Hard Creek Nickel Corporation.: Exhibit 99.1 - Filed by newsfilecorp.com
#1060-1090 West Georgia Street
Vancouver, BC V6E 3V7
Tel: 604-681-2300 Fax: 604-681-2310
MANAGEMENT INFORMATION CIRCULAR
(This document contains information as at May 14, 2014 and all
amounts are in Canadian dollars, unless otherwise indicated.)
GENERAL PROXY INFORMATION
This Management Information Circular is furnished to the
shareholders (the “Shareholders”) of Hard Creek Nickel Corporation (the
“Company”) by the board of directors of the Company (the “Board”) in connection
with the solicitation by the Company’s Board of proxies to be voted at the
Annual General and Special Meeting (the “Meeting”) of the Shareholders to be
held on Monday, June 23, 2014 at 10:00 a.m. PST.
The solicitation of proxies will be conducted by mail and may
be supplemented by telephone or other personal contact to be made without
special compensation by the directors, regular officers and employees of the
Company. The Company does not reimburse shareholders, nominees or agents for the
cost incurred in obtaining from their principals authorization to execute forms
of proxy, except that the Company has requested brokers and nominees who hold
stock in their respective names to furnish this proxy material to their
customers, and the Company will reimburse such brokers and nominees for their
related out of pocket expenses. No solicitation will be made by specifically
engaged employees or soliciting agents. The cost of solicitation will be borne
by the Company.
No person has been authorized to give any information or to
make any representation other than as contained in this Information Circular in
connection with the solicitation of proxies. If given or made, such information
or representations must not be relied upon as having been authorized by the
Company. The delivery of this Information Circular shall not create, under any
circumstances, any implication that there has been no change in the information
set forth herein since the date of this Information Circular. This Information
Circular does not constitute the solicitation of a proxy by anyone in any
jurisdiction in which such solicitation is not authorized, or in which the
person making such solicitation is not qualified to do so, or to anyone to whom
it is unlawful to make such an offer of solicitation.
Appointment and Revocation of Proxy
Registered Shareholders
Registered Shareholders are entitled to vote at the Meeting. A
Shareholder is entitled to one vote for each common share in the capital of the
Company (“Common Shares”) that such Shareholder holds on May 14, 2014 (the
“Record Date”) on the resolutions to be acted upon at the Meeting and any other
matter to come before the Meeting. The persons named as proxy holders (the
“Designated Persons”) in the enclosed form of proxy are directors and/or
officers of the Company.
In order to be voted, the completed form of proxy
must be received by the Company’s registrar and transfer agent,
Computershare Trust Company of Canada, at their offices located at 100
University Avenue, 8th Floor, Toronto, Ontario M5J 2Y1
(Tel: 1 800 564 6253), at least 48 hours (excluding Saturdays, Sundays and
holidays recognized in the Province of British Columbia) prior to the scheduled
commencement of the Meeting or an adjournment of the Meeting.
- 2 -
A proxy may not be valid unless it is dated and signed by the
Shareholder who is giving it or by that Shareholder’s attorney-in-fact duly
authorized by that Shareholder in writing or, in the case of a corporation,
dated and executed by a duly authorized officer, or attorney-in-fact for, the
corporation. If a form of proxy is executed by an attorney-in-fact for an
individual Shareholder or joint Shareholders or by an officer or
attorney-in-fact for a corporate Shareholder, the instrument so empowering the
officer or attorney-in-fact, as the case may be, or a notarial copy thereof,
should accompany the form of proxy.
A Shareholder who has given a proxy may revoke it at any time,
before it is exercised, by an instrument in writing: (a) executed by that
Shareholder or by that Shareholder’s attorney-in-fact authorized in writing or,
where that Shareholder is a corporation, by a duly authorized officer of, or
attorney-in-fact for, the corporation and (b) delivered either: (i) to the
Company at #1060-1090 West Georgia Street, Vancouver, BC V6E 3V7 (Attention:
Mark Jarvis) at any time up to and including the last business day preceding the
day of the Meeting or, if adjourned or postponed, any reconvening thereof; (ii)
to the Chairman of the Meeting prior to the vote on matters covered by the proxy
on the day of the Meeting or, if adjourned or postponed, any reconvening
thereof; or (iii) in any other manner provided by law. Also, a proxy will
automatically be revoked by either: (a) attendance at the Meeting and
participation in a poll (ballot) by a Shareholder or (b) submission of a
subsequent proxy in accordance with the foregoing procedures. A revocation of a
proxy does not affect any matter on which a vote has been taken prior to the
revocation.
The enclosed form of proxy confers discretionary authority upon
the persons named therein with respect to other matters which may properly come
before the Meeting, including any amendments or variations to any matters
identified in the notice of meeting and with respect to other matters which may
properly come before the Meeting. At the date of this Information Circular,
management of the Company knows of no such amendments, variations, or other
matters to come before the Meeting. The shares represented by a
Shareholder’s proxy will be voted or withheld from voting in accordance
with the instructions of the Shareholder on any ballot that may be called
for. If the Shareholder specifies a choice with respect to any matter to
be voted upon, the shares represented by that Shareholder’s proxy will be
voted accordingly.
In the case of abstentions from or withholding of the voting of
Common Shares on any matter, the shares which are the subject of the abstention
or withholding will be counted for determination of a quorum, but will not be
counted as affirmative or negative on the matter to be voted upon.
A Shareholder has the right to appoint a person to attend
and act for him on his behalf at the Meeting other than the persons named in the
enclosed instrument of proxy. To exercise this right, the Shareholder must
strike out the names of the persons named in the instrument of proxy and insert
the name of his nominee in the blank space provided, or complete another
instrument of proxy. Such Shareholder should notify the nominee of the
appointment, obtain the nominee’s consent to act as proxy and should
provide instruction to the nominee on how the Shareholder’s shares
should be voted. The nominee should bring personal identification to the
meeting.
If no choice is specified in the proxy with respect to a
matter to be acted upon, the proxy confers discretionary authority with respect
to that matter upon the designated persons named in the form of proxy. It is
intended that the designated persons will vote the common shares represented by
the proxy in favour of each matter identified in the proxy and for the
nominees of the company’s board of directors for directors and
auditor.
The enclosed form of proxy confers discretionary authority upon
the persons named therein with respect to other matters which may properly come
before the Meeting, including any amendments or variations to any matters
identified in the Notice, and with respect to other matters which may properly
come before the Meeting. At the date of this Information Circular, management of
the Company is not aware of any such amendments, variations, or other matters to
come before the Meeting.
- 3 -
In the case of abstentions from, or withholding of, the voting
of the common shares on any matter, the common shares that are the subject of
the abstention or withholding will be counted for determination of a quorum, but
will not be counted as affirmative or negative on the matter to be voted
upon.
Non Registered Shareholders
The information set out in this section is of significant
importance to those Shareholders who do not hold shares in their own name.
Shareholders who do not hold their shares in their own name (referred to in this
Information Circular 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 Common Shares will not
be registered in the Shareholder’s name on the records of the Company. Such
Common Shares will more likely be registered under the names of the
Shareholder’s broker or an agent of that broker. In the United States, the vast
majority of such Common Shares are registered under the name of Cede & Co.
as nominee for The Depository Trust Company (which acts as depositary for many
U.S. brokerage firms and custodian banks), and in Canada, under the name of CDS
& Co. (the registration name for The Canadian Depository for Securities
Limited, which acts as nominee for many Canadian brokerage firms). Beneficial
Shareholders should ensure that instructions respecting the voting of their
Common Shares are communicated to the appropriate person well in advance of the
Meeting.
Regulatory policies require intermediaries to seek voting
instructions from Beneficial Shareholders in advance of a shareholders’ meeting.
Beneficial Shareholders have the option of either not objecting to their
intermediary disclosing certain ownership information about themselves to the
Company (such Beneficial Shareholder are designated as non-objecting beneficial
owners, or “NOBOs”) or objecting to their intermediary disclosing ownership
information about themselves to the Company (such Beneficial Shareholders are
designed as objecting beneficial owners, or “OBOs”).
In accordance with the requirements of National Instrument
54-101 Communication with Beneficial Owners of Securities of a Reporting
Issuer, the Company has elected to send the notice of meeting, this
Information Circular and a request for voting instructions (a “VIF”) instead of
a proxy (the notice of meeting, Information Circular and VIF or proxy are
collectively referred to as the “Meeting Materials”), directly to the NOBOs and
indirectly through intermediaries to the OBOs. The intermediaries (or their
service companies) are responsible for forwarding the Meeting Materials to the
OBOs.
Meeting Materials sent to Beneficial Shareholders are
accompanied by a VIF, instead of a proxy. By returning the VIF in accordance
with the instructions noted on it, the Beneficial Shareholder is able to
instruct the intermediary (or other registered shareholder) how to vote the
Beneficial Shareholder’s shares on the Beneficial Shareholder’s behalf. For this
to occur, it is important that the VIF be completed and returned in accordance
with the specific instructions noted on the VIF.
The majority of intermediaries now delegate responsibility for
obtaining instructions from Beneficial Shareholders to Broadridge Investor
Communication Solutions, Inc. (“Broadridge”) in Canada. Broadridge typically
prepares a machine-readable VIF, mails these VIFs to Beneficial Shareholders and
asks Beneficial Shareholders to return the VIFs to Broadridge, usually by way of
mail, the internet or telephone. Broadridge then tabulates the results of all
instructions received and provides appropriate instructions respecting the
voting of shares to be represented at the Meeting by proxies for which
Broadridge has solicited voting instructions. If you have any questions
respecting the voting of shares held through an intermediary, please contact
that intermediary for assistance.
In either case, the purpose of this procedure is to permit
Beneficial Shareholders to direct the voting of the shares which they
beneficially own. A Beneficial Shareholder receiving a VIF, through
Broadridge or another intermediary, cannot use that form to vote Common
Shares directly at the Meeting. Beneficial Shareholders should carefully follow
the instructions set out in the VIF including those regarding when and where the
VIF is to be delivered. Should a Beneficial Shareholder who receives a VIF
wishes to attend the Meeting or have someone else attend on their behalf, the
Beneficial Shareholder may request a legal proxy as set forth in the VIF, which
will grant the Beneficial Shareholder or their nominee the right to attend and
vote at the Meeting.
- 4 -
Only Registered Shareholders have the right to revoke a proxy.
A Beneficial Shareholder who wishes to change its vote must, at least seven (7)
days before the Meeting, arrange for its intermediary to revoke its VIF on its
behalf.
All references to Shareholders in this Information Circular and
the accompanying instrument of proxy and notice of meeting are to Registered
Shareholders unless specifically stated otherwise.
The Meeting Materials are being sent to both registered and
non-registered owners of the Company’s shares. If you are a Beneficial
Shareholder and the Company or its agent has sent the Meeting Materials directly
to you, your name and address and information about your holdings of the
Company’s securities have been obtained in accordance with applicable securities
regulatory requirements from the intermediary holding on your behalf. By
choosing to send the Meeting Materials to you, the Company (and not the
intermediary holding on your behalf) has assumed responsibility for (i)
delivering the Meeting Materials to you; and (ii) executing your proper voting
instructions. Please return your voting instructions as specified in the VIF.
INTEREST OF CERTAIN PERSONS OR COMPANIES IN MATTERS TO BE
ACTED UPON
Except as otherwise disclosed herein, no: (a) person who has
been a director or executive officer of the Company at any time since the
beginning of the Company’s last financial year; (b) proposed nominee for
election as director of the Company; and (c) associate or affiliate of any of
the foregoing persons has any material interest, direct or indirect, by way of
beneficial ownership of securities or otherwise, in any of the matters to be
acted upon other than the election of directors and the appointment of
auditors.
VOTING SECURITIES AND PRINCIPAL HOLDERS OF VOTING SECURITIES
The Company is authorized to issue an unlimited number of
Common Shares without par value, of which 90,373,493 Common Shares are issued
and outstanding as of May 14, 2013, the Record Date. Although the Company
is also authorized to issue an unlimited number of Class A Preference Shares
without par value, none of these preference shares have been issued.
Only the registered holders of Common Shares who were holders
as of the Record Date are entitled to vote at the Meeting. These registered
holders of Common Shares will be entitled to one vote for each Common Share held
on the Record Date.
To the knowledge of the directors and executive officers of the
Company, the following are the only persons or companies that beneficially own,
directly or indirectly, or exercise control or direction over more than 10% of
the outstanding Common Shares:
| Name of Shareholder |
No. of
Common
Shares
Owned |
Percentage
of
Outstanding
Common Shares |
| CDS
& Co. |
87,217,463 |
96.51% |
- 5 -
MATTERS TO BE ACTED UPON AT THE MEETING
Appointment and Remuneration of Auditors
Shareholders will be asked to vote for an ordinary resolution
to re-appoint Dale Matheson Carr-Hilton LaBonte, Chartered Accountants of
Vancouver, British Columbia, as the auditors of the Company until the next
annual general meeting of the Shareholders and to authorize the Board to fix
their remuneration.
Management recommends shareholders to vote for the
ratification of the appointment of Dale Matheson Carr-Hilton LaBonte,
Chartered Accountants, as the Company’s auditors for the Company’s fiscal
year ending December 31, 2014 at a remuneration to be fixed by the
Company’s Board.
UNLESS SUCH AUTHORITY IS WITHHELD, PROXIES RECEIVED IN
FAVOUR OF MANAGEMENT WILL BE VOTED IN FAVOUR OF THE APPOINTMENT OF DALE MATHESON
CARR-HILTON LABONTE, CHARTERED ACCOUNTANTS, AS AUDITORS OF THE COMPANY TO HOLD
OFFICE UNTIL THE NEXT ANNUAL GENERAL MEETING OF THE SHAREHOLDERS AND TO
AUTHORIZE THE BOARD OF DIRECTORS TO FIX THEIR REMUNERATION.
Election of Directors
The directors of the Company are elected at each annual general
meeting of the Company and hold office until the next annual general meeting or
until their successors are elected or appointed, unless the director’s office is
earlier vacated in accordance with the Company’s Articles or applicable
corporate statutes.
The Shareholders will be asked to pass an ordinary resolution
to fix the number of directors of the Company at six (6). Management of the
Company proposes to nominate each of the following persons for re-election as a
director. Information concerning such persons, as furnished by the individual
nominees, is as follows:
Name,
Province & Country of Residence
and Position Held with
the Company |
Principal Occupation
During the Last Five Years |
Number of
Voting Securities Beneficially
Owned or Controlled or Directed, Directly
or Indirectly (1) |
Period
(s) During Which Served as a
Director of the Company |
MARK JARVIS (3)
British Columbia,
Canada
President, CEO and
Director |
Businessman; President and
CEO of the Company from January 2004 to present; CEO and director of Shoal
Point Energy Ltd. from June 28, 2013 to present. |
6,910,289
|
January 9, 2004 to
present
|
LYLE DAVIS (2) (3)
British Columbia,
Canada
Chairman and Director |
Director of the Company from
June 2004 to present; CEO of Condor Resources Inc. from July 2013 to
present; director of Condor Resources Inc. from February 2004 to present;
principal of Ellardee Group Capital Inc. from June 1999 to present. |
20,000
|
June 11, 2004 to present
|
- 6 -
GARY JOHNSON
Claremont, WA,
Australia
Director
|
Consultant; Metallurgical Advisor of Prophecy Platinum
from November 2011 to present; Director
of Antipa Minerals Ltd. and Potash West, May 2010 to present; Director of Tati Nickel Mining co. (Pty) Ltd., Boswana;
Managing Director of Norilsk Nickel Australia Pty. Ltd., 2007
to 2010;
|
150,000
|
June 10, 2010 to present
|
TOM MILNER
British Columbia,
Canada
Director |
Retired; Director of the Company since
October 2007.
|
220,000
|
October 11, 2007 to
present
|
GEORGE SOOKOCHOFF (2)
British Columbia,
Canada
Director
|
Consultant; Self employed since 1983 as
a computer and
graphics consultant; director of International PBX Ventures Ltd. from August 2006 and President and CEO from February 2008 to October 2012. |
Nil
|
November 20, 2003 to
present
|
CLIFF S. CARSON (2)
British Columbia,
Canada
Director |
Retired; Director of Company since May 2011.
|
560,000
|
May 10, 2011 to present
|
| (1) |
The information as to security holdings of each director
has been provided by the respective proposed directors and nominees and is
not within the Company’s knowledge. |
- 7 -
| (2) |
Member of the Company’s audit committee. |
| (3) |
Member of the Company’s disclosure
committee. |
Management recommends shareholders to vote for the nominees for
re-election as directors.
UNLESS SUCH AUTHORITY IS WITHHELD, PROXIES RECEIVED IN
FAVOUR OF MANAGEMENT WILL BE VOTED IN FAVOUR OF A RESOLUTION TO FIX THE NUMBER
OF DIRECTORS AT SIX (6) AND TO APPOINT AS DIRECTORS, MARK JARVIS, GEORGE
SOOKOCHOFF, GARY JOHNSON, TOM MILNER, LYLE DAVIS AND CLIFF CARSON.
Management does not contemplate that any of the nominees will
be unable to serve as a director.
Except as otherwise disclosed in this Information Circular, no
director or proposed director of the Company is, or within the ten years prior
to the date of this Information Circular has been, a director, chief executive
officer or chief financial officer of any company (including the Company) that:
| |
(a) |
was subject to an order that was issued while the
proposed director was acting in the capacity as director, chief executive
officer or chief financial officer; or |
| |
|
|
| |
(b) |
was subject to an order that was issued after the
proposed director ceased to be a director, chief executive officer or
chief financial officer and which resulted from an event that occurred
while that person was acting in the capacity as director, chief executive
officer or chief financial officer. |
No proposed director of the Company is, or was, within the ten
(10) years before the date of this Information Circular, a director or an
executive officer of any company that, while the person was acting in that
capacity, or within a year of that person ceasing to act in the capacity, became
bankrupt, made a proposal under any legislation relating to bankruptcy or
insolvency or was subject to or instituted any proceedings, arrangement or
compromise with creditors, or had a receiver, receiver manager or trustee
appointed to hold its assets.
No proposed director of the Company has, within the ten (10)
years before the date of this Information Circular, became bankrupt, made a
proposal under any legislation relating to bankruptcy or insolvency, or became
subject to or instituted any proceedings, arrangement or compromise with
creditors, or had a receiver, receiver manager or trustee appointed to hold the
assets of the proposed director.
The above information was provided by management of the
Company.
CORPORATE CEASE TRADE ORDERS OR BANKRUPTCIES
Other than as described below, none of the directors of the
Company is, or within the past ten years prior to the date hereof has been, a
director of executive officer of any issuer that, while that person was acting
in that capacity:
(a) was subject to a cease trade
or similar order or an order that denied the issuer access to any statutory
exemptions for a period of more than 30 consecutive days;
(b) was subject to an event that
resulted, after the director or executive officer ceased to e a director or
senior officer, in the issuer being the subject of a cease trade or similar
order or an order that denied the issuer access to any statutory exemptions for
a period of more than 30 consecutive days; or
(c) was declared bankrupt or made
a voluntary assignment in bankruptcy, made a proposal under any legislation
relating to bankruptcy or insolvency or has been subject to or instituted any
proceedings, arrangements or compromise with creditors or had a receiver,
receiver manager or trustee appointed to hold the assets of the person.
- 8 -
EXECUTIVE COMPENSATION
General
For the purpose of this Information Circular:
“CEO” of the Company means each individual who acted as chief
executive officer of the Company or acted in a similar capacity for any part of
the most recently completed financial year;
“CFO” of the Company means each individual who acted as chief
financial officer of the Company or acted in a similar capacity for any part of
the most recently completed financial year;
“LTIP” means a long-term incentive plan providing compensation
intended to motivate performance over a period greater than one financial year.
LTIPs do not include options or SARs (as defined below) plans or plans for
compensation through shares or units that are subject to restrictions on resale.
“Named Executive Officers” or “NEO” means each of the following
individuals:
| |
(a) |
a CEO; |
| |
(b) |
a CFO; |
| |
(c) |
each of the Company’s three most highly compensated
executive officers, or the three most highly compensated individuals
acting in a similar capacity, other than the CEO and CFO, at the end of
the most recently completed financial year and whose total compensation
was, individually more than $150,000 as determined in accordance with
subsection 1.3(6) of Form 51-102 F6 Statement of Executive
Compensation; or |
| |
(d) |
any individual who would be a Named Executive Officer
under paragraph (c) but for the fact that the individual was neither an
executive officer of the Company, nor acting in a similar capacity, at the
end of the most recently completed financial year; |
“SAR” means a stock appreciation right which is a right,
granted by a company or any of its subsidiaries as compensation for employment
services or office to receive cash or an issue or transfer of securities based
wholly or in part on changes in the trading prices of publicly traded
securities.
On September 18, 2008, the Canadian Securities Regulators
announced the adoption of new rules under Form 51-102 F6 Statement of
Executive Compensation in respect of financial years ending on or after
December 31, 2008. The disclosure contained in this Part complies with the new
rules. While the new rules require the compensation table to present
compensation information for the Company’s three most recently completed
financial years that end on or after December 31, 2008, in this first year of
implementation a company is not required to include any comparative period
disclosure.
Compensation Discussion and Analysis
The overall objective of the Company’s compensation strategy is
to offer short-term, medium-term and long-term compensation components to ensure
that the Company has in place programs to attract, retain and develop management
of the highest calibre and has in place a process to provide for the orderly
succession of management, including receipt on an annual basis of any
recommendations of the chief executive officer, if any, in this regard. The
Company currently has short-term and long-term compensation components in place,
and will develop medium-term compensation components. The objectives of the
Company’s compensation policies and procedures are to align the interests of the
Company’s employees with the interests of the Company’s Shareholders. Therefore
a significant portion of the total compensation is based upon overall corporate
performance.
- 9 -
The Company does not have in place a Compensation and
Nominating Committee. All tasks related to developing and monitoring the
Company’s approach to the compensation of officers of the Company and to
developing and monitoring the Company’s approach to the nomination of directors
to the Board are performed by the members of the Board. The compensation of the
NEOs and the Company’s employees is reviewed, recommended and approved by the
Board. During the fiscal year ended December 31, 2013, the Company paid bonuses
of $7,500 to the CFO and $3,000 to its Corporate Secretary.
Compensation to NEOs is comprised of a base salary. The Company
chooses to pay a base salary to its NEOs and employees to satisfy the short-term
compensation component. In the future, the Company may consider paying
discretionary annual cash bonuses to satisfy the medium term compensation
component. The Company grants options to purchase Shares of the Company with
longer future vesting dates to satisfy the long term compensation component.
The annual salaries for NEOs are designed to be comparable to
executive compensation packages for similar positions at companies with similar
financial, operating and industrial characteristics. The NEOs will be paid an
annual salary that also takes into account his or her existing professional
qualifications and experience. The NEOs’ performances and salaries are to be
reviewed periodically on the anniversary of their appointment to their
respective officer-ships with the Company. Increases in salary are to be
evaluated on an individual basis and are performance and market-based.
2013 Performance Graph
The following graph compares the total cumulative return of a
shareholder who invested $100 in the Company’s Shares on December 31, 2013 with
the cumulative return of the S&P/TSX Composite Index.
Cumulative Value of a $100 Investment
| |
|
Dec 31/08 |
|
|
Dec 31/09 |
|
|
Dec 31/10 |
|
|
Dec 31/11 |
|
|
Dec 31/12 |
|
|
Dec 31/13 |
|
| Hard Creek |
$ |
100 |
|
$ |
182 |
|
$ |
409 |
|
$ |
173 |
|
$ |
73 |
|
$ |
55 |
|
| S&P/TSX |
$ |
100 |
|
$ |
131 |
|
$ |
154 |
|
$ |
133 |
|
$ |
149 |
|
$ |
152 |
|
- 10 -
Option-Based Awards
The Company regards the strategic use of incentive stock
options as a cornerstone of the Company’s compensation plan. It applies to
personnel at all levels and continues to be one of the Company’s primary tools
for attracting, motivating and retaining qualified personnel, which is critical
to the Company’s success. The Company is committed to long-term incentive
programs that promote the continuity of an excellent management team and,
therefore, the long-term success of the Company. The Company established a
formal plan under which stock options may be granted to directors, officers,
employees and consultants as an incentive to serve the Company in attaining its
goal of improved shareholder value. The Board is responsible for administering
the Company’s stock option plan and determining the type and amount of
compensation to be paid to directors, officers, employees and consultants of the
Company including the awards of any stock options under a stock option plan.
Stock options are typically part of the overall compensation package for
executive officers and employees.
All grants of stock options to the NEOs are reviewed and
approved by the Board. In evaluating option grants to an NEO, the Board
evaluates a number of factors including, but not limited to: (i) the number of
options already held by such NEO; (ii) a fair balance between the number of
options held by the NEO concerned and the other executives of the Company, in
light of their responsibilities and objectives; (iii) the value of the options
(generally determined using a Black-Scholes analysis) as a component in the
NEO’s overall compensation package.
Summary Compensation Table
Particulars of compensation paid to each NEO in the most
recently completed financial year, is set out in the summary compensation table
below:
|
Year
Ending |
Salary
|
Share-
based awards |
Option-
based awards |
Non-equity
incentive plan
compensation
|
Pension
value |
All
other
compensation |
Total
compensation |
Name
and principal position
|
|
($)
|
($)
|
($)
|
($) |
($)
|
($)
|
($)
|
| Annual
incentive |
Long-
term |
| plans
|
incentive plans |
Mark Jarvis
President and
CEO(1) (2) |
12/31/2013
12/31/2012 |
$Nil
$79,500 |
Nil
Nil |
8,908
Nil |
Nil
Nil |
Nil
Nil |
Nil
Nil |
Nil
Nil |
$8,908
$79,500 |
Brian Fiddler
CFO(3) (4) |
12/31/2013
12/31/2012 |
$38,500
$60,500 |
Nil
Nil |
8,908
Nil |
Nil
Nil |
Nil
Nil |
Nil
Nil |
Nil
Nil |
$47,408
$60,500 |
Leslie Young
Corporate
Secretary(5) (6) |
12/31/2013
12/31/2012 |
$34,000
$58,000 |
Nil
Nil |
8,908
Nil |
Nil
Nil |
Nil
Nil |
Nil
Nil |
Nil
Nil |
$42,908
$58,000
|
- 11 -
| (1) |
Mark Jarvis was appointed Chief Executive Officer and
President of the Company on January 9, 2004. |
| (2) |
Effective June 1, 2012 Mr. Jarvis voluntarily reduced his
salary from $5,000 per month to NIL. Note: Effective December 31, 2013 Mr.
Jarvis forgave $51,000 of accrued 2012 management fees. |
| (3) |
Brian Fiddler was appointed as Chief Financial Officer of
the Company on January 9, 2003. |
| (4) |
Effective March 18, 2013, the Company entered into a one
year consulting agreement with Brian Fiddler pursuant to which Mr. Fiddler
serves as the Chief Financial Officer. Mr. Fiddler was paid $3,000.00 per
month from January to July 2013 and $2,000.00 per month from August to
December 2013. |
| (5) |
Leslie Young was appointed as Corporate Secretary of the
Company on February 26, 2004. |
| (6) |
Effective January 2013, the Company entered into a one
year employment agreement with Leslie Young pursuant to which Ms. Young
serves as the Corporate Secretary. Ms. Young was paid a monthly salary of
$3,000.00 from January to July 2013 and $2,000.00 per month from August to
December 2013. |
| (7) |
The value of perquisites including property or other
personal benefits provided to an NEO that are generally available to all
employees, and that in the aggregate are worth less than $50,000, or are
worth less than 10% of an NEO’s total salary for the financial year are
not reported herein. |
Incentive Plan Awards
Outstanding option-based awards and share-based
awards
The following tables set forth the outstanding option-based
awards and share-based awards granted to the NEOs of the Company during the most
recently completed financial year:
| |
Option-based Awards |
Share-based Awards |
|
Name |
Number of
securities
underlying
unexercised
options (#) |
Option
exercise
price
(1) ($) |
Option
expiration
date
|
Value of
unexercised
in-the-
money
options (2) |
Number of
shares or
units of
shares that
have not
vested (#) |
Market or
payout value
of share-
based
awards that
have not
vested ($) |
|
Mark Jarvis
President &
CEO
|
250,000
125,000
400,000
200,000 |
$0.35
$0.50
$0.50
$0.10
|
15-Oct-14
29-Nov-15
27-Jan-16
4-Jan-18 |
Nil
Nil
Nil
Nil |
N/A
N/A
N/A
N/A |
N/A
N/A
N/A
N/A |
|
Brian
Fiddler,
CFO |
100,000
50,000
200,000 |
$0.35
$0.50
$0.10 |
15-Oct-14
27-Jan-16
4-Jan-18
|
Nil
Nil
Nil |
N/A
N/A
N/A |
N/A
N/A
N/A |
|
Leslie
Young,
Corporate
Secretary |
75,000
50,000
50,000
200,000 |
$0.35
$0.50
$0.50
$0.10
|
15-Oct-14
29-Nov-15
27-Jan-16
4-Jan-18 |
Nil
Nil
Nil
Nil |
N/A
N/A
N/A
N/A |
N/A
N/A
N/A
N/A |
| Notes: |
|
| |
|
| (1) |
The exercise price is not less than the volume
weighted average trading price on the TSX for the five day period
immediately preceding the option grant. |
| (2) |
Value of unexercised in-the-money options
calculated using the closing share price on the TSX at December 31, 2013
less the exercise price of in-the-money stock options.
|
- 12 -
Incentive Plan Awards – Value
Vested or Earned During the Year
The following table sets forth details of the value vested or
earned for all incentive plan awards during the most recently completed
financial year by each NEO:
Value Vested or Earned for Incentive Plan Awards During the
Most
Recently Completed Financial Year
| Name |
Option-based
awards – Value
vested during the
year
($) |
Share-based
awards – Value
vested during the
year
($) |
Non-equity
incentive
plan compensation –
Value earned
during
the year
($) |
|
Mark Jarvis
President and CEO |
8,908 |
N/A |
N/A |
Brian
Fiddler,
CFO |
8,908 |
N/A |
N/A |
Leslie Young
Corporate Secretary |
8,908 |
N/A |
N/A |
DIRECTOR COMPENSATION
Director Compensation Table
The following table sets forth the details of compensation
provided to the directors, other than the Named Executive Officers, during the
Company’s most recently completed financial year:
| Name |
Fees
Earned
($) |
Share- based
Awards
($) |
Option- based
Awards
($) |
Non-Equity
Incentive
Plan
Compensation
($) |
Pension
Value
($) |
All Other
Compensation
($) |
Total
($)
|
| Lyle Davis
(1) |
Nil
|
Nil
|
13,363 |
Nil
|
Nil
|
Nil
|
13,363 |
| Tom Milner
(2) |
Nil
|
Nil
|
13,363 |
Nil
|
Nil
|
Nil
|
13,363 |
| George Sookochoff (3) |
4,100 |
Nil |
8,908 |
Nil |
Nil |
Nil |
13,008 |
| Gary Johnson (4) |
Nil |
Nil |
13,363 |
Nil |
Nil |
Nil |
13,363 |
| Cliff Carson
(5) |
Nil
|
Nil
|
22,271 |
Nil
|
Nil
|
Nil
|
22,271 |
| (1) |
Mr. Davis was appointed a director of the company on June
11, 2004. |
| (2) |
Mr. Milner was appointed a director of the company on
October 9, 2007. |
| (3) |
Mr. Sookochoff was appointed a director of the company on
November 28, 2003. |
| (4) |
Mr. Gary Johnson was appointed a director of the company
on June 10, 2010. |
| (5) |
Mr. Carson was appointed a director of the Company on May
10, 2011. |
- 13 -
Compensation of Directors
Commencing January 1, 2009, the Company paid $2,000 per audit
committee meeting with a maximum of $8,000 per year to the independent
directors. The Company held four audit committee meetings during the most
recently completed financial year.
Commencing April 2012, the independent directors forfeited
payment.
Other than as set forth in the foregoing, no director of the
Company who is not an NEO has received, during the most recently completed
financial year, compensation pursuant to:
| |
(a) |
any standard arrangement for the compensation of
directors for their services in their capacity as directors, including any
additional amounts payable for committee participation or special
assignments; |
| |
|
|
| |
(b) |
any other arrangement, in addition to, or in lieu of, any
standard arrangement, for the compensation of directors in their capacity
as directors; or |
| |
|
|
| |
(c) |
any arrangement for the compensation of directors for
services as consultants or experts. |
Incentive Plan Awards for Directors
Outstanding Option-Based Awards and Share-Based
Awards
| |
Option-based Awards |
Share-based Awards |
|
Name
|
Number of
securities
underlying
unexercised
options (#) |
Option
exercise
price ($) (1)
|
Option
expiration
date
|
Value of
unexercised
in-the-
money
options ($)
(2)
|
Number of
shares or
units of
shares that
have not
vested
|
Market or
payout
value of
share-based
awards that
have not
vested |
|
Lyle Davis
|
100,000
50,000
300,000 |
$0.35
$0.50
$0.10 |
15-Oct-14
27-Jan-16
4-Jan-18
|
Nil
Nil
Nil |
N/A
N/A
N/A |
N/A
N/A
N/A |
|
Gary
Johnson
|
500,000
200,000
300,000 |
$0.40
$0.50
$0.10 |
10-Jun-15
27-Jan-16
4-Jan-18
|
Nil
Nil
Nil |
N/A
N/A
N/A |
N/A
N/A
N/A |
|
Tom Milner
|
150,000
300,000 |
$0.50
$0.10 |
29-Nov-15
4-Jan-18 |
Nil
Nil |
N/A
N/A |
N/A
N/A |
|
George
Sookochoff
|
200,000
50,000
200,000 |
$0.35
$0.50
$0.10 |
15-Oct-14
27-Jan-16
4-Jan-18
|
Nil
Nil
Nil |
N/A
N/A
N/A |
N/A
N/A
N/A |
|
Cliff Carson
|
800,000
500,000 |
$0.42
$0.10 |
11-May-16
4-Jan-18 |
Nil
Nil |
N/A
N/A |
N/A
N/A |
- 14 -
| Notes: |
|
| |
|
| (1) |
The exercise price is not less than the volume
weighted average trading price on the TSX for the five day period
immediately preceding the option grant. |
| (2) |
Value of unexercised in-the-money options
calculated using the closing share price on the TSX at December 31, 2012
less the exercise price of in-the-money stock options.
|
Incentive Plan Awards – Value
Vested or Earned During the Year
The following table sets forth details of the value vested or
earned for all incentive plan awards during the most recently completed fiscal
year by each director:
Value Vested or Earned for Incentive Plan Awards during the
Most
Recently Completed Financial Year
|
Name
|
Option-based Awards
Value Vested during
the year ($)
|
Share-based Awards
Value Vested during
the year ($)
|
Non-Equity Incentive
Plan compensation –
Value earned during
the year ($) |
|
Lyle Davis |
13,363 |
N/A |
N/A |
|
Tom Milner |
13,363 |
N/A |
N/A |
|
George Sookochoff
|
8,908 |
N/A |
N/A |
|
Gary Johnson |
13,363 |
N/A |
N/A |
|
Cliff Carson |
22,271 |
N/A |
N/A |
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION
PLANS
The following table sets out those securities of the Company
which have been authorized for issuance under equity compensation plans as at
the end of the most recently completed financial year:
|
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
security holders |
18,390,333 |
$0.15 |
2,740,349 |
|
Equity
compensation
plans not approved
by security holders |
Nil |
N/A |
N/A |
|
Total |
18,390,333 |
$0.15 |
2,740,349 |
- 15 -
A copy of the stock option plan (the “Plan”), approved at the
Company’s 2009 annual general and special meeting of shareholders, is available
for review at the offices of the Company at Suite 1060-1090 West Georgia Street,
Vancouver, BC V6E 3V7 or at Clark Wilson LLP, the registered offices of the
Company, at Suite 800 – 885 West Georgia Street, Vancouver, BC V6C 3H1 during
normal business hours up to and including the date of the Meeting.
CORPORATE GOVERNANCE DISCLOSURE
National Instrument 58-101 Disclosure of Corporate
Governance Practices, requires all reporting issuers to provide certain
annual disclosure of their corporate governance practices with respect to the
corporate governance guidelines (the “Guidelines”) adopted in National Policy
58-201 Corporate Governance Principles. These Guidelines are not
prescriptive, but have been used by the Company in adopting its corporate
governance practices. The Company’s corporate governance policies and mandates
may also be publicly viewed on the Company’s website at www.hardcreeknickel.com.
Board of Directors
Independence of Members of Board
The Company’s current Board consists of six directors, five of
which are independent based upon the tests for independence set forth in NI
52-110. Messrs. Cliff Carson, Lyle Davis, Gary Johnson, George Sookochoff and
Tom Milner are independent. Mr. Mark Jarvis is not independent as he is the
President and Chief Executive Officer of the Company.
Management is nominating six (6) individuals to the Company’s
Board: Mark Jarvis, Lyle Davis, George Sookochoff, Gary Johnson, Tom Milner and
Cliff S. Carson, all of whom are currently directors of the Company. The
Guidelines suggest that the Board of every reporting issuer should be
constituted with a majority of individuals who qualify as “independent”
directors under National Instrument 52-110 Audit Committees (“NI
52-110”), which provides that a director is independent if he or she has no
direct or indirect “material relationship” with the Company. A “material
relationship” is a relationship which could, in the view of the Company’s Board,
be reasonably expected to interfere with the exercise of a member’s independent
judgment.
Of the Company’s current directors, all directors except Mark
Jarvis are considered to be independent directors, as they have no direct or
indirect material relationship with the Company. Mark Jarvis is not considered
to be an independent director as he is also an executive officer of the Company.
The operations of the Company do not support a large board, and
the Board has determined that the current size and constitution of the Board is
appropriate for the Company’s current stage of development.In the event of a
conflict of interest at a meeting of the Board, the conflicted director will, in
accordance with corporate law and in accordance with his or her fiduciary
obligations as a director of the Company, disclose the nature and extent of his
or her interest to the meeting and abstain from voting on or against the
approval of such participation.
Participation of Directors in Board Meetings
For the year ended December 31, 2013, three regular board
meetings were held. All directors were in attendance, either in person or via
teleconference.
- 16 -
Board Mandate
The Board is responsible for the conduct of the Company’s
affairs generally. The Board is responsible for reviewing and approving the
Company’s operating plans and budgets as presented by management. The Board is
responsible for identifying the principal risks of the Company’s business and
for ensuring these risks are effectively monitored and mitigated to the extent
practicable. Succession planning, including the recruitment, supervision,
compensation and performance assessment of the Company’s senior management
personnel also fall within the ambit of the Board’s responsibilities. The Board
is responsible for ensuring effective communications by the Company with its
shareholders and the public and for ensuring that the Company adheres to all
regulatory requirements with respect to the timeliness and content of its
disclosure. In keeping with its overall responsibility for the stewardship of
the financial affairs of the Company, the Board created an Audit Committee which
is responsible for the integrity of the Company’s internal control and
management information systems.
The Board is responsible for approving annual operating plans
recommended by management. Board consideration and approval is also required for
all material contracts and business transactions and all debt and equity
financing proposals.
The Board delegates responsibility to management for meeting
defined corporate objectives, implementing approved strategic and operating
plans, carrying on the Company’s business in the ordinary course, managing the
Company’s cash flow, evaluating new business opportunities, recruiting staff and
complying with applicable regulatory requirements.
The Board believes the Company is well served and the
independence of the Board from management is not compromised. The Board does not
have, and does not consider it necessary under the circumstances to have, any
formal structures or procedures in place to ensure that the Board can function
independently of management. The Board believes that its current composition is
sufficient to ensure that the Board can function independently of management.
Position Descriptions
Given the small size of the Company, the board does not have
written position descriptions for its chairman or its committee chairs. The
Board delineates the role and responsibilities of these individuals through
reference to industry norms, past practice and in the case of the CEO, through
his employment contract with the Company.
The Chairman is independent of management and is responsible
for leading the discussion and ensuring that the Board convenes as often as is
required in order to meet the needs of the Company. In addition, the Chairman
also meets with the CEO on a regular basis to help with this function. The Audit
Committee has a chair and a charter which charter provides structure and
guidance with respect to the roles of the board, committee and the chair. In
addition, the chair of the Audit Committee is independent of management. The
Disclosure Committee does not have a written description for the chair. The
Chair of the Disclosure Committee is independent from Management and has a
Corporate Disclosure Policy which provides for timely, factual and accurate
disclosure of all corporate information to Security holders of the Company and
to the public.
Directorships
The following table is a list of directorships in other
reporting issuers held by the director(s) of the Company:
- 17 -
| Name of
Director |
Name of Reporting Issuer |
| Lyle Davis |
Condor Resources Inc.
Terra Nova Energy Ltd. ** |
| Mark Jarvis |
Shoal Point Energy
Ltd.*
Terra Nova Energy Ltd. ** |
(*) Mr. Jarvis became a director of Shoal Point Energy Ltd.
effective June 28, 2013.
(**) Messrs. Jarvis and Davis became directors of
Terra Nova Energy effective February 18, 2014.
Orientation and Continuing Education
Due to the size of the Company’s current Board, the Board does
not have a formal process of orientation or education program for the new
members of the Board. However, any new directors will be given the opportunity
to: (a) familiarize themselves with the Company, the current directors and
members of management; (b) review copies of recently publicly filed documents of
the Company, technical reports and the Company’s internal financial information;
(c) have access to technical experts and consultants; and (d) review a summary
of significant corporate and securities legislation. Directors are also given
the opportunity for continuing education.
Board meetings may also include presentations by the Company’s
management and consultants to give the directors additional insight into the
Company’s business.
Ethical Business Conduct
The Board has adopted a Code of Ethics and Insider Trading
Policy which has been distributed to its directors, officers, employees and
consultants. A copy of the Code is available from the Company on written request
or may be viewed on the Company’s website.
Nomination of Directors
The Board does not currently have a nominating committee, and
these functions are currently performed by the Board as a whole. The Board
considers its size each year when it passes a resolution determining the number
of directors to be appointed at each annual general meeting of Shareholders. The
Board has determined that the configuration of six (6) directors proposed at the
Meeting is the appropriate number of directors, taking into account the number
required to carry out duties effectively while maintaining a diversity of views
and experiences.
Compensation
The directors of the Company do not receive any compensation
for services rendered in his capacity as a director until such time the Company
has sufficient cash reserves. The Board does not have a compensation committee.
The compensation of the Company’s executive officers is determined by the Board
as a whole.
Other Board Committees
The Board has an audit committee and a disclosure committee.
- 18 -
Disclosure Committee
The disclosure committee is responsible for ensuring compliance
with the Company’s corporate disclosure policy, which provides for timely,
factual and accurate disclosure of corporate information to security holders and
to the public. The members of the disclosure committee are those persons who
from time to time occupy the following offices of the Company: chief executive
officer, chief financial officer, the chairman of the Board, the executive
vice-president and the corporate secretary.
Audit Committee
The audit committee is comprised of three independent
directors. Each member of the audit committee is considered to be independent
and financially literate in accordance with NI 520110. The audit committee is
responsible for assisting the board in the discharge of its responsibilities
relating to the Company’s accounting principles, reporting practices, internal
controls and its approval of the company’s annual and quarterly financial
statements.
Audit committee information, as required under NI 52-110, is
contained in the Company’s Annual Information Form dated December 31, 2013 under
the heading “Audit Committee”. The Company’s Annual Information Form for the
year ended December 31, 2013 is available under the Company’s profile on
SEDAR at www.sedar.com.
Assessments
Due to the size of the Company’s current Board, the Board does
not formally review individual Board members or committee members and their
contributions. The Board is of the view that the Company’s shareholders are the
most important assessors of Board performance and that they provide the most
effective, objective assessment of the Board’s performance.
INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS
Other than as elsewhere in this Information Circular or the
documents of the Company incorporated by reference, no “Informed Person” (as
defined in National Instrument 51-102 Continuous Disclosure Obligations),
no proposed director of the Company and no associate or affiliate of any
Informed Person or proposed director, has any material interest, direct or
indirect, in any transaction since the commencement of the Company’s most
recently completed financial year or in any proposed transaction, which has
materially affected or would materially affect the Company or any of its
subsidiaries.
MANAGEMENT CONTRACTS
No management functions of the Company or any of its
subsidiaries are to any substantial degree performed by a person other than the
directors or executive officers of the Company.
DISCLOSURE REGARDING SECURITY BASED COMPENSATION ARRANGEMENTS
The TSX requires that listed issuers must disclose on an annual
basis, in their information circulars, the terms of their security based
compensation arrangements and any amendments that were adopted in the last
fiscal year. Accordingly, the Company is providing the disclosure below.
- 19 -
Stock Option Plan
The Shareholders will be asked to approve the unallocated
options issuable pursuant to the Plan every three years in accordance with the
rules and policies of the TSX. Therefore, the Shareholders will be asked for
such approval at the annual and special meeting of the shareholders of the
Corporation to be held in 2014.
The only security based compensation arrangement which the
Company has in place is the amended and restated stock option plan (the “Plan”),
which was approved by the Company’s Shareholders at the Company’s annual general
and special meeting held on June 27, 2008. The Company amended and restated its
previous stock option plan (approved by Shareholders at the Company’s 2004
annual general meeting) (the “2004 Plan”) to meet the requirements of the
policies of the TSX as set out in the TSX Company Manual (the “Manual”). The
Company also made certain amendments to the 2004 Plan, to allow for beneficial
tax treatment of incentive stock options by certain eligible persons who are
subject to tax in the United States.
The purpose of the Plan is to advance the interests of the
Company by encouraging the directors, officers, employees, consultants and
management company employees of the Company to acquire Shares in the Company,
thereby increasing their proprietary interest in the Company, encouraging them
to remain associated with the Company and furnishing them with additional
incentive in their efforts on behalf of the Company in the conduct of their
affairs.
The rules of the TSX provide that all unallocated options
issuable under a “rolling” stock option plan must be approved by Shareholders
every three years after the institution of the stock option plan.
Eligible Participants
Stock options (“Options”) to purchase Shares may be granted to
the following persons under the Plan:
| |
a) |
Eligible Employees (as defined in the Plan); |
| |
b) |
Service Providers (as defined in Section 613(b) of the
Manual): |
| |
c) |
directors; |
| |
d) |
consultants; and |
| |
e) |
such other persons as the plan administrator will select,
subject to applicable laws. |
Securities Available for Issuance under the
Plan
Subject to adjustment as provided in Section 13 of the Plan,
the Options to be offered under the Plan consist of authorized but unissued
Shares of the Company. The aggregate number of shares to be delivered upon the
exercise of all Options granted under the Plan cannot exceed an amount equal to
10% of the issued shares of the Company at the time of any granting of Options
(on a non-diluted basis). Based upon 90,373,493 Shares outstanding on the Record
Date, this amounts to 9,037,349 Shares.
The Company currently has 6,297,000 Options issued and
outstanding under the Plan, representing 69.70% of the Company’s currently
issued and outstanding Shares (on a non-diluted basis).
Issuances to Insiders
The Plan limits the number of Options which may be granted
under the Plan to Insiders (as defined under applicable laws) as follows:
| |
a) |
the number of Shares reserved for issuance with respect
to options granted to Insiders cannot exceed ten percent (10%) of the
issued and outstanding Shares on the grant
date; |
- 20 -
| |
b) |
the issuance to Insiders, within a one year period,
cannot result in a number of Shares issued to Insiders exceeding ten
percent (10%) of the issued and outstanding Shares; and |
| |
|
|
| |
c) |
the issuance of Shares to any one Insider, within a one
year period, cannot exceed five percent (5%) of the issued and outstanding
Common Shares. |
Issuances to Individuals
The Plan limits the number of Options which may be granted
under the Plan to any individual. No person is eligible to receive Options to
purchase more than 5% of the issued and outstanding Shares (subject to
adjustment as set forth in Section 13 of the Plan). Additionally, the number of
Options granted to persons employed in investor relations activities and to
consultants is limited to 2% of the issued and outstanding Shares.
Option Price
The exercise price of each Option is determined by the plan
administrator in accordance with applicable laws, including the Manual and, for
certain Options, the United States Internal Revenue Code of 1986. The exercise
price per Share cannot be less than the closing trading price of the Shares on
the TSX on the last trading day preceding the date on which the Option is
granted (or if the Shares are not then listed and posted for trading on the TSX,
on such other stock exchange or quotation system on which the Shares are listed
and posted for trading as may be selected by the Board). In the event that the
Shares are not listed and posted for trading on any stock exchange or other
quotation system, the exercise price will be the fair market value of the Shares
as determined by the plan administrator. Additional restrictions on the exercise
price of Options are stated in Section 4.1(c) of the Plan.
Vesting
The Plan provides that no Option will be exercisable until it
has vested. The plan administrator may, in its sole discretion, determine the
time during which Options will vest and the method of vesting or that no vesting
restriction will exist. The vesting of one or more outstanding Options may be
accelerated by the plan administrator at such times and in such amounts as it
will determine in its sole discretion.
If no vesting schedule is specified at the time of grant, the
Options will vest as follows:
| |
a) |
on the first anniversary of the date of grant, the Option
will vest and will become exercisable with respect to 25% of the Shares to
which it pertains; |
| |
|
|
| |
b) |
on the second anniversary of the date of grant, the
Option will vest and will become exercisable with respect to an additional
25% of the Shares to which it pertains; |
| |
|
|
| |
c) |
on the third anniversary of the date of grant, the Option
will vest and will become exercisable with respect to an additional 25% of
the Shares to which it pertains; and |
| |
|
|
| |
d) |
on the fourth anniversary of the date of grant, the
Option will vest and will become exercisable with respect to the balance
of the Shares to which it pertains. |
Term
Subject to Sections 11 and 12 of the Plan, the term of each
Option (the “Option Period”) is a period of time fixed by the plan
administrator, not to exceed the maximum period permitted by any stock exchange
or quotation system on which the Shares are then listed or other regulatory body
having jurisdiction.
- 21 -
Termination
The Plan provides that, if an Optionee ceases to be a director,
officer, employee or consultant, as the case may be, of the Company for any
reason (other than death), that person may, but only within 90 days next
succeeding his ceasing to be a director, officer, employee or consultant,
exercise his Option to the extent that he was entitled to exercise it at the
date of such cessation provided that, in the case of such person who is engaged
in investor relations activity on behalf of the Company, the 90 day period will
be shortened to 30 days. In the case of termination of employment or contractual
relationship with the Company or its subsidiaries for cause (as determined in
the sole discretion of the plan administrator), the Options will terminate
immediately.
In the event of the death of an Option holder, the Option
previously granted to him is exercisable only within the 12 months next
succeeding such death and then only:
| |
a) |
by the person or persons to whom the Option holder’s
rights under the Option will pass by the Option holder’s will or the laws
of descent and distribution of the Option holder’s domicile at the time of
death; and |
| |
|
|
| |
b) |
if and to the extent that he was entitled to exercise the
Option at the date of his death. |
Transferability
All benefits, rights and Options accruing to the Option holder
in accordance with the terms and conditions of the Plan are not transferable or
assignable unless specifically provided for by the Plan.
Amendment
The plan administrator may, at any time, suspend or terminate
the Plan. The Board may, subject to such approvals as may be required under the
rules of any stock exchange or which the Shares are then listed, or other
regulatory body having jurisdiction or any applicable securities laws, also at
any time amend or revise the terms of the Plan, provided that no such amendment
or revision will alter the terms of any Options granted under the Plan prior to
such amendment or revision.
Notwithstanding the foregoing, the events triggering
acceleration of vesting of outstanding Options may be modified, expanded or
eliminated without the consent of Option holders and the plan administrator may
modify grants to persons who are eligible to receive Options under this Plan who
are foreign nationals or employed outside Canada and the United States to
recognize differences in local law, tax policy or custom.
So long as it remains a policy of the TSX, or such other stock
exchange or quotation system on which the Company’s Shares are listed and posted
for trading, the Company will obtain disinterested shareholder approval for any
reduction in the exercise price of the Option if the Option holder is an Insider
of the Company at the time of the proposed amendment.
Copy of the Plan
A copy of the Plan is available for review at the offices of
the Company at Suite 1060-1090 West Georgia Street, Vancouver, B.C. V6E 3V7 or
at Clark Wilson LLP, the registered offices of the Company, at Suite 800 – 885
West Georgia Street, Vancouver, B.C. V6C 3H1 during normal business hours up to
and including the date of the Meeting.
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ADDITIONAL INFORMATION
Additional information relating to the Company is on SEDAR at
www.sedar.com. Financial information relating to the Company is provided
in the Company’s comparative financial statements and MD&A for the fiscal
year ended December 31, 2013 and for the three months ended March 31, 2014.
Shareholders may contact the Company to request copies of financial statements
and MD&A at the following address: #1060-1090 West Georgia Street,
Vancouver, British Columbia, Canada V6E 3V7.
APPROVAL OF THE BOARD OF DIRECTORS
The contents of this Information Circular have been approved,
and the delivery of it to each Shareholder entitled thereto and to the
appropriate regulatory agencies, has been authorized by the Board of the
Company.
Dated at Vancouver, British Columbia, this 16th day
of May, 2014.
BY ORDER OF THE BOARD OF DIRECTORS
“Mark Jarvis”
Mark Jarvis
President,
CEO and Director
