Asanko Gold Inc.: Exhibit 99.2 - Filed by newsfilecorp.com
NOTICE OF ANNUAL GENERAL MEETING
OF SHAREHOLDERS
AND
MANAGEMENT INFORMATION CIRCULAR
TO BE HELD ON JUNE 7, 2019
VANCOUVER, BRITISH COLUMBIA, CANADA
DATED: APRIL 29, 2019
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| These materials are important and require your immediate
attention. If you have questions or require |
| assistance with voting your shares, you may contact
Asanko’s proxy solicitation agent: |
| |
| Laurel Hill Advisory Group |
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| North American Toll-Free Number: 1 -877-452-7184
|
| |
| Collect Calls Outside North America: 416-304-0211
|
| |
| Email: assistance@laurelhill.com |
| |
YOUR VOTE IS IMPORTANT. PLEASE VOTE YOUR SHARES TODAY.
| ASANKO GOLD INC. |
| Suite 680, 1066 West Hastings Street |
| Vancouver, BC V6E 3X2 |
| Telephone: (604) 683- 8193 / Fax: (604) 683- 8194
|
| Toll Free: 1-855-246-7341 |
| www.asankogold.com |
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
The Annual General Meeting of holders
(“Shareholders”) of common shares (“Common
Shares”) of Asanko Gold Inc. (the “Company”) will
be held at Suite 1500 – 1055 West Georgia Street, Vancouver, British
Columbia on Friday, June 7, 2019 at 10:00 a.m., Pacific Time, (the
“Meeting”) for the following purposes:
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1. |
To consider the audited financial statements of the
Company for its fiscal year ended December 31, 2018 and the report of the
auditor thereon (together the “annual financials”), which are available
for download under the Company’s SEDAR profile at
www.sedar.com; |
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2. |
To consider, and if thought fit, to pass an ordinary
resolution to set the number of directors to be elected to the Board of
Directors (the “Board”) of the Company at eight (see “Election of
Directors” in the Company’s management information circular dated
April 29, 2019 (the “Information Circular”)); |
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3. |
To elect directors of the Company for the ensuing year
(see “Election of Directors” in the Information
Circular); |
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4. |
To appoint the auditor of the Company for the ensuing
year and to authorize the directors to fix their remuneration (see
“Appointment of Auditor” in the Information Circular);
and |
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5. |
To consider, and if thought fit, to pass an ordinary
resolution to ratify, confirm and approve the Company’s Amended and
Restated Shareholder Rights Plan for continuation for a further three-
year term as described in the accompanying Information
Circular. |
No other matters are contemplated for consideration at the
Meeting, however any permitted amendment to or variation of any matter
identified in this Notice of Meeting (the “Notice”) may properly be considered
at the Meeting. The Meeting may also consider the transaction of such other
business as may properly come before the Meeting or any adjournment thereof.
The Company has elected to use the notice-and-access provisions
under National Instrument 51-102 – Continuous Disclosure Obligations and
National Instrument 54-101 – Communication with Beneficial Owners of
Securities of a Reporting Issuer (together the “Notice-and-Access
Provisions”) for this Meeting. Notice-and-Access Provisions are a set of rules
developed by the Canadian Securities Administrators that allow a Company to
reduce the volume of materials to be physically mailed to Shareholders by
posting the Information Circular and any additional annual meeting materials
online. Shareholders will still receive this Notice and a form of proxy (the
“Proxy”) for registered Shareholders, or a voting instruction form for
Beneficial Shareholders (as defined below), and may choose to receive a hard
copy of the Information Circular. The Company will not use procedures known as
‘stratification’ in relation to the use of Notice-and-Access Provisions.
Stratification occurs when a reporting issuer using the Notice-and-Access
Provisions provides a paper copy of the Information Circular to some
Shareholders with a notice package. In relation to the Meeting, all Shareholders
will receive the required documentation under the Notice-and-Access Provisions,
which will not include a paper copy of the Information Circular.
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Copies of this Notice of Meeting, the Information Circular, the
Proxy and the annual financials (together “Proxy Materials”), are posted on the
Company’s website at: www.asanko.com/Investors/AGM-Materials and
are SEDAR filed under the Company’s profile at www.sedar.com. Any
Shareholder who wishes to receive a paper copy of the Information Circular,
should contact the Company at Suite 680, 1066 West Hastings Street, Vancouver,
British Columbia, V6E 3X2, or by telephone: (604) 683-8193, or by telephone
toll-free: 1-855-246-7341 or by fax: (604) 683-8194. A Shareholder may also use
the toll-free number noted above to obtain additional information about the
Notice-and-Access Provisions.
In order to allow for reasonable time to be allotted for a
Shareholder to receive and review a paper copy of the Information Circular and
submit their vote prior to 10:00 a.m., Pacific Time, on Wednesday, June 5,
2019 (the “Proxy Deadline”), any Shareholder wishing to request a paper copy
of the Information Circular as described above should ensure such request is
received by the Company or Laurel Hill Advisory Group (“Laurel Hill”) by May
22, 2019. Under Notice-and-Access Provisions, Proxy Materials must be
available for viewing for up to 1 year from the date of posting and a paper copy
of the Proxy Materials can be requested at any time during this period.
The Information Circular contains details of matters to be
considered at the Meeting. Please review the Information Circular before
voting.
Registered Shareholders who are unable to attend the Meeting
in person and who wish to ensure their Common Shares will be voted at the
Meeting are asked to complete, date and sign the enclosed form of Proxy, and
deliver it in accordance with the instructions set out in the form of Proxy and
in the Information Circular. To be effective, the Proxy must be duly
completed and signed and then deposited with the Company’s registrar and
transfer agent, Computershare Investor Services Inc., 100 University Avenue,
8t h Floor, Toronto, Ontario, M5J 2Y1, or voted via telephone, fax or
via the internet (online) as specified in the Proxy, no later than 10:00 a.m.,
Pacific Time, on June 5, 2019. The time limit for the deposit of proxies may be
waived or extended by the chair of the Meeting at his or her discretion without
notice.
If you hold your Common Shares in a brokerage account you
are a non-registered shareholder (“Beneficial Shareholder”). Beneficial
Shareholders who hold their Common Shares through a bank, broker or other
financial intermediary should carefully follow the instructions found on the
form of Proxy or Voting Instruction Form (“VIF”) provided to them by their
intermediary, in order to cast their vote or in order to notify the Company if
they plan to attend the Meeting.
DATED at Vancouver, British Columbia, this
29th day of April, 2019.
BY ORDER OF THE BOARD
/s/ Greg McCunn
Greg McCunn
Chief Executive Officer
| If you have any questions and/or need assistance in voting
your shares , please contact our proxy |
| solicitation agent: |
| LAUREL HILL ADVISORY GROUP |
| North American Toll-Free Number: 1 -877-452- 7184
|
| Collect Calls Outside North America: 416-304- 0211
|
| Email: assistance@laurelhill.com |
YOUR VOTE IS IMPORTANT. PLEASE VOTE YOUR SHARES TODAY.
TABLE OF CONTENTS
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| ASANKO GOLD INC. |
| |
| Suite 680, 1066 West Hastings Street |
| Vancouver, BC, V6E 3X2 |
| Telephone: (604) 683-8193 / Fax: (604) 683-8194
|
| Toll Free: 1-855-246- 7341 |
| |
| INFORMATION CIRCULAR |
| with information as at April 22, 2019 (unless
indicated otherwise) |
This Information Circular (“Information Circular”) is
furnished in connection with the solicitation of proxies by the management of
Asanko Gold Inc. for use at the Annual General Meeting (the “Meeting”) of its
holders (“Shareholders”) of Common Shares (defined below) to be held on Friday,
June 7, 2019 at the time and place and for the purposes set forth in the
accompanying Notice of the Meeting.
In this Information Circular, references to the “Company,”
“we,” “our” and “Asanko” refer to Asanko Gold Inc. “Common Shares” means common
shares without par value in the capital of the Company. “Registered
Shareholders” means shareholders whose names appear on the share register of the
Company. “Beneficial Shareholders” means shareholders who hold their Common
Shares with a bank, broker or other financial intermediary and “intermediaries”
refers to brokers, investment firms, clearing houses and similar entities that
own securities on behalf of Beneficial Shareholders. References to $ are to US
dollars and references to C$ are to Canadian dollars.
GENERAL PROXY INFORMATION
Solicitation of Proxies
The solicitation of proxies will be primarily by mail, but
proxies may be solicited personally or by telephone by directors, officers and
regular employees of the Company. The Company will bear all costs of this
solicitation. We have arranged for intermediaries to forward the meeting
materials to beneficial owners of the Common Shares held of record by those
intermediaries and we may reimburse the intermediaries for their reasonable fees
and disbursements in that regard. Asanko has also retained Laurel Hill Advisory
Group (“Laurel Hill”) to assist in connection with the Company’s communications
with shareholders and solicitation of proxies. In connection with these
services, Laurel Hill is expected to receive a fee of C$35,000, plus reasonable
out-of-pocket expenses. The costs of solicitation by management will be borne by
the Company.
Notice-and-Access
Notice-and-Access means provisions concerning the delivery of
proxy-related materials to Shareholders found in section 9.1.1 of National
Instrument 51-102 – Continuous Disclosure Obligations (“NI 51-102”), in
the case of registered Shareholders, and section 2.7.1 of National Instrument
54-101 – Communication with Beneficial Owners of Securities of a Reporting
Issuer (“NI 54-101”), in the case of beneficial Shareholders
(“Notice-and-Access Provisions”), which allow an issuer to deliver an
information circular forming part of proxy-related materials to Shareholders via
certain specified electronic means provided that the conditions of NI 51-102 and
NI 54-101 are met.
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Notice-and-Access Provisions allow reporting issuers, other
than investment funds, to choose to deliver proxy-related materials to
registered holders and beneficial owners of securities by posting such materials
on a non-SEDAR website (usually the reporting issuer’s website and sometimes the
transfer agent’s website) rather than by delivering such materials by mail.
Notice-and-Access Provisions can be used to deliver materials for both general
and special meetings. Reporting issuers may still choose to continue to deliver
such materials by mail, and beneficial owners will be entitled to request
delivery of a paper copy of the Information Circular at the reporting issuer’s
expense.
Use of Notice-and-Access Provisions reduces paper waste and
printing and mailing costs incurred by the issuer. In order for the Company to
utilize Notice-and-Access Provisions it must send a notice to Shareholders,
including Non-Registered (Beneficial) Holders, indicating that the proxy-related
materials have been posted and explaining how a Shareholder can access them or
obtain from the Company, a paper copy of those materials. This Information
Circular has been posted in full on the Company’s website at:
www.asanko.com/Investors/AGM-Materials and under the
Company’s profile at www.sedar.com. Any Shareholder who wishes to receive
a paper copy of the Information Circular should contact the Company at Suite
680, 1066 West Hastings Street, Vancouver, British Columbia, V6E 3X2, or by
telephone: (604) 683-8193, or by telephone toll-free: 1-855-246-7341 or by fax:
(604) 683-8194. A Shareholder may also use the toll-free number noted above to
obtain additional information about the Notice-and-Access Provisions.
In order to use the Notice-and-Access Provisions, a reporting
issuer must set the record date for notice of the meeting to be on a date that
is at least 40 days prior to the shareholder meeting in order to ensure there is
sufficient time for the materials to be posted on the applicable website and
other materials to be delivered to Shareholders. The requirements of that notice
of meeting, which requires the Company to (I) provide basic information about
the Meeting and the matters to be voted on, (ii) explain how a Shareholder can
obtain a paper copy of the Information Circular and any related financial
statements and related management discussion and analysis, and (iii) explain the
Notice-and-Access Provisions process; have been built into the Notice of
Meeting. The Notice of Meeting has been delivered to Shareholders by the
Company, along with the applicable voting document: a form of Proxy in the case
of registered Shareholders; or a Voting Instruction Form in the case of
Non-Registered (Beneficial) Holders.
As the Company is a reporting issuer and has previously used
Notice-and-Access Provisions for delivery of its annual meeting materials, the
Company is eligible to abridge the time between the filing of notification of
the Meeting and Record Dates and the Record Date indicating its intent to hold
the Annual General Meeting and to use the Notice-and Access Provisions for
delivery of the proxy materials related to the Meeting. Notwithstanding, the
Company filed its Notice of Meeting and Record Date on March 22, 2019. The
Company will not rely upon the use of ‘stratification’. Stratification occurs
when a reporting issuer using Notice-and-Access Provisions provides a paper copy
of its information circular with the notice to be provided to its shareholders
as described above. In relation to the Meeting, all Shareholders will have
received the required documentation under the Notice-and-Access Provisions and
all documents required to vote in respect of all matters to be voted on at the
Meeting. No Shareholder will receive a paper copy of the Information Circular
from the Company or any intermediary unless such Shareholder specifically
requests same.
The Company will pay intermediaries, including Broadridge
Financial Solutions (“Broadridge”), to deliver proxy-related materials to NOBOs
(as defined herein) and the Company will pay intermediaries for delivery of
proxy-related materials to OBOs (as defined herein).
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Any Shareholder who wishes to receive a paper copy of this
Information Circular should make contact with the Company at Suite 680, 1066
West Hastings Street, Vancouver, British Columbia, V6E 3X2, or by
telephone: (604) 683-8193, by telephone toll-free: 1-855-246-7341 or by fax:
(604) 683-8194. In order to ensure that a paper copy of the Information
Circular can be delivered to a requesting Shareholder in time for such
Shareholder to review the Information Circular and return a proxy or voting
instruction form prior to the deadline for receipt of Proxies at 10:00 a.m. on
June 5, 2019 (the “Proxy Deadline”), it is strongly suggested that a
Shareholder ensure their request is received by the Company no later than
May 22, 2019.
All Shareholders may call 1-855-246-7341 (toll-free) in order
to obtain additional information relating to the Notice-and-Access Provisions or
to obtain a paper copy of the Information Circular, up to and including the date
of the Meeting, including any adjournment of the Meeting.
Appointment of Proxyholders
The individuals named in the accompanying form of proxy (the
“Proxy”) are officers and/or directors of the Company. If you are a
Shareholder entitled to vote at the Meeting, you have the right to appoint a
person or company other than either of the persons designated in the Proxy, who
need not be a shareholder, to attend and act for you and on your behalf at the
Meeting. You may do so either by inserting the name of that other person in the
blank space provided in the Proxy or by completing and delivering another
suitable form of proxy.
Voting by Proxyholder
The persons named in the Proxy will vote or withhold from
voting the Common Shares represented thereby in accordance with your
instructions on any ballot that may be called for. If you specify a choice with
respect to any matter to be acted upon, your Common Shares will be voted
accordingly. The Proxy confers discretionary authority on the persons named
therein with respect to:
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(a) |
each matter or group of matters identified therein for
which a choice is not specified; and |
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(b) |
any other matter that properly comes before the
Meeting. |
In respect of a matter for which a choice is not specified
in the Proxy, the management appointee acting as a proxyholder will vote in
favour of each matter identified on the Proxy and, if applicable, for the
nominees of management for election of directors and appointment of auditors as
identified in the Proxy.
Registered Shareholders
Registered Shareholders may wish to vote by proxy whether or
not they are able to attend the Meeting in person. Registered Shareholders who
wish to submit a proxy may choose one of the following methods:
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(a) |
complete, date and sign the enclosed Proxy and return it
to the Company’s transfer agent, Computershare Investor Services Inc.
(“Computershare”), by fax within North America to 1- 866- 249- 7775, by
fax outside North America to 416-263- 9524, by mail or by hand to the 8th
Floor, 100 University Avenue, Toronto, Ontario, Canada, M5J 2Y1, or by
hand delivery to the 3rd Floor, 510 Burrard Street, Vancouver,
British Columbia, Canada, V6C 3B9; or |
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(b) |
use a touch-tone phone to transmit voting choices to a
toll-free number. Registered shareholders must follow the instructions of
the voice response system and refer to the enclosed Proxy for the toll-free number, the holder’s
account number and the Proxy voting control number; or |
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(c) |
access the internet website of Computershare at
www.investorvote.com. Registered shareholders must follow the
instructions given on Computershare’s website and refer to the
enclosed Proxy for the holder’s account number and the proxy
voting control number. |
Registered Shareholders must ensure the Proxy is received at
least 48 hours (excluding Saturdays, Sundays and holidays) before the Meeting or
any adjournment thereof. Late proxies may be accepted or rejected by the
Chairperson of the Meeting (the “Chair”), in his or her discretion. However, the
Chair is under no obligation to accept or reject any particular late proxy. The
Chair may waive this time limit for receipt of proxies without notice.
Beneficial Shareholders
The following information is of significant importance to
Beneficial Shareholders (those Shareholders who do not hold Common Shares in
their own name). Beneficial Shareholders should note that the only proxies
that can be recognized and acted upon at the Meeting are those deposited by
registered shareholders (those whose names appear on the records of the Company
as the registered holders of Common Shares) or as set out in the following
disclosure.
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 intermediaries.
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).
Intermediaries are required to seek voting instructions from
Beneficial Shareholders in advance of meetings of shareholders. Every
intermediary has its own mailing procedures and provides its own return
instructions to clients. Beneficial Shareholders should ensure that instructions
respecting the voting of their Common Shares are communicated in a timely manner
and in accordance with the instructions provided by their intermediary. Your
intermediary will not vote your Common Shares without receiving instructions
from you.
The voting instruction form supplied to you by your broker will
be similar to the proxy provided to registered shareholders by the Company.
However, its purpose is limited to instructing the intermediary on how to vote
your Common Shares on your behalf. Most brokers delegate responsibility for
obtaining instructions from clients to Broadridge Financial Solutions, Inc.
(“Broadridge”) in the United States and in Canada. Broadridge mails a Voting
Instruction Form (“VIF”) in lieu of the Proxy provided by the Company. The VIF
will name the same persons as are set out in the Company’s Proxy to represent
your Common Shares at the Meeting.
Although a Beneficial Shareholder may not be recognized
directly at the Meeting for the purpose of voting Common Shares registered in
the name of its intermediary, a Beneficial Shareholder may attend the Meeting as
a proxyholder for the intermediary and vote the Common Shares in that capacity.
You have the right to appoint a person (who need not be a Beneficial Shareholder
of the Company), other than any of the persons designated in the VIF, to
represent your Common Shares at the Meeting and that person may be you. To
exercise this right, insert the name of the desired representative (which may be
you) in the blank space provided in the VIF. The completed VIF must then be
returned to Broadridge by mail or facsimile or given to Broadridge by phone or
over the internet, in accordance with Broadridge’s instructions. Broadridge then tabulates the results of all
instructions received and provides appropriate instructions respecting the
voting of Common Shares to be represented at the Meeting and the appointment of
any shareholder’s representative. If you receive a VIF from Broadridge, the VIF
must be completed and returned to Broadridge, in accordance with its
instructions, well in advance of the Meeting in order to have your Common Shares
voted or to have an alternate representative duly appointed to attend the
Meeting and vote your Common Shares at the Meeting.
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There are two kinds of beneficial owners: those who object
to their name being made known to the issuers of securities which they own
(called “OBOs” for Objecting Beneficial Owners) and those who do not object
(called “NOBOs” for Non-Objecting Beneficial Owners). The Company may be
utilizing the Broadridge QuickVote™ service to assist Shareholders with voting
their Common Shares. NOBOs may be contacted by Laurel Hill to conveniently
obtain a vote directly over the telephone.
Notice to Shareholders in the United States
The solicitation of proxies involves securities of an issuer
located in Canada and is being effected in accordance with the corporate laws of
the Province of British Columbia, Canada and securities laws of the provinces of
Canada. The proxy solicitation rules under the United States Securities
Exchange Act of 1934, as amended, are not applicable to the Company
or this solicitation, and this solicitation has been prepared in accordance with
the disclosure requirements of the securities laws of the provinces of Canada.
Shareholders should be aware that disclosure requirements under the securities
laws of the provinces of Canada differ from the disclosure requirements under
United States securities laws.
The enforcement by Shareholders of civil liabilities under
United States federal securities laws may be affected adversely by the fact that
the Company is incorporated under the Business Corporations Act (British
Columbia) (the “BCA”), as amended, certain of its directors and its executive
officers are residents of Canada and a substantial portion of its assets and the
assets of such persons are located outside the United States. Shareholders may
not be able to sue a foreign company or its officers or directors in a foreign
court for violations of United States federal securities laws. It may be
difficult to compel a foreign company and its officers and directors to subject
themselves to a judgment by a United States court.
Revocation of Proxies
In addition to revocation in any other manner permitted by law,
a registered shareholder who has given a proxy may revoke it by:
| (a) |
executing a proxy bearing a later date or by executing a
valid notice of revocation, either of the foregoing to be executed by the
registered shareholder or the registered shareholder’s authorized attorney
in writing, or, if the shareholder is a corporation, under its corporate
seal by an officer or attorney duly authorized, and by delivering the
proxy bearing a later date to Computershare, or at the address of the
registered office of the Company at 1500 Royal Centre, 1055 West Georgia
Street, P. O. Box 11117, Vancouver, British Columbia, V6E 4N7, at any time
up to and including the last business day that precedes the day of the
Meeting or, if the Meeting is adjourned, the last business day that
precedes any reconvening thereof, or to the Chair of the Meeting on the
day of the Meeting or any reconvening thereof, or in any other manner
provided by law, or |
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| (b) |
personally attending the Meeting and voting the
registered shareholder’s Common Shares. |
Beneficial Shareholders should follow the instructions found on
the Proxy or VIF provided to them from their intermediary.
A revocation of a proxy will not affect a matter on which a
vote is taken before the revocation.
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INTEREST OF CERTAIN PERSONS OR COMPANIES IN MATTERS TO BE
ACTED UPON
No director or executive officer of the Company, or any person
who has held such a position since the beginning of the last completed financial
year end of the Company, nor any nominee for election as a director of the
Company, nor any associate or affiliate of the foregoing persons, has any
substantial or material interest, direct or indirect, by way of beneficial
ownership of securities or otherwise, in any matter to be acted on at the
Meeting.
VOTING SECURITIES AND PRINCIPAL HOLDERS OF VOTING SECURITIES
The Board of Directors of the Company (the “Board”) has fixed
April 22, 2019 as the record date (the “Record Date”) for determination of
persons entitled to receive notice of the Meeting. Only Shareholders of record
at the close of business on the Record Date who either attend the Meeting
personally or complete, sign and deliver a Proxy in the manner and subject to
the provisions described above will be entitled to vote or to have their Common
Shares voted at the Meeting.
The Company is authorized to issue an unlimited number of
Common Shares. As of April 22, 2019, there were 225,804,614 Common Shares issued
and outstanding, each carrying the right to one vote. No group of shareholders
has the right to elect a specified number of directors, nor are there cumulative
or similar voting rights attached to the Common Shares. The Company is also
authorized to issue an unlimited number of preferred shares. There were no
preferred shares issued and outstanding as at April 22, 2019.
To the knowledge
of the directors and executive officers of the Company, as at April 22, 2019,
based upon filings made with Canadian and United States securities regulators,
the persons who beneficially own, or control or direct, directly or indirectly,
voting securities carrying more than 10% of the voting rights attached to any
class of voting securities are as follows:
Name
|
Number of Asanko
Shares
|
% of Outstanding
Asanko
Shares |
| Donald Smith
& Co., Inc. |
22,600,747 |
10.01% |
The following documents filed with the securities commissions
or similar regulatory authority in each of the Provinces of Alberta, British
Columbia, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince
Edward Island and Newfoundland and Labrador at www.sedar.com are
specifically incorporated by reference into, and form an integral part of, this
Information Circular:
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The audited financial statements of the Company for the years ended
December 31, 2018 and 2017, the auditor’s report thereon and the related
management’s discussion and analysis (filed on SEDAR on February 14, 2019).
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The Company’s Annual Information Form for the year ended December 31, 2018
(filed on SEDAR on March 28, 2019).
Copies of documents incorporated herein by reference may also
be obtained by a Shareholder upon request without charge from the Company’s
Corporate Secretary at Suite 680, 1066 West Hastings Street, Vancouver, BC, V6E
3X2, Tel: (604) 683-8193, or toll free: 1-855-246-7341, or fax: (604)
683-8194.
VOTES NECESSARY TO PASS RESOLUTIONS
A simple majority of affirmative votes cast at the Meeting is
required to pass the resolutions described herein. If there are more nominees
for election as directors than there are vacancies to fill, those nominees receiving the greatest number of votes will be elected
or appointed, as the case may be, until all such vacancies have been filled. If
the number of nominees for election is equal to the number of vacancies to be
filled, all such nominees will be declared elected or appointed by acclamation.
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ELECTION OF DIRECTORS
The number of individuals to be elected to the Board was last
set by ordinary resolution of the Shareholders at the annual general meeting of
the Company held on June 8, 2018, and that number was seven (7). The Board has
determined that the number of individuals to be elected to the Board at the
Meeting will be eight (8), with the addition of the recently appointed Chief
Executive Officer (“CEO”), Mr. Greg McCunn. Therefore, at the Meeting,
Shareholders will be asked to approve an ordinary resolution to set the number
of directors to be elected to the Board at eight (8).
The term of office of each of the current directors will end at
the conclusion of the Meeting. Unless a director’s office is vacated earlier in
accordance with the provisions of the BCA, each director elected will hold
office until the conclusion of the next annual general meeting of the Company,
or if no director is then elected, until a successor is elected or appointed.
Majority Voting Policy
The Board believes that each of its members should carry the
confidence and support of its shareholders. Therefore, on May 27, 2013, the
Board approved and implemented a majority voting policy (the “Majority Voting
Policy”). On May 2, 2017, the Board approved certain amendments to the Majority
Voting Policy (the Majority Voting Policy as amended, the “Amended Majority
Voting Policy”) to comply with recent Toronto Stock Exchange (the “TSX”)
guidance with respect to majority voting requirements and best practices for
corporate governance. Nominees for election to the Board have agreed to abide by
the Amended Majority Voting Policy. In accordance with the Amended Majority
Voting Policy: (a) any director not elected by at least a majority of votes cast
for election, in an uncontested election, will immediately offer to submit
his/her resignation (the “Subject Director”); (b) the Compensation, Nominating
and Governance Committee will make a recommendation to the Board with respect to
accepting or rejecting the Subject Director’s resignation; (c) any Subject
Director who has tendered his/her resignation may not participate in the
meetings of the Compensation, Nominating and Governance Committee on such
matter; (d) the Board will determine whether to accept or reject the Subject
Director’s resignation; (e) the Board will accept the Subject Director’s
resignation except where exceptional circumstances would warrant the Subject
Director remain in place; (f) the Board will issue a press release announcing
its decision, and reasons for rejecting the resignation, if applicable, within
90 days of the meeting in question. The full text of the Amended Majority Voting
Policy is included in the Company’s “Corporate Governance Policies and
Procedures Manual” available at www.asanko.com/Governance/Governance-Documents/default.aspx.
The following disclosure sets out the names of management’s
eight nominees for election as directors, all major offices and positions with
the Company and any of its significant affiliates each now holds, each nominee’s
principal occupation, business or employment, the period of time during which
each has been a director of the Company and the number of Common Shares of the
Company beneficially owned by each, directly or indirectly, or over which each
exercised control or direction, as at April 22, 2019.
- 8 -
| Colin Steyn |
|
Chairman
Independent Director
Western Cape, South Africa
Director Since: October 15, 2012 |
Colin Steyn is
a retired businessman with over 40 years’ experience in the resource
sector, particularly in the development of mining operations in southern
Africa. He was previously President and Chief Executive Officer of LionOre
Mining International from 1999 to 2007, when it was acquired by Norilsk
Nickel. From 1996 to 2000, Mr. Steyn was a director of Centachrome, a
worldwide metals marketing organization, and for five years prior to this
was Executive Director in charge of Metallurgical Operations in Zimbabwe
for Rio Tinto, where he started his career in 1979. Mr. Steyn is a past
Director of Mantra Resources Ltd; a past Non-Executive Chairman of
Coalspur Mines Ltd and a past Director of Mirabela Nickel Limited
(“Mirabela”). |
| Securities Held: |
Board/Committee Membership |
Attendance |
Common Shares:
2,697,059*
Stock Options: 377,000
Cash-settled RSUs: 113,334
*1,719,459 Common Shares are held
indirectly through
Springvale
Enterprises Ltd., a family trust |
Board |
8 of 8 |
100% |
| Other Public Directorships |
Committee Appointments |
| No other public
companies |
| Greg McCunn |
|
Chief Executive Officer
Non-Independent Director
British Columbia, Canada
Director Since: April 1, 2019 |
Greg McCunn is the CEO of the
Company and a Professional Engineer with over 25 years’ experience in
finance, operations, project engineering, project construction and
corporate development. Most recently he served as CEO of Alio Gold Inc, as
CFO for Asanko and as CFO for Farallon Mining, prior to which he held
technical, operational and corporate development roles with Teck
Resources, Placer Dome and junior mining companies in Canada and
Australia. He holds a Bachelor of Applied Science degree in Metallurgical
Engineering and a Master’s degree in Business Administration. |
Securities Held:
Common Shares: 100,000
Stock Options: 300,000
Cash-settled RSUs: 200,000
|
Board/Committee Membership |
Attendance |
| Board |
n/a |
n/a |
| Other Public Directorships |
Committee Appointments |
| No other public companies |
- 9 -
| Peter Breese |
|
President and Chief Operating Officer
Non-Independent Director
Gauteng, South Africa
Director Since: October 15, 2012 |
Peter Breese is the President
and Chief Operating Officer (“COO”) of the Company. Mr. Breese has over 25
years operational experience in the global mining industry, having
predominantly worked across Africa (Ghana, South Africa, Botswana,
Tanzania and Zimbabwe) and Australia in the gold, uranium, nickel,
platinum and chrome sectors. He has held a number of senior management
positions in public companies listed on the TSX and the NYSE American,
including Chief Executive Officer of Asanko until April 1, 2019, the Chief
Executive Officer of Mantra Resources, before its US$1 billion acquisition
by ARMZ, the 51.4% shareholder in Uranium One Inc., Chief Executive of
Norilsk Nickel International, following its US$6 billion acquisition of
LionOre, where he was Chief Operating Officer, as well as senior executive
and board positions with Impala Platinum Holdings, Mimosa Mining Company,
Zimasco and BCL. He holds a PMD from Harvard Business School. |
Securities Held:
Common Shares: 780,249
Stock Options: 1,590,000
Cash-settled RSUs: 476,650
|
Board/Committee Membership |
Attendance |
| Board |
8 of
8 |
100% |
| Safety, Health, Environment and
Community Committee |
4 of 4 |
100% |
| Other Public Directorships |
Committee Appointments |
| No other public
companies |
| Shawn Wallace |
|
Independent Director
British Columbia, Canada
Director Since: February 26, 2010 |
Shawn Wallace is a businessman involved in managing public
companies and one of the original founding members of the Company and
served as Chairman of the Company from March 2010 to February 2014. He has
spent the last thirty years active in all facets of building and operating
several successful junior mining exploration and development companies. He
is currently the President and CEO of Auryn Resources Inc. and the
Chairman of Torq Resources Inc.
Mr. Wallace is a past Chairman and Director of Cayden Resources Inc.
and a past Director of Full Metal Minerals Inc |
Securities Held:
Common Shares: 17,200
Stock Options: 357,000
Cash-settled RSUs: 113,334
|
Board/Committee Membership |
Attendance |
| Board |
6 of 8 |
75% |
| Other Public Directorships |
Committee
Appointments |
| Torq Resources Inc. (TSX-V)
– Co-Chair of the Board |
None |
| Auryn Resources Inc.
(TSX) |
None |
- 10 -
| Gordon Fretwell |
|
Independent Director
British Columbia, Canada
Director Since: February 24, 2014 |
Gordon Fretwell is a lawyer who holds a Bachelor of Commerce
degree and graduated from the University of British Columbia in 1979 with
a Bachelor of Law degree. Formerly a partner in a large Vancouver law
firm, Mr. Fretwell has, since 1991, been a self- employed solicitor
(Gordon J. Fretwell Law Corporation) in Vancouver practicing primarily in
the areas of corporate and securities law.
Mr. Fretwell is a past director of Coro Mining Corp., Northern Dynasty
Minerals Ltd., Curis Resources Ltd., Benton Resources Corp., Lignol Energy
Corp (“Lignol”), and Pine Valley Mining Corporation. |
Securities Held:
Common Shares: 243,200
Stock Options: 357,000
Cash-settled RSUs: 113,334
|
Board/Committee Membership |
Attendance |
| Board |
8 of 8 |
100% |
| Audit Committee |
4 of 4 |
100% |
| Compensation, Governance and
Nominating Committee (CGNC) – Chair |
2 of 2 |
100% |
| Other Public Directorships |
Committee Appointments |
Auryn Resources Inc. (TSX)
|
Audit Committee, Compensation
Committee, Nominating and
Governance Committee, Mergers and
Acquisitions Committee |
| Canada Rare Earth Corp. (TSX-V) |
Compensation Committee |
RE Royalties Ltd. (TSX-V) |
Nominating and Corporate
Governance Committee |
| Marcel de Groot |
|
Independent Director
British Columbia, Canada
Director Since: July 2, 2009 |
Marcel de Groot is an independent consultant and founding
partner and President of Pathway Capital Ltd. (“Pathway”), a
Vancouver-based private venture capital corporation. Pathway has worked
with a number of successful public mining companies including Peru Copper
Inc. (acquired by Chinalco), and Sandstorm Gold Ltd. Mr. de Groot
graduated from the University of British Columbia with a Bachelor of
Commerce degree and articled with Grant Thornton LLP where he obtained the
Chartered Accountant designation.
Mr. de Groot is the past chairman and director of Luna Gold Corp., and
a past director of Northern Dynasty Minerals Ltd., Sandstorm Metals &
Energy Ltd., Underworld Resources Inc., Esperanza Resources, Premier
Royalty, Lowell Copper and Anthem United. |
Securities Held:
Common Shares: 40,000
Stock Options: 357,000
Cash-settled RSUs: 113,334
|
Board/Committee Membership |
Attendance |
| Board |
8 of
8 |
100% |
| Audit Committee – Chair |
4 of 4 |
100% |
| Compensation, Governance and
Nominating Committee (CGNC) |
2 of 2 |
100% |
| Other Public Directorships |
Committee
Appointments |
| Equinox Gold Corp. (TSX-V) |
Audit Committee, Compensation and
Corporate Governance Committee |
- 11 -
| Michael Price |
|
Independent Director
London, United Kingdom
Director Since: February 6, 2014 |
Dr. Michael Price is a mining
finance consultant and advisor with over 35 years’ experience in mining
and mining finance. During his career, he has held senior positions at
Barclays Capital, Societe Generale, and NM Rothschild and Sons and he is
also the London Representative of Resource Capital Funds. |
Securities Held:
Common Shares: Nil
Stock Options: 357,000
Cash-settled RSUs: 113,334
|
Board/Committee Membership |
Attendance |
| Board |
7 of
8 |
88% |
| Audit Committee |
3 of 4 |
75% |
| Safety, Health, Environment and
Communities Committee – Chair |
4 of 4 |
100% |
| Other Public Directorships |
Committee Appointments |
| Eldorado Gold Corporation
(TSX, NYSE) |
Audit Committee,
Sustainability Committee |
| Entrée Resources Ltd. (TSX,
NYSE) |
Audit Committee,
Technical Committee |
| William Smart |
|
|
Independent Director
Guernsey, Channel Islands
Director Since: Nov. 11, 2015 |
William Smart is a businessman with over 40 years’ experience in
the resource sector. He is a previous Managing Director of mining
companies with the Anglo American and Zimasco Groups in Zimbabwe with
experience in the base metal and precious metal sectors in Southern
Africa. He was a senior executive of LionOre at the time of its
acquisition by Norilsk Nickel.
Mr. Smart is a past Director of Mantra Resources Ltd and Coalspur Mines
Ltd. |
Securities Held:
Common Shares: 1,092,561
Stock Options: 337,000
Cash-settled RSUs: 113,334
|
Board/Committee Membership |
Attendance |
| Board |
8 of
8 |
100% |
| Compensation, Governance and
Nominating Committee (CGNC) |
2 of 2 |
100% |
| Safety, Health, Environment and Communities
Committee |
4 of 4 |
100% |
| Other Public Directorships |
Committee Appointments |
| No other public companies |
Notes:
| (1) |
The information as to principal occupation, business
or employment and Common Shares beneficially owned or controlled is not
within the knowledge of the management of the Company and has been
furnished by the respective nominees. |
| |
|
| (2) |
None of the proposed nominees for election as a
director of the Company are proposed for election pursuant to any
arrangement or understanding between the nominee and any other
person. |
| |
|
| (3) |
As of April 22, 2019, the directors and officers of
the Company and their associates and affiliates, as a group beneficially
owned, directly or indirectly, or exercised control or direction over, an
aggregate of approximately 5,175,081 Common Shares representing
approximately 2.3% of the outstanding Common Shares of the
Company. |
- 12 -
Cease Trade Orders, Bankruptcies, Penalties or
Sanctions
None of the individuals named above is or has been within the
past ten years a director, chief executive officer or chief financial officer of
any company that:
| (a) |
was subject to a cease trade order or similar order or an
order that denied the relevant company access to any exemption under
securities legislation that was in effect for a period of more than 30
consecutive days 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 a cease trade order or similar order or an
order that denied the relevant company access to any exemption under
securities legislation that was in effect for a period of more than 30
consecutive days 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. |
Except as disclosed below, none of the individuals named above
is or has been within the past ten years, a director or executive officer of any
company that, while that person was acting in that capacity or within a year of
that person ceasing to act in that 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, or has,
within the past ten years become bankrupt, made a proposal under any legislation
relating to bankruptcy or insolvency, or become 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.
Mr. Steyn was a director of Mirabela until January 11, 2014. On
February 25, 2014, within a year of Mr. Steyn ceasing to be a director, Mirabela
announced that it had entered into a legally binding plan support agreement
(“PSA”) which established a framework for a proposed recapitalization of
Mirabela, subject to certain terms and conditions, as well as the appointment of
Messrs. Madden, Rocke and Winterbottom of KordaMentha as joint and several
voluntary administrators. Mirabela also announced that, under the PSA, the
proposed recapitalization will be effected through a recapitalization and
restructuring plan to be implemented through a deed of company arrangement in
Australia and an extrajudicial reorganization proceeding to be filed by Mirabela
Brazil before the competent Brazilian court. Trading in securities of Mirabela
on the Australian Securities Exchange has been suspended since October 9,
2013.
Mr. Fretwell was a director of TSX-V listed Lignol Energy
Corporation (“Lignol”) from January 2007 to May 2015. Lignol went into
receivership on August 22, 2014.
In addition, none of the individuals named above has been
subject to:
| (a) |
any penalties or sanctions imposed by a court relating to
securities legislation or by a securities regulatory authority or has
entered into a settlement agreement with a securities regulatory
authority; or |
| |
|
| (b) |
any other penalties or sanctions imposed by a court or
regulatory body that would likely be considered important to a reasonable
shareholder in deciding whether to vote for a nominee as
director. |
- 13 -
Advance Notice Provisions
At the Company’s Annual General and Special Meeting
held on June 27, 2013 the shareholders approved an amendment to the Articles of
the Company to include advance notice provisions (the “Advance Notice
Provisions”) with respect to the nomination of individuals for
election as director. A copy of the Notice of Meeting and Information Circular
prepared for the June 27, 2013 annual general and special meeting including the
resolution to amend the Articles of the Company, which include the Advance
Notice Provisions were SEDAR filed on May 31, 2013.
The Advance Notice Provisions provide shareholders, directors
and management of the Company with a clear framework for nominating directors.
Among other things, the Advance Notice Provisions fix a deadline by which
holders of Common Shares must submit director nominations to the Company prior
to any annual or special meeting of shareholders and sets forth the minimum
information that a shareholder must include in the notice to the Company for the
notice to be in proper written form.
A copy of the amended Articles (the “Articles”) as referred to
in the Information Circular prepared for the July 27, 2013 annual general and
special meeting, was filed under the Company’s SEDAR profile on July 11, 2013 at
www.sedar.com.
The Company has not received notice of a nomination in
compliance with the Articles of the Company and, as such, any nominations other
than nominations by or at the direction of the Board or an authorized officer of
the Company will be disregarded at the Meeting.
APPOINTMENT OF AUDITOR
The Shareholders will be asked to approve the appointment of
KPMG LLP, Chartered Professional Accountants, of 777 Dunsmuir Street, Vancouver,
British Columbia, V7Y 1K3 as auditor of the Company at a remuneration to be
fixed by the Board. KPMG LLP has been auditor of the Company since August 23,
2011.
The following table discloses the aggregate fees billed for
each of the last two fiscal years for professional services rendered by the
Company’s audit firm for various services.
Nature of Services
|
Fees Paid to Auditor for
Year Ended
December 31, 2018 |
Fees Paid to Auditor for
Year Ended
December 31, 2017 |
| Audit Fees |
C$569,013 |
C$768,049 |
| Tax Fees |
Nil |
Nil |
| All Other Fees |
Nil |
Nil |
| Total |
C$569,013 |
C$768,049 |
SHAREHOLDER RIGHTS PLAN
The Shareholders of Asanko previously approved a shareholder
rights plan agreement at the annual general meeting of Asanko’s shareholders
held on June 16, 2016 (the “Original Shareholder Rights Plan”), originally
effective May 17, 2016 (the “Effective Date”). The Original Shareholder Rights
Plan is set to expire at the conclusion of the Meeting.
- 14 -
On April 29, 2019, the Board approved the amendment and
restatement of the Original Shareholder Rights Plan to provide for continuation
for a further three-year term to the close of the annual general meeting of the
shareholders of the Company to be held in 2022 (the “Amended and
Restated Shareholder Rights Plan”). No other substantive amendments to
the Original Shareholder Rights Plan are proposed. At the Meeting, the
Shareholders will be asked to consider and, if deemed advisable, to ratify,
confirm and approve the Amended and Restated Shareholder Rights Plan, as amended
and restated, for a further three-year term. The approval of the Amended and
Restated Shareholder Rights Plan is not being recommended in response to or in
contemplation of any known take-over bid or other similar transaction. The
specific terms of the Amended and Restated Shareholder Rights Plan will be
reflected in an agreement to be finalized between the Company and Computershare
Investor Services Inc., as Rights Agent, and will be duly executed as of April
29, 2019. The principal terms of the Amended and Restated Shareholder Rights
Plan are summarized below. The full text of the Amended and Restated Shareholder
Rights Plan will be filed prior to the Meeting in a Material Change Report
expected to filed in May 2019, and which will be available for download at
www.sedar.com and from the Company’s website at
www.asanko.com/Investors/AGM-Materials. In addition, a copy of the
Amended and Restated Shareholder Rights Plan will be available for inspection at
the Meeting.
Unless otherwise defined below, all capitalized terms shall
have the meanings specified in the Amended and Restated Shareholder Rights Plan
Agreement.
Purpose of the Plan
The objectives of the Amended and Restated Shareholder Rights
Plan are to ensure, to the extent possible, that all Shareholders are treated
equally and fairly in connection with any takeover bid for the Company. Takeover
bids may be structured to be coercive or may be initiated at a time when the
Board will have a difficult time preparing an adequate response to the offer.
Accordingly, such offers do not always result in Shareholders receiving equal or
fair treatment or full or maximum value for their investment. Under current
Canadian securities legislation, a takeover bid is required to remain open, in
certain circumstances, for a minimum of 105 days, a period of time which should
be sufficient for the directors to: (i) evaluate a takeover bid (particularly if
it includes share consideration); (ii) explore, develop and pursue alternatives
which are superior to the takeover bid and which could maximize Shareholder
value; and (iii) make reasoned recommendations to the Shareholders.
The Amended and Restated Shareholder Rights Plan states the
minimum time for a takeover bid to remain open is 105 days. The Amended and
Restated Shareholder Rights Plan discourages discriminatory, coercive or unfair
takeovers of the Company and gives the Board time if, in the circumstances, the
Board determines it is appropriate to take such time, to pursue alternatives to
maximize Shareholder value in the event an unsolicited takeover bid is made for
all or a portion of the outstanding Common Shares. As set forth in detail below,
the Amended and Restated Shareholder Rights Plan discourages coercive hostile
takeover bids by creating the potential that any Common Shares which may be
acquired or held by such a bidder will be significantly diluted. The potential
for significant dilution to the holdings of such a bidder can occur as the
Amended and Restated Shareholder Rights Plan provides that all holders of Common
Shares who are not related to the bidder will be entitled to exercise rights
issued to them under the Amended and Restated Shareholder Rights Plan and to
acquire Common Shares at a substantial discount to prevailing market prices. The
bidder or the persons related to the bidder will not be entitled to exercise any
Rights (defined below) under the Amended and Restated Shareholder Rights Plan.
Accordingly, the Amended and Restated Shareholder Rights Plan will encourage
potential bidders to make takeover bids by means of a Permitted Bid (as defined
below) or to approach the Board to negotiate a mutually acceptable transaction.
The Permitted Bid provisions of the Amended and Restated Shareholder Rights Plan are designed to ensure that in any takeover bid for
outstanding Common Shares of the Shareholders, all Shareholders are treated
equally and are given adequate time to properly assess such takeover bid on a
fully-informed basis.
- 15 -
The Amended and Restated Shareholder Rights Plan is not being
proposed to prevent a takeover of the Company, to secure the continuance of
management or the directors of the Company in their respective offices or to
deter fair offers for the Common Shares.
Term
Provided the Amended and Restated Shareholder Rights Plan is
ratified and approved at the Meeting, the Amended and Restated Shareholder
Rights Plan (unless terminated earlier) will remain in effect until the close of
the annual meeting of Shareholders to be held in 2022.
Issuance of Rights
Pursuant to the Original Shareholder Rights Plan, the Company
issued one right (a “Right”) in respect of each Voting Share outstanding as of
the close of business (Vancouver time) (the “Record Time”) of the Effective
Date. “Voting Shares” include the Common Shares and any other shares of the
Company entitled to vote generally in the election of all directors. As of the
Effective Date, the only Voting Shares outstanding were the Common Shares. One
Right is also issued for each additional Voting Share issued after the Record
Time and prior to the earlier of the Separation Time and the Expiration Time,
subject to the earlier termination or expiration of the Rights as set out in the
Rights Agreement.
The issuance of the Rights is not dilutive and do not affect
reported earnings or operating cash flow per share until the Rights separate
from the underlying Common Shares and become exercisable or until the exercise
of the Rights. The issuance of the Rights does not change the manner in which
Shareholders trade their Common Shares.
Certificates and Transferability
Prior to the Separation Time, the Rights are evidenced by a
legend imprinted on certificates for Common Shares issued after the Record Time.
Rights are also attached to Common Shares outstanding on the Effective Date,
although share certificates issued prior to the Effective Date do not bear such
a legend. Shareholders are not required to return their certificates in order to
have the benefit of the Rights. Prior to the Separation Time, Rights trade
together with the Common Shares and are not exercisable or transferable
separately from the Common Shares. From and after the Separation Time, the
Rights will become exercisable, will be evidenced by Rights Certificates and
will be transferable separately from the Common Shares.
Separation of Rights
The Rights will become exercisable and begin to trade
separately from the associated Common Shares at the “Separation Time” which is
generally (subject to the ability of the Board to defer the Separation Time) the
close of business on the tenth trading day after the earliest to occur of:
- a public announcement that a person or group of affiliated or associated
persons or persons acting jointly or in concert has become an “Acquiring
Person”, meaning that such person or group has acquired Beneficial Ownership
(as defined in the Rights Plan) of 20% or more of the outstanding Voting
Shares other than as a result of: (i) a reduction in the number of Voting
Shares outstanding; (ii) a “Permitted Bid” or “Competing Permitted Bid” (as
defined below); (iii) acquisitions of Voting Shares in respect of which the
Board has waived the application of the Rights Agreement; (iv) other specified
exempt acquisitions and pro rata acquisitions in which shareholders
participate on a pro rata basis; or (v) an acquisition by a person of Voting Shares upon the exercise, conversion or
exchange of a security convertible, exercisable or exchangeable into a Voting
Share received by a person in the circumstances described in (ii), (iii) or
(iv) above;
- 16 -
-
the date of commencement of, or the first public announcement of an
intention of any person (other than the Company or any of its subsidiaries) to
commence a takeover bid (other than a Permitted Bid or a Competing Permitted
Bid) where the Voting Shares subject to the bid owned by that person
(including affiliates, associates and others acting jointly or in concert
therewith) would constitute 20% of more of the outstanding Voting Shares; and
-
the date upon which a Permitted Bid or Competing Permitted Bid ceases to
qualify as such.
Promptly following the Separation Time, separate certificates
evidencing rights (“Rights Certificates”) will be mailed to the holders of
record of the Voting Shares as of the Separation Time and the Rights
Certificates alone will evidence the Rights.
Rights Exercise Privilege
After the Separation Time, each Right entitles the holder
thereof to purchase one Common Share at an initial “Exercise Price” equal to
three times the “Market Price” at the Separation Time. The Market Price is
defined as the average of the daily closing prices per share of such securities
on each of the 20 consecutive trading days through and including the trading day
immediately preceding the Separation Time. Following a transaction which results
in a person becoming an Acquiring Person (a “Flip-In Event”), the Rights entitle
the holder thereof to receive, upon exercise, such number of Common Shares which
have an aggregate Market Price (as of the date of the Flip-In Event) equal to
twice the then Exercise Price of the Rights for an amount in cash equal to the
Exercise Price. In such event, however, any Rights beneficially owned by an
Acquiring Person (including affiliates, associates and others acting jointly or
in concert therewith), or a transferee of any such person, will be null and
void. A Flip-In Event does not include acquisitions approved by the Board or
acquisitions pursuant to a Permitted Bid or Competing Permitted Bid.
Permitted Bid Requirements
A bidder can make a takeover bid and acquire Voting Shares
without triggering a Flip-In Event under the Rights Plan if the takeover bid
qualifies as a Permitted Bid.
The requirements of a “Permitted Bid” include the following:
-
the takeover bid must be made by means of a takeover bid circular;
-
the takeover bid is made to all holders of Voting Shares on the books of
the Company, other than the offeror;
-
no Voting Shares are taken up or paid for pursuant to the takeover bid
unless more than 50% of the Voting Shares held by Independent Shareholders:
(i) shall have been deposited or tendered pursuant to the take- over bid and
not withdrawn; and (ii) have previously been or are taken up at the same time;
-
the takeover bid contains an irrevocable and unqualified provision that, no
Voting Shares will be taken up or paid for pursuant to the takeover bid prior
to the close of business on the date which is not less than 105 days following
the date of the takeover bid;
- 17 -
-
the takeover bid contains an irrevocable and unqualified provision that,
Voting Shares may be deposited pursuant to such takeover bid at any time
during the period of time between the date of the takeover bid and the date on
which Voting Shares may be taken up and paid for and any Voting Shares
deposited pursuant to the takeover bid may be withdrawn until taken up and
paid for; and
-
the takeover bid contains an irrevocable and unqualified provision that, if
on the date on which Voting Shares may be taken up and paid for under the
takeover bid, more than 50% of the Voting Shares held by Independent
Shareholders have been deposited pursuant to the takeover bid and not
withdrawn, the offeror will make public announcement of that fact and the
takeover bid will remain open for deposits and tenders of Voting Shares for
not less than 10 business days from the date of such public announcement.
The Amended and Restated Shareholder Rights Plan also allows
for a competing Permitted Bid (a “Competing Permitted Bid”) to be made while a
Permitted Bid is in existence. A Competing Permitted Bid must satisfy all of the
requirements of a Permitted Bid except that it may expire on the same date as
the Permitted Bid, subject to the requirement that it be outstanding for a
minimum period of 105 days (which is the minimum period required under current
Canadian securities laws).
Permitted Lock-Up Agreements
A person will not become an Acquiring Person by virtue of
having entered into an agreement (a “Permitted Lock-Up Agreement”) with a
Shareholder whereby the Shareholder agrees to deposit or tender Voting Shares to
a takeover bid (the “Lock-Up Bid”) made by such person, provided that the
agreement meets certain requirements including:
-
the terms of the agreement are publicly disclosed and a copy of the
agreement is publicly available not later than the date of the Lock-Up Bid or,
if the Lock-Up Bid has not been made prior to the date on which such agreement
is entered into, not later than the first business day following the date of
such agreement;
-
the holder who has agreed to tender Voting Shares to the Lock-Up Bid made
by the other party to the agreement is permitted to terminate its obligation
under the agreement, and to terminate any obligation with respect to the
voting of such Voting Shares, in order to tender Voting Shares to another
takeover bid or to support another transaction where: (i) the offer price or
value of the consideration payable under the other takeover bid or transaction
is greater than the price or value of the consideration per share at which the
holder has agreed to deposit or tender Voting Shares to the Lock-Up Bid, or is
greater than a specified minimum which is not more than 7% higher than the
price or value of the consideration per share at which the holder has agreed
to deposit or tender Voting Shares under the Lock-Up Bid; and (ii) if the
number of Voting Shares offered to be purchased under the Lock-Up Bid is less
than all of the Voting Shares held by Shareholders (excluding Voting Shares
held by the offeror), the number of Voting Shares offered to be purchased
under the other takeover bid or transaction (at an offer price not lower than
in the Lock-Up Bid) is greater than the number of Voting Shares offered to be
purchased under the Lock-Up Bid or is greater than a specified number which is
not more than 7% higher than the number of Voting Shares offered to be
purchased under the Lock-Up Bid; and
- 18 -
- no break-up fees, top-up fees, or other penalties that exceed in the
aggregate the greater of 2.5% of the price or value of the consideration
payable under the Lock-Up Bid and 50% of the increase in consideration
resulting from another takeover bid or transaction shall be payable by the
holder if the holder fails to deposit or tender Voting Shares to the Lock-Up
Bid.
Waiver and Redemption
If a potential offeror does not desire to make a Permitted Bid,
it can negotiate with, and obtain the prior approval of, the Board to make a
takeover bid by way of a takeover bid circular sent to all holders of Voting
Shares on terms which the Board considers fair to all Shareholders. In such
circumstances, the Board may waive the application of the Amended and Restated
Shareholder Rights Plan thereby allowing such bid to proceed without dilution to
the offeror. Any waiver of the application of the Amended and Restated
Shareholder Rights Plan in respect of a particular takeover bid shall also
constitute a waiver of any other takeover bid which is made by means of a
takeover bid circular to all holders of Voting Shares while the initial takeover
bid is outstanding. The Board may also waive the application of the Amended and
Restated Shareholder Rights Plan in respect of a particular Flip-in Event that
has occurred through inadvertence, provided that the Acquiring Person that
inadvertently triggered such Flip-in Event reduces its beneficial holdings to
less than 20% of the outstanding Voting Shares within 14 days or such earlier or
later date as may be specified by the Board. With the prior consent of the
holders of Voting Shares, the Board may, prior to the occurrence of a Flip-in
Event that would occur by reason of an acquisition of Voting Shares otherwise
than pursuant to the foregoing, waive the application of the Amended and
Restated Shareholder Rights Plan to such Flip- in Event.
The Board may, with the prior consent of the holders of Voting
Shares, at any time prior to the occurrence of a Flip-in Event, elect to redeem
all but not less than all of the then outstanding Rights at a redemption price
of $0.00001 per Right. Rights are deemed to be redeemed following completion of
a Permitted Bid, a Competing Permitted Bid or a takeover bid in respect of which
the Board has waived the application of the Rights Plan.
Protection Against Dilution
The Exercise Price, the number and nature of securities which
may be purchased upon the exercise of Rights and the number of Rights
outstanding are subject to adjustment from time to time to prevent dilution in
the event of dividends, subdivisions, consolidations, reclassifications or other
changes in the outstanding Common Shares, pro rata distributions to holders of
Common Shares and other circumstances where adjustments are required to
appropriately protect the interests of the holders of Rights.
Exemptions for Investment Advisors
Investment advisors (for client accounts), trust companies
(acting in their capacity as trustees or administrators), statutory bodies whose
business includes the management of funds (for employee benefit plans, pension
plans, or insurance plans of various public bodies) and administrators or
trustees of registered pension plans or funds acquiring greater than 20% of the
Voting Shares are exempted from triggering a Flip- in Event, provided they are
not making, either alone or jointly or in concert with any other person, a
takeover bid.
- 19 -
Duties of the Board
The ratification and approval of the Amended and Restated
Shareholder Rights Plan for continuation will not in any way lessen or affect
the duty of the Board to act honestly and in good faith with a view to the best
interests of the Company. The Board, when a takeover bid or similar offer is
made, will continue to have the duty and power to take such actions and make
such recommendations to Shareholders as are considered appropriate.
Amendment
The Company may make amendments to the Amended and Restated
Shareholder Rights Plan at any time to correct any clerical or typographical
error and may make amendments which are required to maintain the validity of the
Amended and Restated Shareholder Rights Plan due to changes in any applicable
legislation, regulations or rules. The Company may, with the prior approval of
Shareholders (or the holders of Rights if the Separation Time has occurred),
supplement, amend, vary, rescind or delete any of the provisions of the Amended
and Restated Shareholder Rights Plan.
Vote Required and Recommendation of the Board
Shareholder Approval
The text of the resolution to ratify, confirm and approve the
Amended and Restated Shareholder Rights Plan, as amended, for continuation (the
“Shareholder Rights Plan Resolution”), which will be submitted to Shareholders
at the Meeting, is set forth below. In addition to ratifying and approving the
Amended and Restated Shareholder Rights Plan for continuation, the Shareholder
Rights Plan Resolution also approves any amendments to the Amended and Restated
Shareholder Rights Plan necessary to respond to any requirements which may be
raised by any stock exchange or professional commentators on shareholder rights
plans in order to conform the Amended and Restated Shareholder Rights Plan to
versions of shareholder rights plans currently prevalent for reporting issuers
in Canada. The Company believes that the Amended and Restated Shareholder Rights
Plan is consistent with the form of shareholder rights plans now prevalent for
public companies in Canada and so does not anticipate that any such further
amendments will be required, but the resolution provides the Company with the
necessary authority to make any such amendments should the need arise.
The Board believes that continuation of the Amended and
Restated Shareholder Rights Plan is in the best interests of the Company and its
Shareholders and, accordingly, recommends that Shareholders vote FOR the
Shareholder Rights Plan Resolution. To be approved, the Shareholder Rights Plan
Resolution must be passed by the affirmative votes cast by Independent
Shareholders of not less than a majority of the Common Shares represented in
person or by proxy at the Meeting that vote on the Shareholder Rights Plan
Resolution. In effect, all shareholders will be considered Independent
Shareholders provided they are not, at the relevant time, an Acquiring Person or
making a takeover bid for the Company. The Company is not aware of any
shareholder whose vote at the Meeting would be excluded for purposes of the
approval requirement under the Amended and Restated Shareholder Rights Plan. The
TSX requires that the Shareholder Rights Plan Resolution be passed by the
affirmative votes cast by holders of not less than a majority of the Common
Shares represented in person or by proxy at the Meeting. Except where a
Shareholder who has given the proxy directs that his or her Common Shares be
voted against the Shareholder Rights Plan Resolution, the appointees named in
the accompanying Proxy will vote the Common Shares represented by such proxy FOR
the Shareholder Rights Plan Resolution, the text of which is set out as follows.
- 20 -
“BE IT RESOLVED that:
| |
1. |
The Amended and Restated Shareholder Rights Plan,
originally effective as of May 17, 2016, as amended and restated April 29,
2019, between the Company and Computershare Investor Services Inc. (the
“Amended and Restated Shareholder Rights Plan”) as described in the
Information Circular of the Company dated April 29, 2019, be and is hereby
ratified, confirmed and approved for continuation for a further three
years; and |
| |
|
|
| |
2. |
The making on or prior to the date hereof of any other
amendments to the Amended and Restated Shareholder Rights Plan as the
Company may consider necessary or advisable to satisfy the requirements of
any stock exchange or professional commentators on shareholder rights
plans in order to conform the Amended and Restated Shareholder Rights Plan
to versions of shareholder rights plans currently prevalent for reporting
issuers in Canada, be and is hereby approved.” |
Recommendation of the Board
The Board has determined that continuation of the Amended
and Restated Shareholder Rights Plan is in the best interests of the Company and
its shareholders and recommends that shareholders vote FOR the Shareholder
Rights Plan Resolution to ratify, confirm and approve continuation of the
Amended and Restated Shareholder Rights Plan. To be effective, the Shareholder
Rights Plan Resolution must be approved by a majority of votes cast in person or
by proxy at the Meeting. Unless instructed in the Proxy to the contrary, the
persons named in the accompanying form of proxy intend to vote FOR the
Shareholder Rights Plan Resolution.
CORPORATE GOVERNANCE
Corporate governance refers to the policies, procedures and
structure of the board of directors of a company, whose members are elected by
and are accountable to the shareholders of a company. Corporate governance
encourages establishing a reasonable degree of independence of the board of
directors from executive management and the adoption of policies to ensure the
board of directors recognizes the principles of good management. The Board is
committed to sound corporate governance practices; as such practices are both in
the interests of shareholders and help to contribute to effective and efficient
decision-making.
This section sets out the Company’s approach to corporate
governance and addresses the Company’s compliance with National Instrument
58-101 Disclosure of Corporate Governance Practices (“NI 58-101”).
Constitution and Independence of the Board
The Board is currently comprised of seven persons, of whom six
are independent directors. After the Meeting six of the eight directors will be
independent, including Messrs. Steyn, Wallace, Fretwell, de Groot, Price and
Smart. Directors are considered to be independent if they have no direct or
indirect material relationship with the Company that could, or could be expected
to interfere with the proper exercise of their discretion as directors. A
“material relationship” is a relationship which could, in the view of the Board,
be reasonably expected to interfere with the exercise of a director’s
independent judgment. Messrs. McCunn and Breese currently serve as the Company’s
CEO and COO and as such are not considered to be independent.
- 21 -
Other Directorships
See disclosure under “Election of
Directors” above.
Meeting Attendance
The Board facilitates its independent supervision over
management by holding regular meetings of the Board to discuss the operations of
the Company.
The Board understands the need for it to maintain a significant
degree of independence from management. The independent members of the Board
meet without management once after every quarterly Board meeting. For the year
ended December 31, 2018, the Company held a total of eight formal Board meetings
and its members were in frequent communication via email and other means. The
attendance record of each member of the Board has been noted under “Election of
Directors” above.
Board Responsibilities
The Board has overall responsibility for the stewardship of the
Company. The Board has made public its
“Corporate Governance Policies and Procedures Manual”
(the “Corporate Governance Manual”) which was adopted effective April 22, 2009
and last amended February 12, 2019. A copy of the Corporate Governance Manual is
available at
www.asanko.com/Governance/Governance-Documents/default.aspx. The
Board’s responsibilities include:
| (a) |
To oversee management of the Company and, in doing so, at
all time to serve the best interests of the Company on behalf of its
shareholders; |
| |
|
| (b) |
To exercise business judgment in discharging their
fiduciary duties of care, loyalty and candour, acting on behalf of the
shareholders in the best interests of the Company; |
| |
|
| (c) |
To know and understand the Company and its business by
becoming and remaining informed about the Company and all aspects of its
business; |
| |
|
| (d) |
To determine and design and implement effective systems
of control and gathering of information for periodic and timely reporting
on important matters concerning the Company’s business, and to
periodically review and monitor the integrity of such systems; |
| |
|
| (e) |
To establish and implement policies to protect the
Company’s confidentiality and proprietary information from unauthorized or
inappropriate disclosure and to retain confidentiality of matters
addressed in all Board discussions and proceedings; |
| |
|
| (f) |
To attend Board meetings and committee meetings on which
they serve, devoting the necessary time, as frequently as required, to
inform themselves of and discuss issues, and to properly discharge their
responsibilities. |
The Board is empowered by governing corporate law, the
Company’s Articles and the Corporate Governance Manual to manage, or supervise
the management of, the affairs and business of the Company.
- 22 -
The Board performs its functions through quarterly and special
meetings and has delegated certain of its responsibilities to those committees
described below. In addition, the Board has established policies and procedures
that limit the ability of management to carry out certain specific activities
without the prior approval of the Board.
Long-term strategies and annual operating and capital plans
with respect to the Company’s operations are developed by Senior Management and
are to be reviewed and approved by the Board.
The Board, through the Audit Committee, has the responsibility
to identify the principal risks of the Company’s business. It works with
management to implement policies to identify the risks and to establish systems
and procedures to ensure that these risks are monitored.
The Board, through the Compensation, Nominating and Governance
Committee, reviews and discusses succession planning for senior management
positions as part of the Company’s planning process. The Board has, together
with the CEO, developed a written position description for the CEO. As well, the
Board meets at least quarterly with the CEO to review and approve the CEO’s
quarterly and annual objectives. The Board has delegated responsibility for
communication with the public and the Company’s shareholders to its Disclosure
Committee. Section IX – Disclosure Controls and Procedures Policy
of the Corporate Governance Manual explains the procedures in place that ensure
proper dissemination of news releases, and that those shareholders who request
information about the Company receive it in a timely manner. Inquiries by
shareholders are directed to and dealt with by Senior Management.
The Board has delegated responsibility for the integrity of
internal controls and management information systems to the Audit Committee. The
Company’s external auditors report directly to the Audit Committee. In its
regular meetings with the external auditors, the Audit Committee discusses,
among other things, the Company’s financial statements and the adequacy and
effectiveness of the Company’s internal controls and management information
systems.
Orientation and Continuing Education
As part of the orientation program, new directors meet with
senior management to discuss the business of the Company, Board policies and
historical and current operating and financial information, and may tour
selected offices of the Company. See Section II – Corporate Governance
Overview and Guidelines in the Corporate Governance Manual for more
information.
The Board is comprised of individuals with varying backgrounds,
who have, both collectively and individually, extensive experience in running
and managing public companies in the natural resource sector. Refer to the
section “Occupation, Business or Employment of Directors” for a
description of the current principal occupations of the members of the Board of
Directors.
The Compensation, Nominating and Governance Committee has
determined that the eight director nominees possess the competencies necessary
for the Board to effectively fulfill its responsibilities.
Board members are encouraged to communicate with management,
auditors and technical consultants to keep themselves current with industry
trends and developments and changes in legislation, with management’s
assistance. Board members have full access to the Company’s records. There are
technical presentations at Board meetings and the question and answer portions
of these presentations are a valuable learning resource for the non-technical
directors.
- 23 -
The following table provides details regarding additional
continuing education undertaken by the directors during the year ended December
31, 2018:
| Director |
Course/Event |
Date |
| Colin Steyn |
Asanko
Gold Mine site visit |
November 2018 |
Greg McCunn
|
BMO Metals & Mining
Conference
Implications of the Block Chain on Precious Metal Sales
Seminar
European Gold Forum
RBC Capital Markets Marco Economic
Update Seminar
Precious Metals Summit
Laurel Hill Corporate
Governance Trends Seminar
Korn Ferry Executive Compensation in Mining
Seminar
JP Morgan Cybersecurity Awareness Seminar |
February 2018
March 2018
April 2018
August 2018
September 2018
October 2018
November 2018
December 2018 |
Peter Breese
|
Asanko Gold Mine site visits
Indaba Mining Conference
BMO Metals & Mining Conference
Denver Gold Forum
London Mines & Money Conference
Damang
Mine Site visit |
Numerous
February 2018
February 2018
September 2018
November 2018
December 2018
|
| Shawn Wallace |
None |
n/a |
Gordon Fretwell
|
Asanko Gold Mine site visit
Mandated Law Society Continued Education (twelve hours) |
November 2018
Various
|
Marcel de Groot
|
Vancouver Resource Investment
Conference
BMO Metals & Mining Conference
PDAC Mining
Conference
KPMG Audit Committee Round Table
Sprott Vancouver
Symposium on Natural Resources
Precious Metals Summit
Denver Gold
Forum
Mines & Money Americas Conference
Silver & Gold
Summit
Asanko Gold Mine site visit
Aurizona Gold Mine site visit
|
January 2018
February 2018
March 2018
July 2018
July 2018
September 2018
September 2018
October 2018
October 2018
November 2018
December 2018 |
Michael Price
|
Indaba Mining Conference
London Mines & Money Conference
Asanko Gold Mine site visit
Critical Resource Seminars
Accredited Director Education Sessions
|
February 2018
November 2018
November 2018
Various
Various |
| William Smart |
Asanko Gold Mine site visit |
November 2018 |
The orientation and continuing education process will be
reviewed on an annual basis and will be revised accordingly.
Assessments
The Board monitors the adequacy of information given to
directors, communication between the Board and management and the strategic
direction and processes of the Board and its committees. This function is
carried out by the Compensation, Nominating and Governance Committee whose
evaluations and assessments are used in connection with its duty of evaluating
and recommending persons as nominees for the position of Director of the
Company.
- 24 -
Ethical Business Conduct
The Board has adopted a written Code of Business Conduct and
Ethics which is available on the Company’s website at
www.asanko.com/Governance/Governance-Documents/default.aspx,
included within Section XIV – Code of Business Conduct and
Ethics in the Corporate Governance Manual (the “Code of Ethics”). The
Company’s Code of Ethics clearly sets out the Company’s standard requirements
for honest and ethical conduct of its directors, officers and employees
pertaining to conflicts of interest, timely disclosure, compliance with the law
and accountability. The Code of Ethics also clearly states the Company’s
requirements for fair dealing, and its corporate position on: conflicts of
interest and corporate opportunities and gifts, confidentiality and corporate
assets, intellectual property, reporting and the effects of violations.
The Board has a number of procedures in place designed to
ensure that directors exercise independent judgement in a matter where a
director or officer has a material interest. Since there is one director who is
not independent (Peter Breese, President and Chief Executive Officer), there are
limited circumstances where such an interest is of concern. In those limited
circumstances, the relevant director must declare his interest and refrain from
voting and the Compensation, Nominating and Governance Committee considers the
transaction in advance of its consideration by the Board.
Compensation, Nominating and Governance Committee
The Board’s Compensation, Nominating and Governance Committee
periodically reviews the size of the Board and any possible requirement for an
increase or decrease in members of the Board. It also recruits and reviews
candidates for the position of director and selects the most appropriate
candidates for submission to the Board as a whole for consideration as a
potential director nominee. Responsibilities of the Compensation, Nominating and
Governance Committee include:
| (a) |
Recommending to the Board of the form and amount of
compensation to be paid by the Company to directors for service on the
Board and on Board committees. The Committee reviews director compensation
at least annually; |
| |
|
| (b) |
Annually reviewing the Company’s base compensation
structure and the Company's incentive compensation and stock option plan
and recommendation of changes in or additions in such structure and plans
to the Board as needed; |
| |
|
| (c) |
Recommending to the Board of the annual base compensation
of the Company's executive officers and senior managers (collectively the
“Officers”); |
| |
|
| (d) |
Recommending to the Board with respect to the range of
increase or decrease in the annual base compensation for non-Officer
personnel providing services to the Company; |
| |
|
| (e) |
Recommending to the Board with respect to annual
corporate goals and objectives under any incentive compensation plan
adopted by the Company for Officers and non-Officer personnel providing
services to the Company and establish incentive compensation participation
levels for Officers and non-Officer personnel providing services to the
Company under any such incentive compensation plan. In determining the
incentive component of compensation, the Committee will consider the
Company’s performance and relative shareholder return, the values of
similar incentive at comparable companies and the awards given in past
years; |
- 25 -
| (f) |
Evaluation of the performance of Officers generally and
in light of annual corporate goals and objectives under any incentive
compensation plan and recommendation to the Board incentive compensation
payable to Officers under any such incentive compensation plan; |
| |
|
| (g) |
Periodic review with the Chairman and CEO with respect to
their assessments of corporate officers and senior managers and succession
plans, in addition, make recommendations to the Board regarding
appointment of officers and senior managers; |
| |
|
| (h) |
Oversight of performance evaluation and incentive
compensation of non-Officer personnel providing services to the
Company; |
| |
|
| (i) |
Administration of the Company’s stock option
plan; |
| |
|
| (j) |
Recommending to the Board the criteria for Board
membership. In making its recommendation, the Committee considers the
competencies and skills that the Board, as a whole, should possess and the
competencies and skills of each current director. The Committee reviews
with the Board, on an annual basis, the requisite skills and criteria for
Board members as well as the composition and size of the Board as a whole
in order to ensure that the Board has the requisite expertise, that its
membership consists of persons with sufficiently diverse and independent
backgrounds, and that its membership consists of an appropriate mix of
inside, outside and independent directors; |
| |
|
| (k) |
Identifying and recommending to the Board individuals
qualified to become Board members, consistent with criteria approved by
the Board. The Committee also recommends to the Board the nominees for
election as directors at any meeting of shareholders and the persons to be
appointed by the Board to fill any vacancies on the Board. The Committee
may adopt procedures regarding director candidates proposed by the
shareholders; |
| |
|
| (l) |
Recommending to the Board corporate governance and ethics
principles and policies that are applicable to the Company. The Committee
monitors legislation, regulatory policies and best industry practices
dealing with corporate governance and, from time to time as it deems
appropriate, reviews and reassesses the adequacy of the Company’s
corporate governance principles and practices and recommend any proposed
changes to the Board; |
| |
|
| (m) |
Considering questions of independence and possible
conflicts of interest of members of the Board and of senior managers and
make recommendations regarding such matters to the Board, including the
criteria for determining director independence; |
| |
|
| (n) |
Annually recommending assignments to committees of the
Board, including recommendations as to chairmen of committees of the
Board, review and make recommendations to the Board concerning the types,
duties, functions, size and operation of committees of the Board, review
the adequacy of all Board committee charters and make recommendations to
the Board for any changes to such charters; |
| |
|
| (o) |
Annually overseeing the evaluation of the Board and its
committees to determine whether the Board, its members and its committees
are functioning effectively; and to determine the nature of evaluation,
supervise the conduct of evaluation and prepare an assessment of
performance of the Board and its committees, to be discussed with the
Board; |
| |
|
| (p) |
Managing Board and committee succession planning;
and |
- 26 -
| (q) |
Monitoring communications with shareholders regarding
matters of corporate governance. |
The Compensation, Nominating and Governance Committee is
composed of three independent directors, Gordon J. Fretwell (Chairman), Marcel
de Groot and William Smart. All of the members of the Compensation, Nominating
and Governance Committee are financially literate and each have acted and
continue to act as directors of numerous public and private companies and have
therefore been involved in compensation issues for such companies. The skills
and experience possessed by members of the Compensation, Nominating and
Governance Committee acquired as a result of their lengthy and extensive
business careers enable them to make decisions on the suitability of the
Company's compensation policies and practice.
The Board recognizes that gender diversity is a significant
aspect of board diversity and acknowledges the important role that women with
appropriate and relevant skills and experience play in contributing to diversity
of perspective and effectiveness in the boardroom. The Board has recently
adopted a new Diversity Policy which is included as Appendix A to this Circular.
Though the Company does not have any female executive officers
at the moment, it benefits from the service of women, including at the
management level. The Company has not adopted any targets for the number of
women in executive officer positions, but the adopted Diversity Policy does
provide guidance as to various diversity considerations in the future
appointment of executive officers.
The Company has also not set mandatory age or term limits for
its directors or senior officers as it focuses on measurable performance rather
than employing arbitrary age thresholds which are of dubious legality in light
of discrimination laws.
The Company’s Code of Ethics as set out in the Corporate
Governance Manual, provides a framework for undertaking ethical conduct in
employment. Under the Code of Ethics, the Company will not tolerate any form of
discrimination or harassment in the workplace.
See Section VI –Compensation, Nominating and Governance
Committee Mandate, respectively, in the Company’s Corporate
Governance Manual, at
www.asanko.com/Governance/Governance-Documents/default.aspx.
Current members of the Compensation, Nominating and Governance Committee are
Gordon J. Fretwell (Chairman), Marcel de Groot and William Smart.
Audit Committee
The Audit Committee Mandate is included within Section V –
Audit Committee Mandate in the Company’s Corporate Governance Manual, at
www.asanko.com/Governance/Governance-Documents/default.aspx.
The
Audit Committee is composed of three independent directors, Marcel de Groot
(Chairman), Gordon J. Fretwell and Michael Price. All of the members of the
Audit Committee are financially literate. See the Company’s Annual Information
Form, filed under the Company’s SEDAR profile at www.sedar.com on March
16, 2018, for further information on the relevant education and experience of
each member of the Audit Committee.
Each member of the Audit Committee has:
- an understanding of the accounting principles used by the Company to
prepare its financial statements, and the ability to assess the general
application of those principles in connection with estimates, accruals and
reserves;
- 27 -
-
experience preparing, auditing, analyzing or evaluating financial
statements that present a breadth and level of complexity of accounting issues
that are generally comparable to the breadth and complexity of issues that can
be reasonably expected to be raised by the issuer’s financial statements; or
experience actively supervising individuals engaged in such activities; and
-
an understanding of internal controls and procedures for financial
reporting.
The Board, through the Audit Committee, is responsible for the
integrity of the internal control and management information systems of the
Company. The Audit Committee meets at least quarterly to review quarterly
financial statements and management’s discussion and analysis and meets at least
once annually with the Company’s external auditor. The Audit Committee
discusses, among other things, the annual audit, the adequacy and effectiveness
of the Company’s internal control and management information systems and
management’s discussion and analysis and reviews the annual financial statements
with the external auditor.
Safety, Health, Environmental and Community
Committee
The Safety, Health, Environmental and Corporate Social
Responsibility (“SHEC”) Committee’s mandate is included within Section VII –
Safety, Health, Environmental and CSR Committee Mandate in the Company’s
Corporate Governance Manual, at
www.asanko.com/Governance/Governance-Documents/default.aspx.
The
SHEC Committee is composed of two independent directors, Michael Price
(Chairman) and William Smart, as well as the Company’s COO (former CEO), Peter
Breese. The SHEC Committee invites the appropriate representatives of senior and
mid-level management to its meetings to ensure that directives are well
understood and implemented at the appropriate levels within the organization.
The Board, through the SHEC Committee, is responsible for
monitoring and reviewing health, safety, environmental and community risks,
ensuring the Company’s compliance with applicable legal and regulatory
requirements, and supporting the furtherance of the Company’s commitment to a
healthy and safe work environment, environmentally sound resource development
and community relationships. The SHEC Committee meets at least quarterly to
review reports by management on health, safety, environmental and corporate
social responsibility matters. The SHEC Committee will regularly review and make
recommendations in regards to the Company’s SHEC policies and assess the health,
safety, environment and community management procedures and recommend
improvements. Any SHEC incidents are to be reported to the Board as
appropriate.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Named Executive Officers
In this section “Named Executive Officer” (“NEOs”) means the
President and CEO, the Chief Financial Officer (“CFO”) and each of the three
most highly compensated executive officers, other than the CEO and CFO, who were
serving as executive officers at the end of the most recently completed
financial year and whose total compensation was more than $150,000, as well as
any additional individuals for whom disclosure would have been provided except
that the individual was not serving as an executive officer of the Company at
the end of the most recently completed financial year.
- 28 -
For the purposes of the following disclosure, each of the
following individuals were an “NEO” of the Company during the year ended
December 31, 2018:
-
Peter Breese – Director, President and CEO 1
-
Fausto Di Trapani – Executive Vice President and CFO
-
Josephat Zvaipa – Executive Vice President and Managing Director (Ghana)
-
Robert Slater – Executive Vice President Strategy
-
Hugo Truter – Senior Vice President Projects & Engineering
Compensation Governance Highlights
-
Low dilution to shareholders – It is the Compensation, Nominating
and Governance Committee’s intention to maintain an annual dilution (“burn
rate”) rate at, or below, a level 2% of common shares outstanding. The annual
burn rate for 2018 was 1.2%;
-
Pay for performance – A significant portion of each NEO’s
compensation is provided in the form of Short-Term Incentive and Long-Term
Incentives (stock options and RSUs) in addition to their base salary;
-
Regular review of peer group – The Compensation, Governance and
Nominating Committee regularly reviews the applicability of the compensation
peer group for NEOs and adjusts the peer group, as necessary, to ensure it
remains relevant and comparable with the ever-evolving size and scope of
Asanko’s operations;
-
Relevant performance metrics – The performance metrics and expected
performance levels for the short-term incentive plan are reviewed on an annual
basis to ensure the metrics and expected performance focus the NEOs on
relevant activities for the business and tie payouts to positive performance
for Asanko’s shareholders;
-
Threshold performance expectations before incentive payouts are made
– Threshold performance expectations are set to make sure that a minimum
level of performance is achieved against short-term incentive performance
metrics before payouts can be made for that metric. Share option grants, due
to the requirement for Asanko’s share price to exceed the exercise price on
grant date for value to be earned upon exercise, also act as a minimum
performance expectation in the long run;
-
Caps on incentive payouts – payouts under the Short-term Incentive
Plan cannot exceed 110% of target without Board discretion;
-
Modest benefits and perquisites – Benefits and perquisites are set
at competitive levels, but represent a small part of total NEO compensation;
__________________________________
1 Mr. Breese
served as President and CEO until April 1, 2019, upon which date Mr. Breese
transitioned to the position of President and COO.
- 29 -
-
Clawback Policy – Beginning in 2017, all Short-Term Incentive and
stock option grants are subject to clawback in the event that an executive
engages in conduct that results in the need for the correction or restatement
of financial results;
-
No excessive Change of Control or Termination without Cause severance
obligations – NEO severance obligations are capped at no higher than 24
months in the case of a Change of Control and 12 months in the case of a
Termination without Cause;
-
Double Triggers – severance provisions in the Company’s employment
agreements only trigger severance when there is both a change in control of
the Company and a termination of employment;
-
Independent Advice – the Compensation, Nominating and Governance
Committee from time to time engages its own independent advisor to support its
decisions regarding executive and Board compensation;
-
Review of compensation risk – The Compensation, Governance and
Nominating Committee monitors the risk inherent within its compensation
program to ensure the program does not encourage excessive risk-taking; and
-
Say on Pay Vote – In the spirit of good governance, on February 12,
2019, the Board adopted a Say on Pay Policy and, commencing in 2020, intends
to have an annual advisory vote on the Board’s approach to executive
compensation. The purpose of the Say on Pay vote is to provide appropriate
director accountability to the shareholders of the Company for the Board’s
compensation decisions by giving shareholders a formal opportunity to provide
their views on the disclosed objectives of the executive compensation plans,
and on the plans themselves, for the past, current and future fiscal years. As
this is an advisory vote, the result will not be binding upon the Board.
However, the Board will take the result of the vote into account, as
appropriate, when considering future compensation policies, procedures and
decisions in determining whether there is a need to significantly increase
their engagement with shareholders on compensation and related matters. The
Board remains fully responsible for its compensation decisions and is not
relieved of these responsibilities by a positive advisory vote by
shareholders. A copy of the Say on Pay policy is included as Appendix B to
this Circular.
-
“Anti-hedging” policy – As part of the Company’s Insider Trading
Policy adopted on February 12, 2019, the Board adopted a policy whereby no
officer or director shall acquire financial instruments that are designed to
hedge or offset a decrease in market value of options or equity securities
granted as compensation or held directly or indirectly by the officer or
director.
Compensation Consultant or Advisor
The Compensation, Nominating and Governance Committee retained
Global Governance Advisors Inc. (“GGA”) to assist the Committee in reviewing
executive officer and director compensation and to make recommendations
surrounding changes to the Company’s equity incentive plans. GGA is an
internationally recognized, independent advisory firm that provides counsel to
boards of directors on matters relating to executive compensation and
governance.
- 30 -
GGA carried out a detailed review in early 2018 related to the
Company’s 2017 compensation and this review included:
- Reviewing the Company’s executive Compensation Philosophy and peer group
to ensure alignment with the Company’s objectives;
- Competitive market review of executive compensation levels and design
against the marketplace;
- Competitive market review of director compensation levels and design
against the marketplace;
- Competitive market review of senior management compensation levels and
design against the marketplace; and
- Review of the Information Circular relating to 2017 compensation.
In light of the recent review carried out by GGA in early 2018,
GGA’s service related to 2018 compensation was limited to a review of this
Information Circular.
Asanko incurred the following fees for GGA’s work over the past
two (2) years:
Year |
Executive Compensation
Related Fees |
All Other Fees |
| 2018 |
C$5,000 |
Nil
|
| 2017 |
C$50,000 |
Nil
|
The Compensation, Nominating and Governance Committee reviews
all fees and the terms of consulting services provided by its independent
compensation consultants before each engagement.
The past number of years, the Company has also participated in
GGA’s annual Global Mining Compensation Survey, which is an industry-leading
source of compensation information for Executive, Corporate and Exploration/Mine
Site roles on an annual basis. The results of this survey are made available to
the chairman of the Compensation, Nominating and Governance Committee for the
committee’s consideration, along with the results of GGA’s annual Report on
Executive & Board Remuneration which provide insights on both executive and
director compensation levels and practices in the global mining industry for
over 250 mining companies.
Compensation Discussion and Analysis
Philosophy and Objectives
The compensation program for the senior management of the
Company is designed to ensure that the level and form of compensation achieves
certain objectives, including:
| (a) |
attracting and retaining talented, qualified and
effective executives; |
| |
|
| (b) |
motivating the short and long-term performance of these
executives; and |
| |
|
| (c) |
better aligning their interests with those of the
Company’s shareholders. |
In compensating its senior management, the Company has employed
a combination of base salary, a short-term incentive plan (“STIP”) and a
long-term incentive plan (“LTIP”).
- 31 -
Peer Group
Asanko uses the following criteria when determining appropriate
peers for benchmarking compensation levels and design in the marketplace:
- Generally comparable size from a total assets and/or market capitalization
perspective;
- Operate within a higher risk of geographical location;
- Mining primarily gold; and
- Currently producing gold from at least one mine.
The peer group defines the competitive market, which Asanko
uses to guide executive compensation design and pay levels.
Based on the criteria listed above, the following peer group
was used for 2018 for the purpose of evaluating the competitiveness of the
Company's executive, senior management and director compensation levels and
designs:
| 2018 PEER GROUP FOR ASANKO GOLD INC. |
| Alacer Gold Corp.
|
Guyana Goldfields Inc. |
Roxgold Inc. |
| Alio Gold Inc. |
Klondex
Mines Ltd. |
SEMAFO Inc. |
| Argonaut Gold Inc. |
Nevsun
Resources Ltd. |
Teranga Gold Corporation |
| Equinox Gold Corp. |
Perseus
Mining Limited |
Torex Gold Resources Inc. |
| Golden Star Resources Ltd. |
Premier
Gold Mines Limited |
|
In addition to the peer group outlined above, for additional
context Asanko also evaluates Global Mining industry data for companies of a
similar size from a Total Assets perspective from GGA’s Global Mining
compensation database to provide an overview of broader market trends and
practices.
Components of Compensation
The Company offers a total compensation package to the NEOs
that is both aligned with the Company’s compensation philosophy and with
competitive market practice:
Compensation
Element |
Form |
Purpose of Element
|
Determination |
| Base Salary |
Cash |
Forms a baseline level of compensation for role
fulfillment commensurate with the experience, skills and market demand for
the executive role and/or incumbent. |
Salaries are determined from analysis of
similar positions within similar companies, as benchmarked against various
independent information sources. Individual experience, individual
performance, level of responsibility and the emphasis on other
compensation program elements are also considered when setting salary
levels. |
| Short-term Incentive Plan (STIP) |
Cash |
To recognize short-term
(typically annual) efforts and milestone achievements that are designed to
link the achievement of personal and annual performance objectives to the
Company’s business strategy and to the enhancement of shareholder value.
|
STIP opportunity for each NEO
is set based both with reference to competitive market practice, the
seniority of the NEO’s position and his or her industry experience. Actual
bonus payments can range from 0% - 110% of the target bonus opportunity,
based upon the achievement of individual and corporate performance
targets. Each NEO’s annual performance is measured against corporate and
individual performance objectives, the weighting of each being dependent
upon his or her role |
- 32 -
Compensation
Element |
Form
|
Purpose of Element
|
Determination
|
|
|
|
in the organization and relative influence over
corporate performance objectives. For additional information, see
Short-term Incentive Plan below. |
| Long-term Incentive Plan
(LTIP) |
Stock Options and
Cash- settled RSUs |
Designed to motivate executives
and employees to create and grow sustainable shareholder total return over
medium- to long-term performance periods and to facilitate key employee
retention. |
Options award levels are
determined in reference to peer group practice and are granted at such
levels that total compensation can achieve above-market levels provided
that the Company’s share price achieves superior returns relative to the
competitive market. The Board sets the term and vesting of options under
the LTIP. For options, the term cannot exceed five (5) years and the Board
will generally fix the vesting terms of all future options such that 1/3
of options granted will vest on the first, second and third anniversaries
of the grant date. Cash-settled RSUs will also vest under a similar
vesting schedule to options and act as an additional retention vehicle
under Asanko’s LTIP program. |
| Benefits and Perquisites |
Indirect cash through broad-
based plan |
Provided to attract and retain the key talent
required to manage the organization but are not intended to make-up a
significant portion of a NEO’s total compensation. |
Benefits are provided on a broad basis to
Asanko NEOs and other eligible employees with limited perquisites to
remain market competitive with the peer group. A specific perquisite will
only be provided when the perquisite provides competitive value and
promotes retention of key executives. |
Compensation Governance
Risk and Executive Compensation
The Company has designed its compensation programs to provide
an appropriate balance of risk and reward in relation to its overall business
strategy. The Company is of the view that its compensation programs do not
incent its executives to take undue risks because executives receive a mix of
compensation elements with a significant portion of compensation in the form of
long-term equity-based awards. Additionally, the Company’s risk mitigation
practices include caps on annual incentive payouts to avoid excessive or extreme
compensation awards, annual incentive metrics that include a balance of key
performance indicators that are not focused on a single financial measure and an
Incentive Clawback Policy for both short-term and long-term variable
compensation. In addition, the board maintains discretion related to the
affordability of the incentive payouts and maintains the right to determine if
an incentive is paid.
Incentive Clawback Policy
In 2017, the Board adopted a policy providing for the full or
partial forfeiture and recoupment of all forms of Incentive Compensation,
including without limitation, Short-term Incentive awards and Option grants
under the Option Plan to officers of the Company, including the NEOs, under
certain circumstances. This Policy will be applied at the discretion of the
Board when:
| (a) |
an executive engages in conduct that results in the need
for the correction or restatement of financial results; |
| |
|
| (b) |
the executive received an award calculated on the
achievement of those financial results, and |
| |
|
| (c) |
the award received would have been lower had the
financial results been properly reported. |
- 33 -
The policy requires that when the clawback is triggered, the
executive must repay the amount of incentive compensation that is in excess of
the incentive compensation the executive would have received if the incentive
compensation had been computed in accordance with the results as restated,
calculated on an after-tax basis.
2018 Compensation Decisions
Base Salary
Base salaries paid in 2018 to the NEOs were as follows:
Named Executive Officer and Position |
Base Salary
($) |
| Peter Breese
– Director, President and CEO1 |
$676,260 |
| Fausto Di Trapani – Executive Vice President and
CFO |
$382,650 |
| Josephat Zvaipa – Executive Vice President and
Managing Director (Ghana) |
$396,496 |
| Robert Slater – Executive Vice President Strategy
|
$360,452 |
| Hugo Truter – Senior Vice President Projects &
Engineering |
$407,213 |
Short-term Incentive Plan
The STIP award for the NEOs in 2018 was based on the actual
achievement versus target achievement levels set by the Board at the beginning
of the year, with respect to certain Corporate and Individual Key Performance
Indicators (“KPIs”) as set out below:
|
CEO |
CFO |
Managing
Director,
Ghana |
EVP
Strategy |
SVP
Engineering
and Projects |
| Target STIP (% of
Base Salary) |
100%
|
75%
|
75%
|
75%
|
50%
|
| STIP Award Range (% of Base Salary) |
0-110% |
0-82.5% |
0-82.5% |
0-82.5% |
0-55% |
| Weighting of Corporate KPIs |
40% |
40% |
40% |
40% |
40% |
| Weighting of Individual KPIs |
60% |
60% |
60% |
60% |
60% |
Measurable Corporate KPIs for the 2018 STIP included:
| KPI |
Target Performance |
Actual Performance
|
Achieve best in class Lost Time
Incident Frequency Rate
(“LTIFR”)
|
Threshold LTIFR: 1.5
Target LTIFR: 1.2
Stretch LTIFR: 1.0 |
Actual LTIFR: 0
(Stretch achieved and
exceeded)
|
Gold Production
|
Threshold Production: 210,000
oz
Target Production: 217,000 oz |
Actual Production: 223,152 oz
(Target met) |
____________________________________
1 Mr. Breese
served as President and CEO until April 1, 2019, upon which date Mr. Breese
transitioned to the position of President and COO.
- 34 -
| KPI |
Target Performance |
Actual Performance |
| |
Stretch Production: 225,000 oz |
|
All in Sustaining Costs (“AISC”)
|
Threshold AISC: US$1,100/oz
Target AISC: US$1,060/oz
Stretch AISC: US$1,000/oz |
Actual AISC: US$1,071/oz
(Threshold met)
|
Overall Achievement against Corporate KPIs for the 2018 year
was determined at 77% of target.
The STIP award levels for 2018 also included Individual KPIs
related to each NEO’s specific role and operational oversight within the
Company. Individual KPIs for 2018 included, but were not limited to:
-
Renegotiating and refinancing the Red Kite debt package of $164 million;
-
Completing drilling programs at Miradani with a view to increasing the
Asanko Gold Mine’s resources by over 5 million tonnes in 2018, and devising a
drilling strategy which prioritizes exploration targets for exploration
drilling over the period 2019- 2022;
-
Completing all work necessary to de-risk the Esaase mine plan for the first
three years of operation (2019 - 2021);
-
Obtaining supplementary permits to enable the trucking of ore from Esaase
to Obotan;
-
Commencing trucking of Esaase ore to Obotan no later than the end of
December 2018 having awarded the mining contract, built the haul road and
completed site infrastructure & site preparation;
-
Further embed the Company’s high-performance management system; and
-
Further strengthening the Company’s social license to operate.
Achievement against Individual KPIs for each of the NEO’s for
the 2018 year was as follows:
Named Executive Officer and
Position |
Individual KPIs
Achieved in 2018 |
| Peter Breese
– Director, President and CEO1 |
102%
of Target |
| Fausto Di Trapani – Executive Vice President and
CFO |
94% of Target |
| Josephat Zvaipa – Executive Vice President and
Managing Director (Ghana) |
99% of Target |
| Robert Slater – Executive Vice President Strategy
|
96% of Target |
| Hugo Truter – Senior Vice President Projects &
Engineering |
93% of Target |
_____________________________________
1 Mr.
Breese served as President and CEO until April 1, 2019, upon which date Mr.
Breese transitioned to the position of President and COO.
- 35 -
For the period January 2018 to December 2018 inclusive, the
STIP opportunity available to the NEOs, the STIP achieved overall (reflecting
both the level of achievement on corporate and personal objectives), as well as
the actual STIP awards, were as follows:
Position |
Target STIP
(% of Base Salary) |
STIP Achieved
(% of Target) |
Actual STIP
awarded
(% of Base
Salary) |
Actual STIP
awarded
($)
|
| President and
CEO1 |
100%
|
92%
|
92%
|
$623,665 |
| EVP and CFO |
75% |
89% |
67% |
$255,711 |
| EVP and Managing Director (Ghana) |
75% |
90% |
68% |
$268,130 |
| EVP Strategy |
75% |
88% |
66% |
$244,200 |
| SVP Projects &
Engineering |
50%
|
87%
|
43%
|
$176,730 |
Long-term Incentive Plan
Option Plan
The only LTIP which the Company currently has in place for NEOs
requiring shareholder approval is the Company’s share option plan,
dated for reference September 27, 2011 (the "Option Plan") which was adopted by
the Directors of the Company on August 18, 2011, approved by Shareholders on
September 27, 2011 and, at the Company's Annual General and Special Meeting held
on June 19, 2014. The Option Plan was amended by the Board on May 2, 2017, and
on May 22, 2017, which amended Option Plan was approved by the Shareholders at
the Annual General and Special Meeting of the Company held on June 9, 2017. A
copy of the Option Plan, as amended, is available under the Company's SEDAR
profile at www.sedar.com.
The Option Plan was established to provide incentive to
qualified parties to increase their proprietary interest in the Company and
thereby encourage their continuing association with the Company. The Option Plan
is administered by the Board or, more specifically, the Plan Administrator as
defined in the Option Plan, and provides that options will be issued to
directors, officers, employees or consultants of the Company, or a subsidiary of
the Company. The Option Plan is a rolling plan, which provides that the number
of Common Shares issuable under the Option Plan, together with all of the
Company's other previously established or proposed share compensation
arrangements, may not at any time exceed 9% of the total number of issued and
outstanding Common Shares; however, this base of Common Shares increases as
options are granted and exercised and as the number of issued and outstanding
Common Shares increases.
Material Terms of the Option Plan
The following is a summary of the material terms of the Option
Plan:
| (a) |
Persons who are directors, officers, employees,
consultants to the Company, its subsidiaries or its affiliates, or who are
employees of a management company providing services to the Company are
eligible to receive grants of options under the Option
Plan. |
__________________________________
1 Mr. Breese
served as President and CEO until April 1, 2019, upon which date Mr. Breese
transitioned to the position of President and COO.
- 36 -
| (b) |
Options may be granted only to a person or to a company
that is wholly-owned by persons eligible for an option grant. If the
option is granted to a company, the company must undertake that it will
not permit any transfer of its Common Shares, nor issue further Common
Shares, to any other individual or entity as long as the incentive stock
option remains in effect without the consent of the TSX. |
| |
|
|
| (c) |
All options granted under the Option Plan will be
exercisable only by the Optionee to whom they have been granted and the
options are non-assignable and non-transferable, except in the case of the
death of an Optionee, any vested option held by the deceased Optionee at
the date of death will become exercisable by the Optionee’s lawful
personal representatives, heirs or executors until the earlier of one year
after the date of death of such Optionee and the date of expiration of the
term otherwise applicable to such Option. |
| |
|
|
| (d) |
Unless otherwise determined by the Board, in particular
the Plan Administrator, options vest equally on the first, second and
third anniversary of the date of grant and are subject to the
following: |
| |
|
|
|
|
The Optionee remaining employed by or continuing to
provide services to the Company or any of its subsidiaries and Affiliates
as well as, at the discretion of the Board, in particular the Plan
Administrator, achieving certain milestones which may be defined by the
Board from time to time or receiving a satisfactory performance review by
the Company or any of its subsidiaries and Affiliates during the vesting
period; or |
| |
|
|
|
|
The Optionee remaining as a director of the Company or
any of its affiliates during the vesting period; or |
| |
|
|
|
|
If a Change of Control or Take-Over Bid occurs, options
which are subject to vesting provisions shall be deemed to have
immediately vested upon the occurrence of the Change of Control or
Take-Over Bid; |
| |
|
|
| (e) |
All options granted under the Option Plan are exercisable
for a period of up to five years. If the expiry of an option occurs during
a period in which participants are restricted from trading Common Shares,
the expiry date will be extended to be the tenth business day following
such blackout period; |
| |
|
|
| (f) |
The exercise price of the option is established by the
Board, in particular the Plan Administrator, at the time the option is
granted, provided that the minimum exercise price shall not be less than
the market price being the weighted average trading price of the Common
Shares on the TSX for the five trading days preceding the date of the
grant; |
| |
|
|
| (g) |
In the case where a participant ceases to be eligible
under the Option Plan to hold options, the participant may exercise any
vested options for one year if such cessation is due to the death of the
participant or otherwise for 90 days following the date that the
participant ceases to be eligible. In the case where a participant is
terminated for cause, such participant’s options will not be exercisable
following the date of such termination; |
| |
|
|
| (h) |
The Option Plan considers that there will be a change of
control of the Company where one person owns or controls 20% or more of
the Common Shares, provided that for persons who hold 20% or more of the
Common Shares as of the date of adoption of the Option Plan, the aforesaid
figure shall be increased to 25%. Upon such change of control,
all outstanding options under the Option Plan will immediately vest and
become exercisable by the participants of the Option Plan; |
- 37 -
| (i) |
Subject to TSX policies, the Option Plan may be amended
by the Board, in particular the Plan Administrator, without further
shareholder approval to: |
| |
|
|
|
(i) |
make amendments which are of a typographical, grammatical
or clerical nature; |
| |
|
|
|
(ii) |
change the vesting provisions of an option granted under
the Option Plan; |
| |
|
|
|
(iii) |
change the termination provision of an option granted
under the Option Plan, which does not entail an extension beyond the
original expiry date of such option; |
| |
|
|
|
(iv) |
add a cashless exercise feature payable in cash or Common
Shares; |
| |
|
|
|
(v) |
make amendments necessary as a result in changes in
securities laws applicable to the Company; |
| |
|
|
|
(vi) |
make such amendments as may be required by the policies
of such senior stock exchange or stock market if the Company becomes
listed or quoted on a stock exchange or stock market senior to the TSX;
and |
| |
|
|
|
(vii) |
it may make such amendments as reduce, and do not
increase, the benefits of the Option Plan to Service Providers (as such
term is defined in the Option Plan). |
| |
|
|
| (j) |
The following amendments to the Option Plan or any Option
granted will require disinterested shareholder approval: |
| |
|
|
|
(i) |
any reduction in exercise price or cancellation and
reissue of Options; |
| |
|
|
|
(ii) |
any amendment that extends the term of an Option beyond
the original expiry; |
| |
|
|
|
(iii) |
any amendments to increase any of the limits on the
number of Options that may be granted; |
| |
|
|
|
(iv) |
amendments to eligible Participants that may permit the
introduction or reintroduction of non-employee Directors on a
discretionary basis or amendments to any limits previously imposed on
non-employee Director participation; |
| |
|
|
|
(v) |
any amendment which would permit Options granted under
the Option Plan to be transferable or assignable other than for normal
estate settlement purposes; |
| |
|
|
|
(vi) |
amendments to the Option Plan amendment provisions that
require disinterested shareholder approval; and |
| |
|
|
|
(vii) |
any amendments requiring shareholder approval under
applicable law. |
- 38 -
| (k) |
The Option Plan is subject to restrictions
that: |
| |
|
|
|
(i) |
the number of Common Shares issuable to Insiders as a
group under the Option Plan, when combined with Common Shares issuable to
Insiders under all the Company’s other Share Compensation Arrangements,
may not exceed 9% of the issued Common Shares within any 12-month
period; |
| |
|
|
|
(ii) |
the number of Common Shares issuable to Insiders at any
time as a group under the Option Plan, when combined with Common Shares
issuable to Insiders under all the Company’s other Share Compensation
Arrangements, may not exceed 9% of the Company’s issued Common
Shares; |
| |
|
|
|
(iii) |
Common Shares being issuable to Directors of the Company
considered independent under NI 52-110 (as defined herein), which when
combined with all other Share Compensation Arrangements of the Company
currently in effect for their benefit (for avoidance of doubt excluding
any previously exercised Options or any other Share Compensation
Arrangement already paid), may not collectively exceed 1% of the
Outstanding Shares and may not exceed for each individual, a value of
$100,000 in any 12 month period; provided as well that Common Shares
issuable under Options and any other Share Compensation Arrangements
currently in effect which have been granted to: |
| |
|
|
|
|
(a) any Director who was non-independent at the time of
grant of Options but who subsequently became an independent Director;
and |
| |
|
|
|
|
(b) any Director who was an independent director at the
time of grant of Options but subsequently becomes a non-independent
Director; |
| |
|
|
|
|
shall in either such case be excluded from the
calculation of 1% of the Outstanding Shares issuable under the Option
Plan. |
Restricted Share Units (“RSUs”)
Asanko commenced with the granting of share-based LTIP awards
in 2018 and these share-based LTIP awards currently take the form of
cash-settled Restricted Share Units (“RSUs”), whose value is linked to the
performance of Asanko’s share price over a 3-year vesting period.
The objective of cash-settled RSUs is to attract and retain
employees while maintaining alignment of compensation with the long-term share
price performance provided to Asanko shareholders. RSUs also aid in promoting
greater share ownership by executives and employees at Asanko.
In the future, Asanko will also consider the merits of
cash-settled Performance Restricted Share Units (“PRSUs”) which will have
additional performance conditions as part of the vesting criteria to further
strengthen pay and performance alignment over a multi-year period.
RSUs will be granted according to the specific level of
responsibility of the particular executive/employee and the number of RSUs for
each level of responsibility is determined by the Compensation, Governance and
Nominating Committee with lower-level employees receiving a larger portion of
their LTIP in the form of RSUs. Consideration will also be made to historical
grants made to the executive and the number of RSUs outstanding when determining the amount of RSUs to be
granted each year. RSUs will generally vest equally in 1/3 increments on the
1st, 2nd and 3rd anniversaries from grant date.
- 39 -
Due to the non-dilutive settlement of RSUs in cash as opposed
to shares from treasury, they will not result in a dilution of shareholder
equity interests and therefore do not require shareholder approval.
The Plan Administrator, which is the Compensation, Nominating
and Governance Committee of the Board, generally relied on the following
criteria and analysis to determine the size and allocation of 2018 LTIP grants
between Stock Options and RSUs:
Level |
Target LTIP
(% of Annual Base
Salary to be earned
over
three-year period) |
Proportion of
Target
LTIP award to be
awarded in form of
Option- based award |
Proportion of Target
LTIP award to be
awarded in form of
cash-settled Share-
based
award |
| Director -
Corporate |
66.7% |
50.0% |
50.0% |
| Director – Non-corporate |
66.7% |
100.0% |
0.0% |
| Level 6 Management (CEO) |
130.0% |
60.0% |
40.0% |
| Level 5 Management (EVPs) |
115.0% |
60.0% |
40.0% |
| Level 4 Management (SVPs) |
105.0% |
50.0% |
50.0% |
| Level 3 Management - Corporate |
75.0% |
40.0% |
60.0% |
| Level 3 Management – Non-corporate |
75.0% |
30.0% |
70.0% |
| Level 2 Management - Corporate |
50.0% |
20.0% |
80.0% |
| Level 2 Management – Non-corporate |
22.5% |
0.0% |
100.0% |
LTIP awards remain subject to the Plan Administrator’s
discretionary recommendations and to the discretion of the Board.
For the fiscal year ended December 31, 2018, the following
option grants were made to the NEOs:
Position |
Number of
Options Granted1 |
Exercise Price
(C$) |
Grant Date Fair
Value of Options
($)2 |
Expiration Date
|
| Peter Breese
– President and CEO3 |
340,000 |
C$1.07 |
$126,128 |
Feb.
6, 2023 |
| Fausto Di Trapani – EVP and CFO |
180,000 |
C$1.07 |
$66,773 |
Feb. 6, 2023 |
| Josephat Zvaipa – EVP and Managing
Director (Ghana) |
190,000 |
C$1.07 |
$70,483 |
Feb. 6, 2023 |
| Robert Slater – EVP Strategy |
150,000 |
C$1.07 |
$55,644 |
Feb. 6, 2023 |
| Hugo Truter – SVP Projects & Engineering |
150,000 |
C$1.07 |
$55,644 |
Feb. 6, 2023 |
| 1 |
Options will vest equally on the 1st, 2nd
and 3rd anniversaries from grant date. |
| |
|
| 2 |
Grant Date Fair Value of Options of C$0.50 is based on a
Black-Scholes value calculated using a C$1.07 exercise price, and
converted into a U.S. dollar equivalent using an exchange rate of C$1 =
$0.7381. |
| |
|
| 3 |
Mr. Breese served as President and CEO until April 1,
2019, upon which date Mr. Breese transitioned to the position of President
and COO. |
- 40 -
For the fiscal year ended December 31, 2018, the following RSUs
were granted to the NEOs:
Position |
Number of RSUs
Granted1 |
Share Price on
Grant Date
(C$) |
Grant Date Fair
Value of RSUs
($)2 |
| Peter Breese
– President and CEO3 |
450,000 |
C$1.02 |
$367,154 |
| Fausto Di Trapani – EVP and CFO |
225,000 |
C$1.02 |
$183,577 |
| Josephat Zvaipa – EVP and Managing
Director (Ghana) |
225,000 |
C$1.02 |
$183,577 |
| Robert Slater – EVP Strategy |
64,580 |
C$1.02 |
$52,691 |
| Hugo Truter – SVP Projects & Engineering |
74,370 |
C$1.02 |
$60,678 |
| 1 |
RSUs will vest equally on the 1st, 2nd
and 3rd anniversaries from grant date. Payment date of
the RSUs is determined by the Board, but shall be no later than December
15th of the third year following the service year for any particular
RSU. |
| |
|
| 2 |
Grant Date Fair Value of Options is based on a C$1.02
underlying share price and converted into a U.S. dollar equivalent using
an exchange rate of C$1 = $0.7381. |
| |
|
| 3 |
Mr. Breese served as President and CEO until April 1,
2019, upon which date Mr. Breese transitioned to the position of President
and COO. |
Compensation Decisions in 2019 to Date
Subsequent to December 31, 2018, the following options were
granted to the NEOs for 2019 and will be reported in next year’s Summary
Compensation Table. These option grants have a 5-year term to expiry and vest in
equal installments over a three-year period from grant date:
Name and Position |
Grant Date |
Options
Granted |
Option
Exercise Price
(C$)
|
Expiry Date |
| Greg McCunn –
CEO4 |
April 1, 2019 |
300,000 |
C$0.86 |
April 1, 2024 |
| Peter Breese – President and COO5 |
February 22, 2019 |
400,000 |
C$0.98 |
February 22, 2024 |
| Fausto Di Trapani – EVP and CFO |
February 22, 2019 |
285,000 |
C$0.98 |
February 22, 2024 |
Josephat Zvaipa – EVP and Managing
Director (Ghana) |
February 22, 2019 |
Nil |
n/a |
n/a |
| Robert Slater – EVP Strategy |
February 22, 2019 |
270,000 |
C$0.98 |
February 22, 2024 |
| Hugo Truter – SVP Projects and
Engineering |
February 22, 2019 |
179,000 |
C$0.98 |
February 22, 2024
|
| 4 |
Mr. McCunn was appointed CEO effective April 1,
2019 |
| |
|
| 5 |
Mr. Breese served as President and CEO until April 1,
2019, upon which date Mr. Breese transitioned to the position of President
and COO. |
- 41 -
Subsequent to December 31, 2018, the following cash-settled
RSUs were granted to the NEOs for 2019 and will be reported in next year’s
Summary Compensation Table. These RSU grants vest in equal installments over a
three-year period:
Name and Position
|
Grant Date
|
RSUs
Granted
|
Underlying Share
Price
(C$)
|
| Greg McCunn –
CEO1 |
April 1, 2019 |
200,000 |
C$0.86 |
| Peter Breese – President and COO2 |
February 22, 2019 |
176,650 |
C$0.98 |
| Fausto Di Trapani – EVP and CFO |
February 22, 2019 |
90,120 |
C$0.98 |
| Josephat Zvaipa – EVP and Managing
Director (Ghana) |
February 22, 2019 |
229,050 |
C$0.98 |
| Robert Slater – EVP Strategy |
February 22, 2019 |
85,500 |
C$0.98 |
| Hugo Truter – SVP Projects and Engineering |
February 22, 2019 |
88,620 |
C$0.98 |
| 1 |
Mr. McCunn was appointed CEO effective April 1,
2019. |
| |
|
| 2 |
Mr. Breese served as President and CEO until April 1,
2019, upon which date Mr. Breese transitioned to the position of President
and COO. |
Performance Graph
The following graph compares the yearly change in the Company’s
cumulative total Shareholder return on its Common Shares as listed on the TSX
based on an initial fixed investment of $100 versus the cumulative return on
S&P/TSX Composite Total Return Index (“S&P/TSX Composite”) and the
S&P/TSX Global Gold Index, since January 1, 2012. The graph also shows the
relationship between Shareholder value and total compensation for our CEO over
the same period, for the purposes of comparing compensation to performance.
- 42 -
Note when viewing the chart below that:
- The total reported compensation for each year represents the aggregate of
the total compensation for the CEO as presented in the Summary Compensation
Table for each year, inclusive of the grant date fair value of stock options.
- By comparison, the total realizable compensation (the sum total of salary,
short-term incentive paid and the currently realizable value of stock options
and RSUs) represents the compensation actually paid or payable to the CEO as
of December 31, 2018 for each year.
- As shown in the chart below, Realizable Compensation for Asanko’s CEO has
generally moved in alignment with shareholder returns over the past five
years, with the exception of 2018.
The payment of salary and STIP are not typically directly
linked to share price performance (see factors discussed under “Compensation
Discussion and Analysis” above). Therefore, the Company does not expect a direct
correlation between Total Shareholder Return and cash compensation levels in any
given period. The above analysis shows that CEO compensation has generally moved
in alignment with the experience of the Company’s shareholders over the past
five years with the exception of 2018 where an increase in compensation is
observed. The increase in compensation is predominantly due to no STIP being
paid in 2017, while 2018 compensation reflects the successful completion of a
funding solution to extinguish the former senior debt facility of the Asanko
Gold Mine, by means of the joint venture agreement completed with Gold Fields
Limited on July 31, 2018. In addition, operational performance of the Asanko
Gold Mine generally fell Above Target which, combined with personal performance,
led to an increase in the STIP payment being made for 2018. The value of
stock options and RSUs is directly linked to Total Shareholder Return. The CEO’s
realizable compensation has lagged reported compensation as all stock option
grants are out-of-the-money.
- 43 -
Summary Compensation Table
The compensation paid to the NEOs during the Company’s three
most recently completed financial years ended December 31, 2018, 2017 and 2016
is as set out below and expressed in US dollars unless otherwise noted:
Name and
principal
position
|
Year
|
Salary
($) |
Share-
based
awards
($) |
Option-
based
awards
($) |
Non-equity incentive
plan
compensation
($) |
Pension
value
($)
|
All other
compensation
($) |
Total
compensation
($) |
Short-
term
incentive
plans (6) |
Long-
term
incentive
plans |
Peter Breese (1)
President and CEO
|
2018
2017
2016 |
676,260
663,000
650,000 |
367,154
Nil
Nil |
126,128
303,658
84,350
|
623,665
Nil
750,000
|
Nil
Nil
Nil |
Nil
Nil
Nil |
12,000
12,000
12,000
|
1,805,207
978,658
1,496,350 |
Fausto Di Trapani (2)
EVP & CFO
|
2018
2017
2016 |
382,650
370,000
309,000 |
183,577
Nil
Nil |
66,773
218,634
141,565
|
255,711
Nil
259,525
|
Nil
Nil
Nil |
Nil
Nil
Nil |
2,449
2,915
2,914 |
891,160
591,549
568,839 |
Josephat Zvaipa (3)
EVP and Managing
Director (Ghana) |
2018
2017
2016 |
396,496
388,722
381,100 |
183,577
Nil
Nil |
70,483
206,487
63,262
|
268,130
Nil
404,370
|
Nil
Nil
Nil |
Nil
Nil
Nil |
79,299
77,744
94,765
|
997,985
672,954
943,497 |
Rob Slater (4)
EVP
Strategy
|
2018
2017
2016 |
360,452
346,698
339,000 |
52,691
Nil
Nil |
55,644
133,610
180,803
|
244,200
92,799
289,958
|
Nil
Nil
Nil |
Nil
Nil
Nil |
12,000
12,000
12,000
|
724,987
585,107
821,761 |
Hugo Truter (5)
SVP Projects &
Engineering |
2018
2017
2016 |
407,213
399,228
391,400 |
60,678
Nil
Nil |
55,644
182,195
54,827
|
176,730
104,465
382,100 |
Nil
Nil
Nil |
Nil
Nil
Nil |
12,000
12,000
12,000
|
712,265
697,888
840,327 |
Notes:
| (1) |
Mr. Breese was appointed as President and CEO on
October 15, 2012. He served in this capacity until April 1, 2019, when he
transitioned to the position of President and COO. |
| |
|
| (2) |
Mr. Di Trapani joined the Company on November 1, 2012
as Executive Finance and was appointed as CFO on January 11,
2017. |
| |
|
| (3) |
Mr. Zvaipa joined the Company on July 1, 2013 and was
appointed as Managing Director, Ghana effective April 1,
2014. |
| |
|
| (4) |
Mr. Slater joined the Company on March 24, 2014 as
Mining Executive and was appointed EVP Strategy on November 2,
2018. |
| |
|
| (5) |
Mr. Truter was appointed as SVP Projects &
Engineering on November 1, 2012. |
- 44 -
Incentive Plan Awards
The following table sets out all option-based and share-based
awards outstanding as at December 31, 2018, for each NEO:
| |
Option- based Awards |
Share-based Awards |
Name
|
Number of
securities
underlying
unexercised options
(#) |
Option
exercise
price
(C$) |
Option
expiration date
(mm/dd/yy) |
Value of
unexercised in-
the-money
options
(C$)(1) |
Number of
shares or units
of shares that
have not
vested
(#) |
Market or
payout value of
share-based
awards that
have not vested
(C$) |
Peter Breese
|
600,000 |
2.12 |
02/10/19 |
Nil |
n/a |
n/a |
| 400,000 |
2.08 |
01/22/20 |
Nil |
n/a |
n/a |
| 200,000 |
1.98 |
01/21/21 |
Nil |
n/a |
n/a |
| 250,000 |
3.98 |
02/27/22 |
Nil |
n/a |
n/a |
| 340,000 |
1.07 |
02/06/23 |
Nil |
450,000 |
C$391,500 |
Fausto
Di
Trapani |
260,000 |
2.12 |
02/10/19 |
Nil |
n/a |
n/a |
| 175,000 |
2.08 |
01/22/20 |
Nil |
n/a |
n/a |
| 100,000 |
1.98 |
01/21/21 |
Nil |
n/a |
n/a |
| 180,000 |
3.98 |
02/27/22 |
Nil |
n/a |
n/a |
| 180,000 |
1.07 |
02/06/23 |
Nil |
225,000 |
C$195,750 |
| Josephat Zvaipa |
450,000 |
2.12 |
02/10/19 |
Nil |
n/a |
n/a |
| 300,000 |
2.08 |
01/22/20 |
Nil |
n/a |
n/a |
| 150,000 |
1.98 |
01/21/21 |
Nil |
n/a |
n/a |
| 170,000 |
3.98 |
02/27/22 |
Nil |
n/a |
n/a |
| 190,000 |
1.07 |
02/06/23 |
Nil |
225,000 |
C$195,750 |
| Robert Slater |
300,000 |
2.33 |
04/04/19 |
Nil |
n/a |
n/a |
| 275,000 |
2.08 |
01/22/20 |
Nil |
n/a |
n/a |
| 100,000 |
1.98 |
01/21/21 |
Nil |
n/a |
n/a |
| 110,000 |
3.98 |
02/27/22 |
Nil |
n/a |
n/a |
| 150,000 |
1.07 |
02/06/23 |
Nil |
64,580 |
C$56,185 |
| Hugo Truter |
390,000 |
2.12 |
02/10/19 |
Nil |
n/a |
n/a |
| 260,000 |
2.08 |
01/22/20 |
Nil |
n/a |
n/a |
| 130,000 |
1.98 |
01/21/21 |
Nil |
n/a |
n/a |
| 150,000 |
3.98 |
02/27/22 |
Nil |
n/a |
n/a |
| 150,000 |
1.07 |
02/06/23 |
Nil |
74,370 |
C$64,702 |
Note:
| (1) |
Calculated based on the market price of the underlying
Common Shares on December 31, 2018 of C$0.87 and the exercise price of the
option. |
- 45 -
The following table sets out the value vested or earned under
incentive plans during the year ended December 31, 2018, for each NEO:
Name
|
Option- based awards –
Value
vested during the year
($)(1) |
Share-based awards –
Value
vested during the year
($)(2) |
Non- equity long-term incentive
plan
compensation – Value
earned during the year
($)
|
| Peter
Breese |
Nil
|
Nil
|
Nil
|
| Fausto Di Trapani |
Nil |
Nil |
Nil |
| Josephat Zvaipa |
Nil |
Nil |
Nil |
| Robert Slater |
Nil |
Nil |
Nil |
| Hugo Truter
|
Nil
|
Nil
|
Nil
|
Note:
| (1) |
The value vested is based on the difference between
underlying share price at the date of vesting and the exercise price of
the option vesting. As all options were out of the money during the year,
this value is $Nil. |
| |
|
| (2) |
The Company commenced with the granting of share-based
awards in early 2018, with the first vesting occurring on February 6,
2019. Since no share-based awards vested during the year ended December
31, 2018, the value vested is $Nil. |
Stock Option Overhang, Dilution and Burn Rates
The following table provides a 3-year history of the overhang,
dilution and burn rates for the Option Plan required under Section 613 of the
TSX Company Manual.
|
2018 |
2017 |
2016 |
| (#) |
(%) |
(#) |
(%) |
(#) |
(%) |
| Overhang |
6,839,988 |
3.0% (1) |
5,731,871 |
2.8% (1) |
5,591,171 |
2.8% (1) |
| Dilution |
13,482,427 |
6.0% (2) |
12,578,625 |
6.2% (2) |
14,591,750 |
7.2% (2) |
| Burn Rate |
2,739,802 |
1.2% (3) |
3,374,000 |
1.7% (3) |
2,915,000 |
1.4% (3)
|
Notes:
| (1) |
The total number of Common Shares reserved for
issuance to employees, less the number of Options outstanding, expressed
as a percentage of the total number of Common Shares outstanding as at
December 31st of each year. |
| |
|
| (2) |
The total number of Options outstanding, expressed as
a percentage of the total number of Common Shares outstanding as at
December 31st of each year. |
| |
|
| (3) |
The number of Options granted in a fiscal year,
expressed as a percentage of the weighted average number of Common Shares
outstanding for the fiscal year. |
Termination and Change of Control Benefits
Written employment agreements are in place between the Company
and each of the NEOs. The NEOs are entitled to compensation from the Company in
the event of termination without cause. In the event that a NEO’s employment
agreement is terminated by the Company without cause, the Company must pay a
severance payment. For Messrs. Breese and Di Trapani, the payment is equal to 12
months base salary plus benefits at the time of termination and for Mr. Zvaipa,
Mr. Slater and Mr. Truter, the payment is equal to six months base salary plus
benefits at the time of termination.
- 46 -
Each employment agreement also provides for a change of control
of the Company. In the case of Messrs. Breese and Di Trapani, if a termination
without cause or a resignation for good reason occurs within 12 months following
the change of control then the NEO will be entitled to receive an amount equal
to 24 months of the NEO’s monthly base salary, plus the monthly equivalent of
the most recently paid annual bonus and any other monthly benefits. In the case
of Mr. Zvaipa, Mr. Slater and Mr. Truter, if a termination without cause occurs
within 12 months following the change of control then the NEO will be entitled
to receive an amount equal to 12 months of the NEO’s monthly base salary and any
other monthly benefits. Additionally, in the event of a change in control, all
of the NEOs outstanding options and RSUs will immediately vest.
The estimated incremental payments from the Company to each of
the NEOs on (i) termination without cause or (ii) termination without cause or
resignation for Good Reasons within 12 months following a change of control,
assuming the triggering event occurred on December 31, 2018, are as follows:
| NEO |
|
Termination Without Cause |
Change of Control |
Peter Breese
|
Salary
|
$676,620 |
$1,352,520 |
| Bonus |
$0 |
$623,665 |
| RSUs(1) |
$0 |
$289,000 |
| Other |
$12,000 |
$49,000 |
Fausto Di Trapani
|
Salary |
$390,000 |
$780,000 |
| Bonus |
$0 |
$255,711 |
| RSUs(1) |
$0 |
$144,500 |
| Other |
$10,415 |
$45,830 |
Josephat Zvaipa
|
Salary |
$198,248 |
$396,496 |
| Bonus |
$0 |
$0 |
| RSUs(1) |
$0 |
$144,500 |
| Other |
$39,649 |
$79,299 |
Robert Slater
|
Salary |
$185,000 |
$370,000 |
| Bonus |
$0 |
$0 |
| RSUs(1) |
$0 |
$41,500 |
| Other |
$6,000 |
$12,000 |
Hugo Truter
|
Salary |
$203,606 |
$407,213 |
| Bonus |
$0 |
$0 |
| RSUs(1) |
$0 |
$47,800 |
| Other |
$6,000 |
$12,000 |
Note:
| |
(1) |
Cash- settled RSUs will vest immediately in the event
of a change in control, and will be settled at the prevailing market price
at the time of a change in control. The value of cash-settled RSUs is
based on RSUs granted as of December 31, 2018 and on the market price of
the underlying Common Shares as at that date of C$0.87, converted into
a U.S. dollar equivalent using an exchange rate of C$1 =
$0.7381. |
In addition, the Company appointed Mr. McCunn as CEO effective
April 1, 2019. In the event that Mr. McCunn’s employment agreement is terminated
by the Company without cause, the Company must pay a severance payment equal to
12 months base salary plus benefits at the time of termination. In the case of a
termination without cause or a resignation for good reason within 12 months
following a change of control, then Mr. McCunn will be entitled to receive an amount
equal to 24 months of the NEO’s monthly base salary, plus the monthly equivalent
of the most recently paid annual bonus and any other monthly benefits.
- 47 -
Except as outlined above, there are no other contracts,
agreements, plans or arrangements that provide for payments to any of the NEOs
at, following or in connection with any termination (whether voluntary,
involuntary or constructive), resignation, retirement, a change in control of
the Company or a change in an NEO’s responsibilities.
Director Compensation
The following section pertains to the compensation arrangements
the Company has with each director, namely Colin Steyn, Gordon J. Fretwell,
Shawn Wallace, Marcel De Groot, Michael Price and William Smart. Director fees
are comprised of monthly retainers for serving on the Board and Board
Committees. Executive officers do not receive additional compensation for
serving as directors. Peter Breese and Greg McCunn are directors but also NEOs
and receive no additional compensation for their role as a director. Their
compensation is discussed in the NEO compensation section of this circular.
Director compensation was last adjusted in February 2014 based
on the recommendations of an independent consultant who was retained to provide
a full review of the Board and Committee compensation with a full set of
benchmark company comparisons. The Board approved a compensation structure
whereby independent directors are to be remunerated for their services with flat
rate annual fees, as follows:
| |
C$ |
| Base Retainer for
a Director |
C$50,000 |
| Additional Chair of the Board Retainer |
C$90,000 |
| Additional Audit Committee Chair Retainer |
C$16,000 |
| Additional Retainer for Chairs of
Compensation, Nominating and Governance Committee and SHEC Committee,
respectively |
C$10,000
|
Asanko’s Compensation, Governance and Nominating Committee
requested its independent compensation consultant, GGA, to conduct a review of
the competitiveness of director compensation levels against Asanko’s peer group
for 2018. While director compensation levels were observed to be generally
market competitive, GGA identified some gaps to market for certain positions and
made certain recommended adjustments that would position Asanko’s director
compensation levels more competitively in the marketplace.
While certain gaps to market were observed in GGA’s report, the
Compensation, Governance and Nominating Committee decided to make no changes to
cash compensation levels for directors in 2018 to take into account the
shareholder experience since 2017.
- 48 -
The total compensation provided to the directors, excluding
directors who are NEOs, for the Company’s most recently completed financial year
of December 31, 2018 was:
Name |
Fees
earned
($) |
Share-based
awards
($) |
Option- based
awards
($) |
Non-equity
incentive plan
compensation
($) |
Pension
value
($) |
All other
compensation
($) |
Total
($) |
| Colin Steyn
|
108,562 |
28,556 |
5,564 |
Nil
|
Nil
|
Nil
|
142,682 |
| Marcel de Groot |
51,269 |
28,556 |
5,564 |
Nil |
Nil |
Nil |
85,389 |
| Gordon J. Fretwell |
46,527 |
28,556 |
5,564 |
Nil |
Nil |
Nil |
80,647 |
| Michael Price |
46,527 |
28,556 |
5,564 |
Nil |
Nil |
Nil |
80,647 |
| Shawn Wallace |
38,772 |
28,556 |
5,564 |
Nil |
Nil |
Nil |
72,892 |
| William Smart |
38,772 |
28,556 |
5,564 |
Nil |
Nil |
Nil |
72,892 |
The following table sets out the value vested or earned under
incentive plans during the year ended December 31, 2018 for each director who is
not also an NEO:
Name
|
Option-based awards
–
Value vested during the year
($)(1) |
Share-based awards
–
Value vested during the year
($)(2) |
Non-equity incentive plan
compensation –
Value earned
during the year
($) |
| Colin Steyn
|
Nil
|
Nil
|
Nil
|
| Marcel de Groot |
Nil |
Nil |
Nil |
| Gordon J. Fretwell |
Nil |
Nil |
Nil |
| Michael Price |
Nil |
Nil |
Nil |
| Shawn Wallace |
Nil |
Nil |
Nil |
| William Smart |
Nil |
Nil |
Nil |
Note:
| (1) |
The value vested is based on the difference between
underlying share price at the date of vesting and the exercise price of
the option vesting. As all options were out of the money during the year,
this value is $Nil. |
| |
|
| (2) |
The Company commenced with the granting of share-based
awards in early 2018, with the first vesting occurring on February 6,
2019. Since no share-based awards vested during the year ended December
31, 2018, the value vested is $Nil. |
The following table sets out all option-based awards and
share-based awards outstanding as at December 31, 2018 for each director who is
not also an NEO:
| |
Option-based Awards |
Share-based Awards |
Name |
Number of
securities
underlying
unexercised
options
(#) |
Option
exercise
price
(C$) |
Option
expiration date
(mm/dd/yy) |
Value of
unexercised
in-the-money
options
(C$)(1) |
Number of
shares or units
of shares that
have not
vested
(#) |
Market or payout
value of share-
based awards that
have not
vested
(C$) |
Colin Steyn
|
144,000 |
2.12 |
02/10/19 |
Nil |
Nil |
Nil |
| 80,000 |
2.08 |
01/22/20 |
Nil |
Nil |
Nil |
| 60,000 |
1.98 |
01/21/21 |
Nil |
Nil |
Nil |
| 42,000 |
3.98 |
02/27/22 |
Nil |
Nil |
Nil |
| 15,000 |
1.07 |
02/06/23 |
Nil |
35,000 |
C$30,450 |
- 49 -
| |
Option-based Awards |
Share-based Awards |
Name |
Number of
securities
underlying
unexercised
options
(#) |
Option
exercise
price
(C$) |
Option
expiration date
(mm/dd/yy) |
Value of
unexercised
in-the-money
options
(C$)(1) |
Number of
shares or units
of shares that
have
not vested
(#) |
Market or payout
value of share-
based awards that
have not vested
(C$) |
Marcel de Groot
|
125,000 |
2.12 |
02/10/19 |
Nil |
Nil |
Nil |
| 80,000 |
2.08 |
01/22/20 |
Nil |
Nil |
Nil |
| 40,000 |
1.98 |
01/21/21 |
Nil |
Nil |
Nil |
| 42,000 |
3.98 |
02/27/22 |
Nil |
Nil |
Nil |
| 15,000 |
1.07 |
02/06/23 |
Nil |
35,000 |
C$30,450 |
Gordon J. Fretwell
|
125,000 |
2.12 |
02/10/19 |
Nil |
Nil |
Nil |
| 80,000 |
2.08 |
01/22/20 |
Nil |
Nil |
Nil |
| 40,000 |
1.98 |
01/21/21 |
Nil |
Nil |
Nil |
| 42,000 |
3.98 |
02/27/22 |
Nil |
Nil |
Nil |
| 15,000 |
1.07 |
02/06/23 |
Nil |
35,000 |
C$30,450 |
Michael Price
|
137,000 |
2.12 |
02/10/19 |
Nil |
Nil |
Nil |
| 80,000 |
2.08 |
01/22/20 |
Nil |
Nil |
Nil |
| 40,000 |
1.98 |
01/21/21 |
Nil |
Nil |
Nil |
| 42,000 |
3.98 |
02/27/22 |
Nil |
Nil |
Nil |
| 15,000 |
1.07 |
02/06/23 |
Nil |
35,000 |
C$30,450 |
Shawn Wallace
|
125,000 |
2.12 |
02/10/19 |
Nil |
Nil |
Nil |
| 80,000 |
2.08 |
01/22/20 |
Nil |
Nil |
Nil |
| 40,000 |
1.98 |
01/21/21 |
Nil |
Nil |
Nil |
| 42,000 |
3.98 |
02/27/22 |
Nil |
Nil |
Nil |
| 15,000 |
1.07 |
02/06/23 |
Nil |
35,000 |
C$30,450 |
William Smart
|
100,000 |
2.03 |
11/27/20 |
Nil |
Nil |
Nil |
| 42,000 |
3.98 |
02/27/22 |
Nil |
Nil |
Nil |
| 15,000 |
1.07 |
02/06/23 |
Nil |
35,000 |
C$30,450 |
Note:
| (1) |
Calculated based on the market price of the underlying
Common Shares on December 31, 2018 of C$0.87 and the exercise price of the
option. |
Director Compensation Decisions in 2019 to Date
While cash compensation levels remain unchanged for 2019,
subsequent to December 31, 2018, the following options were granted to non-NEO
directors for 2019 and will be reported in next year’s director compensation
table:
Name |
Options
granted |
Grant Date |
Expiry Date
|
Option exercise
price
(C$)
|
| Colin Steyn
|
180,000 |
February 22, 2019 |
February 22, 2024 |
C$0.98 |
| Marcel de Groot |
180,000 |
February 22, 2019 |
February 22, 2024 |
C$0.98 |
- 50 -
Name |
Options
granted |
Grant Date |
Expiry Date
|
Option exercise
price
(C$)
|
| Gordon J.
Fretwell |
180,000 |
February 22, 2019 |
February 22, 2024 |
C$0.98 |
| Michael Price |
180,000 |
February 22, 2019 |
February 22, 2024 |
C$0.98 |
| Shawn Wallace |
180,000 |
February 22, 2019 |
February 22, 2024 |
C$0.98 |
| William Smart |
180,000 |
February 22, 2019 |
February 22, 2024 |
C$0.98 |
The Compensation, Governance and Nominating Committee also
approved the following cash-settled RSUs to non-NEO directors for 2019. These
RSU grants vest in equal installments over a three-year period:
Name |
Grant Date |
RSUs
Granted |
Underlying
Share Price
(C$)
|
| Colin Steyn
|
February 22, 2019 |
90,000 |
C$0.98 |
| Marcel de Groot |
February 22, 2019 |
90,000 |
C$0.98 |
| Gordon J. Fretwell |
February 22, 2019 |
90,000 |
C$0.98 |
| Michael Price |
February 22, 2019 |
90,000 |
C$0.98 |
| Shawn Wallace |
February 22, 2019 |
90,000 |
C$0.98 |
| William Smart |
February 22, 2019 |
90,000 |
C$0.98 |
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION
PLANS
The following table sets out equity compensation plan
information as at December 31, 2018. See “Compensation of Executive Officers”
above for a description of the Material Terms of the Option Plan.
Equity Compensation Plan Information
|
Number of securities
to
be issued upon exercise
of outstanding
options
and rights |
Weighted-average
exercise
price of outstanding
options, warrants
and
rights |
Number of securities remaining
available for
future issuance
under equity compensation plans
(excluding securities reflected in
column (a))
|
| Plan
Category |
(a) |
(b) |
(c) |
| Equity compensation plans approved by
security holders (the Plan) |
13,482,427(1) |
C$2.22 |
6,839,988 |
| Equity compensation plans not approved by
security holders |
N/A |
N/A |
N/A |
| Total |
13,482,427 (1) |
C$2.22 |
6,839,988 |
Notes:
| (1) |
As of December 31, 2018, the outstanding options
represented 6.0% of the issued and outstanding Common
Shares. |
| (2) |
As of April 22, 2019, the Company had 13,887,427
options outstanding and 6,434,988 available for future issuance,
representing 6.2% and 2.8% of total Common Shares issued and outstanding,
respectively. |
- 51 -
INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS
No directors, proposed nominees for election as directors,
executive officers or their respective associates or affiliates, or other
management of the Company were indebted to the Company as of the end of the most
recently completed financial year or as at the date hereof.
INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS
Other than as set out below, no informed person of the Company
(generally speaking insiders and related parties of the Company) nor any
proposed director of the Company, or any associate or affiliate of any informed
person or proposed director, had any 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
There are no management functions of the Company, which are to
any substantial degree performed by a person or company other than the directors
or executive officers of the Company.
ADDITIONAL INFORMATION
Additional information relating to the Company is included in
the Company’s Annual Information Form and in the audited financial statements
for the year ended December 31, 2018 and in the related management discussion
and analysis and filed under the Company’s SEDAR profile at
www.sedar.com, along with additional information relating to the Company.
Copies of these documents are also available upon request from the Corporate
Secretary at Suite 680, 1066 West Hastings Street, Vancouver, British Columbia,
V6E 3X2, or by telephone: (604) 683-8193, or by telephone toll-free:
1-855-246-7341 or by fax: (604) 683-8194. Copies of documents will be provided
free of charge to security holders of the Company. The Company may require the
payment of a reasonable charge from any person or company who is not a security
holder of the Company, who requests a copy of any such document.
OTHER MATTERS
The Board is not aware of any other matters which it
anticipates will come before the Meeting as of the date of mailing of this
Information Circular.
The contents of this Information Circular and its distribution
to shareholders have been approved by the Board of the Company.
DATED at Vancouver, British Columbia, this 29th day of
April, 2019.
BY ORDER OF THE BOARD
/s/ Greg McCunn
Greg McCunn
Chief Executive Officer
- 52 -
APPENDIX A – DIVERSITY POLICY
- 53 -
- 54 -
- 55 -
- 56 -
QUESTIONS MAY BE DIRECTED TO THE PROXY SOLICITOR
NORTH AMERICAN TOLL-FREE
1-877-452-7184
Collect calls outside North America
416-304-0211
Email: assistance@laurelhill.com
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