RESOURCES LTD.
ANNUAL GENERAL AND SPECIAL MEETING OF SHAREHOLDERS - MAY 28, 2002
PROXY
THIS PROXY IS SOLICITED BY MANAGEMENT OF THE CORPORATION
The undersigned holder of common shares in the capital stock of Golden Star
Resources Ltd. (the "Company") hereby nominates and appoints Robert R. Stone,
Chairman of the Board of the Company, or failing him, Peter J. Bradford,
President and Chief Executive Officer of the Company, or instead of them or any
of them, ________________________________, as the proxy of the undersigned to
attend, act and vote in respect of all common shares registered in the name of
the undersigned at the Annual General and Special Meeting (the "Meeting") of
shareholders of the Company to be held at 10:00 a.m. on Tuesday, May 28, 2002 in
the University Room, at the Courtyard by Marriott Downtown, 475 Yonge Street, in
Toronto, Ontario, Canada M4Y 1X7, and at any and all adjournments thereof.
Without limiting the general powers hereby conferred, the said proxy is directed
to vote as follows, provided that, if no choice is specified herein, or if any
instructions given are not clear, the shares shall be voted as if the
shareholder had specified an affirmative vote:
1. TO ELECT THE FOLLOWING PERSONS AS DIRECTORS OF THE COMPANY:
JAMES E. ASKEW FOR WITHHOLD
------ ------
PETER J. BRADFORD FOR WITHHOLD
------ ------
DAVID K. FAGIN FOR WITHHOLD
------ ------
ERNEST C. MERCIER FOR WITHHOLD
------ ------
IAN A. MACGREGOR FOR WITHHOLD
------ ------
ROBERT R. STONE FOR WITHHOLD
------ ------
2. TO APPOINT PRICEWATERHOUSECOOPERS LLP AS THE AUDITOR OF THE COMPANY AND
TO AUTHORIZE THE BOARD OF DIRECTORS TO FIX THE AUDITOR'S REMUNERATION:
FOR WITHHOLD
------ ------
3. TO APPROVE THE ISSUANCE BY THE COMPANY, IN ONE OR MORE PRIVATE
PLACEMENTS DURING THE TWELVE (12) MONTHS FOLLOWING APPROVAL OF THE
RESOLUTION, OF UP TO 30,000,000 COMMON SHARES, AS MORE PARTICULARLY SET
OUT IN THE MANAGEMENT INFORMATION CIRCULAR FOR THE MEETING:
FOR AGAINST
------ ------
4. TO APPROVE AMENDMENTS TO THE COMPANY'S BY-LAWS, AS MORE PARTICULARLY
SET OUT IN THE MANAGEMENT INFORMATION CIRCULAR FOR THE MEETING:
------ ------
FOR AGAINST
5. TO APPROVE AMENDMENT OF THE COMPANY'S ARTICLES OF ARRANGEMENT TO
PROVIDE FOR MEETINGS OF SHAREHOLDERS OF THE COMPANY TO BE HELD AT
SPECIFIC LOCATIONS OUTSIDE OF CANADA, AS MORE PARTICULARLY SET OUT IN
THE MANAGEMENT INFORMATION CIRCULAR FOR THE MEETING:
FOR AGAINST
------ ------
6. TO APPROVE THE AMENDMENTS TO THE COMPANY'S STOCK OPTION PLAN, AS MORE
PARTICULARLY SET OUT IN THE MANAGEMENT INFORMATION CIRCULAR FOR THE
MEETING:
FOR AGAINST
------ ------
The undersigned hereby revokes any instrument of proxy heretofore given
with reference to the said meeting or any adjournment thereof.
The proxyholder may in his discretion vote with respect to amendments
or variations to matters identified in the Notice of Meeting or to other matters
which may properly come before the meeting or any adjournment thereof.
DATED this day of , 2002.
----------- ---------------------------
------------------------ -----------------------------------------
Signature Name of shareholder (Please Print)
-----------------------------------------
-----------------------------------------
Address
(PLEASE SEE NOTES ON REVERSE SIDE)
NOTES
1. The shares represented by this proxy will be voted in accordance with
the instructions given herein. IF NO CHOICE IS SPECIFIED HEREIN, OR IF
ANY INSTRUCTIONS GIVEN ARE NOT CLEAR, THE SHARES SHALL BE VOTED AS IF
THE SHAREHOLDER HAD SPECIFIED AN AFFIRMATIVE VOTE, ALL IN THE SAME
MANNER AND TO THE SAME EXTENT AS THE SHAREHOLDER COULD DO IF THE
SHAREHOLDER WERE PERSONALLY PRESENT AT THE MEETING.
2. A SHAREHOLDER HAS THE RIGHT TO APPOINT A PERSON (WHO NEED NOT BE A
SHAREHOLDER) OTHER THAN THE PERSON DESIGNATED IN THIS PROXY TO ATTEND
AND ACT FOR THE SHAREHOLDER AND ON THE SHAREHOLDER'S BEHALF AT THE
MEETING. Such right may be exercised by printing in the space provided
the name of the person to be appointed, in which case only the person
so named may vote the shares at the meeting.
3. This proxy will not be valid unless it is dated and signed by the
shareholder or the shareholder's attorney authorized in writing or, if
the shareholder is a corporation, by a duly authorized officer or
attorney of the corporation, and ceases to be valid one year from its
date. If the proxy is executed by an attorney for an individual
shareholder or by an officer or an attorney of a corporate shareholder,
the instrument so empowering the officer or attorney, as the case may
be, or a notarial copy thereof, must accompany the proxy instrument.
4. To be effective, the instrument of proxy must be received by 10:00 a.m.
(Toronto time) on Friday, May 24, 2002 at the address set forth in the
accompanying return envelope (Attention: Proxy Department, CIBC Mellon
Trust Company, P.O. Box 12005 STN. BRM B, Toronto, Ontario M7Y 2K5).
SUPPLEMENTAL MAILING LIST
RETURN CARD
TO: GOLDEN STAR RESOURCES LTD.
10579 Bradford Road
Suite 103
Littleton, CO 80127
Attn: Investor Relations
The undersigned certified that the undersigned is the owner of securities of
Golden Star Resources Ltd. (the "Company") and requests that the undersigned be
placed on the Company's Supplemental Mailing List in respect of its interim
financial statements.
DATE:
------------------
-------------------------------
Signature
-------------------------------
Name - Please print
-------------------------------
-------------------------------
-------------------------------
Address
-------------------------------
Name and title of person
signing if different from name
above (please print)
NOTE: If you wish to be included in the Company's Supplemental Mailing List in
order to receive its interim financial statements, please complete and
return this card to Golden Star Resources Ltd., 10579 Bradford Road,
Suite 103, Littleton, CO 80127, Attention: Investor Relations.