For
the month of,
|
April
|
2008
|
|
Commission
File Number
|
001-14620
|
||
Pan
American Silver Corp
|
|||
(Translation
of registrant’s name into English)
|
|||
1500-625
Howe Street, Vancouver BC Canada V6C 2T6
|
|||
(Address
of principal executive offices)
|
Form
20-F
|
Form
40-F
|
X
|
Yes
|
No
|
X
|
Document
|
|
1
|
Information
Circular, dated April 10, 2008
|
NOTICE
OF ANNUAL GENERAL MEETING
|
i
|
INFORMATION
CIRCULAR
|
1
|
Solicitation
of Proxies
|
1
|
Appointment
of Proxyholder
|
1
|
Revocation
of Proxy
|
2
|
Voting
by Non-Registered Shareholders
|
2
|
Voting
of Proxies
|
3
|
Exercise
of Discretion
|
3
|
Voting
Securities and Principal Holders of Voting Securities
|
4
|
Quorum
and Votes Necessary
|
4
|
Particular
Matters to be Acted Upon
|
4
|
Election of
Directors
|
4
|
Appointment
of Auditors
|
7
|
Approval of
2008 Stock Option and Stock Bonus Plan
|
7
|
Corporate
Governance
|
9
|
Composition
of the Board
|
9
|
Board
Committees
|
9
|
Summary of
Attendance of Directors
|
12
|
Code of
Ethical Conduct
|
13
|
Directors’
and Officers’ Liability Insurance
|
13
|
Executive
Compensation
|
14
|
Summary
Compensation Table
|
14
|
Long-Term
Incentive Plan
|
14
|
Stock
Options
|
15
|
Termination
of Employment, Change in Responsibilities and Employment
Contracts
|
17
|
Compensation
Committee
|
18
|
Report on
Executive Compensation
|
18
|
Compensation
of Directors
|
21
|
Equity
Compensation Plan Information
|
21
|
Performance
Graph
|
22
|
Interest
of Insiders in Material Transactions
|
22
|
Management
Contracts
|
22
|
Interest
of Certain Persons in Matters to be Acted Upon
|
23
|
Other
Matters
|
23
|
Additional
Information
|
23
|
Approval
of this Circular
|
23
|
APPENDIX
“A” – Corporate Governance Disclosure
|
A-1
|
APPENDIX
“B” – Proposed 2008 Stock Option and Stock Bonus Plan
|
B-1
|
APPENDIX
“C” – Proposed Resolution
|
C-1
|
1.
|
to
receive and consider the consolidated financial statements of the Company
for the financial year ended December 31, 2007, together with the
auditors’ report thereon;
|
2.
|
to
elect directors of the Company;
|
3.
|
to
reappoint Deloitte & Touche LLP, Chartered Accountants, as auditors of
the Company to hold office until the next annual general
meeting;
|
4.
|
to
authorize the directors of the Company to fix the remuneration to be paid
to the auditors of the Company;
|
5.
|
to
consider and, if thought appropriate, to pass an ordinary resolution
approving the adoption of the 2008 Stock Option and Stock Bonus Plan the
form of which is discussed under “Particular Matters to be Acted Upon –
Approval of 2008 Stock Option and Stock Bonus Plan” and the complete text
of which is set out in Appendix “B” to the attached Information Circular
for the Meeting;
|
6.
|
to
consider amendments to or variations of any matter identified in this
Notice of Meeting; and
|
7.
|
to
transact such further and other business that does not have a material
effect on the business of the Company as may be properly brought before
the Meeting or any and all adjournments
thereof.
|
BY
ORDER OF THE BOARD
|
||
/s/ ROBERT PIROOZ | ||
Robert Pirooz,
|
||
General
Counsel, Secretary and Director
|
|
(a)
|
in
the name of an intermediary (an “Intermediary”) that the
Non-Registered Holder deals with in respect of the Shares, such as a bank,
trust company, securities dealer or broker or trustee or administrator of
self-administered RRSPs, RRIFs, RESPs or similar plans;
or
|
|
(b)
|
in
the name of a depository (such as The Canadian Depository for Securities
Limited) of which the Intermediary is a
participant.
|
|
(a)
|
receive,
as part of the Meeting Materials, a voting instruction form which must be
completed, signed and delivered by the Non-Registered Holder in accordance
with the directions provided by the Intermediary on the voting instruction
form (which may in some cases permit the completion of the voting
instruction form by telephone or through the internet);
or
|
|
(b)
|
be
given a form of proxy which has already been signed by the Intermediary
(typically by a facsimile, stamped signature), which is restricted to the
number of Shares beneficially owned by the Non-Registered Holder but which
is otherwise uncompleted. This form of proxy need not be signed
by the Non-Registered Holder. In this case, the Non-Registered
Holder who wishes to submit a proxy should otherwise properly complete
this form of proxy and deposit it as described
above.
|
Name,
Residence and Position
|
Principal
Occupation,
Business
or Employment
Director
Since 2003
|
Number
of
Shares
Held
|
||||
|
Ross
J. Beaty
Vancouver,
B.C.
Canada
Chairman
|
Chairman
of the Company; formerly Chief Executive Officer of the
Company.
Director
of the Company since September 30, 1988.
|
1,802,622
Shares (5)
197,900
Options
|
|||
|
Geoffrey
A. Burns(4)
North
Vancouver, B.C.
Canada
President,
Chief Executive Officer and Director
|
President
and Chief Executive Officer of the Company; formerly Chief Financial
Officer of Coeur d’Alene Mines Corporation.
Director
of the Company since July 1, 2003.
|
17,018
Shares
41,511
Options
|
|||
|
William
A. Fleckenstein(3)(8)
Seattle,
Washington
USA
Director
|
President
of Fleckenstein Capital, Inc. (investment counselling firm).
Director
of the Company since May 9, 1997.
|
102,755
Shares(6)
30,438
Options
|
|||
|
Michael
Larson(1)
Seattle,
Washington
USA
Director
|
Business
Manager of Cascade Investment, LLC (a private investment
company).
Director
of the Company since November 29, 1999.
|
2,612,894
Shares(7)
32,000
Options
|
Name,
Residence and Position
|
Principal
Occupation,
Business
or Employment
Director
Since 2003
|
Number
of
Shares
Held
|
|
Michael
J.J. Maloney
(1)(2)(3)
Seattle,
Washington
USA
Director
|
Private
Investor.
Director
of the Company from Sept. 25, 1995 to November 29, 1999; and re-elected
March 2, 2000 to present.
|
60,854
Shares
22,000
Options
|
|||
|
Robert
P. Pirooz(4)
Vancouver,
B.C.
Canada
General
Counsel, Secretary, and Director
|
General
Counsel and Secretary of the Company; formerly General Counsel, and Group
Vice President with the BCR Group of Companies.
Director
of the Company since April 30, 2007.
|
2,454
Shares
37,078
Options
|
|||
|
Paul
B. Sweeney(1)(2)
Surrey,
B.C.
Canada
Director
|
Executive
Vice-President Corporate Development of Plutonic Power Corporation;
formerly Vice President and Chief Financial Officer of Canico Resource
Corp.
Director
of the Company since August 5, 1999.
|
8,758
Shares
0
Options
|
|||
David
C. Press
West
Vancouver, B.C. Canada
Nominated
as a Director
|
President,
Press Mining Consulting Inc.
Nominated
to serve as a director.
|
0 Shares
0 Options
|
(1)
|
Member
of the Audit Committee.
|
(2)
|
Member
of the Compensation Committee.
|
(3)
|
Member
of the Nominating and Governance
Committee.
|
(4)
|
Member
of the Health Safety & Environment
Committee.
|
(5)
|
160,000
of these Shares are held by Kestrel Holdings Ltd., a private company owned
by Mr. Beaty.
|
(6)
|
Mr.
Fleckenstein holds a portion of these Shares directly and exercises
control or direction over 101,300 Shares on behalf of the RTM
fund.
|
(7)
|
Mr.
Larson exercises control or direction over 2,600,000 Shares on behalf of
Cascade Investment LLC, however beneficial ownership of such shares is
specifically disclaimed.
|
(8)
|
Lead
Independent Director. As Lead Independent Director, Mr.
Fleckenstein holds in camera meetings with all independent directors of
the Board and reports back on those in camera meetings to the
Board.
|
|
(a)
|
include
provisions which provide for an optional cashless exercise
mechanism. The cashless exercise mechanism is set out in
section 4.2 of the 2008 Plan, and provides that the exercise price for a
vested option may be satisfied by the holder of such option providing to
the Company for cancellation that number of other vested options having an
“in-the-money” value equal to the exercise price of the option to be
exercised;
|
|
(b)
|
change
the maximum amount of Shares issuable under the plan from a variable
amount, currently 10% of the issued and outstanding common shares in the
capital of the Company, to a fixed amount of 6,461,470 Shares, being 8% of
the current issued and outstanding common shares in the capital of the
Company;
|
|
(c)
|
include
provisions which provide, in the event of a take-over bid or change of
control, that 50% of an option holder’s unvested outstanding options will
vest and are conditionally exercisable until immediately before the
completion of the take-over bid or change of control, provided that: (i)
any options that are unvested or unexercised by the completion of the
take-over bid or change of control become null and void; and (ii) in the
event the take-over bid or change of control is not completed within 90
days of the proposed completion date the option holder will be refunded
any payments made to exercise the options, the exercised options will be
reissued, and the purported exercise of the options will be null and
void;
|
|
(d)
|
include
provisions which provide that, except where not permitted by the Toronto
Stock Exchange (the “TSX”), where an option
expires during a Black-Out Period (as defined below) or within ten
business days following the end of such Black-Out Period, the term of such
options will be extended to the end of day that is ten business days
following the end of the applicable Black-Out
Period;
|
|
(e)
|
provide
additional limitations so that the number of Shares issuable under the
2008 Plan, together with all of the Company’s other previously established
or proposed share compensation arrangements, within a one-year period
to: (i) insiders of the Company, in aggregate, shall not exceed
7% of the outstanding issue; (ii) any one optionee who is an insider (and
associates of such insider) shall not exceed 2% of the outstanding issue;
and (iii) any non-employee director, other than the Chairman, shall not
exceed an equity award value of $100,000 (other than as Shares granted or
taken in lieu of cash fees);
|
|
(f)
|
grant
to the Board the power and authority to make certain limited amendments to
the 2008 Plan or any option without shareholder approval,
including:
|
|
·
|
amendments
of a “housekeeping” nature, including any amendment for the purpose of
curing any ambiguity, error, inconsistency or omission in or from the 2008
Plan or any related option
agreement;
|
|
·
|
a
change to the vesting provisions of an
option;
|
|
·
|
extensions
to the term of an option held by a person (other than an insider of the
Company);
|
|
·
|
accelerating
the expiry date of an option; amending the definitions contained within
the 2008 Plan;
|
|
·
|
amending
or modifying the mechanics of the exercise of options (except with respect
to the requirement that full payment be received for the exercise of
options);
|
|
·
|
amendments
that are necessary to comply with the provisions of applicable laws or the
rules, regulations and policies of the
TSX;
|
|
·
|
amendments
relating to the administration of the 2008
Plan;
|
|
·
|
amendments
that are necessary to suspend or terminate the 2008 Plan;
and
|
|
·
|
any other amendment, whether fundamental or
otherwise, not requiring shareholder approval under applicable law
(including, without limitation, the rules, regulations, and policies
of the
TSX);
|
|
(g)
|
expressly require shareholder
approval for any of the following amendments to the 2008
Plan:
|
|
·
|
amendments that increase the
number of Shares
issuable under the 2008 Plan, except in certain circumstances as
contemplated in the 2008
Plan;
|
|
·
|
any reduction in the option price of an
option if the optionee is not an insider of the Company at the time of the
proposed amendment; and
|
|
·
|
amendments required to be
approved by
shareholders under applicable law (including, without limitation, pursuant
to the rules,
regulations and policies of the TSX and Nasdaq);
and
|
|
(h)
|
expressly require disinterested
shareholder approval for any of the following amendments to the 2008
Plan:
|
|
·
|
amendments to the 2008
Plan that could
result at any time in the number of Shares reserved for issuance under the Plan to
insiders of the Company exceeding 10% of the outstanding
issue;
|
|
·
|
any reduction in the option price
of an option if the optionee is an insider of the Company at the time of
the proposed amendment; and
|
|
·
|
amendments requiring
disinterested
shareholder approval under applicable law (including, without limitation,
pursuant to the rules, regulations and policies of the TSX and
Nasdaq).
|
·
|
bookkeeping
or other services related to the accounting records or financial
statements of the Company;
|
·
|
financial
information systems design and implementation, except for services
provided in connection with the assessment, design and implementation of
internal account controls and risk management
controls;
|
·
|
appraisal
or valuation services, fairness opinions or contribution-in-kind reports,
where the results of any valuation or appraisal would be material to the
Company’s financial statements or where the accounting firm providing the
appraisal, valuation, opinion or report would audit the
results;
|
·
|
actuarial
services;
|
·
|
internal
audit outsourcing services;
|
·
|
management
functions or human resources
functions;
|
·
|
broker-dealer,
investment advisor or investment banking
services;
|
·
|
legal
services; and
|
·
|
expert
services unrelated to audits.
|
Year
ended December 31,
2007
(CAD$)
|
Year
ended December 31,
2006
(CAD$)
|
||
Audit Fees
|
$1,331,800
|
$1,168,275
|
|
Audit Related Fees
|
nil
|
nil
|
|
Tax-Related Fees
|
$13,345
|
nil
|
|
Other Fees
|
nil
|
nil
|
|
Total:
|
$1,345,145
|
$1,168,275
|
Director
|
Board
|
Audit
|
Compensation
|
Nominating
and
Governance
|
Health,
Safety and
Environment(1)
|
|||||
9
meetings
|
8
meetings
|
2
meetings
|
1
meeting
|
1
meeting
|
||||||
Ross
J. Beaty
|
9/9
|
-
|
-
|
-
|
-
|
|||||
Geoffrey
A. Burns
|
9/9
|
-
|
-
|
-
|
1/1
|
|||||
William
A. Fleckenstein
|
9/9
|
-
|
-
|
1/1
|
-
|
|||||
Michael
Larson
|
5/9
|
6/6(4)
|
-
|
-
|
-
|
|||||
Michael
J.J. Maloney
|
9/9
|
8/8
|
2/2
|
1/1
|
-
|
|||||
Paul
B. Sweeney
|
9/9
|
8/8
|
1/1(5)
|
-
|
-
|
|||||
John
M. Willson
|
9/9
|
2/2(4)
|
2/2
|
-
|
1/1
|
|||||
John
H. Wright
|
4/5(2)
|
-
|
-
|
-
|
-
|
|||||
Robert
P. Pirooz
|
4/4(3)
|
-
|
-
|
-
|
1/1
|
(1)
|
The
Health, Safety and Environment Committee consisted of all members of the
Board until April 30, 2007. On April 30, 2007 the
members of the Health, Safety and Environment Committee were changed to
include only Mr. Burns, Mr. Willson, and Mr.
Pirooz.
|
(2)
|
Mr.
Wright retired from the Board on April 30, 2007, and attended 4 out of 5
meetings of the Board which took place prior to his
retirement.
|
(3)
|
Mr.
Pirooz was elected as a director on April 30, 2007, and attended all 4
meetings of the Board which took place after his
election.
|
(4)
|
Mr.
Larson replaced Mr. Willson on the Audit Committee on April 30, 2007, and
attended all 6 meetings of the Audit Committee which took place after his
appointment.
|
(5)
|
Mr.
Sweeney was added to the Compensation Committee on April 30, 2007, and
attended the only meeting of the Compensation Committee which took place
after his addition.
|
Annual
Compensation $
|
Long-Term
Compensation
|
||||||||||||||
Awards
|
|||||||||||||||
Name
and
Principal
Position
|
Year
|
Salary
|
Bonus
(3)
|
Other
Annual Compensation
|
Number
of
Shares Under
Option
Granted(3)
|
Number
of Bonus
Shares Subject to Resale Restrictions(3) |
All
Other
Compensation
$ (3) |
||||||||
Geoffrey
A. Burns
President
and Chief Executive Officer
|
2007
2006
2005
|
359,070
295,721
244,186
|
171,456
134,406
45,327
|
-
-
-
|
16,909
17,634
20,904
|
1,737
1,643
1,638
|
20,737
15,655
11,752
|
||||||||
A.
Robert Doyle
Chief
Financial Officer
|
2007
2006
2005
|
226,977
218,419
177,767
|
79,244
75,682
42,664
|
-
-
-
|
8,016
10,656
12,174
|
824
993
954
|
9,831
9,460
6,844
|
||||||||
Andrés
Dasso
Executive
Director of Pan American Silver Peru, S.A.
|
2007
2006
2005
|
280,000
247,250
201,600
|
79,625
97,210
42,310
|
-
-
-
|
9,267
12,770
14,248
|
952
1,190
1,098
|
12,217
12,187
8,467
|
||||||||
Steven
Busby
Senior
Vice President, Project Development
|
2007
2006
2005
|
279,070
255,628
208,047
|
105,705
94,391
56,173
|
-
-
-
|
10,752
13,606
11,502
|
1,105
1,267
1,116
|
13,186
12,078
8,010
|
||||||||
Michael
Steinmann
Senior
Vice President, Geology and Exploration
|
2007
2006
2005
|
241,860
208,977
168,372
|
98,831
105,287
36,832
|
-
-
-
|
9,319
11,123
7,862
|
957
1,036
616
|
11,428
9,874
4,861
|
|
(1)
|
Except
for Mr. Dasso, annual salary and bonus are paid to the Named Executive
Officers in Canadian dollars, and for the purposes of this table have been
converted to US currency at a CAD = 1 US Dollar exchange rate of
1.075.
|
(2)
|
Number
of options and bonus shares representing the period ended for 2007, 2006
and 2005 were issued on January 10, 2008, January 2, 2007 and January 3,
2006, respectively.
|
(3)
|
Bonuses
shown for 2007 are those earned in 2007, which were paid in cash during
the year or will be paid in 2008.
|
Name
|
Number
of Securities Under Option
|
%
of Total Options Granted to Employees in Financial
Year
|
Conversion/Exercise
Price (1)
|
Market
Value of Securities Underlying Options on the Date of Grant
($/Securities)(2)
|
Expiry
Date
|
|||||
Geoffrey
A. Burns
President
and Chief Executive Officer
|
17,634
|
11%
|
28.41
|
29.58
|
Jan
2, 2012
|
|||||
A.
Robert Doyle
Chief
Financial Officer
|
10,656
|
6.7%
|
28.41
|
29.58
|
Jan
2, 2012
|
|||||
Andres
Dasso
Executive
Director of Pan American Silver Peru, S.A.
|
12,770
|
8%
|
28.41
|
29.58
|
Jan
2, 2012
|
|||||
Steven
Busby
Senior
Vice President, Project Development
|
13,606
|
8.6%
|
28.41
|
29.58
|
Jan
2, 2012
|
|||||
Michael
Steinmann
Senior
Vice President, Geology and Exploration
|
11,123
|
7%
|
28.41
|
29.58
|
Jan
2, 2012
|
(1)
|
The
weighted average trading price of the Company’s Common shares on the TSX
on the 5 trading days prior to the date of grant. Dollar
amounts are in Canadian dollars.
|
(2)
|
The
TSX closing price on January 2, 2007. Dollar amounts are in
Canadian dollars.
|
Name
|
Securities
Acquired
on
Exercise
|
Aggregate
Realized
Value
($)(1)
|
Unexercised
Options at Financial Year End
Exercisable/
Unexercisable
|
Value
of Unexercised in- the-Money Options at Financial Year End
Exercisable
($)/
Unexercisable
($)(1)(2)
|
||||
Geoffrey
A. Burns
President
and Chief Executive Officer
|
20,000
|
395,600
|
6,968/31,570
|
90,236/296,503
|
||||
A.
Robert Doyle
Chief
Financial Officer
|
40,000
|
700,700
|
4,058/18,772
|
52,551/175,219
|
||||
Andres
Dasso
Executive
Director of Pan American Silver Peru, S.A.
|
Nil
|
Nil
|
14,004/26,777
|
211,594/280,535
|
||||
Steven
Busby
Senior
Vice President, Project Development
|
50,000
|
1,223,930
|
4,749/23,105
|
61,500/212,540
|
||||
Michael
Steinmann
Senior
Vice President, Geology and Exploration
|
28,233
|
425,544
|
16/19,222
|
207/185,630
|
(1)
|
Dollar
amounts are in Canadian dollars.
|
(2)
|
The
last closing board lot sale price of Common Shares on the TSX as at
December 31, 2007 was CAD $34.99.
|
|
(i)
|
common
shares in the capital of the Company having a value of $70,000 based on
the 10-day weighted average of the Company’s common stock on the Nasdaq
National Market immediately prior to the annual general meeting;
or
|
|
(ii)
|
options
to purchase common shares in the capital of the Company having a value of
$70,000, according to the Black-Scholes formula. The exercise price of
such options will be equal to the weighted average trading price of the
Company’s common stock on the Nasdaq National Market on the five trading
days (on which at least one board lot of the common shares was traded)
prior to the annual general meeting. The options will vest immediately and
will expire ten years after the date on which they were
granted.
|
Plan
Category
|
Number
of securities to be issued upon exercise of outstanding
options,
warrants
and rights
(a)
|
Weighted-average
exercise price of outstanding options, warrants and rights
(b)
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in
column(a))
(c)
|
|||
Equity
compensation plans approved by securityholders
|
620,559
|
$18.52
|
5,670,556(1)
|
Total:
|
620,559
|
$18.52
|
5,670,556
|
(1)
|
10% of the Company’s outstanding
issue as at December 31, 2007 less options outstanding as at December 31,
2007.
|
(CAD$)
|
||||||||
Pan
American Silver Corp.
Closing Price |
Base
|
S&P TSX
Composite
|
Base
|
|||||
December 31, 2002
|
$ 12.28
|
100.00
|
6,615
|
100.00
|
||||
December 31, 2003
|
$ 18.46
|
150.33
|
8,221
|
124.28
|
||||
December
31, 2004
|
$ 19.23
|
156.60
|
9,247
|
139.79
|
||||
December
31, 2005
|
$ 21.91
|
178.42
|
11,272
|
170.40
|
||||
December
30, 2006
|
$ 29.40
|
239.41
|
12,908
|
195.13
|
||||
December
29, 2007
|
$ 34.99
|
284.93
|
13,833
|
209.13
|
BY ORDER OF THE BOARD | |
/s/ Robert Pirooz | |
Robert Pirooz, | |
General Counsel and Secretary |
Governance Disclosure Guidelines
under National Instrument 58-101 Disclosure of
Corporate Governance Practices
|
Comments
|
||
1. Board of
Directors
|
|||
(a)
Disclose the identity
of directors who are independent.
|
The
following members of the board of directors (the “Board”) of Pan American
Silver Corp. (the “Company”) proposed for nomination as directors are
considered to be “independent”, within the meaning of the Corporate
Governance Disclosure Rules:
William
A. Fleckenstein – independent
Michael
Larson – independent
Michael
J.J. Maloney – independent
Paul
B. Sweeney – independent
David
C. Press – independent
|
||
(b)
Disclose the identity
of directors who are not independent, and describe the basis for that
determination.
|
§
|
Ross
J. Beaty – not independent – member of the executive of the Company from
1994 to 2006
|
|
§
|
Geoffrey
A. Burns – not independent – current President and CEO of the
Company
|
||
§
|
Robert
Pirooz – not independent – current General Counsel and Secretary of the
Company
|
||
(c)
Disclose whether or
not a majority of directors are independent. If a majority of directors
are not independent, describe what the Board does to facilitate its
exercise of independent judgment in carrying out its
responsibilities.
|
A
majority of the Company’s directors are independent - Five of the eight
persons nominated as directors qualify as independent directors for the
purposes of the Corporate Governance Disclosure Rules and the Nasdaq
rules.
|
||
(d)
If a director is
presently a director of any other issuer that is a reporting issuer (or
the equivalent) in the same jurisdiction or a foreign jurisdiction,
identify both the director and the other issuer.
|
§
|
Ross Beaty – member of the board
of directors and Co-Chairman of Western Copper Corp. Chair and
member of the board of directors of Global Copper
Corp.
|
|
§
|
Michael Larson – member of the
board of trustees of Western Asset/Claymore US Treasury Inflation
Protected Securities Fund and Western Asset/Claymore US Treasury Inflation
Protected Securities Fund (II).
|
||
§
|
Robert Pirooz - member of the
board of directors of Global Copper Corp., and Rodinia Minerals
Inc.
|
||
§
|
Paul Sweeney – member of the board
of directors of
|
Governance Disclosure Guidelines
under National Instrument 58-101 Disclosure of
Corporate Governance Practices
|
Comments
|
|
Newgold Inc., Pacific Rim Mining
Corp. and Polaris Minerals Corporation.
|
||
§
|
John M. Willson – member of the
board of directors of Harry Winston Diamond Corp., Finning International
Inc. and Nexen Inc.
|
|
(e)
Disclose whether or
not the independent directors hold regularly scheduled meetings at which
non-independent directors and members of management are not in attendance.
If the independent directors hold such meetings, disclose the number of
meetings held since the beginning of the issuer’s most recently completed
financial year. If the independent directors do not hold such meetings,
describe what the Board does to facilitate open and candid discussion
among its independent directors.
|
At the beginning of each regularly
scheduled board of directors meeting, the independent members of the Board
hold in camera meetings at which non-independent directors and members of
management are not in attendance.
|
|
(f)
Disclose whether or
not the chair of the Board is an independent director. If the Board has a
chair or lead director who is an independent director, disclose the
identity of the independent chair or lead director, and describe his or
her role and responsibilities. If the Board has neither a chair that is
independent nor a lead director that is independent, describe what the
Board does to provide leadership for its independent
directors.
|
Ross J. Beaty is the Chair of the
Board and is not independent. William Fleckenstein, an
independent director, has been appointed lead director. Michael J.J.
Maloney, an independent director, is the Chairman of the Nominating and
Governance Committee.
The Board has adopted a position
description for the lead director, which was recommended for adoption by
the Board by the Nominating and Governance Committee. The lead director’s
primary responsibility is to ensure that the Board functions independent
of management and to act as principal liaison between the independent
directors and the Chief Executive Officer. The “Mandate of the
Lead Director” was attached as Schedule “A” to the Company’s 2006
Information Circular and filed on SEDAR. The lead director
holds in camera meetings at each Board meeting with all independent
directors and then reports to the Board or makes
demands.
|
|
(g)
Disclose the
attendance record of each director for all Board meetings held since the
beginning of the issuer’s most recently completed financial
year.
|
For the financial year ended
December 31, 2007, the Board held nine Board meetings. The
attendance records of each of the directors for the most recently
completed financial year are set out on page 12 of the Information
Circular.
|
Governance Disclosure Guidelines
under National Instrument 58-101 Disclosure of
Corporate Governance Practices
|
Comments
|
2. Board
Mandate
|
|
Disclose the text of the Board’s
written mandate. If the Board does not have a written mandate, describe
how the Board delineates its role and
responsibilities.
|
The Board has adopted a formal
written mandate which defines its stewardship responsibilities. The terms of the Board of
Directors Mandate are attached hereto as Schedule “A”.
|
3. Position
Descriptions
|
|
(a)
Disclose whether or
not the Board has developed written position descriptions for the chair
and the chair of each Board committee. If the Board has not developed
written position descriptions for the chair and/or the chair of each Board
committee, briefly describe how the Board delineates the role and
responsibilities of each such position.
|
The
Board has adopted a written position description for the chair of the
Board, titled “Mandate of the Chairman of the Board” which was attached as
Schedule “C” to the Company’s 2006 Information Circular and filed on
SEDAR.
As
the Chairman of the Board is not independent, a lead director has been
appointed and given a mandate (see 1(f) above).
The chair of each committee has
been provided with a mandate for the committee and has accepted leadership
responsibilities for ensuring fulfilment of the applicable mandate. Each
chair is sufficiently skilled through education and experience to lead the
respective committee.
|
(b)
Disclose whether or
not the Board and CEO have developed a written position description for
the CEO. If the Board and CEO have not developed such a position
description, briefly describe how the Board delineates the role and
responsibilities of the CEO.
|
The
Board has adopted a written position description for the chief executive
officer, titled “Mandate of the Chief Executive Officer” which was
attached as Schedule “D” to the Company’s 2006 Information Circular and
filed on SEDAR.
|
4. Orientation and Continuing
Education
|
|
(a)
Briefly describe what
measures the Board takes to orient new directors regarding (i) the role of the Board, its
committees and its directors, and (ii) the nature and operation of the
issuer’s business.
|
Each
new director, on joining the Board, is given an outline of the nature of
the Company’s business, its corporate strategy, current issues within the
Company, the expectations of the Company concerning input from directors
and the general responsibilities of the Company’s
directors. Each new director is given a board manual which
includes all Board policies and mandates. New directors are required to
meet with management of the Company to discuss and better understand the
business of the Company and will be advised by counsel to the Company of
their legal obligations as directors of the Company. Directors
have been and will continue to be given tours of the Company’s mines and
development sites to give such directors additional insight into the
Company’s business.
|
(b)
Briefly describe what
measures, if any, the Board takes to provide continuing education for its
directors. If the Board does not provide continuing
education,
|
Directors
have been and will continue to be given tours of the Company’s silver
mines and development sites to give such directors additional insight into
the Company’s business.
|
Governance Disclosure Guidelines
under National Instrument 58-101 Disclosure of
Corporate Governance Practices
|
Comments
|
describe how the Board ensures
that its directors maintain the skill and knowledge necessary to meet
their obligations as directors.
|
In addition, the General
Counsel of the Company has the responsibility of circulating to the Board
members new and evolving corporate governance developments applicable to
directors of public companies with respect to their conduct, duties and
responsibilities.
|
5. Ethical Business
Conduct
|
|
(a)
Disclose whether or
not the Board has adopted a written code for the directors, officers and
employees. If the Board has adopted a written code: (i) disclose how a person or company
may obtain a copy of the code; (ii) describe how the Board monitors
compliance with its code, or if the Board does not monitor compliance,
explain whether and how the Board satisfies itself regarding compliance
with its code; and (iii) provide a cross-reference to any
material change report filed since the beginning of the issuer’s most
recently completed financial year that pertains to any conduct of a
director or executive officer that constitutes a departure from the
code.
|
As
part of its stewardship responsibilities, the Board has approved a formal
“Code of Ethical Conduct” (the “Code”) that is designed to deter
wrong-doing and to promote honest and ethical conduct and full, accurate
and timely disclosure. The Code is applicable to all the
Company’s directors, officers and employees. The Board monitors
compliance with the Code and is responsible for the granting of any
waivers from these standards to directors or executive
officers. Disclosure will be made by the Company of any waiver
from these standards granted to the Company’s directors or executive
officers in the Company’s quarterly report that immediately follows the
grant of such waiver.
There
has been no conduct of a director or executive officer that constitutes a
departure from the Code, and no material change report in that respect has
been filed.
|
(b)
Describe any steps
the Board takes to ensure directors exercise independent judgment in
considering transactions and agreements in respect of which a director or
executive officer has a material interest.
|
Directors must disclose to the
General Counsel any instances in which they perceive they have a material
interest in any matter being considered by the Board; and if it is
determined there is a conflict of interest, or that a material interest is
held, the conflict must be disclosed to the Board. In addition, the
interested Board member must refrain from voting and exit the meeting
while the transaction at issue is being considered by the
Board.
|
(c)
Describe any other
steps the Board takes to encourage and promote a culture of ethical
business conduct.
|
The Company’s Nominating and
Governance Committee is responsible for setting the standards of business
conduct contained in the Code and for overseeing and monitoring compliance
with the Code. The Code also sets out mechanisms for the reporting of
unethical conduct.
The Board sets the tone for
ethical conduct throughout the Company by considering and discussing
ethical considerations when reviewing the corporate transactions of the
Company.
|
6. Nomination of
Directors
|
|
(a)
Describe the process
by which the Board identifies new candidates for Board
nomination.
|
All
members of the Board are tasked with recommending individuals they believe
are suitable candidates for the Board. The Nominating and Governance
Committee identifies, reviews the qualifications of and recommends to the
Board possible
|
Governance Disclosure Guidelines
under National Instrument 58-101 Disclosure of
Corporate Governance Practices
|
Comments
|
(b)
Disclose whether or
not the Board has a nominating committee composed entirely of independent
directors. If the Board does not have a nominating committee composed
entirely of independent directors, describe what steps the Board takes to
encourage an objective nomination process.
(c)
If the Board has a
nominating committee, describe the responsibilities, powers and operation
of the nominating committee.
|
nominees
for election or re-election to the Board at each annual general meeting of
the Company and identifies, reviews the qualifications of and recommends
to the Board possible candidates to fill vacancies on the Board between
annual general meetings. The Nominating and Governance
Committee also annually reviews and makes recommendations to the Board
with respect to the composition of the Board.
All
members of the Nominating and Governance Committee are outside,
non-management and independent directors in accordance with the Corporate
Governance Disclosure Rules and the Nasdaq Rules.
The
Nominating and Governance Committee oversees the effective functioning of
the Board and annually reviews and makes recommendations to the Board with
respect to: (i) the composition of the Board; (ii) the appropriateness of
the committees of the Board, their mandates and responsibilities and the
allocation of directors to such committees; and (iii) the appropriateness
of the terms of the mandate and responsibilities of the
Board.
|
7. Compensation
|
|
(a)
Describe the process
by which the Board determines the compensation for the issuer’s directors
and officers.
(b)
Disclose whether or
not the Board has a compensation committee composed entirely of
independent directors. If the Board does not have a compensation committee
composed entirely of independent directors, describe what steps the Board
takes to ensure an objective process for determining such
compensation.
(c)
If the Board has a
compensation committee, describe the responsibilities, powers and
operation of the compensation committee.
(d)
If a compensation
consultant or advisor has, at any time since the beginning of the issuer’s
most recently completed financial year, been retained to assist in
determining compensation for any of the issuer’s directors and officers,
disclose the identity of the consultant or advisor and briefly summarize
the mandate for which they have been retained. If the consultant or
advisor has been retained to perform any
|
The
Company’s Director of Human Resources and the Compensation Committee
reviews overall compensation policies, compares them to the overall
industry, and makes recommendations to the Board on the compensation of
executive officers.
The
Compensation Committee is comprised of three directors, each of whom is an
independent director for the purposes of the Corporate Governance
Disclosure Rules and the Nasdaq rules. The Chairman of the
Compensation Committee is John M. Willson. Mr.
Willson is retiring from the Board. Michael J. J. Maloney will
replace Mr. Willson as Chairman of the Compensation
Committee.
The
Compensation Committee determines the salary and benefits of the executive
officers of the Company, determines the general compensation structure,
policies and programs of the Company, administers the Company’s Annual
Incentive Plan, Long-Term Incentive Plan and Stock Option and Stock Bonus
Plan, and delivers an annual report to shareholders on executive
compensation.
In
addition, the Compensation Committee reviews and makes recommendations to
the Board for approval with respect to the annual and long term corporate
goals and objectives relevant to determining the compensation of the
President and CEO and the
|
Governance Disclosure Guidelines
under National Instrument 58-101 Disclosure of
Corporate Governance Practices
|
Comments
|
other work for the issuer, state
that fact and briefly describe the nature of the work.
|
Chairman
of the Board.
|
8. Other Board
Committees
|
|
If the Board has standing
committees other than the audit, compensation and nominating committees,
identify the committees and describe their function.
|
The
Board also has a Health, Safety and Environment Committee which consists
of three directors. The Company recognizes that proper care of
the environment is integral to its existence, its employees, the
communities in which it operates and all of its operations. The
Health, Safety and Environment Committee ensures that an audit is made of
all construction, remediation and active mines. The results of such audits
are reported to the Health, Safety and Environment Committee as is the
progress on any significant remediation efforts. The Health, Safety and
Environment Committee ensures that strict policies with respect to the
health and safety of its employees are in place at each of its operations
and that such policies are enforced.
|
9. Assessments
|
|
Disclose whether or not the board,
its committees and individual directors are regularly assessed with
respect to their effectiveness and contribution. If assessments are
regularly conducted, describe the process used for the assessments. If
assessments are not regularly conducted, describe how the board satisfies
itself that the board, its committees, and its individual directors are
performing effectively.
|
The
Chairman of the Board and the CEO are assessed each year on the basis of
the objectives set out by the Board for their respective positions, their
individual performance throughout the year and their ability to execute on
long-term strategy. The Chairman and the CEO are assessed first by the
Compensation Committee and then by the Board as a whole.
The
Board has also appointed a Nominating and Governance Committee, which
proposes and makes recommendations to the Board with respect to: (i) the
composition of the Board; (ii) the appropriateness of the committees of
the Board, their mandates and responsibilities and the allocation of
directors to such committees; and (iii) the appropriateness of the terms
of the mandate and responsibilities of the Board. During 2005, the
Nominating and Governance Committee, in consultation with the entire
Board, undertook to formally establish the roles and responsibilities of
each of the Lead Director, the Chairman of the Board and the CEO and
determine against what criteria each such position should be
assessed.
In
2006, the Nominating and Governance Committee developed a process to
assess the Board as a whole and the committees of the
Board. The performance assessment of the Board and each
Committee of the Board is based on information and feedback obtained from
director evaluation questionnaires provided to each
director. Each director is asked to complete and return the
assessment questionnaire to the Lead Director on a confidential
basis. The Lead director may discuss the
completed
|
Governance Disclosure Guidelines
under National Instrument 58-101 Disclosure of
Corporate Governance Practices
|
Comments
|
questionnaires
with individual directors where clarification is required. The
evaluation process focuses on Board and committee performance, and also
asks for peer feedback and suggestions or comments regarding the
performance of the Chair of each committee and the Lead
Director. The Lead Director reports the results of the
performance assessments to the Board.
The
Board and the Nominating and Governance Committee have formally assessed
the effectiveness of each member of the Board, and have determined that
each Board member is significantly qualified through their current or
previous professions. Each member fully participates in each
meeting having in all cases been specifically canvassed for their
input.
|
A.
|
Subject
to the Memorandum and Articles of the Company and applicable law, the
Board of Directors of the Company (the “Board”) has a responsibility for
the stewardship of the Company, including the responsibility
to:
|
(i)
|
supervise
the management of and oversee the conduct of business of the
Company;
|
(ii)
|
provide
leadership and direction to
management;
|
(iii)
|
evaluate
management;
|
(iv)
|
set
policies appropriate for the business of the Company;
and
|
(v)
|
approve
corporate strategies and goals.
|
A.
|
A
majority of the Board shall be unrelated to the
Company.
|
B.
|
The
directors will be elected each year by the shareholders of the Company at
the annual general meeting of shareholders. The Nominating and
Governance Committee will recommend to the full Board nominees for
election to the Board and the Board will propose a slate of nominees to
the shareholders for election as directors for the ensuing
year.
|
C.
|
Immediately
following each annual general meeting, the Board
shall:
|
(i)
|
elect
a Chairman of the Board and, when desirable, a lead director of the Board,
and establish their duties and
responsibilities;
|
(ii)
|
appoint
the President and CEO of the Company and establish their duties and
responsibilities;
|
(iii)
|
on
the recommendation of the CEO, appoint the senior officers of the Company
and approve the senior management structure of the
Company;
|
(iv)
|
appoint
a nominating and governance committee, an audit committee, a compensation
committee and a health, safety and environment committee;
and
|
(v)
|
approve
the mandate, duties and responsibilities of each committee of the board of
directors;
|
D.
|
The
Board shall be responsible for monitoring the performance of the President
and CEO, and for determining the compensation of the President and
CEO.
|
E.
|
From
time to time, the Board may appoint special committees to assist the Board
in connection with specific
matters.
|
F.
|
The
Board shall meet not less than four times during each year and will
endeavour to hold one meeting in each financial quarter. The Board will
also meet at any other time at the call of the Chairman of the Board or,
subject to the Memorandum and Articles of the Company, of any
director.
|
A.
|
The
Board will ensure the Company has management of the highest
calibre. This responsibility is carried out primarily
by:
|
(i)
|
appointing
the President as the Company’s business leader and developing criteria and
objectives against which the Board will assess, on an ongoing basis, the
President’s performance;
|
(ii)
|
developing
position descriptions for the Chairman of the Board and the chair of each
board committee and, with the CEO, developing position descriptions for
the President and CEO, and regularly assessing those appointed individuals
against such descriptions; and
|
(iii)
|
developing
and approving corporate objectives which the CEO is responsible for
meeting, and assessing the CEO against these
objectives.
|
B.
|
A
principal responsibility of the Chairman of the Board will be to manage
and act as the chief administrative officer of the Board with such duties
and responsibilities as the Board may establish from time to time. The
Chairman of the Board need not be independent of
management.
|
C.
|
The
principal duties and responsibilities of the lead director will be as
established by the Board from time to time. The lead director will be
independent of management.
|
D.
|
The
Board will ensure that proper limits are placed on management’s
authority.
|
A.
|
The
Board is responsible for adopting, supervising and providing guidance on
the strategic planning process and approving a strategic plan which takes
into account, among other things, the opportunities and risks of the
Company’s business.
|
B.
|
The
President and senior management team will have direct responsibility for
the ongoing strategic planning process and the establishment of long term
goals for the Company, which are to be reviewed and approved not less than
annually by the Board.
|
C.
|
The
Board will have a continuing understanding of the principal risks
associated with the business, largely through continuous communication
with management. The Board will ensure the implementation of appropriate
systems to manage any such risks.
|
D.
|
The
Board will provide guidance to the President and senior management team
with respect to the Company’s ongoing strategic plan. The Board
is responsible for monitoring the success of management in implementing
the approved strategies and goals.
|
A.
|
Through
the President and CEO, management will establish systems to ensure that
appropriate and responsible levels of internal controls are in place for
the Company. The confidence of the Board in the ability and integrity of
management is the paramount control
mechanism.
|
A.
|
The
Board will monitor and review annually the policies and procedures that
are in place to provide for effective communication by the Company with
its shareholders and with the public generally,
including:
|
(i)
|
effective
means to enable shareholders to communicate with senior management and the
Board; and
|
(ii)
|
effective
channels by which the Company will interact with analysts and the
public.
|
B.
|
The
Board will approve the content of the Company’s major communications to
shareholders and the investing public, including interim and annual
reports, the Management Information Circular, the Annual Information Form,
any prospectuses that may be issued and significant press
releases.
|
C.
|
The
Board will maintain a Corporate Disclosure Policy which summarizes its
policies and practices regarding disclosure of material information to
investors, analysts and the media.
|
A.
|
The
Board will keep in place, and review regularly, adequate and effective
succession plans for the Chairman, President and senior management
personnel (including appointing, training and monitoring senior
management).
|
A.
|
The
Board will provide for the independent functioning of the Board. The Board
will implement appropriate structures and procedures to ensure that the
Board can function independently of management at such times as is
desirable or necessary through:
|
(i)
|
the
recruitment of strong, independent directors, who shall compose a majority
of the Board;
|
(ii)
|
the
appointment of a committee of directors independent of
management;
|
(iii)
|
the
appointment of a lead director who is not a member of management;
and
|
(iv)
|
the
institution of regular meetings of independent directors at every
quarterly Board meeting, without the presence of management and which is
chaired by the lead director.
|
B.
|
All
directors will have open access to the Company’s senior
management.
|
C.
|
The
Board encourages individual directors to make themselves available for
consultation with management outside Board meetings in order to provide
specific advice and counsel on subjects where such directors have special
knowledge and experience.
|
A.
|
The
Nominating and Governance Committee, in conjunction with the Chairman and
President, is responsible for ensuring that new directors are provided
with an orientation and education
program.
|
B.
|
The
details of the orientation of each new director will be tailored to that
director’s individual needs and areas of
interest.
|
C.
|
The
Board will assist the Nominating and Governance Committee in establishing
and maintaining an ongoing director education
program.
|
A.
|
Approve
all capital plans and establish priorities for the allocation of funds to
ongoing operations and capital
projects.
|
B.
|
Approve
all single expenditure items proposed by the Company exceeding $2,000,000
not provided for in any approved capital
plan.
|
C.
|
Approve
any policy for hedging and forward sales of silver and/or base
metals.
|
D.
|
Approve
any policy for management of foreign currency
risk.
|
E.
|
Approve
the annual budget.
|
F.
|
Attend,
prepare for and be actively involved in regular Board meetings and, if
applicable, Board committee
meetings.
|
G.
|
Develop
the Company’s approach to corporate governance, including developing a set
of corporate governance principles and guidelines that are specifically
applicable to the Company.
|
H.
|
Adopt
and monitor, through the Nominating and Governance Committee, a formal
code of business ethics that will govern the behaviour of directors,
officers and employees of the Company, and, in appropriate circumstances,
grant waivers from such code of business
conduct.
|
A.
|
The
Board and any committees may at any time retain outside financial, legal
or other advisors at the expense of the Company. Any director may, subject
to the approval of the Chairman of the Board, retain an outside advisor at
the expense of the Company.
|
|
(a)
|
being
employed or engaged by the Company, its subsidiaries or another employer,
in a position the same as or similar to that in which he was last employed
or engaged by the Company or its subsidiaries;
or
|
|
(b)
|
acting
as a director or officer of the Company or its
subsidiaries.
|
|
(a)
|
an
insider as defined in the Securities
Act (British Columbia), other than a person who is an insider
solely by virtue of being a director or senior officer of a subsidiary of
the Company; and
|
|
(b)
|
an
Associate or Affiliate of any person who is an insider under subsection
(a).
|
|
(a)
|
an
employee of the Company or any of its
subsidiaries;
|
|
(b)
|
any
other person or company engaged to provide ongoing management or
consulting services for the Company or for any entity controlled by the
Company; and
|
|
(c)
|
any
person who is providing ongoing management or consulting services to the
Company or to any entity controlled by the Company indirectly through a
company that is a Service Provider under subsection (b)
above.
|
|
(a)
|
to
Insiders in aggregate, shall not exceed 7% of the outstanding
issue;
|
|
(b)
|
to
any one Optionee who is an Insider and any Associates of such Insider,
shall not exceed 2% of the outstanding issue;
and
|
|
(c)
|
to
any non-employee director, other than the Chairman of the Board, shall not
exceed an equity award value of $100,000 (other than Options or Bonus
Shares granted or taken in lieu of cash
fees).
|
|
(a)
|
the
Option shall not have been validly exercised;
and
|
|
(b)
|
the
Option shall no longer be exercisable unless the Board determines
otherwise.
|
|
(a)
|
Resignation
or Ceasing to Hold Office. If the Optionee, or in the
case of an Option granted to any Optionee who satisfies the definition of
Service Provider set out in section 2 of this Plan, the Optionee’s
employer, ceases to be employed or engaged by the Company and any of its
subsidiaries (including by way of voluntary resignation or retirement as a
director, officer or Service Provider), each Option held by the Optionee
shall be exercisable in respect of that number of Option Shares that have
vested pursuant to the terms of the Option Agreement governing such Option
at any time up to but not after the earlier of the Expiry Date of that
Option and the date which is 30 days after the Optionee ceases to be
a director, officer or Service
Provider;
|
|
(b)
|
Death. Notwithstanding
subsection 4.4(a) of this Plan, if the Optionee ceases to be a
director, officer or Service Provider of the Company and any of its
subsidiaries due to death or Disability or, in the case of an Optionee
that is a company, the death or Disability of the person who provides
management or consulting services to the Company or to any entity
controlled by the Company, each Option held by the Optionee shall be
exercisable in respect of that number of Option Shares that have vested
pursuant to the terms of the Option Agreement governing such Option at any
time up to but not after the earlier of the Expiry Date of that Option and
the date which is 12 months after the date of death or Disability;
and
|
|
(c)
|
For
Cause. Notwithstanding subsection 4.4(a) of this Plan,
if the Optionee, or, in the case of an Option granted to an Optionee who
satisfies the definition of Service Provider set out in section 2 of this
Plan, the Optionee’s
employer:
|
|
(i)
|
ceases
to be employed or engaged by the Company and any of its subsidiaries for
cause, as that term is interpreted by the courts of the jurisdiction in
which the Optionee or Optionee’s employer is employed or
engaged;
|
|
(ii)
|
ceases
to be a director, officer or Service Provider of the Company and any of
its subsidiaries by order of any securities commission, recognized stock
exchange, or any regulatory body having jurisdiction to so order;
or
|
|
(iii)
|
ceases
to be eligible to hold office as a director of the Company and any of its
subsidiaries under the provisions of the applicable corporate
statute,
|
|
(a)
|
altering, extending or
accelerating the terms and conditions of vesting of any
Options;
|
|
(b)
|
accelerating the Expiry Date of
Options;
|
|
(c)
|
amending the definitions contained within the
Plan;
|
|
(d)
|
amending or modifying the
mechanics of exercise of Options as set forth in Section 4, provided
however, payment in full of the Option Price for the Shares shall not be
so amended or modified;
|
|
(e)
|
effecting amendments of a “housekeeping” or ministerial nature including,
without limiting the generality of the foregoing, any amendment for the
purpose of curing any ambiguity, error, inconsistency or omission in or
from the Plan or any Option
Agreement;
|
|
(f)
|
effecting amendments necessary to comply
with the provisions of applicable laws (including, without limitation, the
rules, regulations and policies of the
Exchanges);
|
|
(g)
|
effecting amendments respecting
the administration of the
Plan;
|
|
(h)
|
effecting amendments necessary to suspend or terminate
the Plan; and
|
|
(i)
|
any other amendment, whether
fundamental or otherwise, not requiring shareholder approval under
applicable law (including, without limitation, the rules, regulations, and
policies of the Exchanges).
|
|
(a)
|
amendments that increase the
number of Shares issuable under the Plan, except such increases by
operation of Section 6 of the
Plan;
|
|
(b)
|
any reduction in the Option Price of an Option if the
Optionee is not an Insider at the time of the proposed amendment;
and
|
|
(c)
|
amendments required to be approved
by shareholders under applicable law (including, without limitation,
pursuant to the rules, regulations and policies of the
Exchanges).
|
|
(a)
|
amendments to the Plan that could
result at any time in the number of Shares reserved for
issuance under the
Plan to Insiders exceeding 10% of the outstanding
issue;
|
|
(b)
|
any reduction in the Option Price
of an Option if the Optionee is an Insider at the time of the proposed
amendment; and
|
|
(c)
|
amendments requiring Disinterested
Shareholder Approval under applicable law (including,
without limitation, pursuant to the rules, regulations and policies of the
Exchanges).
|
|
(a)
|
the
Option Price will be adjusted to a price per Share which is the product
of:
|
|
(i)
|
the
Option Price in effect immediately before that effective date or record
date; and
|
|
(ii)
|
a
fraction the numerator of which is the total number of Shares outstanding
on that effective date or record date before giving effect to the Share
Reorganization, and the denominator of which is the total number of Shares
that are or would be outstanding immediately after such effective date or
record date after giving effect to the Share Reorganization;
and
|
|
(b)
|
the
number of Unissued Option Shares will be adjusted by multiplying (i) the
number of Unissued Option Shares immediately before such effective date or
record date by (ii) a fraction which is the reciprocal of the fraction
described in subsection (a)(ii).
|
|
(a)
|
shares
of the Company, other than the
Shares;
|
|
(b)
|
evidences
of indebtedness;
|
|
(c)
|
any
cash or other assets, excluding cash dividends (other than cash dividends
which the Board has determined to be outside the normal course);
or
|
|
(d)
|
rights,
options or warrants,
|
|
(a)
|
a
reclassification of outstanding Shares, a change of Shares into other
shares or securities, or any other capital reorganization of the Company,
other than as described in sections 6.1 or 6.2 of this
Plan;
|
|
(b)
|
a
consolidation, merger or amalgamation of the Company with or into another
corporation resulting in a reclassification of outstanding Shares into
other shares or securities or a change of Shares into other shares or
securities; or
|
|
(c)
|
a
transaction whereby all or substantially all of the Company’s undertaking
and assets become the property of another
corporation;
|
(a)
|
on
_________________, ______ (the “Grant Date”);
|
||
(b)
|
________________________________
(the “Optionee”);
|
||
(c)
|
was
granted the option to purchase ____________ Common Shares (the “Option
Shares”) of the Company;
|
||
(d)
|
for
the price (the “Option Price”) of $__________ per share;
|
||
(e)
|
which
will become exercisable up to, but not after ___________, _____ (the
“Expiry Date”), as follows:
|
||
(i)
|
up
to ____________ Option Shares after ______________;
|
||
(ii)
|
up
to ____________ Option Shares after ______________;
|
||
(iii)
|
up
to ____________ Option Shares after ______________; and
|
||
(iv)
|
up
to ____________ Option Shares after ______________,
|
PAN
AMERICAN SILVER CORP.
|
|||
By:
|
|||
Signature
of Optionee
|
Authorized
Signatory
|
||
By:
|
|||
Authorized
Signatory
|
TO:
|
The
Administrator, Stock Option Plan
PAN
AMERICAN SILVER CORP.
1500
- 625 Howe Street
Vancouver,
British Columbia, Canada
V6C 2T6
|
(a)
|
all
of the Options; or
|
(b)
|
_____________________of
the Options;
|
|
A.
|
The
Company wishes to adopt a new Stock Option and Stock Bonus Plan (the
“2008 Plan”),
subject to requisite shareholder and regulatory approval, substantially in
the form attached to the Company’s Information Circular as Appendix “B”;
and
|
|
B.
|
The
substantial changes reflected in the 2008 Plan, as compared to the
Company’s 2005 Stock Option and Stock Bonus Plan (the “2005 Plan”) are set out
in the Company’s Information Circular.
BE
IT RESOLVED that:
|
|
1.
|
The
adoption of the 2008 Plan allowing for the issuance of a maximum of
6,461,470 common shares of the Company, substantially as set out in
Appendix “B” to the Company’s Information Circular, is hereby approved and
confirmed;
|
|
2.
|
All
outstanding options and common shares available for issuance under the
2005 Plan be transferred to the 2008
Plan;
|
|
3.
|
Any
one of a group consisting of the directors and officers of the Company be
and is hereby authorized, for and on behalf of the Company, to do all acts
and things, to settle the form of, execute, under the Company’s common
seal or otherwise, and deliver all documents and instruments, to give all
notices and to deliver, file with regulatory authorities or otherwise, and
distribute, al documents and information which may, in the opinion of such
person, be necessary or desirable to implement to this ordinary resolution
and the matters authorized hereby, such determination to be conclusively
evidenced by the execution and delivery of such document or instrument and
the taking of any such action.”
|
PAN AMERICAN SILVER
CORP
|
||||||
(Registrant)
|
||||||
Date:
|
April
10, 2008
|
By:
|
/s/ Robert Pirooz
|
|||
Name:
|
Robert
Pirooz
|
|||||
Title:
|
General
Counsel, Secretary and Director
|