UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the
Securities Exchange Act of 1934 (Amendment No.)
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy
Statement
[ ]
Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive
Additional Materials
[ ] Soliciting Material Pursuant to §240.14a -12
INTERNATIONAL TOWER HILL MINES LTD.
(Name of Registrant as Specified in its Charter)
________________________________________________________
(Name
of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ]
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No fee required.
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[ ]
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Fee computed on table below per
Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which
transaction applies:
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Aggregate number of securities to which
transaction applies:
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(3)
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Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it was
determined):
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(4)
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Proposed maximum aggregate value of
transaction:
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(5)
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Total fee paid:
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[ ]
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Fee paid previously with preliminary
materials.
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Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date of its
filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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Date Filed:
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INTERNATIONAL TOWER HILL MINES LTD.
SUITE 2300, 1177 WEST
HASTINGS STREET
VANCOUVER, BC V6E 2K3
TEL: 604-683-6332
FAX:
604-408-7499
NOTICE OF 2014 ANNUAL GENERAL MEETING OF SHAREHOLDERS
To Be Held May 29, 2014
To the Shareholders of INTERNATIONAL TOWER HILL MINES LTD.:
NOTICE IS HEREBY GIVEN that the 2014
Annual General Meeting (the Meeting) of the shareholders of International
Tower Hill Mines Ltd. (the Company) will be held at the offices of McCarthy
Tetrault LLP, Suite 1300, 777 Dunsmuir Street, Vancouver, British Columbia, on
Thursday, May 29, 2014, at the hour of 10:00 a.m. (Vancouver time), for the
following purposes:
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1.
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To receive the audited consolidated financial statements
of the Company for the fiscal year ended December 31, 2013 (with
comparative statements relating to the preceding fiscal period) together
with the report of the auditor thereon;
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2.
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To fix the number of Directors at five (5);
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3.
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To elect the five (5) persons named in the Companys
Information Circular/Proxy Statement as Directors, to hold office until
the next annual shareholders meeting or until each such Director's
successor is elected and qualified;
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4.
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To appoint PricewaterhouseCoopers, LLP as
auditors/independent registered public accountants of the Company for the
fiscal year ending December 31, 2014 and to authorize the Directors to fix
the auditors remuneration;
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5.
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To conduct an advisory vote on the compensation of the
named executive officers;
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6.
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To transact any other business that may properly come
before the Meeting and any postponements or adjournments
thereof.
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The
Company has fixed the close of business on April 10, 2014 as the record date for
the determination of shareholders who are entitled to receive notice of, and to
vote at, the Meeting. The transfer books of the Company will not be closed. Only
shareholders of record as of the close of business on April 10, 2014 are
entitled to receive notice of and to vote at the Meeting and any postponements
or adjournments thereof. The accompanying Information Circular/Proxy Statement
provides additional information relating to the matters to be dealt with at the
Meeting and is incorporated into this notice. It is important that your shares
are represented and voted at the Meeting. For that reason, whether or not you
expect to attend in person, please vote your shares by mail, telephone or
through the Internet as detailed in the accompanying Information Circular/Proxy
Statement and enclosed Proxy/Voting Instruction Form.
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BY ORDER OF THE BOARD OF DIRECTORS,
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/s/
Marla Ritchie
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Marla Ritchie,
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Corporate Secretary
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Vancouver, British Columbia,
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Canada April 10, 2014
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Important Notice Regarding the Availability of Proxy
Materials
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for the Annual General Meeting of Shareholders to be Held
on May 29, 2014:
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The Proxy Statement and 2013 Annual Report to Shareholders
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are available at the Companys website: www.ithmines.com
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INTERNATIONAL TOWER HILL MINES LTD.
INFORMATION CIRCULAR/PROXY STATEMENT
TABLE OF CONTENTS
INTERNATIONAL TOWER HILL MINES LTD.
SUITE 2300, 1177 WEST
HASTINGS STREET
VANCOUVER, BC V6E 2K3
TEL: 604-683-6332
FAX:
604-408-7499
INFORMATION CIRCULAR/PROXY STATEMENT
2014 Annual General Meeting
(Information is as at
April 10, 2014 except as indicated)
This information circular/proxy statement (Proxy Statement)
is furnished in connection with the solicitation of proxies by the board of
directors (the Board) of
INTERNATIONAL TOWER HILL MINES LTD.
(the
Company) for use at the 2014 Annual General Meeting of Shareholders (the
Meeting) to be held at the offices of McCarthy Tetrault LLP, Suite 1300, 777
Dunsmuir Street, Vancouver, British Columbia, on Thursday, May 29, 2014, at the
hour of 10:00 a.m. (Vancouver time), or any postponement or adjournment thereof,
for the purposes set forth in the accompanying Notice of Meeting. This Proxy
Statement and the accompanying proxy/voting instruction form are first being
sent to shareholders beginning on or about April 21, 2014.
All dollar amounts used herein are in U.S. dollars unless
otherwise noted. References to C$ or CAD represent amounts denominated in
Canadian dollars.
At the Meeting, shareholders will vote on the following
matters, as well as any other business properly brought before the meeting:
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Proposal One:
To fix the number of
Directors for the time being at five (5). The Board recommends a vote FOR
this proposal.
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Proposal Two
: To elect as Directors the
five (5) nominees named in this Proxy Statement. The Board recommends a
vote FOR each of these nominees.
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Proposal Three
: To appoint
PricewaterhouseCoopers, LLP as the Companys auditors/independent
registered public accountants for the fiscal year ending December 31, 2014
and to authorize the Directors to fix the auditors remuneration. The
Board recommends a vote FOR this proposal.
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Proposal Four
: To provide advisory
approval of the compensation of our named executive officers. The Board
recommends a vote FOR this proposal.
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VOTING AT THE ANNUAL GENERAL MEETING
The only voting securities of the Company are its shares of
common stock (the Common Shares). Only holders of record of Common Shares at
the close of business on April 10, 2014 (the Record Date), the date selected
as the Record Date by the Board, are entitled to vote at the Meeting. The
holders of Common Shares are entitled to one vote per share on each matter
submitted to a vote of the shareholders. The Common Shares will vote together as
a single class on all matters to be considered at the Meeting. At the close of
business on April 10, 2014, 98,068,638 Common Shares were outstanding and
entitled to vote.
On a show of hands, every individual who is present as a
registered shareholder or as a duly appointed representative of one or more
registered corporate shareholders will have one vote, and on a poll every
registered shareholder present in person or represented by a validly appointed
proxyholder, and every person who is a duly appointed representative of one or
more corporate registered shareholders, will have one vote for each Common Share
registered in the name of the shareholder on the list of shareholders, which is
available for inspection during normal business hours at Computershare Investor
Services Inc. and will be available at the Meeting. Shareholders represented by
proxyholders are not entitled to vote on a show of hands.
Two or more holders of an aggregate of 5% of the issued and
outstanding Common Shares entitled to vote at the Meeting and who are present,
in person or by proxy, will constitute a quorum for the transaction of business
at the Meeting or any adjournment or postponement thereof. Abstentions and
broker non-votes are counted as present to determine whether there is a quorum
for the Meeting. A broker non-vote occurs if a shareholder does not provide the
record holder of their shares (usually a bank, broker or other nominee)
withvoting instructions on a matter and the record holder does not have
discretionary voting authority to vote on the matter without instructions from
such shareholder.
Subject to the Companys Majority Voting in Director Elections
Policy (see Committees of the Board Corporate Governance and Nominating
Committee Majority Voting Policy on page 13):
1
(a)
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if the number of Directors fixed for the time being by
the shareholders is the same as the number of nominees standing for
election as a director, a nominee is elected as a Director by virtue of
receiving at least one vote For; and
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(b)
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if the number of Directors fixed for the time being by
the shareholders is less than the number of nominees standing for election
as a Director, then the number of nominees equal to the number of
Directors fixed for the time being who receive the highest proportion of
votes cast will be elected as Directors.
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The allowable votes with respect to the election of Directors
(Proposal Two) are For and Withhold. Withhold votes are only relevant in
connection with the Companys Majority Voting in Director Elections Policy (see
Committees of the Board Corporate Governance and Nominating Committee
Majority Voting Policy on page 13). Directors are elected individually, and
cumulative voting is not permitted in the election of directors. Abstentions and
broker non-votes are not relevant to and will have no effect on this proposal
regarding the election of directors.
With respect to the appointment of the auditors (Proposal
Three), the allowable votes are For and Withhold. Withhold votes do not
represent Against votes. Accordingly, a single vote For will be sufficient
to appoint PricewaterhouseCoopers LLP, who are proposed by the Companys Audit
Committee for appointment as the Companys auditors/independent registered
public accountants for the fiscal year ending December 31, 2014.
With respect to fixing the number of Directors and providing
advisory approval of the compensation of the named executive officers (Proposals
One and Four), a simple majority (50% +1) of the votes eligible to vote at the
Meeting and actually voted on the proposal is required to approve the matter.
For all Proposals, abstentions and broker non-votes will be
counted as present at the Meeting, but will not have any effect on the outcome
of these matters.
The holders of Common Shares are not entitled to appraisal or
dissenters rights with respect to any of the matters to be considered at the
Meeting.
REVOCABILITY OF PROXY
In addition to revocation in any other manner permitted by law,
you may revoke an executed and deposited proxy by (a) except to the extent
otherwise noted on such later proxy, signing a new proxy bearing a later date
and depositing it at the place and within the time required for the deposit of
proxies, (b) signing and dating a written notice of revocation (in the same
manner as a proxy is required to be executed as set out in the notes to the
proxy) and either depositing it at the place and within the time required for
the deposit of proxies or with the Chairman of the Meeting on the day of the
Meeting prior to the commencement of the Meeting or (c) registering with the
scrutineer at the Meeting as a registered shareholder present in person,
whereupon any proxy executed and deposited by such registered shareholder will
be deemed to have been revoked.
Only registered shareholders have the right to revoke a proxy.
If you are not a registered shareholder and you wish to change your vote you
must, at least seven days before the Meeting, arrange for the intermediary which
holds your Common Shares to revoke the proxy given by them on your behalf.
A revocation of a proxy does not affect any matter on which a
vote has been taken prior to the revocation.
2
PERSONS MAKING THE SOLICITATION AND SOLICITATION COSTS
The enclosed proxy is solicited by the Board.
Solicitations will be made by mail and possibly supplemented by telephone or
other personal contact to be made, without special compensation, by the
Companys officers or employees. The Company may reimburse shareholders
nominees or agents (including brokers holding shares on behalf of clients) for
their reasonable out-of-pocket expenses incurred in forwarding proxy materials
and obtaining authorization from their principals to execute proxies. No
solicitation will be made by specifically engaged employees or soliciting
agents. Except as detailed under Non-Registered Shareholders below, all costs
of the solicitation of proxies will be borne by the Company. None of the
directors have advised that they intend to oppose any action intended to be
taken by the Company as set forth in this Proxy Statement.
The contents and the sending of this Proxy Statement have been
approved by the Board.
PROXY INSTRUCTIONS
The persons named in the accompanying proxy are current
directors or officers of the Company. If a shareholder wishes to appoint some
other person (who need not be a shareholder) to represent that shareholder at
the Meeting the shareholder may do so, either by striking out the printed names
and inserting the desired persons name in the blank space provided in the proxy
or by completing another proper proxy, and in either case delivering the
completed and executed proxy to the Companys transfer agent, Computershare
Investor Services Inc., Proxy Dept., 100 University Avenue, 9
th
Floor, Toronto, Ontario, Canada M5J 2Y1, by not later than 4:30
p.m. (Vancouver time) on Monday, May 26, 2014 or, in the event the Meeting is
postponed or adjourned, not less than two business days prior to the day set for
the recommencement of such postponed or adjourned Meeting. Proxies delivered
after such times will not be accepted.
To be valid, the proxy must be dated and be signed by the
shareholder or by a duly appointed attorney for such shareholder, or, if the
shareholder is a corporation, it must either be under its common seal or signed
by a duly authorized officer. If a proxy is signed by a person other than the
registered shareholder, or by an officer of a registered corporate shareholder,
the Chair may require evidence of the authority of such person to sign before
accepting such proxy.
THE SHARES REPRESENTED BY PROXY WILL BE VOTED OR WITHHELD
FROM VOTING BY THE PROXY HOLDER IN ACCORDANCE WITH THE INSTRUCTIONS OF THE
PERSON APPOINTING THE PROXYHOLDER ON ANY BALLOT THAT MAY BE CALLED FOR AND, IF A
CHOICE HAS BEEN SPECIFIED WITH RESPECT TO ANY MATTER TO BE ACTED UPON, THE
SHARES WILL BE VOTED ACCORDINGLY.
If a choice with respect to such matters is not specified or
if more than one choice has been specified for the same proposal, the person
appointed proxyholder will vote the securities represented by the proxy as
recommended by the Board. These recommendations are: FOR fixing the number of
directors at five, FOR election of all of the nominees for director named in
this Proxy Statement, FOR the appointment of PricewaterhouseCoopers, LLP as the
Companys auditor/independent registered public accountants for the fiscal year
ending December 31, 2014, a n d FOR approval, on a non-binding advisory basis,
of the compensation of the named executive officers.
The enclosed proxy, when properly completed and delivered and
not revoked, confers discretionary authority upon the person(s) appointed
proxyholder(s) thereunder to vote with respect to any amendments or variations
of matters identified in the notice of Meeting or any other matters which may
properly come before the Meeting. At the time of the printing of this Proxy
Statement, the Company knows of no such amendment, variation or other matter
which may be presented to the Meeting.
NON-REGISTERED SHAREHOLDERS
The information set out in this section is important to many
shareholders as a substantial number of shareholders do not hold their Common
Shares in their own name.
Only registered shareholders or duly appointed proxyholders
for registered shareholders are permitted to vote at the Meeting. Most of the
shareholders of the Company are non-registered shareholders because the Common
Shares they own are not registered in their names but are instead registered in
the name of the brokerage firm, bank or trust company through which they
purchased the shares.
More particularly, a person is not a registered
shareholder in respect of Common Shares which are held on behalf of that person
(the Non-Registered Holder) but which are registered either (a) in the name of
an intermediary (the Intermediary) that the Non-Registered Holder deals with
in respect of the Common Shares (Intermediaries include, among others, banks,
trust companies, securities dealers or brokers and trustees or administrators of
self-administered RRSPs, RRIFs, RESPs and similar plans); or (b) in the name of
a clearing agency (such as The Canadian Depository for Securities Limited in
Canada or Depositary Trust and Clearing Corporation in the United States) of
which the Intermediary is a participant. In accordance with the Notice and
Access provisions of National Instrument 54-101 of the Canadian Securities
Administrators and applicable United States requirements, the Company has
distributed copies of the proxy/voting information form and a notice with information on how Non-Registered Holders may access the notice
of Meeting and Proxy Statement electronically (collectively referred to as the
Meeting Materials) to the clearing agencies and Intermediaries for onward
distribution to Non-Registered Holders.
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Intermediaries are required to forward the Meeting Materials to
Non-Registered Holders unless a Non-Registered Holder has waived the right to
receive them. Very often, Intermediaries will use service companies to forward
the Meeting Materials to Non-Registered Holders. Generally, if you are a
Non-Registered Holder and you have not waived the right to receive the Meeting
Materials you will either:
(a)
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be given a form of
proxy which has already been signed
by the Intermediary
(typically by a facsimile, stamped signature)
which is restricted to the number of shares beneficially owned by you, but
which is otherwise not complete. Because the Intermediary has already
signed the proxy, this proxy is not required to be signed by you when
submitting it. In this case, if you wish to submit a proxy you should
otherwise properly complete the executed proxy provided and deposit it
with the
Companys Registrar and Transfer Agent, Computershare Investor
Services Inc.
, as provided above; or
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(b)
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more typically, a Non-Registered Holder will be given a
voting instruction form which is not signed by the Intermediary, and
which, when properly completed and signed by the Non-Registered Holder and
returned to the Intermediary or its service company
, will
constitute voting instructions (often called a proxy, proxy
authorization form or voting instruction form) which the Intermediary
must follow. Typically, the proxy authorization form will consist of a one
page pre-printed form. Sometimes, instead of the one page pre-printed
form, the proxy authorization form will consist of a regular printed proxy
accompanied by a page of instructions that contains a removable label
containing a bar-code and other information. In order for the proxy to
validly constitute a proxy authorization form, the Non-Registered Holder
must remove the label from the instructions and affix it to the proxy,
properly complete and sign the proxy
and return it to the Intermediary
or its service company (not the Company or Computershare Investor Services
Inc.)
in accordance with the instructions of the Intermediary or its
service company.
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In either case, the purpose of this procedure is to permit
Non-Registered Holders to direct the voting of the Common Shares that they
beneficially own.
If you are a Non-Registered Holder and you wish to vote at
the Meeting in person as proxyholder for the Common Shares owned by you, you
should strike out the names of the management designated proxy holders named in
the proxy authorization form or voting instruction form and insert your name in
the blank space provided. In either case, you should carefully follow the
instructions of your Intermediary, including when and where the proxy, proxy
authorization or voting instruction form is to be delivered.
The Meeting Materials are being sent to both registered
shareholders and Non-Registered Holders who have not objected to the
Intermediary through which their Common Shares are held disclosing ownership
information about themselves to the Company (NOBOs). If you are a NOBO, and
the Company or its agent has sent these materials to you, your name and address
and information about your holdings of securities have been obtained in
accordance with applicable securities regulatory requirements from the
Intermediary on your behalf.
If you are a Non-Registered Holder who has objected to the
Intermediary through which your Common Shares are held disclosing ownership
information about you to the Company (an OBO), you should be aware that the
Company does not intend to pay for Intermediaries to forward the Meeting
Materials, including proxies or voting information forms, to OBOs and therefore
an OBO will not receive the Meeting Materials unless that OBOs Intermediary
assumes the cost of delivery.
INTEREST OF CERTAIN PERSONS OR COMPANIES
IN MATTERS TO BE
ACTED UPON
Other than as disclosed elsewhere in this Proxy Statement, none
of the current directors or executive officers, no proposed nominee for election
as a director, none of the persons who have been directors or executive officers
since the commencement of the last completed financial year and no associate or
affiliate of any of the foregoing persons has any material interest, direct or
indirect, by way of beneficial ownership of securities or otherwise, in any
matter to be acted upon at the Meeting.
4
PROPOSAL ONE FIXING NUMBER OF DIRECTORS
The business and affairs of the Company are managed under the
direction of the Board, which is currently comprised of five members.
Accordingly, Management intends to place before the meeting for approval, with
or without modification, Proposal One, being a resolution fixing the number of
directors for the time being at five (5). It is therefore anticipated that there
will be five (5) directors to be elected at the Meeting.
Vote Required for Approval
The affirmative vote of a simple majority (50% +1) of the votes
eligible to vote at the Meeting and actually voted on the proposal is required
to fix the number of directors for the time being at five (5). The allowable
votes with respect to Proposal One are For, Against and Withhold.
Abstentions and broker non-votes are not relevant to and will have no effect on
Proposal One.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL ONE.
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PROPOSAL TWO ELECTION OF DIRECTORS
The directors of the Company are elected at each annual meeting
of the shareholders and hold office until the next annual general meeting or
until their successors are duly elected or appointed, unless their office is
earlier vacated in accordance with the
Business Corporations Act
(British
Columbia) (BCBCA). Since the 2013 Annual General Meeting of Shareholders, no
fees were paid to any third party to identify or evaluate a potential director
nominee.
Information concerning the nominees for election as directors
is set forth below under Directors and Officers. In the absence of
instructions to the contrary, the Common Shares represented by proxies will be
voted FOR each of the nominees listed below. Management does not contemplate
that any of the nominees will be unable to serve as a director.
Vote Required for Approval
Subject to the Companys Majority Voting in Director Elections
Policy (see Committees of the Board Corporate Governance and Nominating
Committee Majority Voting Policy on page 13):
(a)
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if the number of Directors fixed for the time being by
the shareholders is the same as the number of nominees standing for
election as a director, a nominee is elected as a Director by virtue of
receiving at least one vote For; and
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(b)
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if the number of Directors fixed for the time being by
the Shareholders is less than the number of nominees standing for election
as a Director, then the number of nominees equal to the number of
Directors fixed for the time being who receive the highest proportion of
votes cast will be elected as Directors.
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The allowable votes with respect to the election of Directors
(Proposal Two) are For and Withhold. Withhold votes are only relevant in
connection with the Companys Majority Voting in Director Elections Policy (see
Committees of the Board Corporate Governance and Nominating Committee
Majority Voting Policy on page 13). Directors are elected individually, and
cumulative voting is not permitted in the election of directors. Abstentions and
broker non-votes are not relevant to and will have no effect on this proposal
regarding the election of directors.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE
DIRECTOR NOMINEES.
DIRECTORS AND OFFICERS
The following table set forth certain information with respect
to current directors and executive officers of the Company as of April 4, 2014.
Name and Residence
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Age
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Position
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Director Since
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Current or Former Public
Company
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Stock
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Directorships
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Exchange
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Anton J. Drescher
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57
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Director
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October 1, 1991
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Xiana Mining Inc. (current)
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TSXV
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British Columbia, Canada
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Trevali Mining Corporation
(current)
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TSX
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Corvus Gold Inc. (current)
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TSX
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KazaX Minerals Inc. (former)
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TSXV
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Oculus VisionTech Inc. (current)
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TSXV, OTC
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Ravencrest Resources Ltd.
(current)
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CNSX
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John J. Ellis
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78
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Director
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February 1, 2014
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Mexivada Mining Corp. (current)
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TSXV
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Nevada, USA
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Sunshine Silver Mines Corp.
(current)
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OTC (US)
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Mark R. Hamilton
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69
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Director
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November 17, 2011
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Alaska Air Group, Inc. (former)
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NYSE
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Alaska, USA
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Stephen A. Lang
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58
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Director, Chairman of the Board
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February 1, 2014
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Allied Nevada Gold Corp.
(current)
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TSX/ NYSE
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Missouri, USA
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MKT
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Centerra Gold Corp. (current)
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TSX
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Thomas S. Weng
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45
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Director
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August 5, 2013
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Scorpio Mining Corporation
(current)
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TSX
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New Jersey, USA
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East Asia Minerals Corporation
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TSXV
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(Current)
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Thomas E. Irwin
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67
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Chief Executive Officer
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N/A
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None
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Alaska, USA
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Tom S. Q. Yip
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56
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Chief Financial Officer
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N/A
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Pretium Resources Inc. (current)
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TSX/NYSE
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Colorado, USA
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6
Nominees for the Board:
The directors of the Company are elected at each annual meeting
of the shareholders and hold office until the next annual general meeting or
until their successors are duly elected or appointed, unless their office is
earlier vacated in accordance with the BCBCA. The following is a brief
biographical description of each director nominee, which includes a discussion
of the skills and attributes held by each director, and that, in part, led the
Corporate Governance and Nominating Committee to conclude that each respective
director should continue to serve as a member of the Board. All of the current
members of the Board are standing as nominees for re-election.
Anton J. Drescher
Mr. Drescher has been a Certified
Management Accountant since 1981. He is currently (since 2007) a director of
Trevali Mining Corporation, a public natural resource company listed on the TSX,
a director (since 2010) of Corvus Gold Inc., a public mineral exploration and
development company listed on the TSX, a director (since 1996) and Chief
Financial Officer (since 2012) of Xiana Mining Inc. (formerly Dorato Resources
Inc.), a public mineral exploration company listed on the TSXV, President (since
2010) and director of Ravencrest Resources Inc., a public mineral exploration
company listed on the CNSX, and the Chief Financial Officer and a director
(since 1994) of Oculus VisionTech Inc., a public company involved in
watermarking of film and data and listed on the TSXV and the OTC Bulletin Board,
and a former director (2012 2013) of KazaX Minerals Inc., a public mineral
exploration company listed on the TSXV. Mr. Drescher is also the President
(since 1979) of Westpoint Management Consultants Limited, a private company
engaged in tax and accounting consulting for business reorganizations and the
President (since 1998) of Harbour Pacific Capital Corp. a private company
involved in regulatory filings for businesses in Canada. Mr. Drescher has served
on the Board since 1991, and the Corporate Governance and Nominating Committee
determined to nominate Mr. Drescher for re-election to the Board due to his
significant financial and accounting experience together with his director
experience with other exploration companies.
John J. Ellis
Mr. Ellis is a Professional Engineer
(B.C.) with over 50 years of experience in the mining industry. He currently
serves as a Director of Mexivada Mining Corp. (since July 2008) and Sunshine
Silver Mines Corporation (since September 2011) and is involved in consulting
for a number of international mining companies. Mr. Ellis previously served as
Chairman and CEO of AngloGold North America Inc. and Hudson Bay Mining and
Smelting Company. Prior to that, he held senior positions at Inspiration
Resources Corp., and CVRD-Inco. His career has included service as a Director on
the Mining Association of Canada and the National Mining Association. Mr. Ellis
graduated from the Haileybury School of Mines and the Montana College of Science
and Technology. Mr. Ellis has served on the Board since February 2014, and the
Corporate Governance and Nominating Committee determined to nominate Mr. Ellis
for re-election to the Board due to his significant technical experience
together with his director experience with other mining and exploration
companies.
Mark R. Hamilton
Mr. Hamilton is a retired U.S.
Major-General and has served as the President Emeritus of the University of
Alaska since 2010. From 1998 to 2010, Mr. Hamilton was the President of the
University of Alaska. Mr. Hamilton received a BSc from the U.S. Military Academy
and a Masters degree in English Literature from Florida State University. He
graduated from the Armed Forces Staff College and the U.S. Army War College. Mr.
Hamilton is the recipient of the U.S. Armed forces highest peacetime award, the
Distinguished Service Medal. His previous board experience includes: Member of
the board of directors of Alaska Air Group (20012011), where he served on the
Audit and Safety Committees; Member of the board of directors of BP America
(20072009) and Member of the board of directors and Chairman for seven years of
the Alaska Aerospace Corporation. He is currently a consultant in the areas of
education and public policy. Mr. Hamilton has served on the Board since November
2011, and the Corporate Governance and Nominating Committee determined to
nominate Mr. Hamilton for re-election to the Board due to his esteemed service
provided to the State of Alaska, the jurisdiction in which the Companys
Livengood Gold Project resides, as well as his prior board of director and
committee experience.
Stephen A. Lang
Mr. Lang is a Mining Engineer with
over 30 years of experience in the mining industry. He currently serves as
Chairman of Centerra Gold Inc. (since May 2012) and as a Director of Allied
Nevada Gold Corporation (since August 2013). Previously, Mr. Lang was President
and CEO and a member of the board of directors of Centerra Gold Inc. (from 2008
to 2012 ). Prior to that, he held senior positions at Stillwater Mining Company,
Barrick Gold Corporation, Rio Algom and Kinross Gold/Amax. Mr. Lang earned a
Bachelor and Masters of Science in Mining Engineering from the University of
Missouri-Rolla. Mr. Lang has served on the Board since February 2014, and the
Corporate Governance and Nominating Committee determined to nominate Mr. Lang
for reelection to the Board due to his significant experience in the mining
industry together with his director and leadership experience with other mining
companies.
Thomas S. Weng
Mr. Weng has more than 22 years of
experience in the financial services sector. Mr. Weng is currently Co-Founding
Partner with Alta Capital Partners, a provider of investment banking services,
(since February 2011). From February 2007 to January 2011, Mr. Weng was a
Managing Director at Deutsche Bank and Head of Equity Capital Markets for Metals
and Mining throughout the Americas and Latin America, across all industry
segments. Prior to 2007, Mr. Weng held various senior positions at Pacific
Partners, an alternative investment firm, Morgan Stanley and Bear Stearns. Mr.
Weng graduated from Boston University with a Bachelor of Arts in Economics. Mr.
Weng has served on the Board since August 2013, and the Corporate Governance and
Nominating Committee determined to nominate Mr. Weng for re-election to the
Board due to his significant financial experience together with his advisory
experience in the metals and mining sector.
7
Executive Officers:
The officers are appointed by and serve at the pleasure of the
Board and hold office until the expiration of their employment agreement, if
such officer has entered into an employment agreement with the Company, or their
earlier death, retirement, resignation or removal. The following is a brief
biographical description of each executive officer.
Thomas E. Irwin
. Mr. Irwin has been the Chief Executive
Officer since January 1, 2014 and was previously Vice President from August 2012
to January 2014. He also served as Alaska General Manager from January 2012 to
August 2012. Mr. Irwin joined the Company in March 2011. Mr. Irwin has over 40
years of experience in the natural resource industry constructing, optimizing,
operating and permitting major mining projects with companies such as Amax Gold
and Kinross Gold. Prior to joining the Company, he served as the Commissioner of
the Alaska Department of Natural Resources for over six years. Prior to his role
with the Alaska Department of Natural Resources, Mr. Irwin held senior positions
at Kinross Golds Fort Knox mine located 40 miles southeast of the Livengood
project. From 2001 to 2003, he served as Vice President, Business Development
for Fairbanks Gold Mining Inc., a subsidiary of Kinross Gold, responsible for
new project permitting, business development and governmental and public
relations as related to Kinross activities in Alaska. Prior to his role as Vice
President, Business Development, he served as General Manager of the Fort Knox
mine from 1999 to 2001. From 1996 to 1999, he served at the Fort Knox mine as
the Operations Manager responsible for mine start-up and operation and, from
1992 to 1996, he was Vice-President of Fairbanks Gold Mining, Inc., responsible
for engineering at Fort Knox during mine design. Prior to his work at Fort Knox,
Mr. Irwin was General Manager of Amax Golds Sleeper Mine in Nevada and Manager
of the Climax Molybdenum Mine in Colorado. Mr. Irwin has a degree in Mineral
Engineering-Chemistry from the Colorado School of Mines.
Tom S. Q. Yip.
Mr. Yip has been the Chief Financial
Officer since September 2011 and has over 25 years of experience in the mining
industry. Prior to joining the Company, he served as the Chief Financial Officer
for Silver Standard Resources Inc., a Canadian mining company with a substantial
portfolio of silver properties in the Americas, from July 2007 to August 2011.
He was a key member of the leadership team to transition from an exploration and
development company to a producer. Prior to that, he served as the Chief
Financial Officer for Asarco, LLC, a copper mining, smelting and refining
company, from May 2006 to July 2007. Mr. Yip began his career in the mining
industry with Echo Bay Mines Ltd., where he worked for 20 years holding various
financial roles including Chief Financial Officer before the company merged with
Kinross Gold Corporation in 2003. He is a Chartered Accountant and holds a
Bachelor of Commerce degree in Business Administration from the University of
Alberta.
Involvement in Certain Legal Proceedings/Cease Trade
Orders, Bankruptcies, Penalties or Sanctions
Except as disclosed below:
1.
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No director, nominee or executive officer of the Company
has been involved in any of the events described by Item 401(f) of
Regulation S-K during the past ten years.
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2.
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Other than as noted below, no proposed director is, as at
the date of this Proxy Statement, or has been within ten years before the
date of this Proxy Statement, a director, chief executive officer or chief
financial officer of any company (including the Company) that:
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(a)
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was subject to an order that was issued while the
proposed director was acting in the capacity as director, chief executive
officer or chief financial officer; or
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(b)
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was subject to an order that was issued after the
proposed director ceased to be a director, chief executive officer or
chief financial officer and which resulted from an event that occurred
while that person was acting in the capacity as director, chief executive
officer or chief financial officer.
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For the purposes hereof, the term order
means:
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(a)
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a cease trade order;
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(b)
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an order similar to a cease trade order; or
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(c)
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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.
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John Ellis was a director of Royal Coal Corp., a public
natural resource company listed on the TSXV. On May 9, 2012, after Mr.
Ellis ceased as a director, the BC Securities Commission issued a cease
trade order against Royal Coal Corp. for failure to file audited financial
statements for the period ended December 31, 2011 during the period when
Mr. Ellis served as a director. The cease trade order remains in
effect.
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3.
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No proposed director:
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8
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(a)
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is, as at the date of this Proxy Statement, or has been
within the ten years before the date of this Proxy Statement, a director
or executive officer of any company (including the Company) that, while
such person was acting in such 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
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(b)
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has, within ten years before the date of this Proxy
Statement, 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 has a receiver,
receiver manager or trustee appointed to hold the assets of the proposed
director.
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4.
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Other than as noted below, no proposed director has been
subject to:
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(a)
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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
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(b)
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any other penalties or sanctions imposed by a court or
regulatory body that would likely be considered important to a reasonable
investor in deciding whether to vote for a proposed
director.
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On March 10, 2010, the TSX Venture Exchange (TSXV) rendered a
decision following a review by its Compliance & Disclosure Department of
certain loans from Dorato Resources Inc. (Dorato) to Trevali Mining
Corporation (Trevali), a company with certain directors and officers in common
with Dorato. Although the loans were repaid in full and disclosed in Doratos
financial statements, the TSXV determined that Dorato had not obtained the
required regulatory or board approval. As part of its decision, the TSXV
determined that Mr. Drescher (a director and audit committee member of Dorato)
must seek prior written approval from the TSXV should he propose to be involved
with any additional TSXV-listed issuer as a director or officer. The Toronto
Stock Exchange (TSX) subsequently determined Mr. Drescher must seek approval
from the TSX should he propose to be involved with any additional TSX-listed
issuers as a director or officer. In addition, Mr. Drescher must inform the TSX
of any future actions commenced against him by any regulatory entity. In March
2013, Mr. Drescher applied to the TSX for reconsideration of the abovementioned
restrictions and, on May 1, 2013, the TSX agreed to remove all such
restrictions.
STATEMENT OF CORPORATE GOVERNANCE PRACTICES
The Board is committed to sound corporate governance practices
that are both in the interest of its shareholders and contribute to effective
and efficient decision making. The Company has reviewed its corporate governance
practices in light of National Policy 58- 201
Corporate Governance Guidelines
(NP 58-201). In certain cases, the Companys practices comply with the
guidelines; however, the Board considers that some of the guidelines are not
suitable for the Company at its current stage of development and therefore these
guidelines have not been adopted. National Instrument 58 101 (NI 58-101)
mandates disclosure of corporate governance practices for non-Venture Issuers in
Form 58-101F1, which disclosure is set out below.
NYSE MKT Corporate Governance
The Common Shares are listed on the NYSE MKT. Section 110 of
the NYSE MKT Company Guide permits the NYSE MKT to consider the laws, customs
and practices of foreign issuers in relaxing certain NYSE MKT listing criteria,
and to grant exemptions from NYSE MKT listing criteria based on these
considerations. Currently, in respect to certain matters discussed below, the
Company follows Canadian practices that differ from the requirements of the NYSE
MKT. The Company posts on its website at www.ithmines.com a description of the
significant ways in which the Companys governance practices differ from those
followed by domestic companies pursuant to NYSE MKT standards. The contents of
the Companys website are not incorporated into this report and the reference to
such website is intended to be an inactive textual reference only.
A description of the significant ways in which the Companys
governance practices differ from those followed by U.S. domestic companies
pursuant to NYSE MKT standards is as follows:
Shareholder Meeting Quorum Requirement
: The NYSE MKT
minimum quorum requirement for a shareholder meeting is one-third of the
outstanding shares of common stock. In addition, a company listed on NYSE MKT is
required to state its quorum requirement in its bylaws. The Companys quorum
requirement is set forth in its articles. The Companys articles provide that
the quorum for the transaction of business at a meeting of shareholders is two
persons who are, or who represent by proxy, shareholders who, in the aggregate,
hold at least 5% of the issued shares entitled to be voted at a meeting. The
Company obtained an exemption from the NYSE-MKT quorum requirements upon its
initial listing.
Shareholder Approval Requirements
: NYSE MKT requires a
listed company to obtain the approval of its shareholders for certain types of
securities issuances, including private placements that may result in the
issuance of common shares (or securities convertible into common shares) equal
to 20% or more of presently outstanding shares for less than the greater of book
or market value of the shares. In general, there is no such requirement under
British Columbia law or under the rules of the TSX unless the transaction
results in a change of control or will result in the issuance of issuance of
common shares (or securities convertible into common shares) equal to an aggregate of 25% or
more of presently outstanding shares at a price less than the market price in
any three-month period. The Company will seek, and has previously obtained, a
waiver from NYSE MKTs shareholder approval requirements in circumstances where
the securities issuance does not trigger such a requirement under British
Columbia law or under the rules of the TSX.
9
The NYSE MKT Company Guide also provides that shareholder
approval is required for the participation of directors and officers in a
private placement(s) pursuant to which the issuance of common shares to such
officers and directors at a discount to market is considered an equity
compensation arrangement. Under applicable Canadian rules, shareholder approval
is not generally required in respect of a private placement to directors and
officers of the issuer unless, during any six month period, securities are
issued to insiders entitling them to purchase more than 10% of the number of
listed securities outstanding, on a non-diluted basis, prior to the completion
of the first private placement to an insider during such period. As shareholder
approval was not required in Canada in respect of certain private placements
carried out by the Company in which directors and officers participated, the
Company was granted exemptions from the requirements of the NYSE MKT Company
Guide pursuant to Section 110 thereof.
The foregoing is consistent with the laws, customs and
practices in Canada.
Board Mandate and Oversight of Risk Management
The Board has not adopted a written mandate. At this stage of
the Companys development, the Board does not believe it is necessary to adopt a
written mandate as sufficient guidance is found in the applicable corporate
legislation and regulatory policies. The mandate of a board of directors, as
prescribed by the BCBCA, is to manage or supervise the management of the
business and affairs of the Company and to act with a view to the best interests
of the Company. In doing so, the Board oversees the management of the Companys
affairs directly and through the operation of its standing committees. In
fulfilling its mandate, the Board, among other matters, is responsible for
reviewing and approving the Companys overall business strategies and its annual
business plan; reviewing and approving the annual corporate budget and forecast;
reviewing and approving significant capital investments outside the approved
budget; reviewing major strategic initiatives to ensure that the Companys
proposed actions are in accordance with its stated shareholder objectives;
reviewing succession planning; assessing managements performance; reviewing and
approving the financial statements, reports and other disclosures issued to
shareholders; ensuring the effective operation of the Board; and safeguarding
shareholders equity interests through the optimum utilization of the Companys
capital resources. The Board also takes responsibility for identifying the
principal risks of the Companys business and for ensuring these risks are
effectively monitored and mitigated to the extent reasonably practicable.
The Board has overall responsibility for risk oversight with a
focus on the most significant risks facing the Company. The Board relies upon
the CEO to supervise day-to-day risk management. The CEO reports directly to the
Board and certain Board committees on such matters, as appropriate.
The Board delegates certain oversight responsibilities to its
Committees. For example, the Audit Committee is primarily responsible for the
integrity of the Companys internal control and management information systems
and for the Companys policies regarding corporate disclosure and
communications.
Director Independence
A director of a company is considered independent within the
meaning of NP 58-201 if he or she has no direct or indirect material
relationship with the company. A material relationship is a relationship
which could, in the view of a companys board of directors, reasonably interfere
with the exercise of a directors independent judgment. Under Section 803 of the
NYSE MKT Company Guide, a director of a company is considered independent if
he or she is not an executive officer or employee of the company (and has not
been so in the past 3 years), and the issuers board of directors affirmatively
determines that the director does not have a relationship that would interfere
with the exercise of independent judgment in carrying out the responsibilities
of a director. The Board has determined that each director is independent under
NYSE MKT listing standards and NP 58-201.
The independent directors routinely meet as a group without
members of management or non-independent directors and exercise their
responsibilities for independent oversight of management with the guidance of
the Chair, who is independent.
Position Descriptions
The Board has not developed a written description for the Chair
position, for the chair of any of its standing committees or for the CEO. To
date, given the size of the Company and its stage of development, the Board does
not believe that formal written descriptions of these positions are required,
and that good business practices and the common law provide guidance as to what
is expected of each position. The general duties of the CEO are set forth in the
employment agreement between the CEO and the Company. The employment agreement
between the CEO and the Company was approved by the Board.
10
The positions of Chair and CEO are separate. Stephen A. Lang is
the current Chair. While the Board has not developed a formal position
description for the Chair, it considers that the Chairs role is to provide
independent leadership to the Board, a function the Board believes Mr. Lang is
well suited for by virtue of his extensive experience with public companies in
the mining industry, including as Chairman.
Orientation and Continuing Education
At the current time, the Board provides
ad hoc
orientation for new directors. New directors are briefed on strategic plans,
short, medium and long term corporate objectives, the Companys current mineral
properties and ongoing exploration programs, business risks and mitigation
strategies, corporate governance guidelines and existing company policies. There
is no formal orientation for new members of the Board. This is considered to be
appropriate given the Companys size and current level of operations. If
warranted by the growth of the Companys operations, the Board would consider
implementing a formal orientation process.
The skills and knowledge of the Board are such that no formal
continuing education process is deemed necessary, as the Board is comprised of
individuals with extensive experience in the mineral exploration and mining
industry, as well as running and managing public companies in the natural
resource sector. Several directors are also directors of other natural resource
companies. 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. They also have full access to the
Companys records. The Company will pay the reasonable costs of attendance by
directors at continuing education courses and seminars with respect to corporate
governance, directors duties and obligations and similar matters.
Ethical Business Conduct
The Board expects management to enhance shareholder value by
executing the Companys business plan and meeting performance goals and
objectives according to the highest ethical standards. To this end, in September
2006 the Board adopted a Code of Business Conduct and Ethics (the Code) for
its directors, officers, employees and, in appropriate cases, consultants.
Copies of the Code are available on our website at www.ithmines.com under
Corporate - Corporate Governance or at www.sedar.com. Training in the Code
is included in the orientation of new employees. To ensure familiarity with the
Code, directors, officers and employees are asked to read the Code and sign a
compliance certificate annually. Directors, officers and employees are required
to report any known violations of the Code to the Companys Ethics Officer, the
chair of the Audit Committee or to the Companys outside U.S. or Canadian
counsel.
Since the beginning of the Companys most recent fiscal year
there have not been any material change reports or current reports on Form 8-K
filed that pertain to any conduct of a director or executive officer that
constitutes a departure from the Code or a waiver of the Code by the Board. In
addition to the provisions of the Code, directors and senior officers are bound
by the provisions of the Companys Articles and the BCBCA which set forth the
manner of dealing with any conflicts of interest. Specifically, any director who
has a material interest in a particular transaction is required to disclose such
interest and to refrain from voting with respect to the approval of any such
transaction.
In September 2006, the Board also adopted a Share Trading
Policy (revised November 5, 2013) which prescribes rules with respect to
trading in securities of the Company where there is any undisclosed material
information or a pending material development. Strict compliance with the
provisions of this policy is required, with a view to enhancing investor
confidence in the Companys securities and contributing to ethical business
conduct by the Companys personnel. In September 2006, the Board also created
the Health, Occupation Safety & Environmental Committee (now called the
Technical Committee) in order to reflect the Companys continuing commitment to
improving the environment and ensuring that its activities are carried out in a
safe, sustainable and environmentally sound manner. In February 2014, the
committee was renamed to the Technical Committee in order to encompass
additional focus on reviewing project design and operational aspects of any
proposed mine development.
Anti-Hedging Policy
The Company does not currently have an anti-hedging policy in
place for directors, officers or employees who may purchase financial
instruments, including, for greater certainty, prepaid variable forward
contracts, equity swaps, collars or units of exchange funds, which are designed
to hedge or offset a decrease in market value of equity securities granted as
compensation. The Board will assess the need and consider implementing such a
policy in the future if warranted.
11
Communications with the Board
Interested parties, including shareholders of the Company,
desiring to communicate with members of the Board may do so by mailing a request
to the Secretary of International Tower Hill Mines Ltd. at 2300-1177 West
Hastings Street, Vancouver, British Columbia, Canada, V6E 2K3. Any such
communication should state the number of shares beneficially owned, if any, by
the interested party making the communication. The Secretary will forward any
such communication to the Chair of the Corporate Governance and Nominating
Committee, and will forward such communication to other members of the Board, as
appropriate, provided that such communication addresses a legitimate business
issue. Any communication relating to accounting, internal controls, auditing or
fraud will be forwarded to the Chairman of the Audit Committee.
COMMITTEES OF THE BOARD
Committees of the Board are an integral part of the Companys
governance structure. At the present time, the Board has four standing
committees: the Audit Committee, the Compensation Committee, the Corporate
Governance and Nominating Committee, and the Technical Committee (formerly the
Health, Occupational Safety & Environmental Committee). Details of the
composition and function of the standing committees of the Board are as follows:
Director
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Audit Committee
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Compensation
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Corporate
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Technical
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Committee
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Governance and
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Committee
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Nominating
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Committee
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Anton J. Drescher
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Chair
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X
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John J. Ellis
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X
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Chair
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Mark R. Hamilton
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X
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Chair
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Stephen A. Lang
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X
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X
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X
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Thomas S. Weng
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X
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Chair
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X
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Audit Committee
Members:
Anton J. Drescher (Chair), Mark R. Hamilton and
Thomas S. Weng
The Board has a standing Audit Committee of at least three
members. All members of the Audit Committee are independent under NP 52-110, the
NYSE MKT listing standards and Rule 10A-3(b)(1) of the Securities Exchange Act
of 1934, as amended (the Exchange Act) and satisfy the composition
requirements of Section 803(B)(2)(a) of the NYSE MKT Company Guide. The Board
has determined that Anton J. Drescher is an audit committee financial expert
as that term is defined in Item 407(d) of Regulation S- K. As an audit
committee financial expert, Mr. Drescher satisfies the NYSE MKT financial
literacy and sophistication requirements. The Audit Committee has adopted a
charter that describes its responsibilities in detail. The charter is available
on the Companys website at www.ithmines.com.
The primary responsibility for financial reporting, internal
controls, compliance with laws and regulations and ethics rests with the
management of the Company. The Audit Committees primary purpose is to oversee
the integrity of the Companys financial statements, the Companys compliance
with legal and regulatory requirements and corporate policies and controls, the
independent auditors selection, retention, qualifications, objectivity and
independence and the performance of the Companys internal controls function.
The Audit Committee reviews the financial information that will be provided to
the shareholders and others, the systems of internal controls that management
and the Board have established and the audit process. The Audit Committee also
reviews the audited financial statements and discusses them with the management
of the Company. Additional information about the Audit Committees role in
corporate governance can be found in the committees charter.
Compensation Committee
Members:
Mark R. Hamilton (Chair), John J. Ellis and Stephen
A. Lang.
As set out in its written charter, the overall purpose of the
Compensation Committee is to implement and oversee human resources and
compensation policies and best practices for recommendation to the Board for
approval and implementation. The Compensation Committee charter is available on
the Company's website at www.ithmines.com. The Compensation Committee has the
duty and responsibility to ensure that the Company has in place programs to
attract and develop management of the highest caliber and a process to provide
for the orderly succession of management. It also has the duty to assess and
report to the Board, on an annual basis, on the performance of the CEO for the
prior year, and to review, on an annual basis, the salary, bonus and other
benefits, direct and indirect, of the CEO and make recommendations in respect
thereof for approval of the Board.
12
Additionally, the Compensation Committee reviews, on an annual
basis, the proposed compensation for all other officers of the Company after
considering the recommendations of the CEO, and makes recommendations in respect
thereof for approval by the Board. The Compensation Committee may not delegate
these duties and responsibilities, however, the Compensation Committee may, in
its sole discretion, retain, at the expense of the Company, such legal,
financial, compensation or other advisors or consultants as it may deem
necessary or advisable in order to properly and fully perform its duties and
responsibilities.
Corporate Governance and Nominating Committee
Members:
Thomas S. Weng, (Chair), Anton J. Drescher and
Stephen A. Lang
As set out in its written charter, the primary roles of the
Corporate Governance and Nominating Committee include developing and monitoring
the effectiveness of the Companys corporate governance system and ensuring the
Company is in line with the proper delineation of the roles, duties and
responsibilities of the Company, the Board and its committees. The Corporate
Governance and Nominating Committee charter is available on the Companys
website at www.ithmines.com. The Corporate Governance and Nominating Committee
also establishes procedures for the identification of new nominees to the Board,
leads the candidate selection process, and develops and implements orientation
procedures for new directors. Currently, the Corporate Governance and Nominating
Committee does not have a policy allowing for the consideration of director
candidates recommended by security holders, but would consider such nominees if
presented to the committee on a timely basis. The Corporate Governance and
Nominating Committee is also responsible for assessing the effectiveness of
directors, the Board and the various committees of the Board and assisting the
Board in setting the objectives of the CEO and evaluating the performance of the
CEO.
The Corporate Governance and Nominating Committee, composed
solely of independent directors, is responsible for reviewing proposals for new
nominees to the Board and conducting such background reviews, assessments,
interviews and other procedures as it believes necessary to ascertain the
suitability of a particular nominee. In determining whether a candidate is
qualified to be nominee for a position on the Board, the committee will take
into consideration factors such as it deems appropriate, including judgment,
skill, diversity, experience with businesses and other organizations of
comparable size and the need for particular expertise on the Board. The
selection of potential nominees for review by the Corporate Governance and
Nominating Committee are generally the result of recruitment efforts by the
individual Board members or the CEO, including both formal and informal
discussions among Board members and with the CEO, and are usually based upon the
desire to have a specific set of skills or expertise included on the Board.
The appointment of new directors, either to fill vacancies or
to add additional directors as permitted by applicable corporate legislation, or
the nomination for election as a director of a person not currently a director
by the shareholders at an annual general meeting is carried out by the Board,
based on the recommendation of the Corporate Governance and Nominating
Committee. Once the names of any suggested nominees are provided to the
Corporate Governance and Nominating Committee, the committee carries out such
reviews as it determines to be appropriate, including interviews with the
proposed nominee, to determine if the proposed nominee is an appropriate fit
for election to the Board. The Corporate Governance and Nominating Committee
then makes a recommendation to the full Board as to the nomination of the
identified individual for election as a director, for appointment as a
replacement for a director who has resigned or for appointment as an additional
director, as applicable. In addition, prior to each annual general meeting of
the shareholders of the Company, the Corporate Governance and Nominating
Committee carries out a review of the then current Board composition and makes
recommendations as to the individuals, whether existing directors or non-
directors, it considers should be nominated for election as a director. With
respect to the five nominees for election as a director at the Meeting disclosed
in this Proxy Statement, the Corporate Governance and Nominating Committee as a
whole made the determination to nominate each such nominee, and no holder of
Common Shares, non-management director, chief executive officer, other executive
officer, third-party search firm, or other source recommended any specific
nominee.
Majority Voting Policy
On April 25, 2013, the Board adopted a majority voting policy.
Pursuant to the majority voting policy, the form of proxy for meetings of the
shareholders of the Company at which directors are to be elected provide the
option of voting in favor, or withholding from voting, for each individual
nominee to the Board. If, with respect to any particular nominee, the number of
shares withheld from voting exceeds the number of shares voted in favor of the
nominee, then the nominee will be considered to have not received the support of
the shareholders, and such nominee is expected to submit his or her resignation
to the Board, to take effect on acceptance by the Board. The Corporate
Governance and Nominating Committee will review any such resignation and make a
recommendation to the Board regarding whether or not such resignation should be
accepted. The Board will determine whether to accept the resignation within 90
days following the shareholders meeting. If the resignation is accepted,
subject to any corporate law restrictions, the Board may:
(a)
|
leave the resultant vacancy in the Board unfilled until
the next annual meeting of shareholders of the
Company;
|
13
(b)
|
fill the vacancy by appointing a director whom the Board
considers to merit the confidence of the shareholders; or
|
|
|
(c)
|
call a special meeting of the shareholders of the Company
to consider the election of a nominee recommended by the Board to fill the
vacant position.
|
Directors who do not submit their resignation in accordance
with the majority voting policy will not be re-nominated for election at the
next shareholders meeting. The majority voting policy applies only in the case
of an uncontested shareholders meeting, meaning a meeting where the number of
nominees for election as directors is equal to the number of directors to be
elected. A copy of the majority voting policy is available at the Companys
website at www.ithmines.com.
Technical Committee
Members:
John J. Ellis (Chair), Stephen A. Lang and Thomas
S. Weng
As set out in its written charter, the overall purpose of the
Technical Committee (previously called the Health, Occupational Safety &
Environmental Committee) is to assist the Board in reviewing technical matters
related to project design and operations as well as fulfilling the Boards
oversight responsibilities with respect to the Boards and the Companys
continuing commitment to improving the environment and ensuring that activities
are carried out and facilities are operated and maintained in a safe and
environmentally sound manner that reflects the ideals and principles of
sustainable development. The Technical Committee charter is available on the
Companys website at www.ithmines.com. The Technical Committee will review
technical materials prepared by management of the Company and will monitor,
review and provide oversight with respect to the Companys policies, standards,
accountabilities and programs relative to health, safety, and
environmental-related matters.
Board and Committee Meetings
The Board held 5 regular meetings, 4 special meetings and 5
meetings by unanimous consent during the fiscal year ended December 31, 2013
(Fiscal Year 2013). Each director attended, in person or by telephone, at
least 75% of the aggregate number of meetings held by the Board and by the
committees of the Board on which he or she served during Fiscal Year 2013. It is
the Companys policy that each director personally attends each Annual Meeting.
All of the then incumbent Directors, other than Mr. Haddon, Mr. Pontius (who was
not standing for re-election) and Mr. Hamilton, attended last years annual
meeting. The attendance record of each director at full Board meetings, and at
meetings of any Board committees of which the applicable director is a member
for the Fiscal Year 2013 are as follows:
|
General
Board
Meeting
(5)
(6)
|
Board
Committees
(1)
|
Audit
|
Compensation
|
Corporate
Governance &
Nominating
|
Donald Ewigleben
(2)
|
14/14
|
|
|
|
Daniel Carriere
(2)
|
11/14
|
|
2/2
|
1/1
|
Anton Drescher
|
14/14
|
4/4
|
|
|
Timothy Haddon
(2)
|
13/14
|
4/4
|
|
|
Mark Hamilton
|
14/14
|
4/4
|
2/2
|
1/1
|
Jeffrey Pontius
(3)
|
3/3
|
|
|
|
Roger Taplin
(2)
|
14/14
|
|
|
|
Thomas Weng
(4)
|
3/3
|
1/1
|
1/1
|
|
Jonathan Berg
(7)
|
-
|
|
|
|
Total Meetings Held
in Fiscal 2013
|
14
|
4
|
2
|
1
|
|
1)
|
The Health, Occupational Safety & Environmental
Committee and the Transaction Committee did not meet during Fiscal Year
2013.
|
|
2)
|
Messrs. Ewigleben, Carriere, Haddon and Taplin resigned
on December 31, 2013.
|
|
3)
|
Mr. Pontius did not stand for re-election at the June 6,
2013 annual general meeting of the shareholders.
|
|
4)
|
Mr. Weng was appointed to the Board on August 5, 2013.
Mr. Weng attended all the meetings of the Board, Audit and Compensation
Committees while he was a member.
|
|
5)
|
Includes 5 meetings held by unanimous consent. Each
director signed every unanimous consent.
|
|
6)
|
Mr. Lang and Mr. Ellis were appointed to the Board in
February 2014.
|
|
7)
|
Mr. Berg resigned as a director on January 29, 2013.
There were no board or committee meetings during Mr. Bergs tenure as a
director in 2013.
|
14
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS AND
MANAGEMENT
The authorized capital of the Company consists of 500,000,000
Common Shares without par value. As at the date of this Proxy Statement,
98,068,638 Common Shares were issued and outstanding. Each issued Common Share
carries the right to one vote at the Meeting.
The following table sets forth certain information regarding
beneficial ownership of the Companys Common Shares, as of April 4, 2014, by
each person known by the Company to be the beneficial owner of more than 5% of
the outstanding Common Shares. The percentage of beneficial ownership is based
on 98,068,638 Common Shares outstanding as of April 4, 2014. Except as indicated
in the footnotes to this table and pursuant to applicable community property
laws, to our knowledge, each beneficial owner named in the table has sole voting
and investment power with respect to the Common Shares set forth opposite such
beneficial owners name. The information provided in this table is based on the
Companys records and information filed with the SEC, unless otherwise noted.
Name and Address of Beneficial Owner
|
Amount and Nature of
Beneficial Ownership
(1)
|
Percentage of Class
|
Tocqueville Asset Management,
L.P.
(2)
40
W. 57th Street, 19th
Floor
New
York, New York 10019
|
19,275,842
|
19.66%
|
AngloGold Ashanti (U.S.A.) Exploration
Inc.
(3)
6300
S. Syracuse Way, Suite
500,
Greenwood
Village, Colorado 80111
|
11,073,323
|
11.29%
|
Paulson &
Company
(4)
1251
Avenue of the Americas, 50th
Floor
New
York, New York 10020
|
8,908,000
|
9.08%
|
(1)
|
Beneficial ownership is determined in accordance with the
rules of the SEC and generally includes voting or investment power with
respect to securities. In accordance with Rule 13d-3(d)(1) under the
Exchange Act, the applicable ownership total for each person is based on
the number of Common Shares held by such person as of April 4, 2014, plus
any securities to which such person has the right to acquire beneficial
ownership within 60 days of April 4, 2014, including those securities held
by such person exercisable for or convertible into Common Shares within 60
days after April 4, 2014. Unless otherwise noted, each person and group
identified possesses sole voting and investment power with respect to the
shares shown opposite such persons or groups name.
|
|
|
(2)
|
Tocqueville Asset Management, L.P. (TAM) is the
investment advisor of a number of investment funds and managed accounts of
private clients and institutional groups (collectively, the TAM
Accounts). TAM does not itself own any securities of the Company, but has
authority to exercise control or direction over certain securities of the
Company as the investment advisor of the TAM Accounts. The share
information is based on Company records.
|
|
|
(3)
|
AngloGold Ashanti (U.S.A.) Exploration Inc. (AngloGold)
is an indirect wholly owned subsidiary of AngloGold Ashanti Limited, a
South African public company whose securities are listed on the New York,
Johannesburg, Ghanaian, London and Australian Stock Exchanges. The share
information is based on Company records.
|
|
|
(4)
|
Paulson and Company is the investment advisor of a number
of investment funds and managed accounts of private clients and
institutional groups (collectively, the PC Accounts). Paulson and
Company does not itself own any securities of the Company, but has
authority to exercise control or direction over certain securities of the
Company as the investment advisor of the PC Accounts. The share
information is based on a Schedule 13G filed with the SEC on July 31,
2013.
|
The following table sets forth certain information regarding
beneficial ownership of Common Shares as of April 4, 2014 by (a) each of the
Companys named executive officers, directors and nominees, individually and (b)
the Companys current executive officers, directors and director nominees, as a
group. The percentage of beneficial ownership is based on 98,068,638 Common
Shares outstanding as of April 4, 2014. Except as indicated in the footnotes to
this table and pursuant to applicable community property laws, each shareholder
named in the table has sole voting and investment power with respect to the
shares set forth opposite such shareholders name. The information provided in
this table is based on Company records and information filed with the SEC and
the BC Securities Commission, unless otherwise noted. The business address of
each person set forth in the table below is c/o International Tower Hill Mines
Ltd. 2300-1177 West Hastings Street, Vancouver, British Columbia, Canada, V6E
2K3.
15
|
|
Number of Shares
Beneficially
|
|
|
|
Number of
|
Owned as a Result of
Equity
|
|
|
|
Common
|
Awards Exercisable or
Vesting
|
|
Percentage of
|
Name of Beneficial Owner
|
Shares Owned
|
Within 60 Days of April 4, 2014
|
Total
(1)
|
Class
|
Non-employee Directors
|
|
|
|
|
Anton Drescher
|
489,218
|
173,333
|
662,551
|
*
|
John Ellis
|
-
|
20,000
|
20,000
|
*
|
Mark Hamilton
|
25,000
|
173,333
|
198,333
|
*
|
Stephen Lang
|
-
|
20,000
|
20,000
|
*
|
Thomas Weng
|
-
|
40,000
|
40,000
|
*
|
Named Executive Officers
|
|
|
|
|
Donald Ewigleben
|
10,000
|
-
|
10,000
|
*
|
Thomas Irwin
|
30,000
|
549,998
|
579,998
|
*
|
Tom Yip
|
40,000
|
1,126,666
|
1,166,666
|
1.19
|
All current directors, executive officers and
director nominees as a group
|
584,218
|
2,103,330
|
2,687,548
|
2.75
|
* Less than 1%
|
|
|
(1)
|
Beneficial ownership is determined in accordance with the
rules of the SEC and generally includes voting or investment power with
respect to securities. In accordance with Rule 13d-3(d)(1) under the
Exchange Act, the applicable ownership total for each person is based on
the number of Common Shares held by such person as of April 4, 2014, plus
any securities to which such person has the right to acquire beneficial
ownership within 60 days of April 4, 2014, including those securities held
by such person exercisable for or convertible into Common Shares within 60
days after April 4, 2014. Unless otherwise noted, each person and group
identified possesses sole voting and investment power with respect to the
shares shown opposite such persons or groups
name.
|
Section 16(a) Beneficial Ownership Reporting
Compliance
Section 16(a) of the Exchange Act requires the Companys
directors and executive officers, and persons who own more than 10% of a
registered class of the Companys equity securities, to file with the SEC
initial reports of ownership and reports of changes in ownership of Common
Shares and other equity securities. Executive officers, directors and holders of
more than 10% of the Common Shares are required by regulations of the SEC to
furnish us with copies of all Section 16(a) reports they file.
To our knowledge, based solely upon a review of the copies of
such reports furnished to us or written representations that no other reports
were required to be filed during Fiscal Year 2013, all filing requirements under
Section 16(a) applicable to officers, directors and more than 10% shareholders
were satisfied timely, with the exception of the initial ownership Form 3 for
Mr. Weng upon his appointment as director in August 2013, which was filed in
March 2014.
Certain Relationships and Related Transactions
There have been no reportable transactions with related persons
during 2013.
Procedures for Approval of Transactions with Related
Parties
In accordance with the requirements of the NYSE MKT, the Board
passed a resolution on June 20, 2007 requiring that, in addition to any
requirements under applicable corporate laws, all related party transactions
are required to first be reviewed and approved by the Companys Audit Committee.
The resolution requires approval by the Audit Committee of all transactions in
which the Company is a participant and in which any of the Companys directors,
executive officers, significant shareholders or an immediate family member of
any of the foregoing persons has a direct or indirect material interest. All
related party transactions are reported for review by the Audit Committee. The
Audit Committee determines whether these transactions are in the best interests
of the Company and its shareholders. In addition, related party transactions are
subject to the provisions of Multilateral Instrument 61-101 Protection of
Minority Shareholders in Special Transactions, which prescribes certain
conditions under which related party transactions may be carried out, and
provides certain exemptions thereto. Conflicts of interest with respect to the
involvement of directors and officers in transactions with the Company are also
subject to the provisions of the BCBCA and the Companys articles.
16
COMPENSATION DISCUSSION AND ANALYSIS
Compensation Committee
The Board established the Compensation Committee and adopted a
written charter for the committee on September 22, 2006. The current members of
the Compensation Committee are Mark Hamilton (Chair), John Ellis and Stephen
Lang, each of whom are independent directors.
During fiscal 2013, the makeup of the Compensation Committee
was as follows: From January 1, 2013 until January 29, 2013, the Compensation
Committee consisted of Mr. Carriere (Chair), Mr. Hamilton and Mr. Berg. From
January 30, 2013 until June 5, 2013, the Compensation Committee consisted of Mr.
Carriere (Chair) and Mr. Hamilton. From June 6, 2013 until August 4, 2013, the
Compensation Committee consisted of Mr. Carriere (Chair), Mr. Hamilton and Mr.
Haddon. From August 5 and prior to January 1, 2014, the Committee consisted of
Mr. Carriere (Chair), Mr. Hamilton and Mr. Weng. During their tenure on the
Compensation Committee, each of Messrs. Carriere, Berg, Haddon and Weng were
independent directors.
Mr. Carriere resigned as a director on December 31, 2013,
following which the Compensation Committee was restructured on January 3, 2014
to consist of Mr. Hamilton (Chair), Mr. Weng and Mr. Drescher. Effective
February 25, 2014, the Compensation Committee was restructured to consist of Mr.
Hamilton (Chair), Mr. Ellis and Mr. Lang.
The overall purpose of the Compensation Committee is to
implement and oversee human resources and compensation policies and best
practices for recommendation to the Board for approval and implementation. The
Compensation Committee is responsible for administering all equity-based
compensation programs, including the Companys 2006 Incentive Stock Option Plan
(the Stock Option Plan).
The duties and responsibilities of the Compensation Committee
are as follows:
|
(a)
|
to recommend to the Board human resources and
compensation policies and guidelines for application to the
Company;
|
|
|
|
|
|
(b)
|
to review and recommend any changes thought necessary to
the Companys domestic and international compensation and human resources
policies and procedures;
|
|
|
|
|
|
(c)
|
if required by applicable legislation or policy, to
prepare, on an annual basis for inclusion in the Companys annual proxy
statement, a report on the Companys compensation practices;
|
|
|
|
|
|
(d)
|
to ensure that the Company has in place programs to
attract and develop management of the highest calibre and a process to
provide for the orderly succession of management, such that
particularly:
|
|
|
|
|
|
|
(i)
|
properly reflect the duties and responsibilities of
members of management;
|
|
|
|
|
|
|
(ii)
|
are effective and competitive in attracting, retaining
and motivating people of the highest quality; and
|
|
|
|
|
|
|
(iii)
|
are based on established corporate and individual
performance objectives;
|
|
|
|
|
|
(e)
|
to assess and report to the Board, on an annual basis, on
the performance of the CEO for the prior year;
|
|
|
|
|
|
(f)
|
to review, on an annual basis, the salary, bonus and
other benefits, direct and indirect, of the CEO and make recommendations
in respect thereof for approval by the Board, provided that such Board
approval will include the approval of a majority of directors that are
independent of the Company within the meaning of all applicable legal
and regulatory requirements (except in circumstances, and only to the
extent, permitted by all applicable legal and regulatory
requirements);
|
|
|
|
|
|
(g)
|
to review, on an annual basis, the proposed compensation
for all other officers of the Company after considering the
recommendations of the CEO, all within the human resources and
compensation policies and guidelines approved by the Board, and make
recommendations in respect thereof for approval by the Board, provided
that such Board approval will include the approval of a majority of
directors that are independent of the Company within the meaning of all
applicable legal and regulatory requirements (except in circumstances, and
only to the extent, permitted by all applicable legal and regulatory
requirements);
|
|
|
|
|
|
(h)
|
to implement and administer human resources and
compensation policies approved by the Board concerning the
following:
|
|
|
|
|
|
|
(i)
|
executive compensation, contracts, stock plans or other
incentive plans; and
|
|
|
|
|
|
|
(ii)
|
proposed personnel changes involving officers reporting
to the CEO;
|
|
|
|
|
|
(i)
|
to review any proposed amendments to the Companys Stock
Option Plan and report to the Board thereon;
|
17
|
(j)
|
to review and make recommendations to the Board
concerning the CEOs recommendations for stock option grants to directors,
senior officers, employees and consultants of the Company and its
affiliates under the Companys Stock Option Plan;
|
|
|
|
|
(k)
|
from time to time, to review the Companys broad policies
and programs in relation to benefits;
|
|
|
|
|
(l)
|
to annually receive from the CEO recommendations
concerning annual compensation policies and budgets for all
employees;
|
|
|
|
|
(m)
|
from time to time, to review with the CEO the Companys
broad policies on compensation for all employees and overall labour
relations strategy for employees;
|
|
|
|
|
(n)
|
to periodically review the adequacy and form of the
compensation of directors and to ensure that the compensation
realistically reflects the responsibilities and risks involved in being an
effective director, and to report and make recommendations to the Board
accordingly;
|
|
|
|
|
(o)
|
to report regularly to the Board on all of the
committees activities and findings during that year; and
|
|
|
|
|
(p)
|
to develop a calendar of activities to be undertaken by
the committee for each ensuing year and to submit the calendar in the
appropriate format to the Board within a reasonable period of time
following each annual general meeting of
shareholders.
|
The following table provides further detail with regard to the
members of the Compensation Committee and their relevant experience in executive
compensation-related roles:
|
Mark
|
John Ellis
|
Stephen
|
Daniel
|
Thomas
|
Jonathan
|
Timothy
|
|
Hamilton
|
|
Lang
|
Carriere
|
Weng
|
Berg
|
Haddon
|
|
|
|
|
|
|
|
|
Experience as senior
|
|
|
|
|
|
|
|
leadership of organizations
|
|/
|
|/
|
|/
|
|/
|
|/
|
|/
|
|/
|
similar to the Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct operational,
|
|
|
|
|
|
|
|
functional or oversight
|
|/
|
|/
|
|/
|
|/
|
|/
|
|/
|
|/
|
experience in executive
|
|
|
|
|
|
|
|
compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Experience serving on
|
|
|
|
|
|
|
|
compensation committees of
|
-
|
|/
|
|/
|
|/
|
|/
|
|/
|
|/
|
organizations similar to the
|
|
|
|
|
|
|
|
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currently serving on
|
|
|
|
|
|
|
|
compensation committee(s)
|
-
|
|/
|
-
|
-
|
|/
|
|/
|
|/
|
of organizations similar to
|
|
|
|
|
|
|
|
the Company
|
|
|
|
|
|
|
|
The current members of the Compensation Committee, consisting
of Messrs. Hamilton, Ellis and Lang, have over 40 years of combined experience,
both as senior leadership as well as direct operational or functional experience
overseeing executive compensation at organizations similar to the Company.
Messrs. Hamilton, Ellis and Lang have each served on the compensation committee
of similar-sized organizations, and the committee supports continuous training
and education with respect to executive compensation. It is the opinion of the
Board that the extensive experience held by members of the Compensation
Committee will provide them with the ability to make sound and proper decisions
on the suitability of the Companys compensation policies and practices.
The Chair of the Compensation Committee is responsible for
setting the priority for the work of the committee, ensuring that members have
the information needed to fulfill their responsibilities, overseeing the
logistics of the committees operations, reporting to the Board on the
committees decisions and recommendations and setting the agenda for meetings of
the committee.
Independent Compensation Advisors
The Compensation Committee has the authority to engage and
compensate, at the expense of the Company, any outside advisor that it
determines to be necessary to permit it to carry out its duties, including
compensation consultants and advisers. In the year ended December 31, 2013, the
Compensation Committee did not retain the services of any independent advisors.
18
Executive Compensation Strategy, Philosophy and
Principles
The Companys executive compensation strategy is designed to
attract, retain and motivate an experienced and effective key management team.
The strategy focuses on creating strong links between pay and performance and
aligning the interests of executives, shareholders and other stakeholders.
The executive officers of the Company are compensated in a
manner consistent with their respective contributions to the overall benefit of
the Company, and in line with the criteria set out below.
The determination of executive compensation amount and award is
based on a combination of factors, including, but not limited to, information
provided to the Compensation Committee by compensation consultants, market
conditions, compensation of peer group entities, internal policies and practices
and the discretion of the Compensation Committee in consideration of their
compensation-related experience. The compensation program for each of the
executive officers includes base salary, annual cash incentive bonus and stock
options.
In the case of a mineral exploration company with a significant
asset in the advanced exploration/feasibility stage such as the Company, the
Compensation Committee considers the following aspects to be of primary
importance in assessing the performance of executive officers:
|
a)
|
the ability to design, implement and carry out mineral
development in a safe, environmentally appropriate and efficient and cost
effective basis;
|
|
|
|
|
b)
|
the ability to raise the significant and necessary
capital to permit the Company to carry out the work required to advance
such a project through to a stage where a production decision can be
considered;
|
|
|
|
|
c)
|
the ability to locate and hire the appropriate personnel
required to carry out a feasibility study and permitting
activities;
|
|
|
|
|
d)
|
should a production decision be made, the ability to
finance, construct and operate a major mine project, focus the Companys
resources and appropriately allocate such resources to the benefit of the
Company as a whole; and
|
|
|
|
|
e)
|
the ability to ensure compliance by the Company with
applicable regulatory requirements and carry on business in a sustainable
manner.
|
In 2012, at the recommendation of the Hay Group, the
Compensation Committees independent compensation advisor, the Company adopted a
new Total Compensation Strategy and Framework with a view to:
|
a)
|
create a performance based and incentivized environment,
wherein significant rewards are available when measurable and achievable
objectives are exceeded;
|
|
|
|
|
b)
|
further incentivize performance by using variable
compensation to focus on developing ownership positions within the
Company;
|
|
|
|
|
c)
|
attract and retain highly qualified executives;
|
|
|
|
|
d)
|
motivate executives and employees to perform at the
highest level possible through a collaborative team effort; and
|
|
|
|
|
e)
|
enhance Company and shareholder
value.
|
The total compensation strategy and framework is described
below.
Compensation Peer Group
For the purpose of external benchmarking, a primary
compensation peer group of companies was recommended by the Hay Group and
subsequently adopted by the Compensation Committee. The Compensation Committee
used its experience and familiarity with the industry and activities of
comparable companies to determine those it believes to be peers.
The selection criteria of the peer companies were stage of
development, project size, project location and entities with a single large
project. The peer group used in 2013 compensation planning consisted of
Chesapeake Gold, Exeter Resource, Gabriel Resources, Guyana Goldfields, NovaGold
Resources, Rainy River, Romarco Minerals, Seabridge Resources and Torex Gold.
19
The peer group was established at the beginning of 2013 and was
deemed to be comparable companies by management and the Compensation Committee.
The group included development stage companies and construction stage/near term
producers. Near term producers were included in the group because the Company
competes with these companies in the process of hiring senior executives.
Information from public reporting documents for each of these companies
regarding annual base and other cash compensation for the CEO and other
executive officers was compiled and analyzed to determine average and median
compensation of executive officers of the peer group for the fiscal year 2012.
The results of the analysis indicated that the compensation of the Companys
NEOs were lower than the average and the median of the peer group for total cash
compensation, which includes annual and short term cash compensation. After the
annual review of executive officer performance, no compensation adjustments were
recommended and resulted in the NEOs base salary being maintained within the
second quartile of the peer group range.
The comparative group of companies can vary from year to year,
depending primarily upon the activities of companies in the industry, their
respective projects and the success of their exploration activities.
Elements of Compensation
Base Salaries
Base salaries were targeted at levels that were competitive
with the base salaries paid by mining companies of a comparable size to the
Company. Base salaries were initially set through negotiation at the time of
hire, and are reviewed annually by the Compensation Committee to determine if
adjustments were required.
In 2013, base salaries were targeted at the median of a
specified range of appropriate base salary levels drawn from data for similar
roles within the peer group as well as the broader mining industry. Executive
salaries at the Company will be reviewed annually when updated market data is
available, and will be adjusted based on corporate and individual performance
over the previous year. Salary for individual executives may be positioned above
or below the target level to reflect years of experience, potential,
performance, business circumstances, market demands or other factors specific to
the executive role. There were no adjustments to the NEOs base compensation for
2014 after considering the market conditions for the gold industry, changes in
the Companys organization, inflation and resultant increases in
responsibilities as well as analysis of peer group data.
The Compensation Committee typically, in consultation with the
CEO, makes recommendations to the Board regarding the base salaries for
executive officers of the Company other than the CEO. The Compensation Committee
is responsible for recommending the salary level of the CEO to the Board for
approval.
Annual Incentives (Short-Term Incentives)
Since 2012, the Company adopted the Annual Incentive
Compensation Plan (the AICP). The AICP considers performance over a short term
(one year) period based on measurable goals and objectives. It is designed to
reinforce performance against both corporate and individual goals. Success in
achievement is assessed relative to pre-determined targets for each of the
strategic objectives. The following is a summary of the AICP:
|
a)
|
The target value of AICP grants is determined based on
market competitiveness in consideration of total compensation, with
recommended target ranges established for all positions. Annual incentive
awards are paid out in the form of cash, shares or a combination of cash
and shares.
|
|
|
|
|
b)
|
With respect to corporate goals, each year the CEO will
develop 3-5 objectives for approval by the Board. These corporate goals
will be implemented as company-wide priorities for the year. Based on the
approved corporate goals, the executive team will then determine
appropriate objectives in their respective business / functional
areas.
|
|
|
|
|
c)
|
With respect to personal goals, each position in the
Company will establish 3-5 achievable and specific objectives per year
that are approved by their superior as their individual goals for the
year. At least one must be a personal goal designed to develop the
employee as an individual, which is invaluable in supporting the ability
of employees to add additional value to the Company as a whole.
|
|
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|
|
d)
|
The performance of executives will be evaluated on a
systematic basis against the pre-established goals. Each executive is
evaluated by the Compensation Committee with regard to their achievement
of goals.
|
|
|
|
|
e)
|
If the Company has met or exceeded its corporate
objectives, then payments will be awarded for various components. If the
Company has not met or exceeded its corporate objectives, the incentive
pool will not be triggered for the year and payments will not be awarded.
For exceptional performance beyond objective achievement, the Board may
recommend payouts above 100% target level at their discretion. These
payouts will only be made in recognition of outstanding performance, and
the payout will be separate from the annual award.
|
20
In 2013, the CEO and corporate goals consisted of five specific
activities:
|
a)
|
Corporate Development/Strategic Planning including
preparation of Strategic Plan (SP) for determining the opportunities for
potential strategic alliance partners and successful negotiation of any
agreements regarding a potential transaction with a strategic
partner.
|
|
|
|
|
b)
|
Completion of the Feasibility Study (FS) for the
Livengood Gold Project (Project) with an optimized project configuration
and to be of a quality and specificity to attract the appropriate
strategic alliance partner(s).
|
|
|
|
|
c)
|
Preparation of a Financing Plan to consider various
scenarios for financing the capital necessary for the Company to remain an
ongoing concern through 2014 and a financing plan for the continued
development of the Project with or without the benefit of strategic
alliance with another entity beyond 2014.
|
|
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|
|
d)
|
Enhance Investor Relations Engagement by improving
investor relationships and enhancing the overall awareness of the Company
and the amount of information flow, as warranted.
|
|
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|
|
e)
|
Maintain Safety and Environmental Performance with a
best-in-class safety environment, improve safety performance, reduce
incident rates, reduce spill frequency and severity rates, and improve
leading indicator performance over the prior year; and achieve an
environmental performance record in full compliance with Federal, state
and local standards, and demonstrate high site stewardship standards and
continuous improvement of environmental
performance.
|
However, with the departure of the former CEO at the end of
2013, no formal evaluation of the achievement of such goals was conducted for
2013.
In 2013, the CFO goals included three specific activities in
support of the overall corporate objectives:
|
a)
|
Ensuring adequate liquidity, developing funding options,
and monitoring cost containment and cash flow;
|
|
|
|
|
b)
|
Preparation for a strategic alliance including
preparation of data room, engaging and consulting with third party
advisors ; and
|
|
|
|
|
c)
|
Ensuring timely and appropriate disclosures for the
Feasibility Study and other material news as
appropriate.
|
In 2013, the Vice Presidents goals included three specific
activities in support of the overall corporate objectives:
|
a)
|
Provide oversight and coordination in the completion of
feasibility study within budgetary constraints including review of various
project options;
|
|
|
|
|
b)
|
Development of a permitting plan for the project;
and
|
|
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|
|
c)
|
Formulate and execute public affairs and communication
strategy and participate in development of a strategic
alliance.
|
In relation to the consideration of AICP for the fiscal year
2013, the Compensation Committee met on November 14, 2013 and reviewed a
memorandum prepared by management which discussed the achievement of the
Companys goals and individual objectives for the year 2013 and the resultant
AICP calculation. The Compensation Committee reviewed with the CEO each of the
achievements of the CFO and VP. With respect to the fiscal year 2013, eligible
bonuses were calculated at 70 percent of their annual salary for both the CFO
and VP; after considering budgetary constraints and given the state of the gold
industry and the companys share price performance during the year, no short
term c a s h incentive was recommended for the NEOs.
Long Term Incentives (Stock Option Plan)
The Stock Option Plan is designed to align the interests of
executives and those of shareholders through an opportunity of ownership. Other
than the Stock Option Plan, the Company does not have any long term incentive
plans.
Stock option grants typically vest 1/3 immediately on the grant
date, 1/3 on the first anniversary of grant date and the balance on the second
anniversary of grant date. The term of executive stock options has been
generally set at five years.
21
Recommendations for the grant of incentive stock options are
initially made by the CEO to the Compensation Committee, which is responsible
for reviewing and considering any such recommended grants and thereafter
recommending the grant thereof (subject to any changes determined appropriate by
the Compensation Committee, including declining to recommend some or all of such
grants, or amending the proposed terms thereof) to the Board, which then makes
the actual grants. Stock options are made at the discretion of the Compensation
Committee, considering the Companys performance and an employees individual
performance. While the Compensation Committee aims to have individuals with
similar levels of responsibility holding approximately equivalent numbers of
options, additional grants may be allocated to those executives believed by the
Compensation Committee to be in a position to more directly affect the success
of the Company.
In addition, ranges will be proposed for each organizational
level of the Company, taking into consideration the number of shares available
for distribution.
Benefit, Perquisites and Pension Programs
Other Benefits and Perquisites
The Companys wholly-owned U.S. subsidiary, Tower Hill Mines,
LLC (Tower US), has a benefit program in place, including medical and dental
benefits and basic life insurance, which applies to all permanent employees of
Tower US. The Company believes that such a plan is an important consideration in
attracting the necessary personnel.
Executive Retirement Plan
The Company does not have a defined benefit pension plan for
any of its executive officers or other employees. However, through Tower US, the
Company makes contributions to a 401(k) plan on behalf of each of its employees,
including executive officers, equal to 3% of their base salaries up to the
contribution limit as prescribed by the U S Internal Revenue Service (IRS). In
Fiscal Year 2013, contributions totaling $22,767 were made on behalf of the
named executive officers.
Compensation Risk Management
The Board annually reviews and approves the Companys strategic
plan, considering business opportunities, level of risks consistent with the
Companys risk appetite, cost implications, health, safety and environmental
standards and alignment with the rapid expansion objectives at the Companys
Livengood gold project in Alaska.
The Company has taken steps to ensure that its compensation
policies and practices are consistent with prudent risk-taking. The following
are highlights of various measures and applications with respect to compensation
arrangements:
|
a)
|
The annual corporate objectives used for the purposes of
short term incentive awards are approved by the Board for each year. The
Board takes into account desired levels of business risk in determining
such objectives.
|
|
|
|
|
b)
|
Measurable objectives are defined and form a portion of
the basis of evaluating incentive compensation and the maximum amount of
short term incentive payout will be defined.
|
|
|
|
|
c)
|
The use of share-based compensation will continue to be
highly emphasized. The deferred vesting of stock options is a measure of
time risk, focusing on long term performance.
|
|
|
|
|
d)
|
The award of various incentives and grants will be based
on a mix of structure guidelines and discretion exercised by the Board.
This balanced approach will help avoid unintentional outcomes as compared
to a pure formulaic approach.
|
The Boards review of compensation policies and practices
considers the business risk of the Company in the context of the mining resource
industry. The Board reviews and approves annual CEO performance targets in the
context of approved annual budgets and corporate objectives. The CEOs
short-term goals and incentives are reviewed in the context of alignment with
increasing shareholder value.
Effects of Internal Revenue Code Section 409A on Executive
Compensation
Section 409A of the Internal Revenue Code generally affects the
grants of most forms of deferred compensation. The Companys compensation
program is designed to comply with the final regulation of the IRS and other
guidance with respect to Section 409A of the Internal Revenue Code and the
Company expects to administer its compensation programs accordingly. The
provisions of the NEO employment agreements include provisions to change the
timing of payments of which may be required affecting any additional taxes or
interest and amending agreements without impairing the economic benefits to the
NEO, but in no event shall the Company be liable to any NEO for any taxes,
penalties, or interest that may be due as a result of the application of
Internal Revenue Code Section 409A.
22
Compensation Committee Report
The information contained in thefollowing Compensation
Committee Report shall not be deemed s
o
liciting material or filed
with the SEC, norshall such information be incorporated by reference into a
future filing under the Securities Act of 1933, as ame
n
ded, or the
Exchange Act, except to the extent the Company specifically incorporatesthis
report byreference therein.
The Compensation Committee has reviewed and discussed with
management the Compensation Discussion and Analysis required by Item 402(b) of
Regulation S-K. Based on such review and discussion, the Compensation Committee
recommended to the Board that the following Compensation Discussion and Analysis
be included in this Proxy Statement and incorporated by reference in the
Companys Annual Report on Form 10-K for the year ended December 31, 2013.
This Report has been submitted by y the following members of
the Compensation Committee:
Mark R. Hamilton, Chair, (member since November 18, 2011 and
Chair from January 3, 2014)
John J. Ellis (from February 25, 2014)
Stephen A. Lang (from February 25, 2014)
Thomas S. Weng (member from
August 5, 2013 until February 25, 2014)
Total Shareholder Return Performance
The following chart compares the total cumulative shareholder
return on $100 invested in Common Shares on May 31, 2009 with the cumulative
total returns of the S&P/TSX Composite Index and the S&P/TSX Global Gold
Index for the same $100 investment over the same period. Canadian dollar closing
price quotes on the TSX are converted to US dollars using the noon exchange
rates as quoted by the Bank of Canada for the date of the closing price quote.
As can be seen from the foregoing graph, the Companys
performance directionally tracked the performance of the S&P/TSX Global Gold
Index during the five most recently completed fiscal years. In earlier years the
Companys performance exceeded the performance of the S&P/TSX Composite
Index and the S&P/TSX Global Gold Index; however in the most recent years
the Companys performance lagged the performance of both indices. The decline of
the Companys stock price over the last two years is worse than the decline in
the price of gold as well as other precious metals equities over this time
period. In 2011, ITH was preparing to transition from an exploration focused
entity to a producer and recruited strong executiv ve staff to begin the
transition. In September 2011, gold prices hit 20 year highs, but started a
steady decline beginning g in October 2012 and investor sentiment turned
negative towards mining equities with projects with lower grade resources
requiring large capital expenditures. During 2013, the Company completed and released the Livengood Feasibility Study which
showed marginal economics for the project contemplated in the Feasibility Study.
Shareholder return declined 81% from December 2012 to December 2013. Total
Compensation for NEOs declined 73% and Cash Compensation (salary and bonus) for
NEOs declined 32% between 2012 and 2013 (except for the CEO who was not employed
for the full year of 2012). In March 2013, option awards were issued at prices
52% above market and no short term cash incentives were paid to the NEOs for
2013 pursuant to the Companys AICP program. The Companys compensation to NEOs
is generally aligned to shareholder returns over the last two years.
23
Summary Compensation Table
The following table sets forth the compensation for each named
executive officer (NEO) during the years ended December 31, 2013 and 2012, and
the seven month period ended December 31, 2011.
Name and
Principal
Position
|
Year
(1)
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
(2)
($)
|
All
other
compensation
($)
|
Total
Compensation
($)
|
Donald C. Ewigleben
CEO
(3)
|
2013
2012
2011
|
528,536
131,868
-
|
-
200,000
(4)
-
|
-
-
-
|
-
1,995,500
-
|
7,650
38,682
-
|
536,186
2,373,550
-
|
Tom S. Q. Yip
CFO
(5)
|
2013
2012
2011
|
348,901
300,000
90,659
|
-
227,000
100,000
(4)
|
-
-
-
|
61,153
812,461
2,819,444
|
7,650
14,831
5,720
|
417,704
1,354,292
3,015,823
|
Thomas E. Irwin
Vice President
(6)
|
2013
2012
2011
|
248,901
199,753
-
|
-
151,300
-
|
-
-
-
|
48,922
649,969
-
|
7,467
7,500
-
|
305,290
1,001,022
-
|
1)
|
Years ended December 31, 2013, December 31, 2012 and
seven months ended December 31, 2011.
|
2)
|
Amount represents the grant date fair value of option
awards. The grant date fair value of option awards was calculated in
accordance with Financial Accounting Standards Board Codification Topic
718. Canadian dollar amounts were translated to U.S. dollars using the
spot rate on the date of grant. Additional option award information for
2013 option grants is contained under the heading Incentive Plan Awards
below.
|
3)
|
Mr. Ewigleben was appointed as CEO on September 19, 2012.
During 2012, Mr. Ewigleben received option grants valued at $487,477 in
his capacity as a director and $1,508,023 upon his appointment as CEO. All
other compensation during 2013 consists of Company contribution to 401(k)
plan of $7,650 and during 2012 includes fees paid for duties performed as
director of $38,682.
|
4)
|
This amount represents initial signing bonuses paid to
induce such individuals to join the Company.
|
5)
|
Mr. Yip was appointed as CFO on September 7, 2011.
Amounts in all other compensation consist of: Company contribution to
401(k) plan of $7,650 during 2013; Company contribution to 401(k) plan of
$7,500 and relocation costs $7,331 in 2012; and Company contribution to
401(k) plan of $5,720 in 2011.
|
6)
|
Mr. Irwin was appointed Vice President on August 16,
2012. Amounts in all other compensation during 2013 and 2012 consist of
Company contribution to 401(k) plan of $7,467 and $7,500,
respectively.
|
Incentive Plan Awards
A summary of plan-based awards granted during the year ended
December 31, 2013 to each NEO is set forth below. All grants are of options made
under the Companys Stock Option Plan.
Grants of Plan Based Awards
|
Name
|
Grant Date
|
All Other
Option
Awards: Number
of Securities
Underlying
Options (#)
|
Exercise or
Base Price
of Option
Awards
(C$/Sh)
|
Grant Date
Fair
Value of Option
Awards
(1)
|
Donald C. Ewigleben
President & CEO
|
-
|
-
|
-
|
-
|
Tom S. Q. Yip
CFO
|
March 14, 2013
|
125,000
|
2.18
|
$61,153
|
Thomas E. Irwin
Vice President
|
March 14, 2013
|
100,000
|
2.18
|
$48,922
|
(1)
|
Amount represents the grant date fair value of option
awards. The grant date fair value of option awards was calculated in
accordance with Financial Accounting Standards Board Codification Topic
718. Canadian dollar amounts were translated to U.S. dollars using the
spot rate on the date of grant.
|
24
Outstanding Option Awards
The following table sets forth the option-based awards granted
to the NEOs that were outstanding as at December 31, 2013:
Outstanding Equity Awards at 2013 Fiscal Year
End
|
Name
|
Number
of
securities
underlying
unexercised
options
(#)
Exercisable
(1)
|
Number
of
securities
underlying
unexercised
options
(#)
Unexercisable
(1)
|
Option
exercise
price
(C$)
|
Option
grant date
|
Option
expiration
date
|
Donald C. Ewigleben
President & CEO
|
666,666
200,000
|
333,334
100,000
|
2.91
3.17
|
September 19, 2012
August 24,
2012
|
March 31, 2014
(2)
March 31, 2014
(2)
|
Tom S. Q. Yip
CFO
|
41,666
333,333
600,000
|
83,334
166,667
-
|
2.18
3.17
8.07
|
March 14, 2013
August 24, 2012
August 23, 2011
|
March 14, 2018
August 24, 2017
August 23, 2016
|
Thomas E. Irwin
Vice President
|
33,333
266,666
|
66,667
133,334
|
2.18
3.17
|
March 14, 2013
August 24, 2012
|
March 14, 2018
August 24, 2017
|
(1)
|
All options presented in this table vest as to one-third
on the date of grant, one-third on the first anniversary of the grant
date, and the balance on the second anniversary of the grant
date.
|
|
|
(2)
|
Options outstanding for Mr. Ewigleben expire 90 days
after his date of resignation from the Company of December 31,
2013.
|
The Company has not granted any share-based awards. There are
no estimated future payouts under non-equity or equity incentive plan
awards
.
None of the NEOs exercised option-based awards during the year
ended December 31, 2013.
Employment Agreements, Termination and Change of Control
Benefits
Employment Agreement with Donald C. Ewigleben
The Company entered into an employment agreement with Mr.
Ewigleben, effective September 19, 2012, to serve as its CEO. Pursuant to the
terms of this agreement, Mr. Ewigleben is to receive an annual base salary of
$500,000 and an annual discretionary performance bonus targeted at up to 100
percent of the base salary. The grant of any such performance payment shall be
in the sole discretion of the Board. Mr. Ewiglebens eligibility to receive such
performance payment is conditioned upon his continued employment at time of
payment. Mr. Ewigleben is also entitled to other benefits made available to the
Companys senior executive officers, including participation in any benefit
plans and policies.
In addition, upon the commencement of his employment, the
Company granted Mr. Ewigleben incentive stock options to purchase 1,000,000
Common Shares. See the Outstanding Equity Awards at 2013 Fiscal Year End and
Option Exercises tables as at December 31, 2013 above for a description of
vesting and other terms applicable to Mr. Ewiglebens option grants.
The employment agreement with Mr. Ewigleben is for an
indefinite term and is an at will agreement, which means that either the
Company or the executive may terminate the employment relationship without
notice and without payment of any compensation (including voluntary resignation,
retirement, termination with or without cause) except as otherwise provided. Mr.
Ewiglebens employment agreement specifically provides for a severance payment
upon termination under certain events. Under the terms of the employment
agreement, the Company may terminate Mr. Ewiglebens employment in its sole
discretion without cause and for any reason whatsoever, in which event Mr.
Ewigleben would be entitled to receive an amount equal to his annual base salary
plus the portion of annual bonus earned. Under the terms of the employment
agreement, upon termination after a change of control, Mr. Ewigleben would be
entitled to receive an amount equal to two times his annual base salary plus the
annual guideline bonus, immediate vesting of any unvested stock options and
continuation of medical benefits for a period of one year.
Change of Control means:
(a)
|
any person or group of affiliated or associated persons
acquires more than 50% of the voting power of the
Company;
|
25
(b)
|
the consummation of a sale of all or substantially all of
the assets of the Company;
|
|
|
(c)
|
the liquidation or dissolution of the Company;
|
|
|
(d)
|
a majority of the members of the Board are replaced
during any 12-month period by Board members whose nomination or election
was not approved by the members of the Board at the beginning of such
period (the Incumbent Board) (provided that any subsequent members of
the Board whose nomination or election was previously approved by the
Incumbent Board shall thereafter be also deemed to be a member of the
Incumbent Board); or
|
|
|
(e)
|
the consummation of any merger, consolidation, or
reorganization involving the Company in which, immediately after giving
effect to such merger, consolidation or reorganization, less than 51% of
the total voting power of outstanding stock of the surviving or resulting
entity is then beneficially owned (within the meaning of Rule 13d-3
under the Securities Exchange Act of 1934, as amended) in the aggregate by
the shareholders of the Company immediately prior to such merger,
consolidation or reorganization. Notwithstanding the foregoing, in no
event shall a Change of Control be deemed to occur in the event of a sale
of Company securities or debt as part of a bona fide capital raising
transaction or internal corporate reorganization.
|
Mr. Ewigleben resigned from the Company effective December 31,
2013. Under the terms of Mr. Ewiglebens separation agreement with the Company,
Mr. Ewigleben will be paid an amount of $515,000. The Company and Mr. Ewigleben
entered into a Consulting Agreement effective January 3, 2014. As a consultant
and counsel for the Company, Mr. Ewigleben will be paid $16,667 per month for
the period of one year under the terms of the Consulting Agreement.
Employment Agreement with Tom S.Q. Yip
The Company entered into an employment agreement with Mr. Yip,
effective September 7, 2011, to serve as its CFO. Mr. Yips employment agreement
was amended on March 11, 2013 to conform the termination and change of control
provisions to be similar to Mr. Ewiglebens agreement as described above.
Pursuant to the terms of the amended agreement, Mr. Yip is to receive an annual
base salary of $350,000 and an annual discretionary performance bonus targeted
at up to 100 percent of the base salary. The grant of any such performance
payment shall be in the sole discretion of the Board. Mr. Yips eligibility to
receive such performance payment is conditioned upon his continued employment at
time of payment. Mr. Yip is also entitled to other benefits made available to
the Companys senior executive officers, including participation in any benefit
plans and policies.
In addition, the Company granted Mr. Yip 600,000 stock options
upon commencement of employment, 500,000 stock options in 2012, and 125,000
options in 2013. See the Outstanding Equity Awards at 2013 Fiscal Year End and
Option Exercises tables as at December 31, 2013 above for a description of
vesting and other terms applicable to Mr. Yips option grants.
The existing employment agreement is for an indefinite term and
is an at will agreement, which means that either the Company or the executive
may terminate the employment relationship without notice and without payment of
any compensation (including voluntary resignation, retirement, termination with
or without cause) except as otherwise provided.
Employment Agreement with Thomas E. Irwin
The Company entered into an employment agreement with Mr.
Irwin, effective March 16, 2011, to initially serve as its Construction Manager,
Livengood Project. Mr. Irwin served as the Companys General Manger from January
4, 2012 to August 16, 2012 and since August 16, 2012, he has served as the
Companys Vice President, Alaska responsible for Alaska activities. Mr. Irwins
employment agreement was amended on March 11, 2013 to conform the termination
and change of control provisions to be similar to Mr. Ewiglebens agreement as
described above except Mr. Irwin will be entitled to a severance payment equal
to one times his annual base salary plus annual guideline bonus upon a
termination after a change of control. Pursuant to the terms of the amended
agreement, Mr. Irwin is to receive an annual base salary of $250,000 and an
annual discretionary performance bonus targeted at up to 100 percent of the base
salary. The grant of any such performance payment shall be in the sole
discretion of the Board. Mr. Irwins eligibility to receive such performance
payment is conditioned upon his continued employment at time of payment. Mr.
Irwin is also entitled to other benefits made available to the Companys senior
executive officers, including participation in any benefit plans and policies.
In addition, the Company granted Mr. Irwin 100,000 stock
options upon commencement of employment, 400,000 stock options in 2012, and
100,000 options in 2013. See the Outstanding Equity Awards at 2013 Fiscal Year
End and Option Exercises tables as at December 31, 2013 above for a
description of vesting and other terms applicable to Mr. Irwins option grants.
The existing employment agreement is for an indefinite term and
is an at will agreement, which means that either the Company or the executive
may terminate the employment relationship without notice and without payment of
any compensation (including voluntary resignation, retirement, termination with
or without cause) except as otherwise provided.
26
Mr. Irwin succeeded Mr. Ewigleben as President and Chief
Executive Officer effective January 1, 2014. The Company entered into a
subsequent employment agreement with Mr. Irwin, effective January 1, 2014, to
serve as its Chief Executive Officer. Pursuant to the terms of this agreement,
Mr. Irwin is to receive an annual base salary of $365,000 and an annual
discretionary performance bonus targeted at up to 100 percent of the base
salary. The grant of any such performance payment shall be in the sole
discretion of the Board. Mr. Irwins eligibility to receive such performance
payment is conditioned upon his continued employment through December
31
st
of the applicable year. Mr. Irwin is also entitled to other
benefits made available to the Companys senior executive officers, including
reimbursement of all medical, dental and vision plan premiums, not to exceed
$26,000 annually.
In addition, the Company granted Mr. Irwin 250,000 stock
options in March 2014 in connection with his appointment as Chief Executive
Officer.
The following table shows the estimated severance payment
payable to the Companys current NEOs if they were terminated on December 31,
2013 after a change in control.
Name
|
Salary
($)
|
Bonus
($)
|
Stock Option
Awards
(1)
|
All Other
Compensation
($)
(2)
|
Total
($)
|
Donald C. Ewigleben
CEO
|
1,030,000
|
1,030,000
|
-
|
33,500
|
2,093,500
|
Tom S. Q. Yip
CFO
|
700,000
|
700,000
|
-
|
33,500
|
1,433,500
|
Thomas E. Irwin
Vice President
|
250,000
|
250,000
|
-
|
33,500
|
533,500
|
|
1)
|
Calculated using the closing market price of Common
Shares on the TSX on December 31, 2013 (C$0.42 per share) less the
exercise price per share.
|
|
2)
|
Estimated based on annual salary contribution to the
401(k) plan subject to the contribution limit as prescribed by the
Internal Revenue Service and continuation of medical benefits for a period
of twelve months.
|
Director
Compensation
The Board has approved the payment of annual retainer and
meeting fees to the non-management directors of the Company in recognition of
the fact that service as a director in an active resource exploration company
such as the Company requires a significant commitment of time and effort and the
assumption of increasing liability. Executive officers who are also directors
are not paid additional compensation for their services on the Board. Therefore,
Mr. Ewigleben, as President and CEO, did not receive any compensation for his
services as a director. For the year ended December 31, 2013, independent
directors received an annual retainer of C$37,000 and the Chair received an
annual retainer C$55,000.
The Company reimburses all directors for their out-of-pocket
costs incurred in attending Board and Board committee meetings.
Director Compensation Table
The following table discloses all amounts of compensation
provided to the Companys directors (other than full-time employees) for the
Companys most recently completed financial year.
|
Fees
Earned
or Paid in
Cash
($)
|
All
Other
Compensation
($)
|
Total
($)
|
Jonathan Berg
(1)
|
2,994
|
-
|
2,994
|
Daniel Carriere
(2)
|
48,955
|
-
|
48,955
|
Anton Drescher
|
32,933
|
-
|
32,933
|
Timothy Haddon
(2)
|
32,933
|
-
|
32,933
|
Mark
Hamilton
|
32,933
|
-
|
32,933
|
Jeffrey Pontius
(3)
|
14,970
|
36,000
(4)
|
50,970
|
Roger
Taplin
(2)
|
32,933
|
-
|
32,933
|
Thomas
Weng
(5)
|
11,589
|
-
|
11,589
|
27
|
1)
|
Mr. Berg resigned from the Board on January 29,
2013.
|
|
2)
|
Messrs. Carriere, Haddon and Taplin resigned from the
Board effective December 31, 2013.
|
|
3)
|
Mr. Pontius did not stand for re-election at the 2013
Annual General Meeting and ceased to be a director as of June 6,
2013.
|
|
4)
|
All other compensation consisted of consulting fees of
$36,000.
|
|
5)
|
Mr. Weng was appointed to the Board on August 5,
2013.
|
Outstanding
Option-Based Awards
The following table sets forth the option-based awards granted
to directors (other than full-time employees) that were outstanding as at
December 31, 2013:
Option-based Awards
|
Name
|
Number
of
securities
underlying
unexercised
options
(#)
Exercisable
|
Number
of
securities
underlying
unexercised
options
(#)
Unexercisable
|
Option
exercise price
(C$)
|
Option
grant date
|
Option
expiration
date
|
Value
of
unexercised
in-the-money
options
($)
(1)
|
Daniel Carriere
|
133,333
|
66,667
|
3.17
|
August 24, 2012
|
March 31, 2014
(2)
|
-
|
Anton Drescher
|
133,333
|
66,667
|
3.17
|
August 24, 2012
|
August 24, 2017
|
-
|
Timothy Haddon
|
100,000
|
50,000
|
3.17
|
August 24, 2012
|
March 31, 2014
(2)
|
-
|
Mark
Hamilton
|
133,333
|
66,667
|
3.17
|
August 24, 2012
|
August 24, 2017
|
-
|
Roger Taplin
|
166,666
|
83,334
|
3.17
|
August 24, 2012
|
March 31, 2014
(2)
|
-
|
|
1)
|
Valued using the closing market price of Common Shares on
the TSX on December 31, 2013 (C$0.42 per share) less the exercise price
per share.
|
|
2)
|
Messrs. Carriere, Haddon and Taplin resigned from the
Board effective December 31, 2013. All outstanding options of Messrs.
Carriere, Haddon and Taplin expire 90 days from their date of
resignation.
|
The Company has not granted any share-based awards. All options
presented in this table vest as to one-third on the date of grant, one-third on
the first anniversary of the grant date, and the balance on the second
anniversary of the grant date.
28
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION
PLANS
The following table sets forth details of all equity
compensation plans of the Company as of December 31, 2013.
Plan
Category
|
Number of
Securities to
be Issued
Upon Exercise of
Outstanding Options,
Warrants and Rights
|
Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights
(C$)
|
Number of
Securities
Remaining Available
for Future
Issuance
Under the Equity
Compensation Plans
|
Equity Compensation
Plans
Approved by
Securityholders
(1)
|
5,493,000
|
3.57
|
4,313,863
|
Equity Compensation
Plans Not
Approved By
Securityholders
|
-
|
-
|
-
|
Total
|
5,493,000
|
3.57
|
4,313,863
|
(1) The Companys only equity compensation plan is the 2006 Incentive
Stock Option Plan.
Incentive
Stock Option Plan
The Stock Option Plan was approved by shareholders of the
Company in September 2006, and subsequently re-approved by shareholders of the
Company in November 2007, October 2008 and October 2009. The Stock Option Plan
was subsequently amended and approved by shareholders in September 2012. The
Stock Option Plan is required to be re-approved by the shareholders every three
years in accordance with the requirements of the TSX. The Stock Option Plan will
next require re-approval on or before September 2015. The Stock Option Plan is a
rolling plan, which means that the maximum number of Common Shares that may be
issued pursuant to the exercise of options granted under the Stock Option Plan
is 10% of the number of issued and outstanding Common Shares at the date of
grant.
As at April 4, 2014, there were an aggregate of 5,854,000
options outstanding under the Stock Option Plan (6% of the issued and
outstanding Common Shares as at such date) and an additional 3,952,863 options
available for grant (4% of the issued and outstanding Common Shares as at such
date).
A brief description of the key provisions of the Stock Option
Plan is as follows:
1.
Options may be granted under the Stock Option Plan to employees,
officers, directors (including non-employee directors), management company
employees and consultants of the Company and its affiliates who, in the opinion
of the Compensation Committee, are in a position to contribute to the success of
the Company or, by virtue of their service to the Company or any of its
affiliates, are worthy of special recognition. The granting of options under the
Stock Option Plan is entirely within the discretion of the Board.
2.
The maximum number of Common Shares that may be issued pursuant to the
exercise of options granted under the Stock Option Plan (together with Common
Shares issuable pursuant to any other security-based compensation plan of the
Company) is 10% of the number of issued and outstanding Common Shares at the
date of grant. In the event that any option granted under the Stock Option Plan
is forfeited, expires, is terminated or cancelled (other than by reason of the
exercise thereof, in which case the shares are automatically reloaded and
available for future option grants), then the Company may grant an equivalent
number of new options under the Stock Option Plan. For so long as the Common
Shares are listed on the TSX, (a) the maximum aggregate number of shares
reserved for issuance pursuant to options granted under the Stock Option Plan or
any other share compensation arrangements of the Company for issuance to
insiders may not exceed 10% of the number of issued and outstanding Common
Shares and (b) the number of options granted to insiders under the Stock Option
Plan or any other share compensation arrangements of the Company within a one
year period may not exceed 10% of the number of issued and outstanding Common
Shares. There are no restrictions on the number of options that may be granted
to any one person or company under the Stock Option Plan.
3.
The exercise price of each option is set by the Compensation Committee
in its discretion, provided that such price must be set in accordance with the
TSX Company Manual and, in any event, shall not be less than the closing price
of the Companys Common Shares on the TSX on the day prior to the option grant.
4.
Options granted under the Stock Option Plan are exercisable for a
period of up to ten years from the date of grant, as determined by the
Compensation Committee. However, options granted under the Stock Option Plan to
any director, employee, officer or consultant of the Company, as the case may
be, shall expire ninety days after the optionee ceases to be in at least one of
those categories. At the time an option is granted, the Compensation Committee
may determine that the option period with respect to that option shall, in the
case of the termination or death of the optionee, be specified in the
option agreement; provided, however, that in the case of the death of the
optionee, the applicable option will expire no later than one year after the
optionholders death.
29
5.
The Stock Option Plan does not provide for any specific vesting
periods. Accordingly, the Compensation Committee may determine, at the time of
grant, whether options issued under the Stock Option Plan are subject to vesting
periods.
6.
On the occurrence of a takeover bid or tender offer, the Board may,
subject to applicable laws and regulations, in its sole and absolute discretion
unilaterally determine that outstanding options, whether fully vested and
exercisable or subject to vesting provisions or other limitations, shall be
conditionally exercisable in full to enable the shares issuable upon the
exercise of options to be conditionally issued and tendered to such takeover bid
or tender offer. In addition the Board may, in its discretion, accelerate the
vesting provisions of any option granted under the Stock Option Plan, including
in connection with a takeover bid, tender offer or other going private
transaction.
7.
Except in the case of death, options granted under the Stock Option
Plan are non-assignable. During the lifetime of an optionholder, options granted
under the Stock Option Plan may only be exercised by the optionholder.
8.
The current Stock Option Plan provides that the exercise price of an
option may only be reduced with shareholder approval.
9.
Currently, the Stock Option Plan provides the Board with broad
discretion to amend or terminate the plan at any time if and when it is deemed
advisable in the absolute discretion of the Board; provided however that (a) no
such amendment or termination shall adversely affect any outstanding options
without the consent of the optionholder and (b) any amendment to the plan is
subject to approval by the TSX or any other regulatory authority having
jurisdiction over the Company and, if required by the TSX or any other
regulatory authority having jurisdiction over the Company, the shareholders of
the Company. Under the current policies of the TSX, notwithstanding the
foregoing, specific shareholder approval is required for: (v) a reduction in the
exercise price under a security-based compensation arrangement benefiting an
insider of the issuer; (w) an extension of the term under a security-based
compensation arrangement benefiting an insider of the issuer; (x) any amendment
to remove or to exceed the insider participation limit; (y) an increase to the
maximum number of securities issuable, either as a fixed number or as a fixed
percentage of the listed issuers outstanding capital represented by such
securities; and (z) amendments to an amending provision within a security-based
compensation arrangement.
The present policy of the Board is not to provide financial
assistance to any optionholder in connection with the exercise options. The
Stock Option Plan does not include any mechanism for transforming options
granted under the Stock Option Plan into stock appreciation rights.
30
INDEBTEDNESS OF DIRECTORS AND SENIOR OFFICERS
No individual who is, or at any time during the last completed
financial year was, a director or executive officer of the Company or who is a
proposed nominee for election as a director of the Company, or any of their
respective associates or affiliates, has been, at any time since January 1,
2013, the beginning of the Companys last completed financial year, either (a)
indebted to the Company or any of its subsidiaries or (b) indebted to entity
where such indebtedness is the subject of a guarantee, support agreement, letter
of credit or other similar arrangement or understanding provided by the Company
or any of its subsidiaries.
INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS
Other than as set forth elsewhere in this Proxy Statement, no
informed person of the Company, proposed director of the Company, or any
associate of affiliate of any informed person or proposed director has had any
material interest, direct or indirect, in:
(a)
|
any transaction since January 1, 2013 (being the
commencement of the Companys last completed financial year); or
|
|
|
(b)
|
any proposed transaction,
|
which materially affected or would materially affect the
Company or any of its subsidiaries.
As defined in National Instrument 51-102, informed person
means:
(a)
|
a director or executive officer of a reporting
issuer;
|
|
|
(b)
|
a director or executive officer of a person or company
that is itself an informed person or subsidiary of a reporting
issuer;
|
|
|
(c)
|
any person or company who beneficially owns, directly or
indirectly, voting securities of a reporting issuer or who exercises
control or direction over voting securities of a reporting issuer or a
combination of both carrying more than 10% of the voting rights attached
to all outstanding voting securities of the reporting issuer other than
voting securities held by the person or company as underwriter in the
course of a distribution; and
|
|
|
(d)
|
a reporting issuer that has purchased, redeemed or
otherwise acquired any of its securities, for so long as it holds any of
its securities.
|
MANAGEMENT CONTRACTS
The management functions of the Company are not, to any
substantial degree, performed by a person or persons other than the Companys
directors or senior officers.
31
PROPOSAL THREE APPOINTMENT OF INDEPENDENT AUDITORS
The Audit Committee has recommended that
PricewaterhouseCoopers, LLP (PwC) be nominated for appointment at the Meeting
as the Companys independent auditors for the fiscal year ended December 31,
2014.
Accordingly, unless such authority is withheld, the persons
named in the accompanying proxy intend to vote for the appointment of PwC as
auditors of the Company for the financial year ending December 31, 2014 and to
authorize the Directors to fix the auditors remuneration.
Representatives of PwC are expected to be present at the
Meeting and will have the opportunity to make a statement if they desire. Also,
PwC will be available to respond to appropriate questions from shareholders.
Changes in Auditor/Independent Registered Public
Accountants
During 2012 the Company changed its auditors/independent
registered public accountants (accountants) from MacKay, LLP (the
Predecessor) to PwC. The resignation of the Predecessor accountants and the
appointment of PwC, both effective March 16, 2012, were considered and approved
by the Audit Committee and by the Board. The Predecessor auditors report on the
financial statements for the fiscal years ended May 31, 2011 and December 31,
2011 contained an unqualified opinion with an emphasis of matter regarding going
concern uncertainties.
During the Companys fiscal years ended May 31, 2011 and
December 31, 2011 and through March 16, 2012, (i) there were no disagreements
(as that term is defined in Item 304(a)(1)(iv) of Securities and Exchange
Commission Regulation S-K and the related instructions) between the Company and
MacKay, LLP on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which, if not resolved to
the satisfaction of MacKay, LLP would have caused MacKay, LLP to make reference
to the subject matter of the disagreement in connection with its reports on the
Company's consolidated financial statements for such years, and (ii) there were
no "reportable events" (as that term is defined in Item 304(a)(1)(v) of
Regulation S-K).
During the Companys fiscal years ended May 31, 2011 and
December 31, 2011 and through March 16, 2012, neither the Company, nor anyone on
its behalf, consulted PwC regarding either (i) application of accounting
principles to a specified transaction, either completed or proposed, or the type
of audit opinion that might be rendered with respect to the consolidated
financial statements of the Company, in any case where a written report or oral
advice was provided to the Company by PwC that PwC concluded was an important
factor considered by the Company in reaching a decision as to any accounting,
auditing or financial reporting issue; or (ii) any matter that was the subject
of a disagreement (as that term is defined in Item 304(a)(1)(iv) of Regulation
S-K and the related instructions) or a reportable event (as that term is
defined in Item 304(a)(1)(v) of Regulation S-K).
The Company provided MacKay, LLP with a copy of the above
disclosure and requested that MacKay, LLP furnish the Company with a letter
addressed to the U.S. Securities and Exchange Commission stating whether MacKay,
LLP agreed with the disclosure contained in this proxy statement or, if not,
stating the respects in which it did not agree. The Company received the
requested letter from MacKay, LLP, a copy of which is attached as Exhibit A to
this proxy statement. Additionally, pursuant to Section 4.11 of NI 51-102, the
Company filed a reporting package on SEDAR under the Companys profile. The
reporting package, which consisted of the following, is attached as Exhibit B to
this Proxy Statement:
(i)
|
Change of Auditor Notice;
|
|
|
(ii)
|
letter from MacKay, LLP as former auditor; and
|
|
|
(iii)
|
letter from PwC as successor
auditor.
|
32
Independent Auditors Fees
The following table provides amounts billed by the independent
auditors for professional services rendered to the Company during the last two
fiscal years:
Fiscal Year Ended
December 31, 2013:
|
Audit
Fees
($)
|
Audit-Related
Fees ($)
|
Tax
Fees
($)
|
All Other
Fees
($)
|
Total
Fees
($)
|
PricewaterhouseCoopers LLP
|
67,970
|
43,695
(1)
|
-
|
-
|
111,665
|
MacKay LLP
|
-
|
12,138
(2)
|
-
|
-
|
12,138
|
|
|
|
|
|
|
Fiscal Year
Ended December 31, 2012:
|
|
|
|
|
|
PricewaterhouseCoopers LLP
|
40,016
|
45,018
(1)
|
-
|
-
|
85,034
|
MacKay LLP
|
80,032
|
-
|
9,804
(3)
|
3,902
(4)
|
93,738
|
|
1)
|
Audit-related fees consisted of procedures related to
interim financial statements.
|
|
2)
|
Audit-related fees billed by MacKay LLP during 2013
consisted of procedures related to the restatement of prior periods in
conjunction with the Companys transition from International Financial
Reporting Standards to U.S. GAAP financial statements.
|
|
3)
|
Tax fees consisted of work performed related to the
Companys Canadian and U.S. tax returns.
|
|
4)
|
Other fees relate to work performed in response to an SEC
comment letter and transition to PwC.
|
The Audit Committee has established procedures for engagement
of an independent registered public accounting firm to perform services other
than audit, review and attest services. In order to safeguard the independence
of the Companys auditor, for each engagement to perform such non-audit service,
(a) the Company and the auditor affirm to the Audit Committee that the proposed
non-audit service is not prohibited by applicable laws, rules or regulations;
(b) the Company describes the reasons for hiring the auditor to perform the
services; and (c) the auditor affirms to the Audit Committee that it is
qualified to perform the services. The Audit Committee has delegated to its
Chair its authority to pre-approve such services in limited circumstances, and
any such pre-approvals are reported to the Audit Committee at its next regular
meeting. All services provided by PwC in 2013 were permissible under applicable
laws, rules and regulations and were pre-approved by the Audit Committee in
accordance with its procedures.
Vote Required for Approval
With respect to the appointment of the auditors, the allowable
votes are For and Withhold. Withhold votes do not represent Against
votes. Accordingly, a single vote For will be sufficient to elect
PricewaterhouseCoopers LLP, who are proposed by the Companys Audit Committee
for appointment as the Companys auditors for the fiscal year ending December
31, 2014.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPOINTMENT
OF
PRICEWATERHOUSECOOPERS, LLP AS AUDITOR/INDEPENDENT REGISTERED PUBLIC
ACCOUNTANTS OF
THE COMPANY.
REPORT OF THE AUDIT COMMITTEE
The information contained in the following Audit Committee
Report shall not be deemed soliciting material or filed with the SEC, nor
shall such information be incorporated by reference into a future filing under
the Securities Act of 1933, as amended, or the Exchange Act, except to the
extent the Company specifically incorporates this Report by reference
therein.
Audit Committee Report
The Audit Committee has reviewed and discussed with the Company
and PwC, the Companys independent auditors for the Fiscal Year 2013, the
audited financial statements of the Company for the fiscal year ended December
31, 2013. The Audit Committee has also reviewed and discussed the Companys
compliance with Section 404 of the Sarbanes-Oxley Act of 2002.
The Audit Committee has discussed with PwC the matters required
under applicable professional auditing standards and regulations as adopted by
the Public Company Accounting Oversight Board. In addition, the Audit Committee
has received and reviewed the written disclosures and letter from PwC required
by applicable requirements of the Public Company Accounting Oversight Board
regarding PwCs communications with the Audit Committee concerning independence,
and has discussed with PwC its independence.
33
Based on the review and discussions referred to above, the
Audit Committee recommended to the Board that the audited financial statements
be included in the Companys Annual Report on Form 10-K for the year ended
December 31, 2013, for filing with the Securities and Exchange Commission.
Submitted by the following members of the Audit Committee of the Board:
Anton Drescher, Chair
Mark Hamilton
Thomas Weng
34
PROPOSAL FOUR - ADVISORY VOTE ON COMPENSATION OF THE NAMED
EXECUTIVE OFFICERS
In accordance with Section 14A of the Exchange Act, at the
Meeting shareholders will be asked to approve the following advisory,
non-binding resolution:
RESOLVED, that the compensation paid to the Companys named
executive officers, as disclosed pursuant to Item 402 of Regulation S-K,
including the Compensation Discussion and Analysis, compensation tables and
narrative discussion, is hereby approved.
The Company is asking shareholders to approve an advisory,
non-binding resolution on compensation of its named executive officers as
described in the Compensation Discussion and Analysis, the compensation tables
and related narrative discussion included in this Proxy Statement. This
proposal, commonly known as a Say on Pay proposal, gives shareholders the
opportunity to approve, reject or abstain from voting with respect to the
Companys fiscal year 2014 executive compensation programs and policies and the
compensation paid to the NEOs. This vote is not intended to address any specific
item of compensation, but rather the overall compensation of the Companys NEOs
as described in this Proxy Statement.
Although the vote on this proposal is advisory only, the Board
and the Compensation Committee will review and consider the voting results when
evaluating the Companys executive compensation program.
Vote Required for Approval
The affirmative vote of a simple majority (50% +1) of the votes
eligible to vote at the Meeting and actually voted on Proposal Four is required
to approve the matter.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR
APPROVAL OF
THE ADVISORY RESOLUTION ON EXECUTIVE COMPENSATION.
35
OTHER MATTERS
The Board knows of no other matters to be brought before the
Meeting. However, if other matters should come before the Meeting each person
named in the proxy is entitled to vote such proxy in accordance with his own
judgment on such matters.
Shareholder Proposals
Pursuant to the rules of the Securities and Exchange
Commission, shareholder proposals intended to be presented at the 2015 Annual
General Meeting of shareholders and to be included in the Company's proxy
materials for the 2015 Annual General Meeting of shareholders must be received
by the Company at its registered office in Vancouver, British Columbia, by no
later than December 15, 2014, which is 120 calendar days before the date the
Companys proxy statement is released to shareholders in connection with the
previous years annual meeting, if such proposals are to be considered timely
and included in the proxy materials.
If the next annual meeting is changed by
more than 30 days from the date of the previous years meeting, then the
deadline is a reasonable time before the Company begins to print and send its
proxy materials.
The inclusion of any shareholder proposal in the proxy
materials for the 2015 Annual General Meeting of shareholders will be subject to
the applicable rules of the Securities and Exchange Commission.
Proxies for the 2015 Annual General Meeting of shareholders
will confer discretionary authority to vote with respect to all proposals of
which the Company does not receive proper notice by 45 days before the date on
which the Company first sent its proxy materials for the prior years annual
general meeting of shareholders. If the date of the meeting has changed more
than 30 days from the prior year, then notice must not have been received a
reasonable time before the registrant sends its proxy materials for the current
year.
The Companys Articles do not provide a method for a
shareholder to submit a proposal for consideration at the 2015 annual general
meeting of shareholders. However, the BCBCA, in Division 7, Shareholder
Proposals, sets forth the procedure by which a person who:
(a)
|
is a registered owner or beneficial owner of one or more
Common Shares; and
|
|
|
(b)
|
has been a registered owner or beneficial owner of one or
more such Common Shares for an uninterrupted period of at least 2 years
before the date of the signing of the proposal,
|
may submit a written notice setting out a matter that the
submitter wishes to have considered at the next annual general meeting of the
Company (a proposal). The BCBCA also sets out the requirements for a valid
proposal and provides for the rights and obligations of the Company and the
submitter upon a valid proposal being made. In general, for a proposal to be
valid, it must be supported in writing by the holders of either at least 1% of
the issued Common Shares or Common Shares having an aggregate value of CAD
2,000, must contain certain information and must be submitted to the registered
office of the Company at least three months before the anniversary of the
Companys last annual general meeting.
36
ADDITIONAL INFORMATION
Additional information regarding the Company and its business
activities is available on the SEDAR website located at www.sedar.com under
Company Profiles International Tower Hill Mines Ltd. and the SECs internet
website at www.sec.gov. The Companys financial information is provided in the
Companys comparative financial statements and related management discussion and
analysis for its most recently completed financial year and may be viewed on the
SEDAR website and the SECs website at the locations noted above. Shareholders
of the Company may request copies of the Companys Annual Report on Form 10-K
for the fiscal year ended December 31, 2013 (filed as the Companys 2013 Annual
Information Form in Canada) and financial statements and related management
discussion and analysis for the fiscal year ended December 31, 2013 by
contacting the Corporate Secretary of the Company by mail at Suite 2300 1177
West Hastings Street, Vancouver, British Columbia, Canada V6E 2K3.
|
BY ORDER OF THE BOARD OF DIRECTORS,
|
|
|
|
/s/
Marla Ritchie
|
|
Marla Ritchie
|
|
Secretary
|
Vancouver, British Columbia,
|
|
Canada
|
|
April 10, 2014
|
|
37
EXHIBIT A
CHARTEREDACCOUNTANTS
|
|
MacKay LLP
|
|
1100 1177 West Hastings Street
|
Vancouver, BC V6E 4T5
|
Tel: (604) 687-4511
|
Fax: (604) 687-5805
|
April 25, 2013
Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
Commissioners:
We have read the statements made by International Tower Hill
Mines Ltd. (the Company) (copy attached) in the section entitled Proposal
Three Appointment of Independent Auditors, subsection entitled Change in
Auditor/ Independent Registered Public Accountants of the Companys Proxy
Statement on Schedule 14A, which we understand will be filed with the U.S.
Securities and Exchange Commission on or about April 29, 2013. We agree with the
statements concerning our firm in such proxy statement.
Yours very truly,
/s/ MacKay, LLP
EXHIBIT B
INTERNATIONAL TOWER HILL MINES LTD.
(the
Company)
NOTICE OF CHANGE OF AUDITOR
The Company has changed its auditor from MacKay LLP, Chartered
Accountants, of 1100 - 1177 West Hastings Street, Vancouver, British Columbia,
Canada V6E 4T5 (the Former Auditor), to PricewaterhouseCoopers LLP, 250 Howe
Street, Suite 700, Vancouver, British Columbia, Canada V6C 3S7 (the Successor
Auditor), effective as of the 16
th
day of March, 2012.
The Former Auditor resigned at the request of the Company. The
resignation of the Former Auditor and the appointment of the Successor Auditor,
both effective March 16, 2012, have been considered and approved by the audit
committee of the Companys board of directors and by the full board.
There were no reservations in the Former Auditors reports on
any of the Companys financial statements relating to the Companys two most
recently completed financial years nor for any period subsequent to the period
for which an audit report was issued up to and including March 16, 2012.
In the opinion of the Companys audit committee and board of
directors, there are no reportable events between the Company and the Former
Auditor.
DATED at Vancouver, British Columbia, this 16
th
day
of March, 2012.
INTERNATIONAL TOWER HILL MINES LTD.
Per:
|
(signed)
Tom S. Q. Yip
|
|
Tom S. Q. Yip, Chief Financial Officer
|
CHARTERED ACCOUNTANTS
|
|
MacKay LLP
|
|
1100 1177 West Hastings Street
|
Vancouver, BC V6E 4T5
|
Tel: (604) 687-4511
|
Fax: (604) 687-5805
|
April 5, 2012
British Columbia Securities Commission
|
Alberta Securities Commission
|
P.O. Box 10142, Pacific Centre
|
Suite 600, 2505th St. SW
|
701 West Georgia Street
|
Calgary, Alberta, T2P 0R4
|
Vancouver, BC V7Y 1L2
|
|
|
|
Ontario Securities Commission
|
TSX Stock Exchange
|
20 Queen Street West
|
The Exchange Tower
|
Suite 1903
|
130 King Street West
|
Toronto ON M5H 3S8
|
Toronto ON M5X 1J2
|
Dear Sirs:
Re: International Tower Hill Mines
Ltd.
Notice Pursuant to National
Instrument 51-102 Change of Auditor (Notice)
As required by National Instrument 51-102, we have reviewed the
information contained in the Notice dated March 16
th
, 2012 given by
the Company to ourselves and PriceWaterhouse Coopers LLP.
Based on our knowledge of such information at this date, we
agree with the statements set out in the Notice.
Yours very truly,
/s/
MacKay LLP
Chartered
Accountants
April 9, 2012
British Columbia Securities Commission
Alberta Securities Commission
Ontario Securities Commission
TSX Stock Exchange
Dear Sirs:
We have read the statements made by
International Tower Hill Mines Ltd. in the attached copy of the Notice of Change
of Auditor dated March 16, 2012, which we understand will be filed pursuant to
Section 4.11 of the National Instrument 51-102.
We agree with the statements in the
Notice of Change of Auditor dated March 16, 2012 except that we have no basis to
agree or disagree with the following statements:
In the opinion of the Companys audit
committee and board of directors, there were no reportable events between the
Company and the Former Auditor.
Yours very truly,
(signed)PricewaterhouseCoopers
LLP
Chartered Accountants
INTERNATIONAL TOWER HILL MINES LTD.
(the Company)
Request for Annual and/or Interim Financial Statements and
related Managements
Discussion and Analysis
National Instrument 51-102 requires the Company to send
annually to the registered holders and beneficial owners of its securities
(Securityholders) a form to allow Securityholders to request a copy of the
Companys annual financial statements and related Managements Discussion and
Analysis (MD&A), interim financial statements and related MD&A, or
both. If you wish to receive such mailings, please complete and return this form
to:
INTERNATIONAL TOWER HILL MINES LTD.
Suite 2300 1177
West Hastings Street
Vancouver, BC V6E 2K3
The undersigned Securityholder hereby elects to receive:
[ ]
|
Interim Financial Statements for the first
quarter ended March 31, 2014, second quarter ended June 30, 2014 and third
quarter ended September 30, 2014, and the related MD&A;
|
|
|
[ ]
|
Annual Financial Statements for the fiscal year
ended December 31, 2014 and related MD&A; or
|
|
|
[ ]
|
BOTH Interim Financial Statements and related
MD&A and the Annual Financial Statements and related MD&A.
|
Please note that a request form will be mailed each year and
Securityholders must return such form each year in order to receive the
documents indicated above
.
Name:
|
|
|
|
|
|
Address:
|
|
|
|
|
|
Postal Code:
|
|
|
|
|
|
I confirm that I am a
registered/beneficial
(circle one) shareholder
of the Company.
|
|
|
|
|
|
Signature of
|
|
|
Securityholder:
|
|
Date:
|
|
|
|
|
CUSIP: 46050R102
2014 ANNUAL GENERAL MEETING OF SHAREHOLDERS
NOTICE-AND-ACCESS NOTIFICATION TO SHAREHOLDERS
You are receiving this notification as International Tower Hill
Mines Ltd. (the Company) has decided to use the notice and access model for
delivery of meeting materials for its 2014 Annual General Meeting (Meeting) to
its shareholders. This Notice and Access Notification regarding the Meeting is
prepared under the notice-and-access rules that came into effect on February 11,
2013 under National Instrument 54-101
Communication with Beneficial Owners of
Securities of a Reporting Issuer
and under notice-and-access provisions of
applicable United States laws
.
Under notice and access, shareholders
still receive a proxy or voting instruction form enabling them to vote at the
Meeting. However, instead of a paper copy of the Notice of Meeting and Proxy
Statement/Information Circular (Proxy Statement), shareholders receive this
notice with information on how they may access such materials electronically.
The use of this alternative means of delivery is more environmentally
responsible as it will help reduce paper use and also will reduce the cost of
printing and mailing materials to shareholders.
MEETING DATE AND LOCATION
|
|
|
Date &
Time:
|
Thursday, May 29, 2014 at 10:00 a.m. PDT
|
|
|
Place:
|
McCarthy Tetrault LLP
|
|
Suite 1300 777 Dunsmuir Street
|
|
Vancouver, British Columbia
|
|
Canada
|
|
|
AT THE MEETING, SHAREHOLDERS WILL BE ASKED TO CONSIDER AND
VOTE ON THE FOLLOWING MATTERS:
|
1.
|
Fixing Number of Directors
: Shareholders will be
asked to fix the number of directors of the Company at five (5).
Information can be found in the Fixing Number of Directors section of
the Proxy Statement.
|
|
|
|
|
2.
|
Election of Directors
: Shareholders will be asked
to elect five (5) directors for the ensuing year. Information can be found
in the Election of Directors section of the Proxy Statement.
|
|
|
|
|
3.
|
Appointment of Auditor
: Shareholders will be asked
to appoint PricewaterhouseCoopers LLP Companys auditors for the fiscal
year ending December 31, 2014, and authorize the Corporations directors
to fix their remuneration. Information can be found in the Appointment of
Auditor section of the Proxy Statement.
|
|
|
|
|
4.
|
Advisory Approval of Executive Compensation
:
Shareholders will be asked to approve an advisory, non-binding resolution
on the compensation of the Companys named executive officers as described
in the Proxy Statement. Information can be found in the Advisory Vote on
Compensation of the Named Executive Officers section of the Proxy
Statement.
|
2
|
5.
|
Other Business
: Shareholders may be asked to
consider other items of business that may be properly brought before the
Meeting. Information respecting the use of discretionary authority to vote
on any such other business can be found in the Proxy Instructions
section of the Proxy Statement.
|
SHAREHOLDERS ARE REMINDED TO
VIEW
THE
MATERIALS FOR THE MEETING
PRIOR
TO VOTING
WEBSITE WHERE MEETING MATERIALS ARE POSTED:
www.ithmines.com
Materials for the Meeting may also be viewed online at
www.sedar.com
HOW TO OBTAIN PAPER COPIES OF THE MEETING MATERIALS:
Shareholders may request that paper copies of the materials for
the Meeting be sent to them by postal delivery at no cost to them. Requests may
be made up to one year from the date the Proxy Statement was filed on SEDAR, as
follows:
Through the internet by going to:
www.ithmines.com
Calling the Company at 604-683-6332
Sending an email to
Lawrence.Talbot@ithmines.com
or
mritchie@ithmines.com
Requests should be received at least five (5) business days in
advance of the proxy cut-off date set out in the accompanying proxy or voting
instruction form in order to receive the materials for the Meeting in advance of
the date of the Meeting.
VOTING:
Registered shareholders
are asked to return their
proxies using one of the following methods at least one business day in advance
of the proxy cut-off date as set out in the accompanying proxy:
INTERNET:
|
www.investorvote.com
|
|
|
TELEPHONE:
|
1-866-732-VOTE (8683) Toll Free
|
|
|
MAIL:
|
Computershare Investor Services Inc., Proxy
Dept.
|
|
100 University Avenue, 8th Floor, Toronto,
Ontario, CANADA
|
Non-registered holders
are asked to use
the voting instruction form provided by your intermediary (bank, trust company
or broker) and RETURN IT TO THE INTERMEDIARY (not to the Company) as early as
practicable to ensure that it is transmitted on time. It must be received by
your intermediary with sufficient time for them to file a proxy by the deadline
noted above.
Shareholders with questions about notice-and-access can email
the Company at
Lawrence.Talbot@ithmines.com
.
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