UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR
15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of July 2015
Commission File No. 001-32210
NORTHERN DYNASTY MINERALS
LTD.
(Translation of registrant's name into English)
15th Floor 1040 West Georgia
Street
Vancouver, British Columbia, V6E 4H8, Canada
(Address of principal executive office)
Indicate by check mark whether the registrant files or will
file annual reports under cover of Form 20-F or Form 40-F
Form 20-F [X] Form 40-F [
]
Indicate by check mark if the registrant is submitting the Form
6-K in paper as permitted by Regulation S-T Rule 101(b)(1) [ ]
Indicate by check mark if the registrant is submitting the Form
6-K in paper as permitted by Regulation S-T Rule 101(b)(7) [ ]
SUBMITTED HEREWITH
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
NORTHERN DYNASTY MINERALS LTD.
Date: September 11, 2015
/s/ Ronald Thiessen |
|
Ronald Thiessen |
President and CEO |
June 8, 2015
Dear Fellow Shareholder,
On behalf of your Board of Directors, I am pleased to provide a
review of Northern Dynastys activities over the past year, and our expectations
for the year ahead. Additional information can be found within the Companys
year-end financial statements and online at www.sedar.com or www.northerndynasty.com.
Should you have questions concerning the proxy materials
provided, please contact our Investor Relations personnel at 604-684-6365 or
toll-free at 1-800-667-2114.
For Northern Dynasty, like most companies active in the global
mining sector, 2014 was another challenging year. Continued weak market
conditions contributed to a host of travails including flagging share prices,
declining capital investment, sluggish M+A activity and ongoing divestitures in
the sector. However, while the sector news remains difficult, we are convinced
that the seeds for the next great bull market in mining stocks are being sown
today by a lack of investment in new projects and new productive capacity.
As a reminder, Northern Dynasty now holds a 100% interest in
the Pebble Limited Partnership (PLP) and the Pebble Project. Notwithstanding
changeable market conditions, Pebble remains among the most valuable mineral
properties in the world. More than $750 millioni has been invested to
advance it. We have assembled an unparalleled scientific database and other
studies to support design and permitting of a world-class mine at Pebble.
Northern Dynastys top operational focus over the past year has
been to address the pre-emptive Clean Water Act Section 404(c) regulatory
process initiated by the US Environmental Protection Agency (EPA). As
followers of Northern Dynasty and Pebble know only too well, this has been an
unprecedented and highly politicized process.
In order to address the EPA threat and allow Pebble to proceed
into permitting unencumbered by any extraordinary development restrictions, PLP
spent a good part of the year developing and deploying a multi-dimensional
legal, investigative and public affairs strategy. We are greatly heartened by
our success to date including the Preliminary Injunction enforced by a federal
court last fall forbidding EPA from taking any further steps in its 404(c)
regulatory process and denying an EPA motion to dismiss the same lawsuit just
this month and continue to believe that Pebble and its science will ultimately
be comprehensively reviewed by the US Army Corps under the National
Environmental Policy Act (NEPA).
During the NEPA permitting process, an
Environmental Impact Statement (EIS) will be prepared by an impartial expert
consultant and will become the true scientific record upon which a raft of
federal and state regulatory agencies will make individual permitting decisions.
While technically rigorous, the transparent and science-based EIS process under
NEPA will ensure that PLP receives an objective and fair evaluation one that
we remain confident will lead to permitting of the Pebble Project.
Northern Dynastys principal corporate goal in 2014 (and again
this year) was the advancement of discussions with potential partners. While the
mining sector market environment and weak commodity prices have made this a
slower process than we would have liked, we continue to believe that the unique
Tier 1 nature of the Pebble resource and its location on US soil, under US
rule-of-law, make it a highly attractive and desirable asset for partnering
purposes.
Northern Dynasty remains committed to qualifying and securing a
partner(s) who has the technical and financial resources to advance the project
in a timely manner, and is as committed to environmentally and socially
responsible mining as we are. Once re-partnered, the Pebble Project can be taken
into the NEPA permitting process in relatively short order.
Overall we have made steady progress this year protecting your
asset. We believe the rule of law will prevail in America, and that Pebble will
ultimately be judged on its scientific merits by federal and state regulators
and the people of Alaska.
Despite past challenges, we believe 2015 will be an exciting
year. We are hopeful that our company, along with the rest of the global mining
sector, will emerge from a dark period in metals and mining to capture the
considerable benefits that the inevitable cyclical recovery will bring.
Significantly, there are several major milestones that lie before us, which
offer the prospect of near-term value creation to reward the considerable
patience of our shareholders.
Northern Dynastys Annual General Meeting, to be held at 2 pm
on July 7, 2015 at 1055 West Georgia Street, 15th floor, Vancouver
Canada will provide another opportunity to discuss the Companys goals for 2015.
I look forward to speaking with you then.
Sincerely,
/s/ Ronald Thiessen
Ronald Thiessen
President
and Chief Executive Officer
__________________________________________________
i
Expenditures during this period were largely focused on exploration programs,
resource estimates, environmental data collection and technical studies, with a
significant portion spent on engineering of various possible mine development
models, as well as related infrastructure, power and transportation systems. As
a consequence of several factors, including EPA's pre-emptive regulatory process
under Section 404(c) of the Clean Water Act, the withdrawal of Anglo American
from the project and the passage of time, technical and engineering studies
related to mine-site and infrastructure development are considered to have very
uncertain and perhaps little value at this time. Environmental baseline studies
and data collection remains a significant legacy asset of the Company from this
period.
NOTICE OF ANNUAL
GENERAL MEETING
OF
SHAREHOLDERS
AND
MANAGEMENT
INFORMATION CIRCULAR
TO BE HELD ON JULY 7, 2015.
DATED JUNE 8, 2015
YOUR VOTE IS IMPORTANT. PLEASE VOTE YOUR SHARES TODAY.
15th Floor, 1040 West Georgia
Street
Vancouver, British Columbia V6E 4H1
Telephone: (604)
684-6365 Fax: (604) 684-8092
NOTICE OF ANNUAL GENERAL MEETING OF
SHAREHOLDERS
The annual general meeting (the "Meeting") of
Shareholders of Northern Dynasty Minerals Ltd. (the "Company") will be held at
the 1500, 1055 West Georgia Street, Vancouver, British Columbia, on July 7, 2015
at 2:00 p.m., local time, for the following purposes:
1. |
To receive the consolidated financial statements for the
year ended December 31, 2014; |
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2. |
To set the number of directors and to elect directors of
the Company for the ensuing year; |
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3. |
To appoint auditors for the ensuing year; and |
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4. |
To consider, and if thought advisable, to approve an
ordinary resolution approving two equity security based compensation plans
namely a Deferred Share Unit ("DSU") Plan and a Restricted Share
Unit ("RSU") Plan. |
The Information Circular accompanying this notice contains
details of matters to be considered at the Meeting. The Meeting will also
consider any permitted amendment to or variation of any matter identified in
this Notice and will transact such other business as may properly come before
the Meeting or any adjournment thereof.
Registered shareholders who are unable to attend the Meeting
in person and who wish to ensure that their shares will be voted at the Meeting
are requested to complete, date and sign the enclosed form of proxy or complete
another suitable form of proxy and deliver it in accordance with the
instructions set out in the form of Proxy and in the Information Circular.
Non-registered shareholders (beneficial shareholders) who
plan to attend the Meeting must follow the instructions set out in the
accompanying form of proxy or voting instruction form, and in the Information
Circular to ensure that your shares will be voted at the Meeting. If you hold
your shares in a brokerage account you are a non-registered (beneficial)
shareholder.
DATED at Vancouver, British Columbia, June 8, 2015.
BY ORDER OF THE BOARD
/s/ Ronald Thiessen
Ronald Thiessen
President and Chief Executive
Officer
15th Floor, 1040 West Georgia Street
Vancouver, B.C. V6E 4H1
Telephone No. (604)
684-6365 / Fax No. (604) 684-8092
INFORMATION CIRCULAR
as at
June 8, 2015 (except as may otherwise be indicated)
This Information Circular is furnished in connection with
the solicitation of proxies by the management of Northern Dynasty Minerals Ltd.
(the "Company") for use at the annual general meeting (the "Meeting") of its
shareholders to be held on July 7, 2015 at the time and place and for the
purposes set forth in the accompanying notice of the Meeting.
In this Information Circular, references to "the Company", "we"
and "our" refer to Northern Dynasty Minerals Ltd. "Common Shares" means common
shares without par value in the capital of the Company. "Beneficial
Shareholders" means shareholders who do not hold Common Shares in their own name
and "intermediaries" refers to brokers, investment firms, clearing houses and
similar entities that hold securities on behalf of Beneficial Shareholders.
GENERAL PROXY INFORMATION
Solicitation of Proxies
The solicitation of proxies will be primarily by mail, but
proxies may be solicited personally or by telephone by directors, officers and
regular employees of the Company. The Company will bear all costs of this
solicitation. We have arranged for intermediaries to forward the meeting
materials to beneficial owners of the Common Shares held of record by those
intermediaries and we may reimburse the intermediaries for their reasonable fees
and disbursements in that regard.
Appointment of Proxyholders
The individuals named in the accompanying form of proxy (the
"Proxy") are directors or officers of the Company. If you are a shareholder
entitled to vote at the Meeting, you have the right to appoint a person or
company other than either of the persons designated in the Proxy, who need not
be a shareholder, to attend and act for you and on your behalf at the Meeting.
You may do so either by inserting the name of that other person in the blank
space provided in the Proxy or by completing and delivering another suitable
form of proxy. If your shares are held in physical (i.e. paper) form and
actually registered in your name, then you are a registered shareholder.
However, if like most shareholders you keep your shares in a brokerage account,
then you are a beneficial shareholder and the manner for voting is different for
registered and beneficial shareholders and you need to carefully read the
instructions below.
Voting by Proxyholder
The persons named in the Proxy will vote or withhold from
voting the Common Shares represented thereby in accordance with your
instructions on any ballot that may be called for. If you specify a choice with
respect to any matter to be acted upon, your Common Shares will be voted
accordingly. The Proxy confers discretionary authority on the persons named
therein with respect to:
(a) |
each matter or group of matters identified therein for
which a choice is not specified, |
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(b) |
any amendment to or variation of any matter identified
therein, and |
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(c) |
any other matter that may properly come before the
Meeting. |
In respect of a matter for which a choice is not specified
in the Proxy, the persons named in the Proxy will vote the Common Shares
represented by the Proxy for the approval of such matter.
Registered Shareholders
Registered Shareholders may wish to vote by proxy whether or
not they are able to attend the Meeting in person. Registered Shareholders
electing to submit a proxy may do so by:
(a) |
completing, dating and signing the enclosed form of proxy
and returning it to the Companys transfer agent, Computershare Investor
Services Inc. (Computershare), by fax within North America at 1-866-
249-7775, outside North America at 1-416-263-9524, or by mail to the 9th
Floor, 100 University Avenue, Toronto, Ontario, M5J 2Y1 or by hand
delivery at 2nd Floor, 510 Burrard Street, Vancouver, British
Columbia, Canada V6C 3B9; |
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(b) |
using a touch-tone phone to transmit voting choices to a
toll free number. Registered shareholders must follow the instructions of
the voice response system and refer to the enclosed proxy form for the
toll free number, the holders account number and the proxy access number;
or |
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(c) |
using the internet through the website of the Companys
transfer agent at www.computershare.com/ca/proxy. Registered
Shareholders must follow the instructions that appear on the screen and
refer to the enclosed proxy form for the holders account number and the
proxy access number; |
in all cases ensuring that the proxy is received at least 48
hours (excluding Saturdays, Sundays and holidays) before the Meeting or the
adjournment thereof at which the proxy is to be used.
Beneficial Shareholders
The following information is of significant importance to
shareholders who do not hold Common Shares in their own name. Beneficial
Shareholders should note that the only proxies that can be recognized and acted
upon at the Meeting are those deposited by registered shareholders (those whose
names appear on the records of the Company as the registered holders of Common
Shares) or as set out in the following disclosure.
If Common Shares are listed in an account statement provided to
a shareholder by a broker, then in almost all cases those Common Shares will not
be registered in the shareholders name on the records of the Company. Such
Common Shares will more likely be registered under the names of the
shareholders broker or an agent of that broker. In the United States, the vast
majority of such Common Shares are registered under the name of Cede & Co.
as nominee for The Depository Trust Company (which acts as depositary for many
U.S. brokerage firms and custodian banks), and in Canada, under the name of CDS
& Co. (the registration name for The Canadian Depository for Securities
Limited, which acts as nominee for many Canadian brokerage firms).
Intermediaries are required to seek voting instructions from
Beneficial Shareholders in advance of shareholders meetings. Every intermediary
has its own mailing procedures and provides its own return instructions to
clients.
There are two kinds of Beneficial owners - those who object to
their name being made known to the issuers of securities which they own (called
OBOs for Objecting Beneficial Owners), and those who do not object to the
issuers of the securities they own knowing who they are (called NOBOs for
Non-Objecting Beneficial Owners).
The Company is taking advantage of the provisions of National
Instrument 54-101 that permit it to deliver proxy-related materials directly to
its NOBOs. As a result NOBOs can expect to receive a scannable Voting
Instruction Form ("VIF") from Computershare, our transfer agent. The VIF is to
be completed and returned to Computershare in the envelope provided or by
facsimile to the number provided in the VIF. In addition, Computershare provides
both telephone voting and internet voting as described on the VIF itself which
contain complete instructions. Computershare will tabulate the results of the
VIFs received from NOBOs and will provide appropriate instructions at the
Meeting with respect to the shares represented by the VIFs they receive.
These securityholder materials are being sent to both
registered and non-registered owners of the securities of the Company. If you
are a non-registered owner, and the Company or its agent sent these materials
directly to you, your name, address and information about your holdings of
securities were obtained in accordance with applicable securities regulatory
requirements from the intermediary holding securities on your behalf.
By choosing to send these materials to you directly, the
Company (and not the intermediary holding securities on your behalf) has assumed
responsibility for (i) delivering these materials to you, and (ii) executing
your proper voting instructions. Please return your VIF as specified in the
request for voting instructions sent to you.
Beneficial Shareholders who are OBOs should follow the
instructions of their intermediary carefully to ensure that their Common Shares
are voted at the Meeting.
The form of proxy supplied to you by your broker will be
similar to the proxy provided to registered shareholders by the Company.
However, its purpose is limited to instructing the intermediary on how to vote
on your behalf. Most brokers now delegate responsibility for obtaining
instructions from clients to Broadridge Financial Solutions, Inc. ("Broadridge")
in the United States and in Canada. Broadridge mails a VIF in lieu of a proxy
provided by the Company. The VIF will name the same persons as the Companys
Proxy to represent your Common Shares at the Meeting. You have the right to
appoint a person (who need not be a Beneficial Shareholder of the Company),
different from the persons designated in the VIF, to represent your Common
Shares at the Meeting, and that person may be you. To exercise this right,
insert the name of the desired representative (which may be yourself) in the
blank space provided in the VIF. The completed VIF must then be returned to
Broadridge by mail or facsimile or given to Broadridge by phone or over the
internet, in accordance with Broadridges instructions. Broadridge then
tabulates the results of all instructions received and provides appropriate
instructions respecting the voting of Common Shares to be represented at the
Meeting and the appointment of any shareholders representative. If you
receive a VIF from Broadridge, it must be completed and returned to Broadridge,
in accordance with Broadridges instructions, well in advance of the Meeting in
order to: (a) have your Common Shares voted as you instruct; or (b) have any
alternate representative you may choose duly appointed to attend the Meeting and
vote your Common Shares.
Alternatively, you can request in writing that your broker send
you a legal proxy which would enable you, or a person designated by you, to
attend the Meeting and vote your Common Shares.
Notice to Shareholders in the United States
The solicitation of proxies and the transactions contemplated
in this Information Circular involve securities of an issuer located in Canada
and are being effected in accordance with the corporate laws of the Province of
British Columbia, Canada and securities laws of the provinces of Canada. The
proxy solicitation rules under the United States Securities Exchange Act
of 1934, as amended, are not applicable to the Company or this solicitation, and
this solicitation has been prepared in accordance with the disclosure
requirements of the securities laws of the provinces of Canada. Shareholders
should be aware that disclosure requirements under the securities laws of the
provinces of Canada differ from the disclosure requirements under United States
securities laws.
The enforcement by Shareholders of civil liabilities under
United States federal securities laws may be affected adversely by the fact that
the Company is incorporated under the Business Corporations Act (British
Columbia), as amended, certain of its directors and its executive officers are
residents of Canada and a portion of its assets and the assets of such persons
are located outside the United States. Shareholders may not be able to sue a
foreign company or its officers or directors in a foreign court for violations
of United States federal securities laws. It may be difficult to compel a
foreign company and its officers and directors to subject themselves to the
jurisdiction of, or a judgment by, a United States court.
Revocation of Proxies
In addition to revocation in any other manner permitted by law,
a registered shareholder who has given a proxy may revoke it by:
(a) |
executing a proxy bearing a later date or by executing a
valid notice of revocation, either of the foregoing to be executed by the
registered shareholder or the registered shareholders authorized attorney
in writing or, if the shareholder is a corporation, under its corporate
seal by an officer or attorney duly authorized, and by delivering the
proxy bearing a later date to Computershare at the address shown on the
preceding page or at the address of the registered office of the Company
at 1500 Royal Centre, 1055 West Georgia Street, P. O. Box 11117,
Vancouver, British Columbia, V6E 4N7, at any time up to
and including the last business day that precedes the day of the
Meeting or, if the Meeting is adjourned, the last business day that precedes any
reconvening thereof, or to the chairman of the Meeting on the day of the Meeting
or any reconvening thereof, or in any other manner provided by law, or |
(b) |
personally attending the Meeting and voting the
registered shareholders Common Shares. |
A revocation of a proxy will not affect a matter on which a
vote is taken before the revocation.
INTEREST OF CERTAIN
PERSONS OR COMPANIES IN MATTERS TO BE ACTED UPON
No director or executive officer of the Company, or any person
who has held such a position since the beginning of the last completed financial
year of the Company, nor any nominee for election as a director of the Company,
nor any associate or affiliate of the foregoing persons, has any substantial or
material interest, direct or indirect, by way of beneficial ownership of
securities or otherwise, in any matter to be acted on at the Meeting other than
the election of directors and as may be set out herein.
RECORD DATE, VOTING SECURITIES AND
PRINCIPAL HOLDERS OF VOTING SECURITIES
The Board of Directors (the "Board") of the Company has fixed
May 8, 2015 as the record date (the "Record Date") for determination of persons
entitled to receive notice of the Meeting. Only shareholders of record at the
close of business on the Record Date who either attend the Meeting personally or
complete, sign and deliver a form of proxy in the manner and subject to the
provisions described above will be entitled to vote or to have their Common
Shares voted at the Meeting.
The Common Shares of the Company are listed for trading on the
Toronto Stock Exchange (the "TSX") and on the NYSE MTK. As of the Record Date,
there were 105,018,453 Common Shares issued and outstanding, each
carrying the right to one vote. No group of shareholders has the right to elect
a specified number of directors, nor are there cumulative or similar voting
rights attached to the Common Shares.
To the knowledge of the directors and executive officers of the
Company, the only person or corporation that beneficially owns, directly or
indirectly, or exercises control or direction over, Common Shares carrying more
than 10% of the voting rights attached to all outstanding Common of the Company
as at the Record Date is:
Shareholder Name
|
Number of common Shares
Beneficially Owned or Controlled |
Percentage of Issued Common
Shares |
Stirling Global Value Fund Inc.(1)(2) |
12,900,000 |
12.29% |
Kopernik Global Investors, LLC (3) |
6,519,135 |
6.21% |
Notes:
1. |
Derived from insider information publicly available at
www.sedar.com. |
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2. |
Stirling Global Value Fund Inc. holds 7,180,000 Special
Warrants which can be converted into common shares at its election on
one-for-one basis at no additional cost. Upon conversion of their
7,180,000 Special Warrants, Stirling Global Fund Inc. would hold 17.90% of
the issued Common Shares assuming no other conversions. Including the
conversion noted in 3 below, Stirling Global Fund Inc. would hold 15.34%
of the issued Common Shares. |
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3. |
Kopernik Global Investors, LLC holds 18,714,146 Special
Warrants which can be converted into common shares at its election on
one-for-one basis at no additional cost. Upon conversion of their
18,714,146 Special Warrants, Kopernik Global Investors, LLC would hold
20.39% of the issued Common Shares. Including the conversion noted in 2
above, Kopernik Global Investors, LLC would hold 19.27% of the issued
Common Shares |
FINANCIAL STATEMENTS
The audited consolidated financial statements of the Company
for the fiscal year ended December 31, 2014, report of the auditor will be
placed before the Meeting. These documents have been filed with the securities
commissions or similar regulatory authorities in Alberta, British Columbia and
Ontario. Copies of the documents may be obtained by a Shareholder upon request
without charge from Investor Relations, Northern Dynasty Minerals Ltd., 15th
Floor, 1040 West Georgia Street, Vancouver, British Columbia, V6E 4H1,
telephone: 604-684-6365 or 1-800-667-2114. These documents are also available
through the Internet under the Companys profile on SEDAR at www.sedar.com.
VOTES NECESSARY TO PASS RESOLUTIONS
A simple majority of affirmative votes cast at the Meeting is
required to pass the resolutions described herein If there are more nominees for
election as directors than there are vacancies to fill, those nominees receiving
the greatest number of votes will be elected or appointed, as the case may be,
until all such vacancies have been filled. If the number of nominees for
election or appointment is equal to the number of vacancies to be filled, all
such nominees will be declared elected or appointed by acclamation. Subject to
the majority vote policy, which is only a policy under which an elected director
will offer his or her resignation, the nine nominees receiving the highest
number of votes are elected, even if a director only gets one vote. Similarly,
unless there is a nomination from the floor for an alternative auditor, the
auditor proposed by management will be elected.
ELECTION OF DIRECTORS
The term of office of each of the current directors will end at
the conclusion of the Meeting. Unless the directors office is vacated earlier
in accordance with the provisions of the Business Corporations Act
(British Columbia) ("BCA"), each director elected will hold office until the
conclusion of the next annual general meeting of the Company or, if no director
is then elected, until a successor is elected.
Majority Vote Policy
The Board has adopted a policy stipulating that if the votes
"for" the election of a director nominee at a meeting of shareholders are fewer
than the number voted "withhold", the nominee will submit his or her resignation
promptly after the meeting for the consideration of the Nominating and
Governance Committee. The Nominating and Governance Committee will make a
recommendation to the Board of Directors after reviewing the matter, and the
Board will then decide within 90 days after the date of the meeting of
shareholders whether to accept or reject the resignation. The Board will accept
the resignation absent exceptional circumstances. The Board's decision to accept
or reject the resignation will be disclosed by way of a press release, a copy of
which will be sent to the Toronto Stock Exchange. If the Board does not accept
the resignation, the press release will fully state the reasons for the
decision. The nominee will not participate in any Committee or Board
deliberations whether to accept or reject the resignation. This policy does not
apply in circumstances involving contested director elections.
The Board has determined that nine directors be elected to the
Board at the Meeting. The following disclosure and accompanying biographical
information sets out the names of managements nine nominees for election as
directors, all major offices and positions with the Company and any of its
significant affiliates each now holds, each nominees principal occupation,
business or employment for the five preceding years, the period of time during
which each has been a director of the Company, and the number of Common Shares
of the Company beneficially owned by each, directly or indirectly, or over which
each exercised control or direction. The information as to shares and options
beneficially owned or controlled is based on insider reports filed on
www.sedi.ca as at May 8, 2015.
Name of Nominee; |
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Current Position with the Company, and City |
Period as a Director of the |
Common Shares Beneficially |
and Province or State of Residence |
Company |
Owned or Controlled |
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Scott D. Cousens |
Since June 1996 |
6,000 Shares |
Director |
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210,000 Options |
Vancouver, British Columbia |
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Robert A. Dickinson |
Since June 1994 |
4,070,083 Shares (1) |
Chairman and Director |
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480,000 Options |
Lions Bay, British Columbia |
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Name of Nominee; |
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Current Position with the Company, and City |
Period as a Director of the |
Common Shares Beneficially |
and Province or State of Residence |
Company |
Owned or Controlled |
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Gordon J. Fretwell (2) |
Since June 2004 |
Nil Shares |
Lead Director |
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150,000 Options |
West Vancouver, British Columbia |
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Russell E. Hallbauer |
Since April 2008 |
106,600 Shares (1) |
Director |
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210,000 Options |
West Vancouver, British Columbia |
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Wayne Kirk (3) |
Since July 2004 |
130,000 Shares |
Director |
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270,000 Options |
Orcas, Washington |
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Peter Mitchell (4) |
Since May 2011 |
Nil Shares |
Director |
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150,000 Options |
Chicago, Illinois |
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Kenneth Pickering (5) |
Since August 2013 |
116,000 Shares |
Director |
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150,000 Options |
Chemainus, British Columbia |
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Marchand Snyman |
Since August 2008 |
120,000 Shares |
Chief Financial Officer and Director |
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480,000 Options |
West Vancouver, British Columbia |
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Ronald W. Thiessen |
Since November 1995 |
2,758,878 Shares |
President, CEO and Director |
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480,000 Options |
West Vancouver, British Columbia |
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Notes:
1. |
Certain of these Common Shares are held through
affiliated private companies. |
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2. |
Mr. Fretwell is Chairman of the Compensation Committee
and a member of the Audit and Risk Committee and the Nominating and
Governance Committee. |
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3. |
Mr. Kirk is Chairman of the Nominating and Governance
Committee and a member of the Audit and Risk Committee. He is also the
Chairman and sole member of the Pebble Partnership Oversight
Committee. |
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4. |
Mr. Mitchell is the Chairman of the Audit and Risk
Committee and a member of the Compensation Committee. |
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5. |
Mr. Pickering is a member of the Compensation Committee
and the Nominating and Governance Committee. |
Biographical Information of Nominees for Director
The following information as to principal occupation, business
or employment is not within the knowledge of the management of the Company and
has been furnished by the respective nominees. Each nominee has held the same or
a similar principal occupation with the organization indicated or a predecessor
thereof for the last five years unless otherwise indicated. Where stated, "CEO"
stands for "Chief Executive Officer" and "CFO", "Chief Financial Officer".
Scott D. Cousens Director
Scott Cousens provides management, technical and financial
services to a number of publicly-traded companies as indicated below. Since 1991
Mr. Cousens principal occupation has been his role as a director of Hunter
Dickinson Inc. ("HDI"), and its wholly-owned subsidiary Hunter Dickinson
Services Inc. ("HDSI"), a company providing management and administrative
services to several publicly-traded companies (including the Company). Mr.
Cousens focus has been the development of relationships within the
international investment community. Substantial financings and subsequent
corporate success has established strong ties with North American, European and
Asian investors.
Mr. Cousens is, or was within the past five years, an officer
and/or director of the following public companies:
Company |
Name of Market |
Positions Held |
From |
To |
Northern Dynasty Minerals Ltd. |
TSX, NYSE MKT |
Director |
June 1996 |
Present |
Amarc Resources Ltd. |
TSX-V, OTCBB |
Director |
September 1995 |
Present |
Continental Minerals Corporation |
TSX-V, OTCBB |
Director |
June 1994 |
April 2011 |
Heatherdale Resources Ltd. |
TSX-V |
Director and
Chairman |
November 2009 |
Present |
Northcliff Resources Ltd.
|
TSX
|
Director |
June 2011 |
February 2012 |
Director |
May 2012 |
Present |
Quartz Mountain Resources Ltd. |
TSX-V, OTCBB |
Director and
Chairman |
November 2012 |
Present |
Rathdowney Resources Ltd. |
TSX-V |
Director |
March 2011 |
Present |
Taseko Mines Limited |
TSX, NYSE MKT |
Director |
October 1992 |
July 2014 |
Robert A. Dickinson, B.Sc., M.Sc. Director and Chairman of
the Board
Robert Dickinson is an economic geologist who has been actively
involved in mineral exploration and mine development for over 40 years. He is
Chairman of HDI and HDSI as well as a director and member of the management team
of a number of public companies associated with HDSI. He is also President and
Director of United Mineral Services Ltd., a private resources company. He also
serves as a Director of Britannia Mine Museum and Trustee of the BC Mineral
Resources Education Program.
Mr. Dickinson is, or was within the past five years, an officer
and/or director of the following public companies:
Company |
Name of Market |
Positions Held |
From |
To |
Northern Dynasty Minerals Ltd.
|
TSX, NYSE MKT
|
Director |
June 1994 |
Present |
Chairman |
April 2004 |
Present |
Amarc Resources Ltd.
|
TSX-V, OTCBB
|
Director |
April 1993 |
Present |
Chairman |
April 2004 |
Present |
Continental Minerals Corporation |
TSX-V, OTCBB |
Director |
June 2004 |
April 2011 |
Curis Resources Ltd.
|
TSX
|
Director |
November 2010 |
November 2012 |
Chairman |
November 2010 |
December 2010 |
Heatherdale Resources Ltd. |
TSX-V |
Director |
November 2009 |
Present |
Northcliff Resources Ltd.
|
TSX
|
Director |
June 2011 |
Present |
Chairman |
June 2011 |
January 2013 |
Rathdowney Resources Ltd.
|
TSX-V
|
Director and
Chairman |
March 2011 |
December 2011 |
Quartz Mountain Resources Ltd.
|
TSX-V
|
Director |
December 2011 |
Present |
Chairman |
December 2011 |
November 2012 |
Taseko Mines Limited |
TSX, NYSE MKT |
Director |
January 1991 |
Present |
Gordon J. Fretwell, B.Comm., LLB. Director
Mr. Fretwell holds a Bachelor of Commerce degree and graduated
from the University of British Columbia in 1979 with his Bachelor of Law degree.
Formerly a partner in a large Vancouver law firm, Mr. Fretwell has,
since 1991, been a self-employed solicitor (Gordon J. Fretwell
Law Corporation) in Vancouver practicing primarily in the areas of corporate and
securities law.
Mr. Fretwell is, or was within the past five years, an officer
and/or director of the following public companies:
Company
|
Name of Market
|
Positions Held |
From
|
To
|
Asanko Gold Corp. (formerly Keegan Resources Inc.) |
TSX-V, AMEX |
Director |
February 2004 |
Present |
Auryn Resources Inc. |
TSX-V |
Director |
October 2013 |
Present |
Bell Copper Corporation
|
TSX-V
|
Secretary |
March 2001 |
May 2011 |
Director |
June 2001 |
April 2011 |
Benton Capital Corp. (formerly Benton
Resources Corp.) |
TSX-V
|
Director |
July 2003 |
July 2013 |
Secretary |
December 2003 |
Present |
Benton Resources Inc.
|
TSX-V
|
Director |
November 2011 |
March 2014 |
Secretary |
November 2011 |
Present |
Canada Rare Earth Corp. |
TSX-V |
Secretary |
June 2009 |
Present |
Curis Resources Ltd. |
TSX |
Director |
January 2011 |
November 2014 |
Coro Mining Corp. |
TSX |
Director |
January 2009 |
Present |
ICN Resources Ltd. |
TSX-V |
Director |
July 2004 |
August 2010 |
Lignol Energy Corporation |
TSX-V |
Director |
January 2007 |
May 1, 2015 |
Meritus Minerals Ltd.
|
TSX-V
|
Director |
June 2007 |
November 2012 |
Secretary |
August 2009 |
Present |
Northern Dynasty Minerals Ltd. |
TSX, NYSE MKT |
Director |
June 2004 |
Present |
Sokoman Iron Corp. (formerly Golden Dory Resources Corp.)
|
TSX-V |
Secretary |
August 2008 |
Present |
Quartz Mountain Resources Ltd.
|
TSX-V, OTCBB
|
Director |
January 2003 |
Present |
Secretary |
January 2003 |
December 2011 |
Rockwell Diamonds Inc. |
TSX-V, OTCBB, JSE |
Secretary |
September 2012 |
March, 2015 |
|
Russell Hallbauer, P.Eng. Director
Mr. Hallbauer graduated from the Colorado School of Mines with
a B.Sc. in Mining Engineering in 1979. He is a Registered Professional Engineer
with the Association of Professional Engineers of British Columbia. He has been
a member of the Canadian Institute of Mining and Metallurgy since 1975 and is a
director and former chairman of the Mining Association of B.C.
In 1983, he joined Teck Corporations Bullmoose mine, advancing
through Engineering and Supervisory positions to become Mine Superintendent in
1987, and in 1992, became General Manager of Quintette. In 1995, he assumed new
responsibilities in Vancouver when he was appointed General Manager, Coal
Operations, overseeing Tecks three operating coal mines in the Province. In
2002, he was appointed General Manager, Base Metal Joint Ventures, responsible
for Teck Comincos interests in Highland Valley Copper, Antamina in Peru, and
Louvicourt in Quebec. Mr. Hallbauer is a director of Hunter Dickinson Services
Inc. (and Hunter Dickinson Inc.), a company providing management and
administrative services to several publicly-traded companies and focuses on
directing corporate development and financing activities.
Mr. Hallbauer is, or was within the past five years, an officer
and/or director of the following public companies:
Company |
Name of Market |
Positions Held |
From |
To |
Northern Dynasty Minerals Ltd. |
TSX, NYSE MKT |
Director |
April 2008 |
Present |
Curis Resources Ltd.
|
TSX
|
Director |
November 2010 |
November 2014 |
Chairman |
December 2010 |
September 2012 |
Co-Chairman |
September 2012 |
November 2014 |
Taseko Mines Limited
|
TSX, NYSE MKT
|
Director, President and CEO
|
July 2005
|
Present
|
|
Wayne Kirk, LLB Director
Mr. Kirk is a retired attorney and professional consultant.
With over 35 years professional experience he also has over 9 years senior
executive experience in the mining industry.
Mr. Kirk is a citizen of the United States and is a resident of
the state of Washington. A Harvard University graduate, Mr. Kirk received his
law degree in 1968. From 1992 to 2001 Mr. Kirk was the Vice President, General
Counsel and Corporate Secretary of Homestake Mining Company. Prior to his
retirement in June 2004 he spent two years as Special Counsel for the law firm,
Thelen Reid & Priest, in San Francisco.
Mr. Kirk is, or was within the past five years, a director of
the following public companies:
Company |
Name of Market |
Positions Held |
From |
To |
Northern Dynasty Minerals Ltd. |
TSX, NYSE MKT |
Director |
July 2004 |
Present |
Atlatsa Resources Corporation |
TSX-V, NYSE MKT, JSE |
Director |
July 2005 |
September 2011 |
Gabriel Resources Ltd. |
TSX |
Director |
June 2008 |
Present |
Great Basin Gold Ltd. |
TSX, NYSE MKT, JSE |
Director |
July 2004 |
January 2012 |
Luna Gold Corp. |
TSX, OTCQX |
Director |
May 2012 |
Present |
Taseko Mines Limited |
TSX, NYSE MKT |
Director |
July 2004 |
June 2014 |
Peter Mitchell, CA Director
Mr. Mitchell is a Chartered Accountant with a degree in
Economics (BA) from the University of Western Ontario and a Masters in Business
Administration (MBA) from the University of British Columbia. He has extensive
senior financial and operating experience with private equity portfolio
companies in the manufacturing and service sector. He previously worked as
Senior Vice President and Chief Financial Officer of Crown Packaging Ltd., as
well as Vice Chairman and Chief Financial Officer of Von Hoffmann Corporation of
St. Louis, Missouri. He has held leadership roles in the for-profit education
sector as President of Florida Career College based in Fort Lauderdale, Florida
and prior to that, as President and Chief Executive Officer of Vatterott
Education Centers, Inc. in St. Louis, Missouri. Mr. Mitchell is a member of the
Institute of Chartered Accountants of Ontario.
Mr. Mitchell is, or was within the past five years, an officer
and or director of the following public companies:
Company |
Name of Market |
Positions Held |
From |
To |
Northern Dynasty Minerals Ltd. |
TSX, NYSE MKT |
Director |
May 2011 |
Present |
Coeur Mining, Inc. |
NYSE, TSX |
Senior Vice President and CFO |
June 2013 |
Present |
Northcliff Resources Ltd. |
TSX |
Director |
June 2011 |
Present |
Company |
Name of Market |
Positions Held |
From |
To |
Taseko Mines Limited |
TSX, NYSE MKT |
CFO |
September 2008 |
May 2013 |
Kenneth Pickering Director
Mr. Pickering is a Professional Engineer and mining executive
with 40 years of experience in a variety of capacities in the natural resources
industry. He has led the development, construction and operation of world-class
mining projects in Canada, Chile, Australia, Peru and the United States,
focusing on operations, executive responsibilities and country accountabilities.
Most recently, Mr. Pickering was Vice President -- Major Projects, Closed Mines
and North American Assets for BHP Billiton Base Metals in Santiago, Chile. His
position involved overseeing the planning and execution of six mining and
infrastructure projects in Chile valued at $3 billion, and serving as a director
of The Resolution Copper joint venture with Rio Tinto in Arizona, while being
responsible for the BHP Billiton Pinto Valley copper operations in Arizona.
Mr. Pickering is a member of the Association of Professional
Engineers and Geoscientists of British Columbia, currently working as a private
consultant in mining operations and project development and as a Non-Executive
Director in the international natural resources industry.
Mr. Pickering is, or was within the past five years, an officer
and/or director of the following public companies:
Company |
Name of Market |
Positions Held |
From |
To |
Northern Dynasty Minerals Ltd. |
TSX, NYSE MKT |
Director |
September 2013 |
Present |
Endeavour Silver Corp. |
TSX, NYSE |
Director |
August 2012 |
Present |
THEMAC Resources Group Limited |
TSX-V |
Director |
March 2011 |
Present |
Pan Aust Minerals |
ASX |
Director |
October 2011 |
Present |
Enaex Chile |
IPSA |
Director |
May 2011 |
Present |
Marchand Snyman, CA (SA), CA (AUS) Director and Chief
Financial Officer
With over 17 years of progressive experience in the mining
sector, Mr. Snyman was a director of Muratie Investments Pty Limited between
2003 and 2006, an Australian mining consultant providing advisory services to
businesses in Australia, China, South Africa and the USA. Mr. Snyman was General
Manager Corporate Finance and Development for Anglo Platinum Limited, the
world's premier platinum producer from 1999 until 2002, responsible for managing
diverse projects including joint venture negotiations, corporate tax structures
and offshore corporate operations, having joined Anglo Platinum in 1996 as
Corporate Finance Manager. Prior to that, he was a senior financial advisor for
a multi-modal transportation company in South Africa. He is a director and Chief
Operating Officer of HDI.
Mr. Snyman is a member of the Institute of Chartered
Accountants in Australia and a member of the South African Institute of
Chartered Accountants.
Mr. Snyman is, or was within the past five years, an officer
and/or director of the following public companies:
Company |
Name of Market |
Positions Held |
From |
To |
Northern Dynasty Minerals Ltd.
|
TSX, NYSE MKT
|
Director |
August 2008 |
Present |
CFO |
August 2008 |
Present |
Continental Minerals Corporation |
TSX-V, OTCBB |
CFO |
January 2008 |
April 2011 |
Heatherdale Resources Ltd. |
TSX-V |
CFO |
November 2009 |
April 2012 |
Northcliff Resources Ltd. |
TSX |
Director and Chairman |
January 2013 |
Present |
Ronald W. Thiessen, FCA President, Chief Executive Officer
and Director
Mr. Thiessen is a Chartered Accountant with professional
experience in finance, taxation, mergers, acquisitions and re-organizations.
Since 1986, Mr. Thiessen has been involved in the acquisition and financing of
mining and mineral exploration companies. Mr. Thiessen is a director of HDSI
(and HDI), a company providing management and administrative services to several
publicly-traded companies and focuses on directing corporate development and
financing activities.
Mr. Thiessen is, or was within the past five years, an officer
and/or director of the following public companies:
Company |
Name of Market |
Positions Held |
From |
To |
Northern Dynasty Minerals Ltd.
|
TSX, NYSE MKT
|
Director |
November 1995 |
Present |
President and
CEO |
November 2001 |
Present |
Amarc Resources Ltd.
|
TSX-V, OTCBB
|
Director |
September 1995 |
Present |
CEO |
September 2000 |
Present |
President |
September 2000 |
November 2014 |
Atlatsa Resources Corporation |
TSX-V, JSE NYSE MKT |
Director |
April 1996 |
June 2011 |
Continental Minerals Corporation
|
TSX-V, OTCBB
|
Director |
November 1995 |
April 2011 |
Co-Chairman |
January 2006 |
April 2011 |
Detour Gold Corporation |
TSX |
Director |
July 2006 |
May 2012 |
Farallon Mining Ltd.
|
TSX
|
Director |
August 1994 |
January 2011 |
Chairman |
December 2005 |
January 2011 |
Great Basin Gold Ltd.
|
TSX, NYSE MKT, JSE
|
Director |
October 1993 |
June 2013 |
Chairman |
November 2006 |
June 2013 |
Quartz Mountain Resources Ltd.
|
TSX-V
|
President, CEO
and Director |
December 2011 |
Present |
Taseko Mines Limited
|
TSX, NYSE MKT
|
Director |
October 1993 |
Present |
Chairman |
May 2006 |
Present |
Except as disclosed below, none of the proposed nominees for
election as a director of the Company are proposed for election pursuant to any
arrangement or understanding between the nominee and any other person, except
the directors and senior officers of the Company acting solely in such
capacity.
Within the last 10 years before the date of this Information
Circular no proposed nominee for election as a director of the Company was a
director or executive officer of any company (including the Company in respect
of which this Information Circular is prepared) or acted in that capacity for a
company that was:
(a) |
subject to a cease trade or similar order or an order
denying the relevant company access to any exemptions under securities
legislation, for more than 30 consecutive days; |
|
|
(b) |
subject to an event that resulted, after the director or
executive officer ceased to be a director or executive officer, in the
company being the subject of a cease trade or similar order or an order
that denied the relevant company access to any exemption under the
securities legislation, for a period of more than 30 consecutive
days; |
|
|
(c) |
within a year of that person ceasing to act in that
capacity, became bankrupt, made a proposal under any legislation relating
to bankruptcy or insolvency or was subject to or instituted any
proceedings, arrangement or compromise with creditors or had a receiver,
receiver manager or trustee appointed to hold its assets; or has become
bankrupt, made a proposal under any legislation relating to bankruptcy or
insolvency, or become subject to or instituted any proceedings, arrangement or
compromise with creditors, or had a receiver, receiver manager or trustee
appointed to hold the assets of the proposed director; |
(d) |
subject to 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 |
|
|
(e) |
subject to any other penalties or sanctions imposed by a
court or a regulatory body that would likely be considered important to a
reasonable securityholder in deciding whether to vote for a proposed
director. |
As publicly disclosed at www.sedar.com, Great Basin Gold
Ltd. ("GBG"), a company on whose board Mr. Thiessen served and Mr. Kirk formerly
served, became insolvent and was liquidated commencing in September 2012. GBG
was developing two gold projects using substantial debt financing when gold
prices began their precipitous fall. Mr. Thiessen resigned in June 2013 and Mr.
Kirk resigned in January, 2012.
Pine Valley Mining Corporation became subject to an order under
CCAA in October 2006 during the year following Mr. Fretwells resignation as a
director of that company. On August 22, 2014, as publicly disclosed at
www.sedar.com, Lignol Energy Corporation, a company for which Mr.
Fretwell is a director, was placed into receivership.
Multiple Directorships
Several directors of the Company also serve as directors of one
or more other resource companies involved in mineral exploration and/or
development. It may occur from time to time that, as a consequence of his
activity in the mineral industry and serving on such other boards, a director
may become aware of potential resource property opportunities which are of
interest to more than one of the companies on whose boards that person serves.
Furthermore, it is possible that the directors of the Company and the directors
of one or more such other companies (many of which are described herein) may
also agree to allow joint participation on the Companys properties or the
properties of that other company. Accordingly, situations may arise in the
ordinary course, which involve a director in an actual or potential conflict of
interest as well as issues in connection with the general obligation of a
director to make corporate opportunities available to the company whose board
the director serves. In all such events, any director is required to disclose a
financial interest in a contract or transaction by virtue of office, employment
or security holdings or other such interest in another company or in a property
interest under consideration by the Board, and is obliged to abstain from voting
as a director of the Company in respect of any transaction involving that other
company or in respect of any property in which an interest is held by him. The
directors will use their best business judgment to help avoid situations where
conflicts or corporate opportunity issues might arise and they must at all times
fulfil their duties to act honestly and in the best interests of the Company as
required by law.
APPOINTMENT OF AUDITOR
Deloitte LLP ("Deloitte"), Independent Registered Public
Accounting Firm, Suite 2800, 1055 Dunsmuir Street, Vancouver, British Columbia,
will be nominated at the Meeting for reappointment as auditor of the Company.
Deloitte was first appointed auditor of the Company on April 21, 2009 by the
Audit and Risk Committee.
CORPORATE GOVERNANCE
Mandate of the Board of Directors
The Board has a formal mandate as outlined in the Corporate
Governance Policies and Procedures Governance Manual (the "Governance Manual"),
dated December 1, 2014. The Governance Manual mandates the Board to: (i) assume
responsibility for the overall stewardship and development of the Company and
monitoring of its business decisions, (ii) identify the principal risks and
opportunities of the Companys business and ensure the implementation of
appropriate systems to manage these risks, (iii) oversee ethical management and succession planning, including appointing,
training and monitoring of senior management and directors, and (iv) oversee the
integrity of the Companys internal financial controls and management
information systems. The Governance Manual also includes written charters for
each committee and it contains a code of ethics, policies dealing with issuance
of news releases and disclosure documents, as well as share trading black-out
periods. Further, in the Governance Manual the Board encourages but does not
require continuing education for all the Companys directors. A copy of the
Governance Manual is available for review on the Companys website under
Corporate Governance at www.northerndynastyminerals.com.
Composition of the Board of Directors
Applicable governance policies require that a listed issuers
board of directors determine the status of each director as independent or not,
based on each directors interest in or other relationship with, the Company.
Governance authorities generally recommend that a board of directors be
constituted with a majority of directors who qualify as independent directors
(as defined below) which is not the case for Northern Dynasty as five of its
nine directors are technically non-independent. Northern Dynasty notes however
that the remunerative relationships which make the below directors technically
non-independent are not in the Boards view sufficient to represent a material
relationship which would impact their discretion as directors.
A board of directors should also examine its size with a view
to determining the impact of the number of directors upon the effectiveness of
the board of directors, and the board of directors should implement a system
which enables an individual director to engage an outside advisor at the expense
of the corporation in appropriate circumstances. The Companys policies allow
for retention of independent advisors for members of the board of directors when
they consider it advisable.
Under the policies, an "independent" director is one who "has
no direct or indirect material relationship" with the Company. Generally
speaking, a director is independent if he or she is free from any employment,
business or other relationship which could, or could reasonably be expected to,
materially interfere with the exercise of the directors independent judgment. A
material relationship includes having been (or having a family member who has
been) within the last three years an employee or executive of the Company or
employed by the Companys external auditor. An individual who (or whose family
member) is or has been within the last three years, an executive officer of an
entity where any of the Companys executive officers served at the same time on
that entitys Compensation Committee is deemed to have a material relationship
as is any individual who (or whose family members or partners) received directly
or indirectly, any consulting, advisory, accounting or legal fee or investment
banking compensation from the Company (other than compensation for acting as a
director or as a part time chairman or vice-chairman).
The Board is proposing nine (9) nominees to be elected to the
office of director, four (4) of whom can be considered "independent" directors.
The "independent" nominees are Peter Mitchell, Wayne Kirk, Gordon Fretwell and
Ken Pickering. These nominees are considered independent by virtue of not being
executive officers of the Company and having received no compensation other than
in their role as directors. The non-independent directors (and the reasons for
that status) are: Scott Cousens (provides capital finance and investor
communications services), Robert Dickinson (Chairman of the Board and geological
consultant for the Company), Russell Hallbauer (provides engineering services),
Marchand Snyman (Chief Financial Officer), and Ronald Thiessen (President and
Chief Executive Officer).
All directors other than Messrs. Kirk and Pickering serve
together on boards of directors of other publicly traded companies associated
with Hunter Dickinson Inc. ("HDI"), a private company. Messrs. Cousens,
Dickinson, Hallbauer, Snyman and Thiessen are directors of HDI. As described in
the Companys Annual Information Form, HDI is the parent company of Hunter
Dickinson Services Inc. ("HDSI"), which provides geological, corporate
development, administrative and management services to, and incurs third party
costs on behalf of, the Company at a cost which in the Boards view does not
exceed the fair market value of such services. HDSI employs members of the
executive management of some of these public companies (of which the Company is
one) and in turn invoices those companies for their share of these services,
pursuant to annually set rates.
The Boards Nominating and Governance Committee (the "NG
Committee") formalizes the process of ensuring high calibre directors and proper
director succession planning. The NG Committee considered and recommended re-election of the current Board. The NG Committee
currently consists of Gordon Fretwell, Wayne Kirk and Ken Pickering, all of whom
are independent (discussed above).
The Board monitors the activities of the senior management
through regular meetings and discussions amongst the Board and between the Board
and senior management. The Board is of the view that its communication policy
between senior management, members of the Board and shareholders is good.
Meetings of independent directors are not held on a regular scheduled basis but
communications among this group occurs on an ongoing basis and as needs arise
from regularly scheduled meetings of the Board or otherwise. The number of these
meetings has not been recorded but it would be less than five in the financial
year that commenced on January 1, 2014. The Board also encourages independent
directors to bring up and discuss any issues or concerns and the Board is
advised of and addresses any such issues or concerns raised thereby. The Board
has appointed Gordon Fretwell as Lead Director (Independent), and as such, Mr.
Fretwells mandate includes ensuring that the Board carries out its
responsibilities effectively and independent from management.
The Board believes that adequate structures and processes are
in place to facilitate the functioning of the Board with a sufficient level of
independence from the Companys management. The Board is satisfied with the
integrity of the Companys internal control and financial management information
systems.
Committees of the Board of Directors
Applicable regulatory governance policies require that (i) the
Boards Audit and Risk Committee be composed only of independent directors, and
the role of the Audit and Risk Committee be specifically defined and include the
responsibility for overseeing managements system of internal controls, (ii) the
Audit and Risk Committee have direct access to the Companys external auditor,
(iii) other committees of the Board be composed of at least a majority of
independent directors (iv) the Board expressly assume responsibility, or assign
to a committee of directors responsibility, for the development of the Companys
approach to governance issues, and (v) the Board appoint a committee, composed
of a majority of independent directors, with the responsibility for proposing
new nominees to the Board and for assessing directors on an ongoing basis. The
Audit and Risk Committee currently consists of Gordon Fretwell, Wayne Kirk and
Peter Mitchell.
As well as an Audit and Risk Committee, the Board also has a
Compensation Committee, a Nominating and Governance Committee and a Pebble
Partnership Oversight Committee. For information concerning the Audit and Risk
Committee please see Item 19 and Appendix A, of the Companys Annual Information
Form filed under the Companys profile on SEDAR at www.sedar.com on March
31, 2015.
Compensation Committee
The Boards Compensation Committee currently consists of Gordon
Fretwell, Ken Pickering and Peter Mitchell.
The Compensation Committee recommends compensation for the
directors and executive officers of the Company. See further disclosure under
the heading, Statement of Executive Compensation. The Compensation
Committee charter is included in the Governance Manual and is available for
viewing at or can be downloaded from the Companys website under Corporate
Governance, at www.northerndynastyminerals.com.
The function of the Compensation Committee includes review, on
an annual basis, of the compensation paid to the Companys executive officers
and directors, review of the performance of the Companys executive officers and
making recommendations on compensation to the Board.
The Compensation Committee administers the Companys share
option plan and periodically considers the grant of share options. Share options
have been granted to the executive officers and directors and certain other
service providers, taking into account competitive compensation factors and the
belief that share options help align the interests of executive officers,
directors and service providers with the interests of shareholders.
The Compensation Committee would also administer the Companys
proposed Deferred Share Unit Plan (the "DSU Plan") and Restricted Share Unit
Plan (the "RSU Plan"), which are being presented to shareholders for approval at
the Meeting. See Particulars of Matters to be Acted On for a
description of the DSU Plan and the RSU Plan.
Nominating and Governance Committee (NG Committee)
The Boards NG Committee currently consists of Gordon Fretwell,
Wayne Kirk and Ken Pickering. The charter for the NG Committee is included in
the Governance Manual and is available for viewing at or can be downloaded from
the Companys website under Corporate Governance, at
www.northerndynastyminerals.com.
The NG Committee has been given the responsibility of
developing and recommending to the Board the Companys approach to corporate
governance and of assisting members of the Board in carrying out their duties.
The NG Committee also reviews with the Board the rules and policies applicable
to governance of the Company to assure that the Company remains in full
compliance with proper governance practices.
The nominating function of the NG Committee is to evaluate and
recommend to the Board the size of the Board and persons as nominees for the
position of director of the Company. The NG Committee does not set specific
minimum qualifications for director positions. Instead, the NG Committee
believes that nominations for election or re-election to the Board should be
based on a particular candidates merits, skills and the Companys needs after
taking into account the current composition of the Board. When evaluating
candidates annually for nomination for election, the NG Committee considers each
individuals skills, the overall diversity needs of the Board (skills mix, age
profiles gender, work and life experience) and independence and time
availability.
The NG Committee seeks to achieve for the Board a balance of
industry and business knowledge and experience, including expertise in the
mining industry, in regulatory and public policy issues, in management and
operations and in transactional situations, as well as independence, financial
expertise, public company experience, sound judgment and reputation.
The NG Committee believes that a diverse Board offers depth of
perspective and enhances Board operations. The NG Committee strives to identify
candidates with the ability to strengthen the Board. The NG Committee does not
specifically define diversity, but considers diversity of experience, education,
ethnicity and gender, as part of its overall annual evaluation of director
nominees. The Board appreciates that women have been under represented on
Canadian boards, and the Company believes that enhancing gender diversity will
strengthen the Board. However, the Board does not establish quotas for any
selection criteria, as the composition of the Board is based on numerous factors
and the character of a candidate and the selection is often a function of the
"best available" candidate.
The Company has not adopted an express policy specifically
addressing gender diversity, nor has the Company set any numerical timeline
objectives for increasing gender diversity. The Company currently has no female
board members or senior executives. Due to the relatively smaller size of the
Company, the Board does not consider it necessary to implement a specific gender
diversity policy at this time but the issue remains under review. Should a
specific gender diversity policy be considered to be of increasing importance in
the future, any adopted policy will be explained to shareholders and input will
be welcomed. The Company has not set mandatory age or term limits for its
directors or senior officers as it focuses on measurable performance rather than
employing arbitrary age thresholds which are of dubious legality as a form of
age related discrimination. However, review by the NG Committee of the
performance of all Board members and senior officers of the Company is ongoing
and it is within the mandate of the NG Committee to keep within its scope the
possibility of imposing such limits in the future
The Company has formal procedures for assessing the
effectiveness of Board committees as well as the Board as a whole. This function
is carried out annually under the direction of the NG Committee and those
assessments are then provided to the Board.
The Companys code of ethics, as set out in the Governance
Manual, provides a framework for undertaking ethical conduct in employment.
Under the code of ethics the Company will not tolerate any form of
discrimination or harassment in the workplace.
Pebble Partnership Oversight Committee
The Board has a Pebble Partnership Oversight Committee, the
sole member of which is currently Wayne Kirk. This Committees function is to
oversee the operations of the Pebble Limited Partnership on behalf of the Board.
Board of Directors Decisions
Good governance policies require the Board of a listed
corporation, together with its chief executive officer, to develop position
descriptions for the Board and for the chief executive officer, including the
definition of limits to managements responsibilities. Any responsibility which
is not delegated to senior management or to a Board committee remains with the
full Board. The Board has approved written position descriptions for the
Chairman of the Board and the Chairmen of the Board Committees.
Recruitment of New Directors and Assessment of Board of
Directors Performance
Good governance policies require that (i) the board of
directors of every listed corporation implement a process for assessing the
effectiveness of the Board and its committees, and the contribution of
individual directors, (ii) every corporation provide an orientation and
education program for new directors, and (iii) every board of directors review
the adequacy and form of compensation of directors and ensure that the
compensation realistically reflects the responsibilities and risks involved in
being an effective director. The following table sets forth the record of
attendance of Board, Audit and Risk, Compensation and NG Committee meetings by
Directors for the 12 month period ended December 31, 2014:
Director
|
Board of Directors
Meetings |
Audit and Risk
Committee Meetings |
NG Committee
Meetings |
Compensation
Committee Meetings |
Scott D. Cousens |
3 of 3 |
|
|
|
Robert A. Dickinson |
3 of 3 |
|
|
|
Gordon Fretwell (1) |
3 of 3 |
4 of 4 |
2 of 2 |
N/A |
Wayne Kirk (2) |
3 of 3 |
4 of 4 |
2 of 2 |
|
Russell Hallbauer |
3 of 3 |
|
|
|
Ken Pickering |
3 of 3 |
|
2 of 2 |
N/A |
Marchand Snyman |
3 of 3 |
|
|
|
Ronald W. Thiessen |
3 of 3 |
|
|
|
Peter C. Mitchell (3) |
3 of 3 |
4 of 4 |
|
N/A |
Stephen Scott (4) |
N/A |
|
|
|
Notes:
1. |
Current Compensation Committee Chairman. |
|
|
2. |
Current NG Committee Chairman. |
|
|
3. |
Current Audit and Risk Committee Chairman. |
|
|
4. |
Mr. Scott resigned from the Board on February 20,
2014. |
Directorships
The section entitled "Election of Directors" above gives
details of other reporting issuers of which each director is a director and
officer where applicable.
Orientation and Continuing Education
The Company has traditionally retained experienced mining
people as directors and hence the orientation needed is minimized. When new
directors are appointed, they generally are acquainted with the Companys
mineral project(s) and the expectations of directors, or they would receive
orientation commensurate with their previous experience on the Companys
properties, business, technology and industry and the responsibilities of
directors. Board meetings generally include presentations by the Companys
senior management and project staff in order to give the directors full insight
into the Companys operations.
To enable each director to better perform his or her duties and
to recognize and deal appropriately with issues that arise, the Company will
provide the directors with appropriate education programs and/or suggestions to
undertake continuing director education, the cost of which will be borne by the
Company. During the year, the Company, through HDSI, provided information
sessions to the directors on various corporate governance topics.
Ethical Business Conduct
The Board has a formal ethics policy which is contained in the
Governance Manual and which is available for download from the Companys website
under Corporate Governance at www.northendynastyminerals.com. In
addition, the Board has implemented an annual procedure whereby directors and
officers sign off on and ratify that they have read and understand the Companys
code of ethics and that they are unaware of any violations thereof.
Nomination of Directors
The Board considers its size each year when it considers the
number of directors to recommend to the shareholders for election at the annual
meeting of shareholders, taking into account the number required to carry out
the Boards duties effectively and to maintain a diversity of views and
experience. The NG Committee recommended to the Board the nine directors as
nominees for election this year. See the description of the NG Committee above
under the heading, Committees of the Board of Directors.
Assessments
The Board monitors the adequacy of information given to
directors, communication between the Board and management and the strategic
direction and processes of the Board and its committees. The NG Committee
oversees an annual formal assessment of the Board and its three main committees
namely the Audit and Risk Committee, Compensation Committee and NG Committee.
The Board is satisfied with the overall project and corporate achievements of
the Company and believes this reflects well on the Board and its practices.
STATEMENT OF EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS Named Executive
Officers
In this section Named Executive Officer (or "NEO") means each
of the following individuals:
(a) |
the Chief Executive Officer ("CEO"); |
|
|
(b) |
the Chief Financial Officer ("CFO"); |
|
|
(c) |
each of the three most highly compensated executive
officers, or the three most highly compensated individuals acting in a
similar capacity, other than the CEO and CFO, at the end of the most
recently completed financial year whose total compensation was,
individually, more than $150,000 for that financial year; and |
|
|
(d) |
each individual who would be an NEO under paragraph (c)
but for the fact that the individual was neither an executive officer of
the company, nor acting in a similar capacity, at December 31,
2014. |
The following disclosure sets out the compensation that the
Board intended to pay, make payable, award, grant, give or otherwise provide to
each NEO and director for the financial year ended December 31, 2014.
Compensation Committee
As indicated above, the Company has a Compensation Committee to
assist the Board in carrying out its responsibilities relating to executive and
director compensation. The charter for the Compensation Committee is included in
the Corporate Governance Policies and Procedures Governance Manual and is
available for viewing from the Companys website under Corporate Governance at
www.northerndynastyminerals.com.
The members of the Compensation Committee of the Company are
Gordon Fretwell, Ken Pickering, and Peter Mitchell, all of whom are independent
directors. The Compensation Committee did not formally meet during the year, but did undertake business by way of consent
resolution. The Compensation Committee assists the Board in carrying out its
responsibilities relating to executive and director compensation.
The members of the Compensation Committee possess the skills
and experience that enable the committee to make decisions on the suitability of
the Companys compensation policies and practices.
As a result of their education and experience, each member of
the Compensation Committee has familiarity with, an understanding of, or
experience in:
(a) |
reviewing compensation philosophy including base
compensation structures & incentive programs; |
|
|
(b) |
reviewing specific executive and director
compensation; |
|
|
(c) |
administering of share options and other equity based
compensation plans and the determination of share option grants;
and |
|
|
(d) |
reviewing performance goals and the assessments of
corporate officers. |
Mr. Fretwell, who is the Chairman of the Compensation
Committee, is a director of a number of public companies and has extensive
experience in the areas of compensation and human resources, having served on
the Compensation Committees of Curis Resources Ltd. and Continental Minerals
Corp. Mr. Pickering serves on the Board of several publicly traded mining
companies. Mr. Mitchell, a Chartered Accountant, is currently Senior Vice
President and Chief Financial Officer of Coeur Mining Inc. and serves on the
Compensation Committee of Northcliff Resources Ltd.
See disclosure under "Biographical Information of Nominees
for Director" for relevant education and experience of policies of the
Compensation Committee.
The Compensation Committee (the "Committee") has, among other
things, the following duties, responsibilities and authority:
(a) |
to recommend to the Board the form and amount of
compensation to be paid by the Company to directors for service on the
Board and on its committees. The Committee shall review director
compensation at least annually. |
|
|
(b) |
to annually review the Companys base compensation
structure and the Company's incentive compensation, share option and other
equity-based compensation programs and recommend changes in or additions
to such structure and plans to the Board as needed. |
|
|
(c) |
to recommend to the Board the annual base compensation of
the Company's executive officers and senior managers (collectively the
"Officers"). |
|
|
(d) |
to recommend to the Board annual corporate goals and
objectives under any incentive compensation plan adopted by the Company
for Officers, and recommend incentive compensation participation levels
for Officers under any such incentive compensation plan. In determining
the incentive component of compensation, the Committee will consider the
Companys performance and relative shareholder return, the values of
similar incentives at comparable companies and the awards given in past
years. |
|
|
(e) |
to evaluate the performance of Officers generally and in
light of annual corporate goals and objectives under any incentive
compensation plan. |
|
|
(f) |
to periodically review with the Chairman and CEO their
assessments of corporate officers and senior managers and succession plans
and make recommendations to the Board regarding appointment of officers
and senior managers. |
|
|
(g) |
to administer the Company's share option and other equity
based compensation plans and determine the annual grants of share options
and other equity based compensation. |
|
|
(h) |
to recommend to the NG Committee the qualifications and
criteria for membership on the Compensation
Committee. |
Report on Executive Compensation
This report on executive compensation has been authorized by
the Compensation Committee members as aforementioned, being Gordon Fretwell, Ken
Pickering, and Peter Mitchell. The Board assumes responsibility for reviewing
and monitoring the long-range compensation strategy for the Companys senior
management, although the Compensation Committee guides it in this role. As part
of its mandate, the Board determines the type and amount of compensation for the
Companys executive officers. In addition, the Board reviews the methodology
utilized by the Company for setting salaries of employees throughout the
organization.
The Compensation Committee receives competitive market
information on compensation levels for executives. The Companys compensation
policies and programs are designed to be competitive with similar junior mining
exploration companies and to recognize and reward executive performance
consistent with the success of the Companys business.
Philosophy and Objectives
The Companys senior management compensation program is
designed to ensure that the level and form of compensation achieves certain
objectives, including:
(a) |
attracting and retaining talented, qualified and
effective executives; |
|
|
(b) |
motivating the short and long-term performance of these
executives; and |
|
|
(c) |
better aligning their interests with those of the
Companys Shareholders. |
In compensating its senior management, the Company employs a
combination of base salary, bonus compensation and equity participation through
its share option plan.
Base Salary
In the Boards view, paying base salaries that are competitive
in the markets in which the Company operates is a first step to attracting and
retaining talented, qualified and effective executives. The NEOs are paid a
salary in order to ensure that the compensation package offered by the Company
is in line with that offered by other companies in our industry, and as an
immediate means of rewarding the NEO for efforts expended on behalf of the
company.
The salary to be paid to a particular NEO is determined by
gathering competitive salary information on comparable companies within the
industry from a variety of sources, including surveys conducted by independent
consultants and national and international publications such as the Mercer
Mining Industry Compensation Survey and Hays Group Global Mining
Compensation Review. Payment of a cash salary fits within the objective of
the compensation program since it rewards each NEO for performance of his duties
and responsibilities.
Bonus Compensation
Except as outlined herein, there are currently no performance
goals set by the Company for executive bonus compensation. Bonus compensation is
awarded at the discretion of the Board and the Board considers performance,
shareholder benefits, competitive factors and other matters in awarding bonuses.
The Companys objective is to achieve certain strategic objectives and
milestones relating to the Pebble Limited Partnership. The Board will consider
executive bonus compensation dependent upon the Company meeting those strategic
objectives and milestones and sufficient cash resources being available for the
granting of bonuses.
Mr. Colliers employment agreement provides for a discretionary
bonus based on performance milestones related to the advancement of the Pebble
Project, and in addition to the discretionary bonus, the payment of an
extraordinary bonus (the Bonus) in the event that a positive final record of
decision in respect of a 404 permit for the Pebble Project is issued by the
United States ARMY Core of Engineers (ROD) as follows:
The Bonus for a final
positive ROD will be payable as follows:
|
a. |
within four years from date of application US$12.5
million. |
|
|
|
|
b. |
within five years from date of application US$10.0
million. |
|
c. |
within six years from date of application US$7.5
million. |
In the event that the Board determines to delay the permit
process or file a material modification of the permit application (the "Permit
Modification") the date such delay is reversed and the Pebble Limited
Partnership (PLP) renews its efforts to actively pursue the permit or the date
such Permit Modification is filed shall be substituted for the foregoing date of
application.
Notwithstanding the foregoing, in the event of litigation
following the issuance of the ROD, then an amount equal to 35% of the Bonus as
determined above will be paid out and the balance (65%) paid out after the later
of the running of all statutes of limitation or the settlement or resolution of
all litigation related to the ROD in favor of PLP. For the purposes hereof
litigation related to the ROD will be considered settled or resolved in favor of
PLP only if PLP is able to proceed with the development and construction of the
same project in all material respects that was approved under the ROD. In the
event the Company is required to pay all or a part of the Bonus, the Company may
pay such in cash or in stock of the Company at the Company's sole election.
Subsequent to December 31, 2014, Mr. Collier received bonus
compensation in the form of a cash payment of US$100,000 for the fiscal year
ended December 31, 2014 and the Company also conditionally granted to Mr.
Collier Restricted Share Units (RSUs) having a value of $426,000, subject to
the adoption of a RSU Plan. This grant will be effected and the number of RSUs
calculated immediately following shareholder approval of the RSU Plan. See
Particulars of matters to be Acted Upon.
Except as outlined herein for the most recently completed
fiscal year, there were no bonuses paid.
The Company obtains salary and bonus information through its
affiliation to the HDI group of companies. No compensation was paid directly to
HDSI or any compensation consultant for compensation services for the two most
recently completed financial years.
All Other Fees
There were no other fees paid to any consultants or advisors
relating to executive compensation.
Equity Participation Option Based Awards
The Company has a share option plan which was last approved by
shareholders on May 16, 2014 (the "Option Plan"). The Option Plan was
established to provide incentive to qualified parties to increase their
proprietary interest in the Company, encourage the alignment of interests with
its shareholders, and foster their continued association with the Company.
Long term incentives are comprised of share options. The
Compensation Committee is delegated the authority to grant share options. The
Compensation Committee reviews the grants of share options to directors,
management, employees and consultants. Share options are generally granted
annually, and at other times of the year to individuals commencing employment
with the Company. Share option exercise prices are set in accordance with TSX
rules and are based on the five-day volume weighted average closing price prior
to the date of grant.
The Company believes that encouraging its executives, employees
and directors to become Shareholders is the best way of aligning their interests
with those of its Shareholders. Equity participation is accomplished through the
Option Plan. Share options are granted taking into account a number of factors,
including the amount and term of options previously granted, base salary and
bonuses, and competitive factors. Share options vest on terms established by the
Compensation Committee.
The Companys long term incentives are designed to foster and
promote the long-term financial success of the Company by strengthening the
ability of the Company to attract and retain highly competent employees,
motivating performance through incentive compensation, promoting greater
alignment of interests between employees and shareholders in creating long-term
shareholder value, and enabling employees to participate in the long-term growth
and financial success of the Company. Share options provide employees with the
opportunity to participate in the growth of the Companys share price as well as
benefit from the favourable tax treatment applicable to this form of
compensation.
See disclosure under "Securities Authorized for Issuance
under Equity Compensation Option Plans" for material terms of the Companys
Option Plan.
The Board has also determined to augment the Option Plan with a
Restricted Share Unit Plan and a Deferred Share Unit Plan. Please see
Particulars of Matters to be Acted Upon
General
The Compensation Committee considered the implications of the
risks associated with the Companys compensation policies and practices and
concluded that, given the nature of the Companys business and the role of the
Compensation Committee in overseeing the Companys executive compensation
practices, the compensation policies and practices do not serve to encourage any
NEO or individual at a principal business unit or division to take inappropriate
or excessive risks, and no risks were identified arising from the Companys
compensation policies and practices that are reasonably likely to have a
material adverse effect on the Company.
There is a restriction on NEOs or directors regarding the
purchase of financial instruments including prepaid variable forward contracts,
equity swaps, collars, or units of exchange funds that are designed to hedge or
offset a decrease in market value of equity securities granted as compensation
or held, directly or indirectly, by the NEO or director. For the years ended
December 31, 2014 and 2013 no NEO or director, directly or indirectly, employed
a strategy to hedge or offset a decrease in market value of equity securities
granted as compensation or held.
Given the evolving nature of the Companys business, the Board
continues to review and redesign the overall compensation plan for senior
management so as to continue to address the objectives identified above.
Performance Graph
The following graph compares the cumulative shareholder return
on an investment of $100 in the Common Shares of the Company for the past five
years of the Company on the TSX with a cumulative total shareholder return on
the S&P/TSX Composite Index.
NEO compensation increased from 2009 to 2010, mirroring the
upward trend in performance of the Companys Common Shares ("Shares") as a
result of the recovery in global financial markets, particularly in relation to
commodity and/or resource based shares. In 2011, NEO compensation increased
principally as a result of the grant of share options early in the year when the
market share price were at historic highs. From 2011 to 2014, the Companys
Shares performed negatively relatively to the TSX for number of reasons which
the Board believes included adverse actions by the United States Environmental
Protection Agency (the "EPA") pertaining to the EPAs Bristol Bay Watershed
Assessment and the threat of a pre-emptive veto by the EPA under Section 404(c)
of the Clean Water Act to consider severe restrictions or a prohibition on
mining activities in the vicinity of the Pebble deposit. While the Company
believes that its legal rights will be upheld by the Courts and that the Company
will ultimately be able to apply for the necessary permits under National
Environmental Protection Act, the uncertainty surrounding the EPAs actions has
contributed to a significant and material decline in the Companys Share price.
In 2012 and 2013 NEO compensation was on par but significantly less than in 2011
as no share options were granted to directors. However, the Companys Shares continued to decline in as a result of continued weakness in
junior mining shares, the ongoing EPA activities and the withdrawal of Anglo
American from the Pebble Limited Partnership ("PLP"), in late 2013. In 2014, NEO
Compensation increased due in part to the inclusion of the new CEO for PLP and
the granting of options. This increase contrasted with the negative performance
in the Companys shares relative to the performance of the TSX. The Companys
market share price continued to be negatively impacted by the EPAs activities
as well as the general malaise in junior mining shares throughout 2014 and
to-date.
SUMMARY COMPENSATION TABLE
The compensation paid to the NEOs during the Companys three
most recently completed financial years ended December 31 is as set out below
and expressed in Canadian dollars unless otherwise noted:
|
|
|
|
Non-equity incentive |
|
|
|
|
|
|
|
plan compensation
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual |
Long- |
|
|
|
|
|
|
Option- |
incentive |
term |
|
All other |
Total |
Name and |
|
|
based |
plans |
incentive |
Pension |
compens |
compensa |
principal |
|
Salary |
awards |
($) |
plans |
value |
ation |
tion |
position |
Year |
($) |
($) |
|
($) |
($) |
($) |
($) |
|
|
|
|
|
|
|
|
|
Ronald |
2014 |
500,500 |
427,200(4) |
Nil |
Nil |
Nil |
Nil |
927,700 |
Thiessen(2)(3) |
2013 |
460,500 |
Nil |
Nil |
Nil |
Nil |
Nil |
460,500 |
President & CEO |
2012 |
371,750 |
Nil |
Nil |
Nil |
Nil |
Nil |
371,750 |
|
|
|
|
|
|
|
|
|
Marchand |
2014 |
240,500 |
427,200(4) |
Nil |
Nil |
Nil |
Nil |
667,700 |
Snyman(2)(3) |
2013 |
198,000 |
Nil |
Nil |
Nil |
Nil |
Nil |
198,000 |
CFO |
2012 |
186,750 |
Nil |
Nil |
Nil |
Nil |
Nil |
186,750 |
|
2014 |
568,408(1) |
352,500(5) |
100,000 |
Nil |
Nil |
17,231(10) |
938,140 |
Thomas C. Collier |
2013 |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
PLP CEO(7) |
|
|
|
|
|
|
|
|
|
2012 |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
|
|
|
|
|
|
|
|
|
Peter |
2014 |
458,409(1) |
58,750 (5) |
Nil |
Nil |
Nil |
17,231(10) |
534,390 |
Robertson(8) |
2013 |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
PLP Senior VP |
|
|
|
|
|
|
|
|
Corporate Affairs |
2012 |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
|
2014 |
272,748 |
167,000(4)(6) |
Nil |
Nil |
Nil |
Nil |
439,748 |
Sean Magee(2) (9) |
2013 |
192,989 |
Nil |
Nil |
Nil |
Nil |
Nil |
192,989 |
VP Public Affairs |
2012 |
162,989 |
119,000 |
Nil |
Nil |
Nil |
Nil |
281,988 |
Notes:
1. |
Salaries except for Messrs. Collier and Robertson are
paid in Canadian dollars. An annual average exchange rate of Cdn$1.00 =
US$0.9053 has been applied for the period of January 1, 2014 to December
31, 2014 for figures reported for Messrs. Collier and Robertson |
|
|
2. |
Salary for Messrs. Thiessen, Snyman and Magee is paid
through HDSI. The compensation amount shown is the amount paid by HDSI
directly to Messrs. Thiessen, Snyman and Magee based on the estimated
amount of time spent providing services to the Company, including the
Pebble Partnership. |
|
|
3. |
Messrs. Thiessen and Snyman do not serve the Company on a
full time basis, and their salary from the Company is allocated based on
the estimated amount of time spent providing services to the Company. For
2014, Mr. Thiessen spent 78% of his time (2013-78%, 2012-41%), and Mr.
Snyman spent 54% (2013-54%, 2012-38%) of his amount of time on providing
executive services to the Company. |
|
|
4. |
The options were granted in February 2014 pursuant to the
Companys Option plan. For compensation purposes, the Black-Scholes option
valuation model has been used to determine the fair value on the date of
grant using the following assumptions: expected life of five years,
expected volatility of 65.79%, expected dividend yield of 0%, and
risk-free interest rate of 1.62%. The Black-Scholes grant date fair value
for these awards was Cdn$0.89 per option which was 50% of the option
exercise price. |
|
|
5. |
The options were granted in April 2014 pursuant to the
Companys Option Plan. For compensation purposes, the Black-Scholes option
valuation model has been used to determine the fair value on the date of
grant using the following assumptions: expected life of five years,
expected volatility of 67.44%, expected dividend yield of 0%, and risk-free
interest rate of 1.64% . The Black-Scholes grant date fair value for these
awards was Cdn$0.47 per option which was 53% of the option exercise price. |
6. |
The options were granted in September 2014 pursuant to
the Companys Option Plan. For compensation purposes, the Black-Scholes
option valuation model has been used to determine the fair value on the
date of grant using the following assumptions: expected life of five
years, expected volatility of 67.42%, expected dividend yield of 0%, and
risk-free interest rate of 1.69%. The Black-Scholes grant date fair value
for these awards was Cdn$0.39 per option which was 54% of the option
exercise price. |
|
|
7. |
Mr. Collier was appointed to the position of CEO of the
Pebble Limited Partnership on February 1, 2014. Mr. Collier is employed
and paid through a subsidiary of the Company. |
|
|
8. |
Mr. Robertson holds the position of Senior Vice President
of Corporate Affairs of the Pebble Limited Partnership. Mr. Robertson is
employed and paid through a subsidiary of the Company. |
|
|
9. |
Mr. Magee does not serve the Company solely on a
full-time basis, and his salary from the Company is allocated based on the
estimated amount of time (93%) (2013-80%, 2012-63%) spent providing
services to the Company and the Pebble Partnership. In 2014, 100% of the
total base salary shown for Mr. Magee was paid for by the Company. In 2013
and 2012 the total base salary shown was paid as follows: a) by the
Company (2013-54%, 2012-66%) and b) by the Pebble Partnership (2013-46%,
2012-34%). |
|
|
10. |
A subsidiary of the Company has a 401(k) retirement
savings plan for U.S. employees whereby employees are able to contribute a
portion of their pay and receive a dollar for dollar Company match up to
6% of their pay, subject to IRS limitations. |
INCENTIVE PLAN AWARDS
Outstanding Share-based Awards and Option-based Awards
The Company currently only has an option-based awards plan and
does not have any share based awards plan. The following table sets out the
option-based awards outstanding as at December 31, 2014, for each NEO:
|
Number of |
|
|
Value of |
|
securities |
|
|
unexercised in- |
|
underlying |
Option exercise |
Option expiration |
the-money |
|
unexercised |
price |
date |
options(1) |
Name |
options (#) |
($) |
m d y |
($) |
|
|
|
|
|
Ronald Thiessen |
|
|
|
|
President and CEO |
480,000 |
1.77 |
Feb-26-2019 (2) |
Nil |
|
|
|
|
|
Marchand Snyman |
480,000 |
1.77 |
Feb-26-2019(2) |
Nil |
CFO |
|
|
|
|
|
|
|
|
|
Thomas C. Collier |
750,000 |
0.89 |
Apr-16-2019(2) |
Nil |
PLP CEO |
|
|
|
|
|
|
|
|
|
Peter Robertson |
|
|
|
|
PLP Senior VP Corporate Affairs |
125,000 |
0.89 |
Apr-16-2019 (2) |
Nil |
Sean Magee |
200,000 |
0.72 |
Sep-15-2019(2) |
Nil |
VP Public Affairs |
100,000 |
1.77 |
Feb-26-2019(2) |
Nil |
|
100,000 |
3.00 |
Jun-29-2017 |
Nil |
Notes:
1. |
The value is the difference between the closing price of
$0.45 per Common Share on the TSX at December 31, 2014 and the exercise
price of options. |
|
|
2. |
Options were granted during the year ended December 31,
2014. |
During the most recently completed financial year, the Company
awarded an aggregate of 5,874,600 options. The following is a summary of the
options awarded during the most recently completed financial year:
1. |
On February 26, 2014, the Company granted 4,494,600
options with an exercise price of $1.77 per Common Share to directors,
employees and other service providers and consultants of the Company. Of
the options granted, an aggregate of 3,050,000 options were awarded to
directors and officers of the Company. The options have either a three or
five year term and vest in two equal tranches: one half vested on date of
grant, the remaining half vest 12 months from the grant date. |
|
|
2. |
On April 16, 2014 the Company granted 1,125,000 options
with an exercise price of $0.89 per Common Share and a five year term to
employees of the Pebble Partnership, which is now a wholly owned
subsidiary of the Company. Of the options granted 1,000,000 share options
vest in three equal tranches: one third vested on date of grant, one third
vest 12 months from the date of the grant and the remaining one third
vests 24 months following the date of the grant. The remaining 125,000
options vest in five equal tranches: one fifth vested on date of grant,
one fifth vest on February 1, 2015, one fifth vest on February 1, 2016,
one fifth vest on February 1, 2017, and one fifth vest on February 1,
2018. |
|
|
3. |
On April 24, 2014 the Company granted 55,500 options with
an exercise price of $0.89 per Common Share and a three year term to
employees of the Pebble Partnership. The share options vest in three equal
tranches: one third vested on date of grant, one third vest 12 months from
the grant date and one third vest 24 months following the grant
date. |
|
|
4. |
On September 15, 2014, the Company granted 200,000
options with an exercise price of $0.72 per Common Share to an officer of
the Company. The options have a five year term and vest in three equal
tranches: one third vested on date of grant, one third vest 12 months from
the grant date and one third vest 24 months following the grant
date. |
Incentive Plan Awards Value Vested or Earned During the
Year
The following table sets out all incentive plans (value vested
or earned) during the year ended December 2014, for each NEO:
|
Option-based awards Value |
Non-equity incentive plan
compensation |
Name |
vested during the
year(1) |
Value earned during the year |
|
($) |
($) |
|
|
|
Ronald Thiessen |
Nil |
Nil |
President and CEO |
|
|
|
|
|
Marchand Snyman |
Nil |
Nil |
CFO |
|
|
|
|
|
Thomas C. Collier |
Nil |
Nil |
PLP CEO |
|
|
|
|
|
Peter Robertson |
Nil |
Nil |
PLP Senior VP Corporate Affairs |
|
|
|
|
|
Sean Magee |
Nil |
Nil |
VP Public Affairs |
|
|
Note:
|
1. |
Represents the aggregate dollar value that would have
been realized if options under the option-based award had been exercised
on the 2014 vesting date determined by taking the difference between the
market price of the shares subject to the option at date of vesting and
the exercise price of the option. |
PENSION PLAN BENEFITS
Except as outlined herein, the Company has no pension or
deferred compensation plans for its NEOs, directors, officers or employees.
A subsidiary of the Company has a 401(k) retirement savings
plan for U.S. employees whereby employees are able to contribute a portion of
their pay and receive a dollar for dollar Company match up to 6% of their pay,
subject to IRS limitations.
TERMINATION AND CHANGE OF CONTROL BENEFITS
Other than Messrs. Collier and Robertson, who have employment
agreements with a wholly-owned subsidiary of the Company, Pebble Services Inc.
("PSI"), there is no written employment contract between the Company and the
remaining NEOs. Messrs. Thiessen, Snyman and Magee all have agreements with
Hunter Dickinson Services Inc. and are seconded to the Company.
There are no compensatory plan(s) or arrangement(s), with
respect to any NEO, other than discussed below, resulting from the resignation,
retirement or any other termination of employment of the officers employment or
from a change of any NEOs responsibilities following a change in control.
Under Mr. Colliers employment agreement, in the event of
termination without cause by the Company or termination by Mr. Collier for good
reason (as defined in the agreement) including a material breach of the
agreement by PSI, constructive dismissal by PSI or termination by the employee
following the six month period after a change of control if the change of
control results in the Company no longer owning any interest in the Pebble
Project, Mr. Collier is entitled to receive an amount equal to two years annual
base salary.
With respect to the payment of the Bonus (see Bonus Compensation
discussed under Incentive Plan Awards), in the event that there is a
positive final ROD:
|
|
within 12 months after the date of termination
without cause or termination for good reason, Mr. Collier will be eligible
to receive 100% of the Bonus; |
|
|
|
|
|
after 12 months but within 24 months from the
date of termination without cause or termination for good reason Mr.
Collier will be eligible to receive 75% of the Bonus; |
|
|
|
|
|
after 24 months but within 36 months of the
date of termination without cause or termination for good reason, Mr.
Collier will be eligible to receive 50% of the Bonus ; and |
|
|
|
|
|
36 months or more after the date of termination
without cause or termination for good reason, no Bonus will be payable to
Mr. Collier. |
In the event that Mr. Colliers employment with PSI is
terminated pursuant to a change of control, then if Mr. Colliers employment is
terminated by PSI without cause or by Mr. Collier for good reason within six
months following a change in control, PSI shall pay the Mr. Collier all
compensation set forth above including payment of the Bonus. In addition each
granted and outstanding share option to purchase shares of common stock of the
Company then held by Mr. Collier will immediately fully vest and become
exercisable in full in accordance with its terms.
For the purposes of Mr. Collier agreement, a change of control
means a sale of a partnership interest in PLP or a merger, a consolidation, a
reorganization or an arrangement that results in a transfer of more than 50% of
the total voting power in PLP to a person or a group of persons different from
that or those holding such voting power immediately prior to such transaction,
other than (i) to a person that already directly or indirectly controls PLP or
(ii) the admittance of another limited partner other than the Northern Dynasty
partners.
Mr. Robertsons employment agreement with PSI states that in
the event that Mr. Robertsons employment with PSI is terminated due to the
following conditions:
|
|
a change of control of the Company; |
|
|
|
|
|
the position is no longer required by the Company;
|
|
|
|
|
|
the Company makes a determination not to proceed with the
project; |
then PSI will provide Mr. Robertson with six months prior
notice of the termination of his employment agreement and Mr. Robertson
employment or six months salary in lieu of notice, or a combination of the two.
The above notice/severance provisions for Mr. Robertson do not
apply if he accepts employment from one of PLPs partner companies on terms and
conditions no less favorable overall than the terms and conditions of his
agreement with PSI.
DIRECTOR COMPENSATION
Philosophy and Objectives
The main objective of director compensation is to attract and
retain directors with the relevant skills, knowledge and abilities to carry out
the Boards mandate.
Director Compensation Table
The compensation provided to the directors, excluding a
director who is included in disclosure for an NEO, for the Companys most
recently completed financial year of December 31, 2014 is:
|
|
|
Non-equity |
|
|
|
|
|
|
incentive |
|
|
|
|
|
Share |
plan |
|
|
|
|
|
option-based |
compensati |
Pension |
All other |
|
|
Fees earned |
awards |
on |
value |
compensation |
Total |
Name |
($) |
($)(4) |
($) |
($) |
($) |
($) |
Scott Cousens(2) |
40,500 |
186,900 |
Nil |
Nil |
Nil |
227,400 |
Robert Dickinson(2) |
165,000 |
427,200 |
Nil |
Nil |
Nil |
592,200 |
Gordon Fretwell(1) |
44,000 |
133,500 |
Nil |
Nil |
Nil |
177,500 |
Russell Hallbauer(2) |
40,500 |
186,900 |
Nil |
Nil |
Nil |
227,400 |
Wayne Kirk(1)(3) |
84,500 |
240,300 |
Nil |
Nil |
Nil |
324,800 |
Peter Mitchell(1) |
49,200 |
133,500 |
Nil |
Nil |
Nil |
182,700 |
Ken Pickering |
40,500 |
133,500 |
Nil |
Nil |
Nil |
174,000 |
Stephen Scott(5) |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
Notes:
1. |
Messrs. Fretwell, Kirk, Mitchell and Pickering provided
services independently of HDSI. Each director of the Company who provided
service independently of HDSI, and who is not an executive officer, was
paid an annual directors fee of: a) $40,500 Base Fee; b) $8,700 for
Chairman of the Audit and Risk Committee; and c) $3,500 for the Chairman
of the Compensation Committee and the Chairman of the NG
Committee. |
|
|
2. |
Fees for Messrs. Cousens, Dickinson and Hallbauer are
paid through HDSI. |
|
|
3. |
Mr. Kirk is sole member and Chairman of the Pebble
Partnership Oversight Committee which is authorized to oversee the
Companys interest in the Pebble Partnership. The Pebble Partnership
Oversight Committee Chairman received an annual fee of $40,500. |
|
|
4. |
The options were granted in February 2014 pursuant to the
Corporations share option plan. For compensation purposes, the
Black-Scholes option valuation model has been used to determine the fair
value on the date of grant using the following assumptions: expected life
of five years, expected volatility of 65.79%, expected dividend yield of
0%, and risk-free interest rate of 1.62%. The Black-Scholes grant date
fair value for these awards was Cdn$0.89 per option which was 50% of the
option exercise price. |
|
|
5. |
Mr. Scott resigned from the Board on February 20,
2014. |
Outstanding Share-based Awards and Option-based
Awards
The following table sets out all option-based awards
outstanding as at December 31, 2014 (as mentioned previously the Company does
not have a share-based awards plan) for each director, excluding a director who
is already set out in disclosure for an NEO for the Company:
|
Option-based Awards |
|
Number of |
|
|
|
|
securities |
Option |
|
|
|
underlying |
exercise |
Option expiration |
Value of unexercised in- |
|
unexercised |
price |
date |
the-money options
(1) |
Name |
options (#) |
($) |
m d y |
($) |
Scott Cousens |
210,000 |
1.77 |
Feb-26-2019(3) |
Nil |
Robert Dickinson |
480,000 |
1.77 |
Feb-26-2019(3) |
Nil |
Gordon Fretwell |
150,000 |
1.77 |
Feb-26-2019(3) |
Nil |
Russell Hallbauer |
210,000 |
1.77 |
Feb-26-2019(3) |
Nil |
Wayne Kirk |
270,000 |
1.77 |
Feb-26-2019(3) |
Nil |
Peter Mitchell |
150,000 |
1.77 |
Feb-26-2019(3) |
Nil |
Ken Pickering |
150,000 |
1.77 |
Feb-26-2019(3) |
Nil |
Stephen Scott (2) |
Nil |
Nil |
Nil |
Nil |
Notes:
1. |
The value is the difference between the closing price of
$0.45 per Common Share on the TSX at December 31, 2014 and the exercise
price of options. |
|
|
2. |
Mr. Scott resigned from the Board on February 20,
2014. |
|
|
3. |
Options were granted during the period ending December
31, 2014. |
Incentive Plan Awards Value Vested or Earned During the
Year
The following table sets out all incentive plans (value vested
or earned) during the year ended December 31, 2014, for each director, excluding
a director who is already set out in disclosure for an NEO for the Company:
|
|
Non-equity incentive plan |
|
Option-based awards Value vested
|
compensation Value earned during
|
Name |
during the year
(1) |
the year |
|
($) |
($) |
Scott Cousens |
Nil |
Nil |
Robert Dickinson |
Nil |
Nil |
Gordon Fretwell |
Nil |
Nil |
Russell Hallbauer |
Nil |
Nil |
Wayne Kirk |
Nil |
Nil |
Peter Mitchell |
Nil |
Nil |
Ken Pickering |
Nil |
Nil |
Stephen Scott (2) |
Nil |
Nil |
Notes:
1. |
Represents the aggregate dollar value that would have
been realized if options under the option-based award had been exercised
on the vesting date, determined by taking the difference between the
market price of the shares subject to the share option at date of vesting
and the exercise price of the share option. |
2. |
Mr. Scott resigned from the Board on February 20,
2014. |
Given the evolving nature of the Corporations business, the
Board continues to review and redesign the overall compensation plan for senior
management so as to continue to address the objectives identified above.
In this regard the Compensation Committee and the Board propose
to recommend that shareholders approve a Restricted Share Unit ("RSU") Plan and
a Deferred Share Unit ("DSU") Plan to align executive directors compensation
with shareholders. See "Particulars of Matters to be Acted On" for a
description of the RSU Plan and the DSU Plan.
In April, 2015 a conditional grant of $426,000 of RSUs to Mr.
Collier was also approved which grant is to be unconditional assuming
shareholder approval of the RSU Plan.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER
EQUITY COMPENSATION PLANS
See disclosure under "Statement of Executive Compensation
Equity Participation Option Based Awards" concerning the Companys Rolling
Share Option Plan (the "Option Plan") which was last approved and ratified by
shareholders on June 19, 2014 for a three year period. Under the Option Plan,
options may be granted in an amount up to 10% of the outstanding shares. As
outstanding share options are exercised, additional share options may be granted
to replace the exercised options. In addition, as the number of issued and
outstanding Common Shares of the Company increases, the number of share options
available for granting to eligible optionees will increase. As at the date
hereof there are share options outstanding to purchase an aggregate of
7,555,800 Common Shares representing approximately 7% of Common
Shares outstanding.
The following is a summary of the material terms of the
Option Plan:
(a) |
Persons who are directors, officers, employees, or
consultants to the Company or its affiliates, or who are employees of a
management company providing services to the Company are eligible to
receive grants of options under the Option Plan. |
|
|
(b) |
Options may be granted only to an individual or to a
company that is owned by individuals eligible for an option grant. If the
option is granted to a company, the company must undertake that it will
not permit any transfer of its shares, nor issue further shares, to any
other individual or entity as long as the incentive stock option remains
in effect without the consent of the TSX. |
|
|
(c) |
All options granted under the Option Plan may be
exercisable only by the Optionee to whom they have been granted and the
options are non-assignable and non-transferable, except that in the case
of the death of an Optionee, any vested option held by the deceased
Optionee at the date of death will become exercisable by the Optionees
lawful personal representatives, heirs or executors until the earlier of
(1) one year after the date of death of such Optionee and (2) the date of
expiration of the term otherwise applicable to such Option. |
|
|
(d) |
Vesting of options is determined by the Board and subject
to the following: |
|
|
where an Optionee has left the Companys
employ/office or has been advised their services are no longer required or
their service contract has expired, subject to other provisions set out in
the Option Plan, vested options expire on the earlier of the expiry date
of the option or 90 days after the date the Optionee ceases to be employed
by, provide services to, or be a director or officer of, the Company, and
all unvested options immediately terminate without right to exercise same
unless the Board otherwise resolves; |
|
|
|
|
|
in the case of the death of an Optionee, any
vested Option held by him at the date of death will become exercisable by
the Optionees lawful personal representatives, heirs or executors until
the earlier of one year after the date of death of such Optionee and the
date of expiration of the term otherwise applicable to such Option; |
|
|
|
|
|
in the case of an Optionee being dismissed from
employment or service for cause, such Optionees options, whether or not
vested at the date of dismissal, immediately terminate without right to
exercise same; |
|
|
in the event of a change of control occurring,
options granted to directors and officers which are subject to vesting
provisions are deemed to have immediately vested upon the occurrence of
the change of control; and |
|
|
|
|
|
in the event of a director not being nominated
for re-election as a director of the Company, although consenting to act
and being under no legal incapacity which would prevent the director from
being a member of the Board, options granted which are subject to a
vesting provision are deemed to have vested on the date of Meeting upon
which the director is not re- elected; |
(e) |
All options granted under the Option Plan are exercisable
for a period of up to 5 years and will vest at the discretion of the
Board, provided that the term of such options may be extended in
circumstances where the expiry date otherwise falls during a black-out
period (defined below) as determined in accordance with the Companys
policies or applicable securities legislation, and subject
to: |
|
(i) |
the Optionee remaining employed by or continuing to
provide services to the Company or any of its subsidiaries and affiliates
as well as, at the discretion of the Board, achieving certain milestones
which may be defined by the Board from time to time or receiving a
satisfactory performance review by the Company or its subsidiary or
affiliate during the vesting period; or |
|
|
|
|
(ii) |
remaining as a director of the Company or any of its
subsidiaries or affiliates during the vesting
period. |
A blackout period is any period of
time during which a participant in the Option Plan is unable to trade securities
of the Company as a consequence of the implementation of a general restriction
on trading by an authorized Officer or Director pursuant to the Companys
governance policies that authorize general and/or specific restrictions on
trading by service providers in circumstances where there may exist undisclosed
material changes or undisclosed material facts in connection with the Companys
affairs. The term of an option will expire on its Expiry Date as defined in the
Option Plan unless the Expiry Date occurs during a blackout period or within
five business days after the expiry of the blackout period, in which case the
Expiry Date for that Option will be the date that is the tenth business day
after the date the blackout period expires.
(f) |
The exercise price of the option is established by the
Board at the time the option is granted, provided that the minimum
exercise price shall not be less than the weighted average trading price
of the Companys shares on the TSX for the five trading days preceding the
date of the grant. |
|
|
(g) |
The number of Common Shares that may be issuable to
directors who are independent directors of the Company, when combined with
all of the Companys other share compensation arrangements currently in
effect for their benefit, may not exceed 1% of the Companys outstanding
Common Shares. |
|
|
(h) |
Subject to the policies of the TSX, the Option Plan may
be amended by the Board without further shareholder approval
to: |
|
(i) |
make amendments which are of a typographical, grammatical
or clerical nature; |
|
|
|
|
(ii) |
change the vesting provisions of an option granted under
the Option Plan; |
|
|
|
|
(iii) |
change the termination provision of an option granted
under the Option Plan, if it does not entail an extension beyond the
original expiry date of such option; |
|
|
|
|
(iv) |
add a cashless exercise feature payable in cash or Common
Shares; |
|
|
|
|
(v) |
make amendments necessary as a result in changes in
securities laws applicable to the Company; |
|
|
|
|
(vi) |
make such amendments as may be required by the policies
of such senior stock exchange or stock market if the Company becomes
listed or quoted on a stock exchange or stock market senior to the TSX;
and |
|
(vii) |
make such amendments as reduce, and do not increase, the
benefits of the Option Plan to Optionees. |
(i) |
The Plan has the following additional
restrictions: |
|
(i) |
common shares to be issued to Insiders under the Plan,
when combined with all of the Companys other share compensation
arrangements, may not exceed 10% of the outstanding Common Shares in any
12 month period; |
|
|
|
|
(ii) |
common shares being issuable to independent directors
under the Plan, when combined with all of the Companys other share
compensation arrangements, may not exceed 1% of the outstanding Common
Shares of the Company from time to time; and |
|
|
|
|
(iii) |
a reduction in the exercise price of an option granted
hereunder to an Insider or an extension of the term of an option granted
hereunder benefiting an Insider, would require the approval of the
disinterested shareholders (defined below) of the
Company. |
Disinterested Shareholder approval shall be required in respect
of:
|
a. |
any amendment which reduces the Exercise Price of an
Option; |
|
|
|
|
b. |
any amendment to extend the term of an option granted to
an Insider; |
|
|
|
|
c. |
amendments to increase any of the limits on the number of
Options that may be granted; |
|
|
|
|
d. |
any amendment that may permit an increase to the proposed
limit on independent director participation; |
|
|
|
|
e. |
any amendment relating to the transferability or
assignability of an Option; and |
|
|
|
|
f. |
any amendments required to be approved by shareholders
under applicable law. |
The Plan provides for the granting of Options that meet the
definition of Incentive Stock Options under the United States Internal Revenue
Code. Subject to adjustment for general changes to the Common Shares, the total
number of Common Shares which may be issued pursuant to such Incentive Stock
Options is limited to 5,000,000 Common Shares.
A "disinterested shareholder" means a shareholder that is not
an Insider eligible to receive options under the Plan, and who is not an
Associate of an Insider. An "Insider" is a director or an officer of the
Company, a director or an officer of a company that is itself an Insider or a
subsidiary of an Insider, or a person that has beneficial ownership of and/or
control or direction, either directly or indirectly, over, securities of the
Company carrying more than 10% of the voting rights attached to all the
Companys outstanding voting securities.
Equity Compensation Plan Information
The following table sets out equity compensation plan
information as at the end of the financial year ended December 31, 2014.
|
Number of shares to |
Weighted-average |
Number of securities |
|
be issued upon |
exercise price of |
remaining available for |
|
exercise of |
outstanding share |
future issuance under |
|
outstanding share |
options, warrants and |
equity compensation |
|
options, warrants and |
rights |
plans (excluding |
|
rights (1) |
|
securities reflected in |
|
|
|
column (a)) |
Plan Category |
(a) |
(b) |
(c) |
Equity compensation plan |
7,687,000 |
$1.95 |
1,813,986 |
approved by security holders |
|
|
|
(the Share Option Plan) |
|
|
|
Equity compensation plans not |
N/A |
N/A |
N/A |
approved by security holders |
|
|
|
Total |
7,687,000 |
$1.95 |
1,813,986 |
INDEBTEDNESS OF DIRECTORS AND EXECUTIVE
OFFICERS
No directors, proposed nominees for election as directors,
executive officers or their respective associates or affiliates, or other
management of the Company were indebted to the Company as of the end of the most
recently completed financial year or as at the date hereof.
INTEREST OF INFORMED PERSONS IN MATERIAL
TRANSACTIONS
To the knowledge of management of the Company, no informed
person (a director, officer or holder of 10% or more of the Common Shares) or
nominee for election as a director of the Company or any associate or affiliate
of any informed person or proposed director had any interest in any transaction
which has materially affected or would materially affect the Company or any of
its subsidiaries during the year ended December 31, 2014, or has any interest in
any material transaction in the current year. Informed persons can be said to
have an interest in the proposed DSU and RSU as it should be expected they will
participate in the plans at some point but such participation has not yet been
determined.
MANAGEMENT CONTRACTS
There are no management functions of the Company, which are to
any substantial degree performed by a person or company other than the directors
or senior officers of the Company.
HDSI is a private company which is owned privately by persons
some of whom are directors of the Company: Messrs. Dickinson, Cousens,
Hallbauer, Thiessen and Snyman. HDSI provides geological, corporate development,
administrative and management services to, and incurs third party costs on
behalf of, the Company and its subsidiaries at annually set rates pursuant to an
agreement dated July 2, 2010 (the "Agreement") which rates do not exceed the
fair market value of such services. During the year ended December 31, 2014, the
Company paid HDSI approximately $4.9 million (2012 $4.2 million) for services
rendered by HDSI and reimbursed HDSI approximately $0.8 million (2012 - $0.8
million) for third party costs incurred by HDSI on the Companys behalf. Certain
members of the Companys senior management are employed directly by HDSI rather
than by Northern Dynasty.
PARTICULARS OF MATTERS TO BE ACTED UPON
In addition to the annual matters requiring Shareholder
approval, which are described in detail above, namely the election of directors
and appointment of the auditors for the ensuing year, the Company is seeking
Shareholder approval of a proposed Deferred Share Unit (DSU) Plan and
Restricted Share Unit (RSU) Plan. The purpose of the DSU and RSU Plans is to
provide non-executive directors, employees, management and other service
providers (the Eligible Persons) with the opportunity to receive equity based
compensation and incentives, thereby (i) increasing the proprietary interests of
the Eligible Persons in the Company, (ii) aligning the interests of such
Eligible Persons with the interests of the Companys Shareholders (iii)
encouraging such Eligible Persons to remain associated with the Company, and
(iv) substituting equity based compensation for cash based compensation.
The DSU and RSU Plans have been filed on SEDAR at www.sedar.com
and will be available for inspection and placed before the Shareholders for
approval at the Meeting. Following the Meeting and subject to Shareholder and
TSX approvals of each of the DSU Plan and the RSU Plan, the two plans along with
the Companys share Option Plan will together comprise all equity based
compensation (Equity Based Compensation) issuable by the Company. The maximum
aggregate amount allowable at any one time of all outstanding Equity Based
Compensation plans will be 10% of the issued and outstanding Common Shares of
the Company.
DEFERRED SHARE UNIT PLAN
Summary of the DSU Plan
Set out below is a summary of the DSU Plan. A complete copy of
the DSU Plan is available to be downloaded at www.sedar.com along with this
Information Circular. Capitalized terms used, but not defined herein have the
meaning ascribed to them in the DSU Plan.
Administration of Plan
The Compensation Committee shall administer the DSU Plan. The
DSU Plan provides that DSUs will be awarded at the discretion of the Board but
also provides that non-executive directors may elect to receive up to 100% of
their annual compensation amount (the Annual Base Compensation) in DSUs. A DSU
is a unit credited to a Participant by way of a bookkeeping entry in the books
of the Company, the value of each DSU is equivalent to one Common Share. All
DSUs paid with respect to Annual Base Compensation will be credited to the
director by means of an entry in a notional account in their favour on the books
of the Company (a DSU Account) when such Annual Base Compensation is payable.
The directors DSU Account will be credited with the number of DSUs calculated
to the nearest thousandth of a DSU, determined by dividing the dollar amount of
compensation payable in DSUs on the payment date by the Share Price of a Common
Share at the time. Share Price is defined in the DSU Plan and means (if the
Common Shares are listed and posted for trading on the TSX) the closing price of
a Common Share on the TSX averaged over the five (5) consecutive trading days
immediately preceding the date of grant or the redemption date, as the case may
be. Fractional Common Shares will not be issued and any fractional entitlements
will be rounded down to the nearest whole number.
Additionally, the Board may award such number of DSUs to a
non-executive director as the Board deems advisable to provide the director with
appropriate equity-based compensation for the services he or she renders to the
Company. The Board shall determine the date on which such DSUs may be granted
and the date as of which such DSUs shall be credited to the directors DSU
Account. The Company and a director who receives such an additional award of
DSUs shall enter into a DSU award agreement to evidence the award and the terms
applicable thereto.
Generally, a participant in the DSU Plan shall be entitled to
redeem his or her DSUs during the period commencing on the business day
immediately following the date upon which the non-executive director ceases to
hold any position as a director of the Company and its subsidiaries and is no
longer otherwise employed by the Company or its subsidiaries, including in the
event of death of the participant (the Termination Date) and ending on the
90th day following the Termination Date, provided, however that for U.S.
Eligible Participants, redemption will be made upon such Participants
separation from service as defined under Internal Revenue Code Section 409A.
Redemptions of DSUs under the DSU Plan may be in Common Shares issued from
treasury (subject to the Shareholder approval being sought at this Meeting), may
be purchased by the Company on the open market for delivery to the former
director, may be settled in cash, or any combination of the foregoing.
Maximum Number of Common Shares Issuable for DSUs
DSUs may be granted in accordance with the DSU Plan, provided
the aggregate number of DSUs outstanding pursuant to the DSU Plan from time to
time does not exceed 2.0% of the issued and outstanding Common Shares from time
to time. The maximum number of Common Shares issuable pursuant to all Security
Based Compensation Arrangements (including all of Option, DSU and RSU Plans), at
any time, including all Common Shares, options or other rights to purchase or
otherwise acquire Common Shares that are granted to Insiders, shall not exceed
10% of the total number of outstanding Common Shares.
The DSU Plan provides that the maximum number of Common Shares
issuable to insiders (as that term is defined by the TSX) pursuant to the DSU
Plan, together with any Common Shares issuable pursuant to any other security-
based compensation arrangement of the Company, within a one year period, will
not exceed 10% of the total number of outstanding Common Shares.
Transferability
No right to receive payment of deferred compensation or
retirement awards shall be transferable or assignable by any participant under
the DSU Plan except by will or laws of descent and distribution.
Amendments to the DSU Plan
In the event of Shareholder approval of the DSU Plan, the Board
may at any time, and from time to time, and without shareholder approval, amend
any provision of the DSU Plan, subject to any regulatory or stock exchange
requirement at the time of such amendment, including, without limitation:
(a) |
for the purposes of making formal minor or
technical modifications to any of the provisions of the DSU Plan including
amendments of a clerical or housekeeping nature; |
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(b) |
to correct any ambiguity, defective provision,
error or omission in the provisions of the DSU Plan; |
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(c) |
amendments to the termination provisions of the
DSU Plan; |
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(d) |
amendments necessary or advisable because of
any change in applicable laws; |
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(e) |
amendments to the transferability of DSUs;
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(f) |
amendments relating to the administration of
the DSU Plan; or |
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(g) |
any other amendment, fundamental or otherwise,
not requiring shareholder approval under applicable laws; |
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provided, however, that: |
(h) |
no such amendment of the DSU Plan may be made without the
consent of each affected participant in the DSU Plan if such amendment
would adversely affect the rights of such affected participant(s) under
the DSU Plan; and |
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(i) |
shareholder approval shall be obtained in accordance with
the requirements of the TSX for any amendment: |
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a. |
to increase the maximum number of Common Shares which may
be issued under the DSU Plan; |
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b. |
to the amendment provisions of the DSU Plan; or |
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c. |
to expand the definition of
Participant. |
Certain United States Federal Income Tax
Consequences
The following is a summary of the principal U.S. federal income
tax consequences generally applicable to DSUs awarded under the DSU Plan. The
following description applies to DSUs that are subject to U.S. federal income
tax. The grant of DSUs and the crediting of DSUs to a Directors DSU Account
should not result in taxable income to the Director at the time of grant. When
DSUs are paid out, the Director will recognize ordinary income equal to the fair
market value of the Common Shares and cash received in settlement of the DSUs,
and the Company will be entitled at that time to a corporate income tax
deduction (for U.S. federal income tax purposes) for the same amount, subject to
the general rules concerning deductibility of compensation. A Directors basis
in any Common Shares received will equal the fair market value of the Common
Shares at the time the Director recognized ordinary income. If, as usually is
the case, the Common Shares are a capital asset in the Directors hands, any
additional gain or loss recognized on a subsequent sale or exchange of the
Common Shares will not be ordinary income but will qualify as capital gain or
loss. To the extent that a Directors DSUs are subject to U.S. federal income
tax and to taxation under the Income Tax Act (Canada), DSUs awarded under the
DSU Plan are intended to comply with Section 409A of the Internal Revenue Code
and to avoid adverse tax consequences under paragraph 6801(d) of the regulations
under the Income Tax Act (Canada), To that end, the DSU Plan contains certain
forfeiture provisions that could apply to DSUs awarded under the DSU Plan in
limited circumstances.
The TSX has conditionally approved the DSU Plan, subject to
approval of the Shareholders.
Based on the foregoing, Shareholders are requested to consider
and, it thought advisable, to pass the following ordinary resolution approving
the DSU Plan (the DSU Plan Resolution, with or without variation:
BE IT RESOLVED, as an ordinary resolution, that:
|
1. |
that the Deferred Share Unit Plan allowing for the
issuance of a maximum of that number of Common Shares from treasury equal
to 2.0% of the Common Shares of the Company issued and outstanding from
time to time, a copy of which is filed on SEDAR at www.sedar.com, be and
is hereby approved; and |
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2. |
all currently available and unallocated Deferred Share
Units issuable pursuant to the DSU Plan be and are hereby approved and
authorized for grant until July 7, 2018. |
The Board unanimously recommends that Shareholders vote FOR
the DSU Plan Resolution set out above. In the absence of contrary
instruction, the person(s) designated by management of the Company in the
enclosed form of proxy intend to vote FOR the DSU Plan Resolution. Greater than
50% of the votes cast by Shareholders present in person or by proxy is required
to approve the DSU Plan Resolution.
RESTRICTED SHARE UNIT PLAN
Summary of the RSU Plan
Set out below is a summary of the Restricted Share Unit Plan
(the RSU Plan). A complete copy of the RSU Plan is available to be
downloaded at www.sedar.com along with this Information Circular. Capitalized
terms used, but not defined herein have the meaning ascribed to them in the RSU
Plan.
In April, 2015 the board of directors approved the grant of
$426,000 in RSUs to Mr. Collier. This grant will be effected and the number of
RSUs calculated following shareholder approval of the RSU Plan.
Eligible Participants
The RSU Plan would be administered by the Compensation
Committee of the Board. Employees, directors and eligible consultants of the
Company and its designated subsidiaries are eligible to participate in the RSU
Plan. RSUs awarded to participants are credited to them by means of an entry in
a notional account in their favour on the books of the Company. Each RSU awarded
conditionally entitles the participant to receive one Common Share (or the cash
equivalent) upon attainment of the RSU vesting criteria.
Vesting
The vesting (i.e. fulfillment of conditions required for
absolute entitlement) of RSUs is conditional upon the expiry of a time-based
vesting period. The duration of the vesting period and other vesting terms
applicable to the grant of the RSUs shall be determined at the time of the grant
by the Compensation Committee.
Once the RSUs vest, the participant is entitled to receive the
equivalent number of underlying Common Shares or cash equal to the Market Value
of the equivalent number of Common Shares. The vested RSUs may be settled
through the issuance of Common Shares from treasury (subject to the Shareholder
approval being obtained at the Meeting), by the delivery of Common Shares
purchased in the open market, in cash or in any combination of the foregoing (at
the discretion of the Company). If settled in cash, the amount shall be equal to
the number of Common Shares in respect of which the participant is entitled
multiplied by the Market Value of a Common Share on the payout date. Market
Value per share is defined in the RSU Plan and means, as at any date (if the
Common Shares are listed and posted for trading on the TSX), the arithmetical
average of the closing price of the Common Shares traded on the TSX for
the five (5) trading days on which a board lot was traded immediately preceding
such date. The RSUs may be settled on the payout date, which shall generally be
before the third anniversary of the date of the grant. The expiry date of RSUs
will be determined by the Committee at the time of grant. However, the maximum
term for all RSUs is three years. All RSUs for which vesting cannot be satisfied
due to a departure from the Company, would be available for future grants.
Maximum Number of Common Shares Issuable
RSUs may be granted in accordance with the RSU Plan provided
the aggregate number of RSUs outstanding pursuant to the RSU Plan from time to
time shall not exceed 3.0% of the number of issued and outstanding Common Shares
from time to time. Furthermore, the maximum number of Common Shares issuable
pursuant to all Security Based Compensation Arrangements (i.e. Option, DSU and
RSU Plans), at any time, shall not exceed 10% of the total number of outstanding
Common Shares.
The RSU Plan provides that the maximum number of Common Shares
issuable to insiders (as that term is defined by the TSX) pursuant to the RSU
Plan, together with any Common Shares issuable pursuant to any other
security-based compensation arrangement of the Company, will not, at any time,
exceed 10% of the total number of outstanding Common Shares.
The RSU Plan provides that the maximum number of Shares issued
to Insiders (as that term is defined by the TSX) pursuant to the RSU Plan,
together with any Common Shares issuable pursuant to any other security-based
compensation arrangement of the Company, within any one year period, shall not
exceed 10% of the total number of weighted average number of common shares
outstanding during the year.
Cessation of Entitlement
Unless otherwise determined by the Company in accordance with
the RSU Plan, RSUs which have not vested on a participants termination date
shall terminate and be forfeited. If a participant who is an employee ceases to
be an employee as a result of termination of employment without cause, in such
case, at the Companys discretion (unless otherwise provided in the applicable
Grant Agreement), all or a portion of such participants RSUs may be permitted
to continue to vest, in accordance with their terms, during any statutory or
common law severance period or any period of reasonable notice required by law
or as otherwise may be determined by the Company in its sole discretion. All
forfeited RSUs are available for future grants.
Transferability
RSUs are not assignable or transferable other than by operation
of law, except, if and on such terms as the Company may permit, to certain
family members and private affiliate companies of the participants.
Amendments to the RSU Plan
In the event of receipt of Shareholders approval for the RSU
Plan, the Board may, without notice, at any time and from time to time, without
shareholder approval, amend the RSU Plan or any provisions thereof in such
manner as the Board, in its sole discretion, determines appropriate including,
without limitation:
|
(a) |
for the purposes of making formal minor or technical
modifications to any of the provisions of the RSU Plan; |
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(b) |
to correct any ambiguity, defective provision, error or
omission in the provisions of the RSU Plan; |
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(c) |
to change the vesting provisions of RSUs; |
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(d) |
to change the termination provisions of RSUs or the RSU
Plan that does not entail an extension beyond the original expiry date of
the RSU; |
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(e) |
to preserve the intended tax treatment of the benefits
provided by the RSU Plan, as contemplated therein;
or |
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(f) |
any amendments necessary or advisable because
of any change in applicable laws; |
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provided, however, that: |
|
(g) |
no such amendment of the RSU Plan may be made without the
consent of each affected participant if such amendment would adversely
affect the rights of such affected participant(s) under the RSU Plan;
and |
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(h) |
Shareholder approval shall be obtained in accordance with
the requirements of the TSX for any amendment that results
in: |
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i. |
an increase in the maximum number of Common Shares
issuable pursuant to the RSU Plan other than as already contemplated in
the RSU Plan; |
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ii. |
an extension of the expiry date for RSUs granted to
insiders under the RSU Plan; |
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iii. |
other types of compensation through Common Share
issuance; |
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iv. |
expansion of the rights of a participant to assign RSUs
beyond what is currently permitted in the RSU Plan; or |
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v. |
the addition of new categories of Participants, other
than as already contemplated in the RSU Plan. |
Certain United States Federal Income Tax Consequences
The following is a summary of the principal U.S. federal income
tax consequences generally applicable to RSUs awarded under the RSU Plan. The
following description applies to RSUs that are subject to U.S. federal income
tax. The grant of RSUs should not result in taxable income to the Participant at
the time of grant. When RSUs are paid out, the Participant will recognize
ordinary income equal to the fair market value of the Common Shares and cash
received in settlement of the RSUs, and the Company will be entitled at that
time to a corporate income tax deduction (for U.S. federal income tax purposes)
for the same amount, subject to the general rules concerning deductibility of
compensation. A Participants basis in any Common Shares received will equal the
fair market value of the Common Shares at the time the Participant recognized
ordinary income. If, as usually is the case, the Common Shares are a capital
asset in the Participants hands, any additional gain or loss recognized on a
subsequent sale or exchange of the Common Shares will not be ordinary income but
will qualify as capital gain or loss.
The TSX has conditionally approved the RSU Plan, subject to
approval of the Shareholders. Shareholders are requested to consider and, if
thought advisable, to pass the following ordinary resolution approving the RSU
Plan, with or without variation:
BE IT RESOLVED, as an ordinary resolution, that:
|
1. |
that the Restricted Share Unit Plan allowing for the
issuance of a maximum of that number of Common Shares from treasury equal
to 3.0% of the Common Shares of the Company issued and outstanding from
time to time, a copy of which is filed on SEDAR at www.sedar.com, be and
is hereby approved; and |
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|
2. |
the $426,000 in RSUs conditionally granted to the CEO Mr
Collier in April, 2015 are hereby ratified, confirmed and approved;
and |
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|
3. |
all currently available and unallocated RSUs issuable
pursuant to the RSU Plan be and are hereby approved and authorized for
grant until July 7, 2018. |
The Board recommends that Shareholders vote FOR the RSU Plan
Resolution set out above and the Company has been advised that the Directors
and senior officers of the Company intend to vote all common shares held by them in favour of the RSU Plan Resolution. In
the absence of a contrary instruction, the person(s) designated by management of
the Company in the enclosed form of proxy intent to vote FOR the RSU Plan
Resolution, including for the Common Shares to be taken from treasury and set
aside for issuance under the RSU Plan. Greater than 50% of the votes cast by
Shareholders present in person or by proxy are required to approve the RSU Plan
Resolution.
ADDITIONAL INFORMATION
Additional information relating to the Company is included in
the Companys Annual Information Form and in the audited financial statements
for the years ended December 31, 2014 and 2013, auditors report, and related
management discussion and analysis filed under the Companys profile on SEDAR at
www.sedar.com. Copies of the Companys most recent interim financial
statements and related management discussion and analysis, and additional
information, may also be obtained from SEDAR at www.sedar.com under the
Companys profile and upon request from the Company at telephone no. (604)
684-6365 or fax number (604) 684-8092.
OTHER MATTERS
The Board of Directors is not aware of any other matters which
it anticipates will come before the Meeting as of the date of mailing of this
Information Circular.
The contents of this Information Circular and its distribution
to shareholders have been approved by the Board of Directors.
DATED at Vancouver, British Columbia, June 8 , 2015.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Ronald Thiessen
Ronald Thiessen
President and Chief Executive
Officer
Request for Annual and Interim Financial Statements and
MD&A
Under National Instrument 51-102 Continuous Disclosure
Obligations ("NI 51-102"), Northern Dynasty Minerals Ltd. (the "Company") is
only required to deliver annual and interim financial statements and the related
Managements Discussion & Analysis ("MD&A") to a person or company which
owns common shares of the Company that requests them. If you wish to receive
the Companys annual financial statements and annual MD&A or interim
financial statements and interim MD&A, you should complete the Return Form
(the "Return Form") on the last page hereof. Please forward the completed Return
Form to the Company at the following address:
NORTHERN DYNASTY MINERALS LTD.
15th Floor, 1040 West Georgia Street
Vancouver, BC V6E 4H1
Tel: 604-684-6365
Fax:
604-684-8092
Toll Free: 1 800 667-2114
The Company reserves the right, in its discretion, to determine
to send the annual financial statements and MD&A, or any interim financial
statements and MD&A, to all registered holders, or all registered holders
and beneficial owners who are identified under NI 51-102 as having chosen to
receive securityholder materials sent to beneficial owners of securities,
notwithstanding elections which such holders or beneficial owners may make
under the Return Form.
Failure to return the Return Form or otherwise specifically
request a copy of financial statements or MD&A will override a beneficial
owners standing instructions under NI 51-102 in respect of such financial
statements and MD&A. So, notwithstanding whether you have given previous
instructions regarding delivery of materials, if you would like to receive the
annual or interim financial statements together with MD&A, you should
complete and return this form to the Company.
Please note that a Return Form will be mailed to you each
year. This Return Form is a request to receive
(i) |
annual financial statements and MD&A for the fiscal
year ending December 31, 2014 and/or |
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(ii) |
interim financial statements and MD&A which the
Company may send to securityholders in 2015 and any other period prior to
the Company sending a new request form and/or |
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(iii) |
annual financial statements and MD&A for the fiscal
year ending December 31, 2015. |
If you wish to receive copies of financial statements or
MD&A for any earlier period, you should send a separate request specifying
the requested financial statements and MD&A.
A copy of the Companys financial statements and MD&A may
be accessed under the Companys profile on SEDAR at www.sedar.com.
* * * * * * * * * * * *
(COMPLETE AND RETURN THIS FORM)
RETURN FORM
NORTHERN DYNASTY MINERALS LTD. (the Company)
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(i) |
(Please mark the appropriate box with a
X) |
Registered Holder
[ ] |
The undersigned is a registered holder of
common shares of the Company and: |
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(b) |
hereby requests that the undersigned be sent a
copy of the Annual Financial Statements for the fiscal year
ended December 31, 2014 and the MD&A for such statements |
[ ] |
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(c) |
hereby requests that the undersigned be sent a
copy of the Interim Financial Statements and the MD&A for
such statements for all fiscal quarters in 2015 and any subsequent
quarters before a new Return Form is sent by the Company |
[ ] |
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(d) |
hereby requests that the undersigned be sent a
copy of the Annual Financial Statements for the fiscal year
ended December 31, 2015 and the MD&A for such statements |
[ ] |
Non-Registered Holder
[ ] |
The undersigned is a beneficial holder of
common shares of the Company and: |
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(a) |
hereby requests that the undersigned be sent a
copy of the Annual Financial Statements for the fiscal year
ended December 31, 2014 and the MD&A for such statements |
[ ] |
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(b) |
hereby requests that the undersigned be sent a
copy of the Interim Financial Statements and MD&A for such
statements for all fiscal quarters in 2015 and any subsequent
quarters before a new Return Form is sent by the Company |
[ ] |
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(c) |
hereby requests that the undersigned be sent a
copy of the Annual Financial Statements for the fiscal year
ended December 31, 2015 and the MD&A for such statements |
[ ] |
The undersigned acknowledges that this request shall expire and
cease to have effect if the undersigned ceases to be either a registered holder
or beneficial owner of securities of the Company.
Name: |
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(please print) |
Address: |
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Postal/Zip Code |
Signature: |
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Date: |
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FOR BENEFICIAL HOLDERS WHO DO NOT WANT TO DISCLOSE THEIR
NAMES AND ADDRESS BUT WHO WANT TO RECEIVE A COPY OF THE ANNUAL FINANCIAL
STATEMENTS AND MD&A AND/OR INTERIM FINANCIAL STATEMENTS AND MD&A, PLEASE
CONTACT YOUR BROKER OR INTERMEDIARY.
Please indicate below if you would like to receive
Northern Dynasty Minerals Ltd. news releases by either one |
of the following
methods: |
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|
News Releases:
[ ] Email ______________________________________ |
[
] Fax ______________________________________ |
Email
address |
Fax
Number |
NORTHERN DYNASTY MINERALS LTD.
2015 RESTRICTED
SHARE UNIT PLAN
1. |
PURPOSE |
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|
1.1 |
This Plan has been established by the Corporation to
assist the Corporation in the recruitment and retention of highly
qualified employees and consultants by providing a means to reward
superior performance, to motivate Participants under the Plan to achieve
important corporate and personal objectives and, through the issuance of
Share Units in the Corporation to Participants under the Plan, to better
align the interests of Participants with the long-term interests of
Shareholders. |
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2. |
PLAN DEFINITIONS AND
INTERPRETATIONS |
In this Plan, the following terms have
the following meanings:
|
(a) |
Account means the bookkeeping account
established and maintained by the Corporation for each Participant in
which the number of Share Units of the Participant are recorded; |
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(b) |
Applicable Law means any applicable provision of
law, domestic or foreign, including, without limitation, applicable
securities legislation, together with all regulations, rules, policy
statements, rulings, notices, orders or other instruments promulgated
thereunder and Stock Exchange Rules; |
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(c) |
Beneficiary means any person designated by the
Participant as his or her beneficiary under the Plan in accordance with
Section 14.1 or, failing any such effective designation, the Participants
legal representative; |
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(d) |
Board means the Board of Directors of the
Corporation; |
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(e) |
Change of Control
means: |
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(i) |
the acquisition whether directly or indirectly, by a
person or company, or any persons or companies acting jointly or in
concert (as determined in accordance with the Securities Act (British
Columbia) and the rules and regulations thereunder) of voting securities
of the Corporation which, together with any other voting securities of the
Corporation held by such person or company or persons or companies,
constitute, in the aggregate, more than 50% of all outstanding voting
securities of the Corporation; |
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(ii) |
(an amalgamation, arrangement or other form of business
combination of the Corporation with another company which results in the
holders of voting securities of that other company holding, in the
aggregate, 50% or more of all outstanding voting securities of the
Corporation (including a merged or successor company) resulting from the
business combination; or |
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2015 RESTRICTED SHARE UNIT PLAN
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|
(iii) |
the sale, lease or exchange of all or substantially all
of the property of the Corporation to another person, other than a
subsidiary of the Corporation or other than in the ordinary course of
business of the Corporation; |
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(f) |
Committee means the Compensation Committee of
the Board or any other committee or person designated by the Board to
administer the Plan, provided, however, if the Company ceases to qualify
as a foreign private issuer (as defined in Rule 3b-4 under the Exchange
Act), the Committee shall be a committee of the Board comprised of not
less than two directors, and each member of the Committee shall be a
non-employee director within the meaning of Rule 16b-3; |
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(g) |
Corporation means Northern Dynasty Minerals Ltd.
and its respective successors and assigns, and any reference in the Plan
to action by the Corporation means action by or under the authority of the
Board or any person or committee that has been designated for the purpose
by the Board including, without limitation, the Committee; |
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(h) |
Designated Subsidiary means an entity (including
a partnership) in which the Corporation holds, directly or indirectly, a
majority voting interest and which has been designated by the Corporation
for purposes of the Plan from time to time; |
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(i) |
Director means a director of the
Corporation; |
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(j) |
Eligible Consultant means an individual, other
than an Employee, that (i) is engaged to provide on a bona fide
basis consulting, technical, management or other services to the
Corporation or any Designated Subsidiary under a written contract between
the Corporation or the Designated Subsidiary and the individual or a
company of which the individual consultant is an employee, (ii) in the
reasonable opinion of the Corporation, spends or will spend a significant
amount of time and attention on the affairs and business of the
Corporation or a Designated Subsidiary, and (iii) does not provide
services in connection with the offer or sale of securities in a
capital-raising transaction and do not directly or indirectly promote or
maintain a market for the registrant's securities; |
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(k) |
Employee means an employee of the Corporation or
any of its Designated Subsidiaries or any combination or partnership of
such corporations; |
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(l) |
Employer means the Corporation, the Designated
Subsidiary or the combination or partnership of such corporations that
employs the Participant or that employed the Participant immediately prior
to the Participants Termination Date; |
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(m) |
Exchange Act means the U.S. Securities Exchange
Act of 1934, as amended; |
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(n) |
Expiry Date means, with respect to Share Units
granted to a Participant, the date determined by the Corporation for such
purpose for such grant, which date shall be no later than December 31 of the calendar year in
which the third anniversary of the Grant Date occurs; |
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2015 RESTRICTED SHARE UNIT PLAN
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(o) |
Fiscal Year means a fiscal year of the
Corporation; |
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(p) |
Grant Agreement means an agreement between the
Corporation and a Participant under which Share Units are granted,
together with such amendments, deletions or changes thereto as are
permitted under the Plan; |
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(q) |
Grant Date of a Share Unit means the date a
Share Unit is granted to a Participant under the Plan; |
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(r) |
Insider has the meaning provided for purposes of
the TSX relating to Security Based Compensation Arrangements; |
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(s) |
Joint Actor means a person acting jointly or in
concert with another person within the meaning of Section 96 of the
Securities Act (British Columbia) or as such section may be amended
or re-enacted from time to time; |
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(t) |
Market Value with respect to a Share as at any
date means the arithmetic average of the closing price of the Shares
traded on the TSX for the five (5) trading days on which a board lot was
traded immediately preceding such date (or, if the Shares are not then
listed and posted for trading on the TSX, on such stock exchange on which
the Shares are then listed and posted for trading as may be selected for
such purpose by the Corporation). In the event that the Shares are not
listed and posted for trading on any stock exchange, the Market Value
shall be the Market Value of the Shares as determined by the Board in its
discretion, acting reasonably and in good faith; |
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(u) |
Participant means a bona fide full-time or
part-time Employee, an Eligible Consultant or a director who, in any such
case, has been designated by the Corporation for participation in the
Plan; |
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(v) |
Payout Date means a date selected by the
Corporation, in accordance with and as contemplated by Sections 3.2, 6.1
and 7.1; |
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(w) |
Plan means this 2015 Restricted Share Unit
Plan; |
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(x) |
Reorganization means any (i) capital
reorganization, (ii) merger, (iii) amalgamation, or (iv) arrangement or
other scheme of reorganization; |
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(y) |
Rule 3b-4 means Rule 3b-4 promulgated by the
Securities and Exchange Commission under the Exchange Act or any successor
rule or regulation; |
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(z) |
Rule 16b-3 means Rule 16b-3 promulgated by the
Securities and Exchange Commission under the Exchange Act or any successor
rule or regulation; |
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2015 RESTRICTED SHARE UNIT PLAN
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(aa) |
Section 409A means Section 409A of the U.S.
Internal Revenue Code of 1986, as amended, and the Treasury
Regulations promulgated thereunder as in effect from time to
time; |
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(bb) |
Securities Act means the U.S. Securities Act of
1933, as amended; |
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(cc) |
Security Based Compensation Arrangement has the
meaning defined in the provisions of the TSX Company Manual relating to
security based compensation arrangements; |
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(dd) |
Shareholders means the holders of
Shares; |
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(ee) |
Shares mean common shares of the Corporation and
includes any securities of the Corporation into which such common shares
may be converted, reclassified, redesignated, subdivided, consolidated,
exchanged or otherwise changed, pursuant to a Reorganization or
otherwise; |
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(ff) |
Share Unit means a unit credited by means of an
entry on the books of the Corporation to a Participant pursuant to the
Plan, representing the right to receive, subject to and in accordance with
the Plan, for each Vested Share Unit one Share or the other consideration
as referred to in the Plan, at the time, in the manner, and subject to the
terms, set forth in the Plan and the applicable Grant Agreement; |
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(gg) |
Stock Exchange Rules means the applicable rules
of any stock exchange upon which Shares are listed; |
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(hh) |
Termination Date means the date on which a
Participant ceases, for any reason including resignation, termination,
death or disability, to be an active Employee, an Eligible Consultant, or
a director, as the case may be, and, in the case of a Participant who is
an Employee, where the employment is terminated by the Employer, whether
wrongful or for cause or otherwise, such date shall be the date notice of
termination is provided and, in the case of a Participant who is an
Eligible Consultant, the date the written contract between the Eligible
Consultant and the Corporation or any Designated Subsidiary is terminated
or expires and the Eligible Consultant no longer provides services
thereunder; |
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(ii) |
TSX means the Toronto Stock Exchange;
and |
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(jj) |
Vested Share Units shall mean Share Units in
respect of which all vesting terms and conditions set forth in the Plan
and the applicable Grant Agreement have been either satisfied or waived in
accordance with the Plan. |
2.2 |
In this Plan, unless the context requires otherwise,
words importing the singular number may be construed to extend to and
include the plural number, and words importing the plural number may be
construed to extend to and include the singular
number. |
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2015 RESTRICTED SHARE UNIT PLAN
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3. |
GRANT OF SHARE UNITS AND TERMS |
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3.1 |
The Corporation may grant Share Units to such Participant
or Participants in such number and at such times as the Corporation may,
in its sole discretion, determine. Unless otherwise determined by the
Corporation in its sole discretion, a grant of Share Units to a
Participant in any calendar year will represent a right to a bonus or
similar payment to be received for services rendered by such Participant
to the Corporation or a Designated Subsidiary, as the case may be, in the
Corporations or Designated Subsidiarys fiscal year ending in, or
coincident with, such calendar year. |
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3.2 |
In granting any Share Units pursuant to Section 3.1, the
Corporation shall designate: |
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(a) |
the number of Share Units which are being granted to the
Participant; |
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(b) |
any time based conditions as to vesting of the Share
Units to become Vested Share Units; |
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(c) |
the Payout Date, which shall in no event be later than
the Expiry Date and, unless otherwise determined on the Grant Date, shall
be the third anniversary of the Grant Date; and |
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(d) |
the Expiry Date, which date shall be no later than (and,
unless otherwise determined on the Grant Date, shall be) December 31 of
the calendar year in which the third anniversary of the Grant Date
occurs; |
of which the items in (a) and (b) shall
be set out in the Grant Agreement, and the Payout Date and Expiry Date may be
set out in the Grant Agreement in the Corporations sole discretion.
3.3 |
The conditions may relate to all or any portion of the
Share Units in a grant and may be graduated such that different
percentages of the Share Units in a grant will become Vested Share Units
depending on the extent of satisfaction of one or more such conditions.
The Corporation may, in its discretion and having regard to the best
interests of the Corporation, subsequent to the Grant Date of a Share
Unit, waive any resulting conditions, provided that the waiver of such
conditions will not accelerate the time of payment with respect to such
Share Units, and the payout will occur on the Payout Date as set forth in
the Grant Agreement or pursuant to Sections 7.1 or 8.3 of the Plan, if
applicable. |
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4. |
GRANT AGREEMENT |
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4.1 |
Each grant of a Share Unit will be set forth in a Grant
Agreement containing terms and conditions required under the Plan and such
other terms and conditions not inconsistent herewith as the Corporation
may, in its sole discretion, deem appropriate. |
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2015 RESTRICTED SHARE UNIT PLAN
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5. |
SHARE UNIT GRANTS AND ACCOUNTS |
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5.1 |
An Account shall be maintained by the Corporation for
each Participant. On the Grant Date, the Account will be credited with the
Share Units granted to a Participant on that date. |
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6. |
PAYOUTS |
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6.1 |
On each Payout Date, the Participant shall be entitled to
receive, and the Corporation shall issue or provide, a payout with respect
to those Vested Share Units in the Participants Account to which the
Payout Date relates, in one of the following
forms: |
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(a) |
subject to shareholder approval of this Plan and the
limitations set forth in Section 11.2 below, Shares issued from treasury
equal in number to the Vested Share Units in the Participants Account to
which the Payout Date relates, net of any applicable deductions and
withholdings; |
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(b) |
subject to and in accordance with any Applicable Law,
Shares purchased by an independent administrator of the Plan in the open
market for the purposes of providing Shares to Participants under the Plan
equal in number to the Vested Share Units in the Participants Account to
which the Payout Date relates, net of any applicable deductions and
withholdings; |
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(c) |
the payment of a cash amount to a Participant on the
Payout Date equal to the number of Vested Share Units in respect of which
the Corporation makes such a determination, multiplied by the Market Value
on the Payout Date, net of any applicable deductions and withholdings;
or |
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(d) |
any combination of the foregoing, |
as determined by the Corporation, in
its sole discretion.
6.2 |
No fractional Shares shall be issued and any fractional
entitlements will be rounded down to the nearest whole number. |
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6.3 |
Shares issued by the Corporation from treasury under
Section 6.1(a) of this Plan shall be considered fully paid in
consideration of past service that is no less in value than the fair
equivalent of the money the Corporation would have received if the Shares
had been issued for money. |
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6.4 |
The Corporation or a Designated Subsidiary may withhold
from any amount payable to a Participant, either under this Plan, or
otherwise, such amount as may be necessary so as to ensure that the
Corporation or the Designated Subsidiary will be able to comply with the
applicable provisions of any federal, provincial, state or local law
relating to the withholding of tax or other required deductions, including
on the amount, if any, includable in the income of a Participant. Each of
the Corporation or a Designated Subsidiary shall also have the right in
its discretion to satisfy any such withholding tax liability by retaining,
acquiring or selling on behalf of a Participant any Shares which would
otherwise be issued or provided to a Participant
hereunder. |
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2015 RESTRICTED SHARE UNIT PLAN
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7. |
CHANGE OF CONTROL |
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7.1 |
Notwithstanding the conditions as to vesting of Share
Units contained in any individual Grant Agreement, all outstanding Share
Units shall become Vested Share Units on any Change of Control and, except
as otherwise provided in Section 16 hereof, the Payout Date in connection
with such Vested Share Units shall, notwithstanding any provisions in the
Grant Agreement, be accelerated to the date of such Change of Control and
the Corporation shall, as soon as practicable following such Change of
Control, issue or provide Shares or make payments to such Participants
with respect to such Vested Share Units in accordance with Section
6. |
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8. |
TERMINATION OF EMPLOYMENT AND
FORFEITURES |
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8.1 |
Unless otherwise determined by the Corporation pursuant
to Section 8.2, on a Participants Termination Date, any Share Units in a
Participants Account which are not Vested Share Units shall terminate and
be forfeited. |
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8.2 |
Notwithstanding Section 8.1, where a Participant ceases
to be an Employee as a result of the termination of his or her employment
without cause, then in respect of each grant of Share Units made to such
Participant, at the Corporations discretion, all or a portion of such
Participants Share Units may be permitted to continue to vest, in
accordance with their terms, during any statutory or common law severance
period or any period of reasonable notice required by law or as otherwise
may be determined by the Corporation in its sole discretion. |
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8.3 |
Except as otherwise provided in Section 16, in the event
a Participants Termination Date is prior to the Payout Date with respect
to any Vested Share Units in such Participants Account, the Payout Date
with respect to such Vested Share Units shall, notwithstanding any
provision in the Grant Agreement, be accelerated to the Participants
Termination Date and the Corporation shall, as soon as practicable
following such Termination Date, issue or provide Shares or make payment
to such Participant, or Beneficiary thereof, as applicable, with respect
to such Vested Share Units in accordance with Section 6. |
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9. |
FORFEITED UNITS |
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9.1 |
Notwithstanding any other provision of the Plan or a
Grant Agreement, Share Units granted hereunder shall terminate on, if not
redeemed or previously terminated and forfeited in accordance with the
Plan, and be of no further force and effect after, the Expiry
Date. |
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10. |
ALTERATION OF NUMBER OF SHARES SUBJECT TO THE
PLAN |
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10.1 |
In the event that the Shares shall be subdivided or
consolidated into a different number of Shares or a distribution shall be
declared upon the Shares payable in Shares, the number of Share Units then
recorded in the Participants Account shall be adjusted by replacing such
number by a number equal to the number of Shares which would be held by
the Participant immediately after the distribution, subdivision or
consolidation, should the Participant have held a number of Shares equal to the number of
Share Units recorded in the Participants Account on the record date fixed for
such distribution, subdivision or consolidation. |
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2015 RESTRICTED SHARE UNIT PLAN
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10.2 |
In the event there shall be any change, other than as
specified in Section 10.1, in the number or kind of outstanding Shares or
of any shares or other securities into which such Shares shall have been
changed or for which they shall have been exchanged, pursuant to a
Reorganization or otherwise, then there shall be substituted for each
Share referred to in the Plan or for each share into which such Share
shall have been so changed or exchanged, the kind of securities into which
each outstanding Share shall be so changed or exchanged and an equitable
adjustment shall be made, if required, in the number of Share Units then
recorded in the Participants Account, such adjustment, if any, to be
reasonably determined by the Committee and to be effective and binding for
all purposes. |
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10.3 |
In the case of any such substitution, change or
adjustment as provided for in this Section 10, the variation shall
generally require that the aggregate Market Value of the Share Units then
recorded in the Participants Account prior to such substitution, change
or adjustment will be proportionately and appropriately varied so that it
be equal to such aggregate Market Value after the variation. |
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11. |
RESTRICTIONS ON ISSUANCES |
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11.1 |
Share Units may be granted by the Corporation in
accordance with this Plan provided the aggregate number of Share Units
outstanding pursuant to the Plan from time to time shall not exceed 3.0%
of the number of issued and outstanding Shares from time to time. The
maximum number of Shares issuable pursuant to all Security Based
Compensation Arrangements, at any time, including all Share Units, options
or other rights to purchase or otherwise acquire Shares that are granted
to Insiders, shall not exceed 10% of the total number of outstanding
Shares. |
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11.2 |
The maximum number of Shares issued to Insiders pursuant
to the Plan, together with any Shares issued pursuant to any other
Security Based Compensation Arrangement, within any one year period, shall
not exceed 10% of the total number of weighted average number of common
shares outstanding during the year. |
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12. |
AMENDMENT, SUSPENSION OR TERMINATION OF THE
PLAN |
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12.1 |
Until such time as the Corporation receives shareholder
approval of the issuances from treasury contemplated in Section 6.1(a),
the Plan may be amended, suspended or terminated at any time by the Board
in whole or in part. No amendment of the Plan shall, without the consent
of the Participants affected by the amendment, or unless required by
Applicable Law, adversely affect the rights accrued to such Participants
with respect to Share Units granted prior to the date of the
amendment. |
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12.2 |
Following shareholder approval of any issuances from
treasury as contemplated by Section 6.1(a), the Corporation may, without
notice, at any time and from time to time, and without shareholder
approval, amend the Plan or any provisions thereof in
such manner as the Corporation, in its sole discretion, determines
appropriate, including, without limitation: |
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2015 RESTRICTED SHARE UNIT PLAN
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(a) |
for the purposes of making formal minor or technical
modifications to any of the provisions of the Plan; |
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(b) |
to correct any ambiguity, defective provision, error or
omission in the provisions of the Plan; |
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(c) |
to change the vesting provisions of Share
Units; |
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(d) |
to change the termination provisions of Share Units or
the Plan which does not entail an extension beyond the original Expiry
Date of the Share Units; |
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(e) |
to make the amendments contemplated by Section 16.1(g);
or |
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(f) |
to make any amendments necessary or advisable because of
any change in Applicable Law; |
provided, however, that:
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(g) |
no such amendment of the Plan may be made without the
consent of each affected Participant in the Plan if such amendment would
adversely affect the rights of such affected Participant(s) under the
Plan; and |
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(h) |
shareholder approval shall be obtained in accordance with
the requirements of the TSX for any amendment that results
in: |
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(i) |
an increase in the maximum number of Shares issuable
pursuant to the Plan (other than pursuant to Section 10); |
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(ii) |
an extension of the Expiry Date for Share Units granted
to Insiders under the Plan; |
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(iii) |
other types of compensation through Share
issuance; |
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(iv) |
an expansion of the rights of a Participant to assign
Share Units other than as set forth in Section 15.2; or |
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(v) |
the addition of additional categories of Participants
(other than as contemplated by Section 10). |
12.3 |
If the Corporation terminates the Plan, Share Units
previously credited shall, at the discretion of the Corporation, either
(a) be settled immediately in accordance with the terms of the Plan in
effect at such time, or (b) remain outstanding and in effect and settled
in due course in accordance with the applicable terms and conditions, in
either case without shareholder approval. |
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2015 RESTRICTED SHARE UNIT PLAN
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13. |
ADMINISTRATION |
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13.1 |
Unless otherwise determined by the Board, the Plan shall
be administered by the Committee subject to Applicable Laws. The Committee
shall have full and complete authority to interpret the Plan, to prescribe
such rules and regulations and to make such other determinations as it
deems necessary or desirable for the administration of the Plan. All
actions taken and decisions made by the Committee shall be final,
conclusive and binding on all parties concerned, including, but not
limited to, the Participants and their beneficiaries and legal
representatives, each Designated Subsidiary and the Corporation. All
expenses of administration of the Plan shall be borne by the
Corporation. |
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13.2 |
The Corporation shall keep or cause to be kept such
records and accounts as may be necessary or appropriate in connection with
the administration of the Plan and the discharge of its duties. At such
times as the Corporation shall determine, the Corporation shall furnish
the Participant with a statement setting forth the details of his or her
Share Units including the Grant Date and the Vested Share Units and
unvested Share Units held by each Participant. Such statement shall be
deemed to have been accepted by the Participant as correct unless written
notice to the contrary is given to the Corporation within 30 days after
such statement is given to the Participant. |
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13.3 |
The Corporation may, at its discretion, appoint one or
more persons or companies to provide services in connection with the Plan
including without limitation, administrative and record-keeping
services. |
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14. |
BENEFICIARIES AND CLAIMS FOR BENEFITS |
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14.1 |
Subject to the requirements of Applicable Law, a
Participant may designate in writing a Beneficiary to receive any benefits
that are payable under the Plan upon the death of such Participant. The
Participant may, subject to Applicable Law, change such designation from
time to time. Such designation or change shall be in such form and
executed and filed in such manner as the Corporation may from time to time
determine. |
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15. |
GENERAL |
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15.1 |
The transfer of an Employee from the Corporation to a
Designated Subsidiary, from a Designated Subsidiary to the Corporation or
from a Designated Subsidiary to another Designated Subsidiary, shall not
be considered a termination of employment for the purposes of the Plan,
nor shall it be considered a termination of employment if a Participant is
placed on such other leave of absence which is considered by the
Corporation as continuing intact the employment relationship. |
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15.2 |
The Plan shall enure to the benefit of and be binding
upon the Corporation, its successors and assigns. The interest of any
Participant under the Plan or in any Share Unit shall not be transferable
or assignable other than by operation of law, except, if and on such terms
as the Corporation may permit, to a spouse or minor children or
grandchildren or a personal holding company or family trust controlled by
a Participant, the sole shareholders or beneficiaries of which, as the
case may be, are any combination of the Participant, the Participants
spouse, the Participants minor children or the
Participants minor grandchildren, and after his or her lifetime shall enure
to the benefit of and be binding upon the Participants Beneficiary, on such
terms and conditions as are appropriate for such transferees to be included in
the class of transferees who may rely on a Form S-8 registration statement under
the Securities Act to sell shares received pursuant to the Share Unit. |
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2015 RESTRICTED SHARE UNIT PLAN
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15.3 |
The Corporations grant of any Share Units or issuance of
any Shares hereunder is subject to compliance with Applicable Law
applicable thereto. As a condition of participating in the Plan, each
Participant agrees to comply with all Applicable Law and agrees to furnish
to the Corporation or a Designated Subsidiary all information and
undertakings as may be required to permit compliance with Applicable
Law. |
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15.4 |
The Corporation shall not have any responsibility for or
in respect of the tax consequences of a grant of Share Units to, or the
receipt of Share Units or payout in respect thereof by, Participants under
this Plan. The Corporation or a Designated Subsidiary may withhold from
any amount payable to a Participant, either under this Plan, or otherwise,
such amount as may be necessary or desirable as determined by the
Corporation in its sole discretion so as to ensure that the Corporation or
the Designated Subsidiary will be able to comply with the applicable
provisions of any federal, provincial, state or local law relating to the
withholding or remittance of tax or other required deductions or amounts,
including on the amount, if any, includable in the income of a
Participant. The Corporation shall also have the right in its discretion
to satisfy any such withholding tax liability by retaining, acquiring or
selling (on such terms as the Corporation determines in its sole
discretion, and, in the case of a sale, without any requirement to obtain
the best possible price) on behalf of a Participant any Shares which would
otherwise be issued or provided to a Participant hereunder, or to require
a Participant, as a condition of receiving anything under this Plan, to
deliver cash or certified cheque payable to the Corporation for the amount
of applicable tax as determined by the Corporation in its sole
discretion. |
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15.5 |
A Participant shall not have the right or be entitled to
exercise any voting rights, receive any distribution or have or be
entitled to any other rights as a Shareholder in respect of any Share
Units. |
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15.6 |
Neither designation of an Employee as a Participant nor
the grant of any Share Units to any Participant entitles any Participant
to the grant, or any additional grant, as the case may be, of any Share
Units under the Plan. Neither the Plan nor any action taken thereunder
shall interfere with the right of the Corporation or a Designated
Subsidiary to terminate a Participants employment, or service under
contract, at any time. Neither any period of notice, if any, nor any
payment in lieu thereof, upon termination of employment, wrongful or
otherwise, shall be considered as extending the period of employment for
the purposes of the Plan. |
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15.7 |
Participation in the Plan shall be entirely voluntary and
any decision not to participate shall not affect any Employees employment
or any consultants contractual relationship with the Corporation or a
Designated Subsidiary. |
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2015 RESTRICTED SHARE UNIT PLAN
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15.8 |
The Plan shall be an unfunded obligation of the
Corporation. Neither the establishment of the Plan nor the grant of any
Share Units or the setting aside of assets by the Corporation (if, in its
sole discretion, it chooses to do so) shall be deemed to create a trust.
The right of the Participant or Beneficiary to receive payment pursuant to
the Plan shall be no greater than the right of other unsecured creditors
of the Corporation. |
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15.9 |
This Plan is established under the laws of the Province
of British Columbia and the rights of all parties and the construction of
each and every provision of the Plan and any Share Units granted hereunder
shall be construed according to the laws of the Province of British
Columbia. |
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16. |
SECTION 409A |
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16.1 |
It is intended that the provisions of this Plan comply
with Section 409A, and all provisions of this Plan shall be construed and
interpreted in a manner consistent with the requirements for avoiding
taxes or penalties under Section 409A. Notwithstanding anything in the
Plan to the contrary, the Corporation may provide in the applicable Grant
Agreement with respect to Share Units granted to Participants whose
benefits under the Plan are or may become subject to Section 409A, such
terms and conditions as may be required for compliance with Section 409A.
In addition, the following will apply to the extent that a Participants
Share Units are subject to Section 409A. |
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(a) |
Except as permitted under Section 409A, any Share Units,
or payment with respect to Share Units, may not be reduced by, or offset
against, any amount owing by the Participant to the Corporation or any
Designated Subsidiary. |
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(b) |
If a Participant otherwise would become entitled to
receive payment in respect of any Share Units as a result of his or her
ceasing to be an Employee, an Eligible Consultant or director upon a
Termination Date, any payment made on account of such person ceasing to be
an Employee or Eligible Consultant shall be made at that time only if the
Participant has experienced a separation from service (within the
meaning of Section 409A). |
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(c) |
If a Participant is a specified employee (within the
meaning of Section 409A) at the time he or she otherwise would be entitled
to payment as a result of his or her separation from service, any payment
that otherwise would be payable during the six-month period following such
separation from service will be delayed and shall be paid on the first day
of the seventh month following the date of such separation from service
or, if earlier, the Participants date of death. |
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(d) |
A Participants status as a specified employee shall be
determined by the Corporation as required by Section 409A on a basis
consistent with the regulations under Section 409A and such basis for
determination will be consistently applied to all plans, programs,
contracts, agreements, etc. maintained by the Corporation that are subject
to Section 409A. |
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(e) |
Each Participant, any beneficiary or the Participants
estate, as the case may be, is solely responsible and liable for the
satisfaction of all taxes and penalties that
may be imposed on or for the account of such Participant in
connection with this Plan (including any taxes and penalties under Section
409A), and neither the Corporation nor any Designated Subsidiary or affiliate
shall have any obligation to indemnify or otherwise hold such Participant or
beneficiary or the Participants estate harmless from any or all of such taxes
or penalties. |
|
2015 RESTRICTED SHARE UNIT PLAN
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|
(f) |
If and to the extent that Share Units would otherwise
become payable upon a Change of Control as defined in the Plan, such
payment will occur at that time only if such change of control also
constitutes a change in ownership, a change in effective control or a
change in the ownership of a substantial portion of the assets of the
Corporation as defined under Section 409A and applicable regulations (a
409A Change in Control). If a Change of Control as defined in the Plan
is not also a 409A Change in Control, unless otherwise permitted under
Section 409A, the time for the payment of Share Units will not be
accelerated and will be payable pursuant to the terms of the Plan and
applicable Grant Agreement as if such Change of Control had not
occurred. |
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(g) |
In the event that the Committee determines that any
amounts payable under the Plan will be taxable to a Participant under
Section 409A prior to payment to such Participant of such amount, the
Corporation may (i) adopt such amendments to the Plan and Share Units and
appropriate policies and procedures, including amendments and policies
with retroactive effect, that the Committee determines necessary or
appropriate to preserve the intended tax treatment of the benefits
provided by the Plan and Grant Agreement and/or (ii) take such other
actions as the Corporation determines necessary or appropriate to avoid or
limit the imposition of an additional tax under Section 409A. |
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(h) |
In Sections 7.1 and 8.3 the phrase as soon as
practicable following a designated event will be interpreted to mean
within the same calendar year as the designated event, or if later, by the
60th day following the occurrence of the designated event. |
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(i) |
Notwithstanding the provisions in Section 12.3, upon
termination of the Plan payments will be made in accordance with the
regulations issued under Section 409A regarding payments upon the
termination of a nonqualified deferred compensation
plan. |
EFFECTIVE DATE:
|
2015 RESTRICTED SHARE UNIT PLAN
|
NORTHERN DYNASTY MINERALS LTD.
2015 NON-EMPLOYEE
DIRECTORS DEFERRED SHARE UNIT PLAN
1. |
PURPOSE OF THE PLAN |
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|
1.1 |
This Plan has been established by the Corporation to
promote the interests of the Corporation by attracting and retaining
qualified persons to serve on the Board and to promote a greater alignment
of long term interests between such Participants and the shareholders of
the Corporation. |
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2. |
PLAN DEFINITIONS AND
INTERPRETATIONS |
In this Plan, the following terms have
the following meanings:
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(a) |
Account means an account maintained for each
Participant on the books of the Corporation which will be credited with
Deferred Share Units, in accordance with the terms of the Plan. |
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(b) |
Applicable Law means any applicable provision of
law, domestic or foreign, including, without limitation, applicable
securities legislation, together with all regulations, rules, policy
statements, rulings, notices, orders or other instruments promulgated
thereunder and Stock Exchange Rules. |
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(c) |
Board means the Board of Directors of the
Corporation. |
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(d) |
Change of Control
means: |
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(i) |
the acquisition whether directly or indirectly, by a
person or company, or any persons or companies acting jointly or in
concert (as determined in accordance with the Securities Act (British
Columbia) and the rules and regulations thereunder) of voting securities
of the Corporation which, together with any other voting securities of the
Corporation held by such person or company or persons or companies,
constitute, in the aggregate, more than 50% of all outstanding voting
securities of the Corporation; |
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(ii) |
(an amalgamation, arrangement or other form of business
combination of the Corporation with another company which results in the
holders of voting securities of that other company holding, in the
aggregate, 50% or more of all outstanding voting securities of the
Corporation (including a merged or successor company) resulting from the
business combination; or |
|
(iii) |
the sale, lease or exchange of all or substantially all
of the property of the Corporation to another person, other than a
subsidiary of the Corporation or other than in the ordinary course of
business of the Corporation; |
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(e) |
Committee means the Compensation Committee of
the Board. |
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(f) |
Common Shares means common shares of the
Corporation and includes any securities of the Corporation into which such
Common Shares may be converted, reclassified, redesignated, subdivided,
consolidated, exchanged or otherwise changed, pursuant to a Reorganization
or otherwise. |
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(g) |
Corporation means Northern Dynasty Minerals Ltd.
and its respective successors and assigns, and any reference in the Plan
to action by the Corporation means action by or under the authority of the
Board or any person or committee that has been designated for the purpose
by the Board including, without limitation, the Committee. |
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(h) |
DSU or Deferred Share Unit means a unit
credited to a Participant by way of a bookkeeping entry in the books of
the Corporation pursuant to this Plan, the value of which is equivalent in
value to a Common Share. |
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(i) |
Grant means any Deferred Share Unit credited to
the Account of a Participant. |
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(j) |
Insider has the meaning provided for purposes of
the TSX relating to Security Based Compensation Arrangements. |
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(k) |
Notice of Redemption means written notice, on a
prescribed form, by the Participant, or the administrator or liquidator of
the estate of the Participant, to the Corporation of the Participants
wish to redeem his or her Deferred Share Units. |
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(l) |
Participant means a director of the Corporation
who is designated by the Committee as eligible to participate in the
Plan. |
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(m) |
Plan means this 2015 Non-Employee Directors
Deferred Share Unit Plan. |
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(n) |
Redemption Date means the date that a Notice of
Redemption is received by the Corporation; provided in the case of a U.S.
Eligible Participant, however, the Redemption Date will be made the
earlier of (i) separation from service within the meaning of Section
409A of the Code, or (ii) within 90 days of the U.S. Eligible
Participants death. |
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(o) |
Reorganization means any (i) capital
reorganization, (ii) merger, (iii) amalgamation, or (iv) arrangement or
other scheme of reorganization. |
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(p) |
Section 409A means Section 409A of the U.S.
Internal Revenue Code of 1986, as amended, and the Treasury
Regulations promulgated thereunder as in effect from time to
time. |
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(q) |
Security Based Compensation Arrangement has the
meaning defined in the provisions of the TSX Company Manual relating to
security based compensation arrangements. |
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(r) |
Share Price means the closing price of a Common
Share on the TSX averaged over the five (5) consecutive trading days
immediately preceding (a) in the case of a Grant, the last day of the
fiscal quarter preceding the date of Grant in respect of a director, or
(b) in the case of a redemption, the Redemption Date, as applicable, or in
the event such shares are not traded on the TSX, the fair market value of
such shares as determined by the Committee acting in good faith. |
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(s) |
Stock Exchange Rules means the applicable rules
of any stock exchange upon which the Common Shares are listed. |
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(t) |
Termination Date means the date of a
Participants death, or retirement from, or loss of office or employment
with the Corporation, within the meaning of paragraph 6801(d) of the
regulations under the Income Tax Act (Canada), including the
Participants resignation, retirement, removal from the Board, death or
otherwise. |
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(u) |
TSX means the Toronto Stock Exchange. |
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(v) |
U.S. Eligible Participant refers to a
Participant who, at any time during the period from the date Deferred
Share Units are granted to the Participant to the date such Deferred Share
Units are redeemed by the Participant, is subject to income taxation in
the United States on the income received for his or her services as a
director of the Corporation and who is not otherwise exempt from U.S.
income taxation under the relevant provisions of the U.S. Internal
Revenue Code of 1986, as amended, or the Canada-U.S. Income Tax
Convention, as amended from time to time. |
3. |
NON-EMPLOYEE DIRECTOR COMPENSATION |
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|
3.1 |
Establishment of Annual Base
Compensation |
An annual compensation amount (the "Annual Base
Compensation") payable to non-employee Directors (hereafter
"Directors") of the Corporation shall be established from time-to-time by the Board. The amount of Annual Base Compensation will
be reported annually in the Corporations management information circular.
3.2 |
Payment of Annual Base Compensation |
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(a) |
The Annual Base Compensation shall be payable in
quarterly installments, with each installment payable as promptly as
practicable following the last business day of the fiscal quarter to which
it applies. Quarterly payments shall be pro rated if Board service
commences or terminates during a fiscal quarter. The number of DSUs to be
paid and the terms of the DSUs shall be determined as provided in the
following sections of this Plan. |
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(b) |
Each Director may elect to receive in DSUs up to 100% of
his or her Annual Base Compensation by completing and delivering a written
election to the Corporation on or before November 15th of the calendar
year ending immediately before the calendar year with respect to which the
election is made. Such election will be effective with respect to
compensation payable for fiscal quarters beginning during the calendar
year following the date of such election. Further, where an individual
becomes a Director for the first time during a fiscal year and such
individual has not previously participated in a plan that is required to
be aggregated with this Plan for purposes of Section 409A, such individual
may elect to participate in the Plan with respect to fiscal quarters of
the Corporation commencing after the Corporation receives such
individuals written election, which election must be received by the
Corporation no later than 30 days after such individuals appointment as a
Director. For greater certainty, new Directors will not be entitled to
receive DSUs pursuant to an election for the quarter in which they submit
their first election to the Corporation or any previous quarter. Elections
hereunder shall be irrevocable with respect to compensation earned during
the period to which such election relates. |
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(c) |
All DSUs granted with respect to Annual Base Compensation
will be credited to the Director's Account when such Annual Base
Compensation is payable (the "Grant Date"). |
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(d) |
The Director's Account will be credited with the number
of DSUs calculated to the nearest thousandths of a DSU, determined by
dividing the dollar amount of compensation payable in DSUs on the Grant
Date by the Share Price. Fractional Common Shares will not be issued and
any fractional entitlements will be rounded down to the nearest whole
number. |
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3.3 |
Additional Deferred Share
Units |
In addition to DSUs granted pursuant to Section 3.2, the Board
may award such number of DSUs to a Participant as the Board deems advisable to
provide the Participant with appropriate equity-based compensation for the
services he or she renders to the Corporation. The Board shall determine the
date on which such DSUs may be granted and the date as of which such DSUs shall
be credited to a Participants Account. The Corporation and a Participant who
receives an award of DSUs pursuant to this Section 3.3 shall enter into a DSU
award agreement to evidence the award and the terms applicable thereto.
4. |
ADMINISTRATION OF DSU ACCOUNTS |
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4.1 |
Administration of Plan |
The Committee shall have the power, where consistent with the
general purpose and intent of the Plan and subject to the specific provisions of
the Plan:
|
(a) |
to establish policies and to adopt rules and regulations
for carrying out the purposes, provisions and administration of the Plan
and to amend and rescind such rules and regulations from time to
time; |
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|
(b) |
to interpret and construe the Plan and to determine all
questions arising out of the Plan and any such interpretation,
construction or determination made by the Committee shall be final,
binding and conclusive for all purposes; |
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|
(c) |
to prescribe the form of the instruments used in
conjunction with the Plan; and |
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|
(d) |
to determine which members of the Board are eligible to
participate in the Plan. |
4.2 |
Redemption of Deferred Share Units |
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(a) |
Each Participant shall be entitled to redeem his or her
Deferred Share Units during the period commencing on the business day
immediately following the Termination Date and ending on the 90th day
following the Termination Date by providing a written Notice of Redemption
to the Corporation. In the event of death of a Participant, the Notice of
Redemption shall be filed by the legal representative of the Participant.
In the case of a U.S. Eligible Participant, however, the redemption will
be deemed to be made on the earlier of (i) separation from service
within the meaning of Section 409A, or (ii) within 90 days of the U.S.
Eligible Participants death. |
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|
(b) |
Upon redemption, the Participant shall be entitled to
receive, and the Corporation shall issue or
provide: |
|
(i) |
subject to shareholder approval of this Plan and the
limitations set forth in Section 6.2 below, a number of Common Shares
issued from treasury equal to the number of DSUs in the Participants
Account, net of any applicable deductions and withholdings; |
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(ii) |
subject to and in accordance with any Applicable Law, a
number of Common Shares purchased by an independent administrator of the
Plan in the open market for the purposes of providing Common Shares to
Participants under the Plan equal in number to the DSUs in the
Participants Account, net of any applicable deductions and
withholdings; |
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(iii) |
the payment of a cash amount to a Participant equal to
the number of DSUs multiplied by the Share Price, net of any applicable
deductions and withholdings; or |
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(iv) |
any combination of the foregoing, as determined by the
Corporation, in its sole discretion. |
4.3 |
Payment Notwithstanding |
Notwithstanding any other provision of this Plan, all amounts
payable to, or in respect of, a Participant hereunder shall be paid on or before
December 31 of the calendar year commencing immediately after the Participants
Termination Date.
5. |
ALTERATION OF NUMBER OF SHARES SUBJECT TO THE
PLAN |
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|
5.1 |
Subdivisions or
Consolidations |
In the event that the Common Shares shall be subdivided or
consolidated into a different number of Common Shares or a distribution shall be
declared upon the Common Shares payable in Common Shares, the number of DSUs
then recorded in the Directors Account shall be adjusted by replacing such
number by a number equal to the number of Common Shares which would be held by
the Director immediately after the distribution, subdivision or consolidation,
should the Director have held a number of Common Shares equal to the number of
DSUs recorded in the Directors Account on the record date fixed for such
distribution, subdivision or consolidation.
In the event there shall be any change, other than as specified
in Section 5.1, in the number or kind of outstanding Common Shares or of any
shares or other securities into which such Common Shares shall have been changed
or for which they shall have been exchanged, pursuant to a Reorganization or
otherwise, then there shall be substituted for each Common Share referred to in the Plan or for each share into which such
Common Share shall have been so changed or exchanged, the kind of securities
into which each outstanding Common Share shall be so changed or exchanged and an
equitable adjustment shall be made, if required, in the number of DSUs then
recorded in the Directors Account, such adjustment, if any, to be reasonably
determined by the Committee and to be effective and binding for all purposes.
In the case of any such substitution, change or adjustment as
provided for in this Section 5, the variation shall generally require that the
number of DSUs then recorded in the Directors Account prior to such
substitution, change or adjustment will be proportionately and appropriately
varied.
6. |
RESTRICTIONS ON ISSUANCES |
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|
6.1 |
Maximum Number of DSUs |
DSUs may be granted by the Corporation in accordance with this
Plan provided the aggregate number of DSUs outstanding pursuant to the Plan from
time to time shall not exceed 2.0% of the number of issued and outstanding
Common Shares from time to time. The maximum number of Shares issuable pursuant
to all Security Based Compensation Arrangements, at any time, including all
Shares, options or other rights to purchase or otherwise acquire Shares that are
granted to Insiders shall not exceed 10% of the total number of outstanding
Shares.
6.2 |
Insider Participation
Limits |
The maximum number of Shares issued to Insiders pursuant to the
Plan, together with any Shares issued pursuant to any other Security Based
Compensation Arrangement, within any one year period, shall not exceed 10% of
the total number of weighted average number of common shares outstanding during
the year.
7. |
AMENDMENT, SUSPENSION OR TERMINATION OF THE
PLAN |
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|
7.1 |
Amendment to the Plan |
Until such time as the Corporation receives shareholder
approval of the issuances from treasury contemplated in Section 4.2(b)(i), the
Plan may be amended, suspended or terminated at any time by the Board in whole
or in part. No amendment of the Plan shall, without the consent of the
Participants affected by the amendment, or unless required by Applicable Law,
adversely affect the rights accrued to such Participants with respect to DSUs
granted prior to the date of the amendment.
Following shareholder approval of any issuances from treasury
as contemplated in Section 4.2(b)(i), the Board may at any time, and from time
to time, and without shareholder approval, amend any provision of the Plan,
subject to any regulatory or stock exchange requirement at the time of such
amendment, including, without limitation:
|
(a) |
for the purposes of making formal minor or technical
modifications to any of the provisions of the Plan including amendments of
a clerical or housekeeping nature; |
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|
(b) |
to correct any ambiguity, defective provision, error or
omission in the provisions of the Plan; |
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|
(c) |
amendments to the termination provisions of Section
7.2; |
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(d) |
amendments necessary or advisable because of any change
in Applicable Laws; |
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(e) |
amendments to the transferability of Deferred Share Units
provided for in Sections 8.2 and 8.10; |
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(f) |
amendments to Section 4.1 relating to the administration
of the Plan; and |
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(g) |
any other amendment, fundamental or otherwise, not
requiring shareholder approval under Applicable
Laws; |
provided, however, that:
|
(h) |
no such amendment of the Plan may be made without the
consent of each affected Participant in the Plan if such amendment would
adversely affect the rights of such affected Participant(s) under the
Plan; and |
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|
(i) |
shareholder approval shall be obtained in accordance with
the requirements of the TSX for any amendment: |
|
(i) |
to Section 6.1 in order to increase the maximum number of
Deferred Share Units which may be issued under this Plan (other than
pursuant to Section 5); |
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|
(ii) |
to Section 7.1; or |
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|
(iii) |
to the definition of
Participant. |
The Committee may decide to discontinue granting awards under
the Plan at any time in which case no further Deferred Share Units shall be
awarded or credited under the Plan. Any Deferred Share Units which remain
outstanding in a Participants Account at that time shall continue to be dealt
with according to the terms of the Plan. The Plan shall terminate when all
payments owing pursuant to Section 4.2 of the Plan have been made and all
Deferred Share Units have been cancelled in all Participants Accounts.
8. |
GENERAL PROVISIONS |
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8.1 |
Withholding |
The Corporation shall not have any responsibility for or in
respect of the tax consequences of a grant of Deferred Share Units to, or the
receipt of Deferred Share Units or payout in respect thereof by, Participants
under this Plan. The Corporation may withhold from any amount payable to a
Participant, either under this Plan, or otherwise, such amount as may be
necessary or desirable as determined by the Corporation in its sole discretion
so as to ensure that the Corporation will be able to comply with the applicable
provisions of any federal, provincial, state or local law relating to the
withholding or remittance of tax or other required deductions or amounts,
including on the amount, if any, includable in the income of a Participant. The
Corporation shall also have the right in its discretion to satisfy any such
withholding tax liability by retaining, acquiring or selling (on such terms as
the Corporation determines in its sole discretion, and, in the case of a sale,
without any requirement to obtain the best possible price) on behalf of a
Participant any Common Shares which would otherwise be issued or provided to a
Participant hereunder, or to require a Participant, as a condition of receiving
anything under this Plan, to deliver cash or certified cheque payable to the
Corporation for the amount of applicable tax as determined by the Corporation in
its sole discretion.
No right to receive payment of DSUs and other benefits under
the Plan shall be transferable or assignable by a Participant except by will or
laws of descent and distribution.
Unless otherwise determined by the Committee, the Plan shall be
unfunded. To the extent any Participant or his or her estate holds any rights by
virtue of a grant of Deferred Share Units under the Plan, such rights (unless
otherwise determined by the Committee) shall be no greater than the rights of an
unsecured creditor of the Corporation.
Any determination or decision by or opinion of the Committee
made or held pursuant to the terms of the Plan shall be final, conclusive and
binding on all parties concerned. All rights, entitlements and obligations of
Participants under the Plan are set forth in the terms of the Plan and cannot be
modified by any other documents, statements or communications, except by Plan
amendments referred to in Section 7.1 of the Plan.
8.5 |
No Right to Employment |
Participation in the Plan shall not be construed to give any
Participant a right to be retained as a Director.
No amount will be paid to, or in respect of, a Participant
under the Plan to compensate for a downward fluctuation in the price of Common
Shares nor will any other form of benefit be conferred upon, or in respect of, a
Participant for such purpose.
8.7 |
No Shareholder Rights |
Under no circumstances shall Deferred Share Units be considered
Common Shares nor shall they entitle any Participant to exercise voting rights
or any other rights attaching to the ownership of Common Shares nor shall any
Participant be considered the owner of Common Shares by virtue of the award of
Deferred Share Units.
8.8 |
Reorganization of the
Corporation |
The existence of any Deferred Share Units shall not affect in
any way the right or power of the Corporation or its shareholders to make or
authorize any adjustment, recapitalization, reorganization or other change in
the Corporations capital structure or its business, or any amalgamation,
combination, merger or consolidation involving the Corporation or to create or
issue any bonds, debentures, shares or other securities of the Corporation or
the rights and conditions attaching thereto or to affect the dissolution or
liquidation of the Corporation or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar nature or otherwise.
8.9 |
Successors and Assigns |
The Plan shall be binding on all successors and assigns of the
Corporation.
8.10 |
General Restrictions and
Assignment |
Except as required by law, the rights of a Participant under
the Plan are not capable of being anticipated, assigned, transferred, alienated,
sold, encumbered, pledged, mortgaged or charged and are not capable of being subject to attachment or
legal process for the payment of any debts or obligations of the Participant.
It is intended that the provisions of this Plan comply with
Section 409A, and all provisions of this Plan shall be construed and interpreted
in a manner consistent with the requirements for avoiding taxes or penalties
under Section 409A. Notwithstanding anything in the Plan to the contrary, the
following will apply with respect to the rights and benefits of U.S. Eligible
Participants under the Plan:
|
(a) |
Except as permitted under Section 409A, any deferred
compensation (within the meaning of Section 409A) payable to or for the
benefit of a U.S. Eligible Participant may not be reduced by, or offset
against, any amount owing by the U.S. Eligible Participant to the
Corporation or any of its affiliates. |
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|
(b) |
If a U.S. Eligible Participant becomes entitled to
receive payment in respect of any Deferred Share Units as a result of his
or her separation from service (within the meaning of Section 409A), and
the U.S Eligible Participant is a specified employee (within the meaning
of Section 409A) at the time of his or her separation from service, and
the Committee makes a good faith determination that (i) all or a portion
of the Deferred Share Units constitute deferred compensation (within the
meaning of Section 409A) and (ii) any such deferred compensation that
would otherwise be payable during the six-month period following such
separation from service is required to be delayed pursuant to the
six-month delay rule set forth in Section 409A in order to avoid taxes or
penalties under Section 409A, then payment of such deferred compensation
shall not be made to the U.S Eligible Participant before the date which is
six months after the date of his or her separation from service (and shall
be paid in a single lump sum on the first day of the seventh month
following the date of such separation from service) or, if earlier, the
U.S Eligible Participants date of death. |
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(c) |
A U.S. Eligible Participants status as a specified
employee shall be determined by the Corporation as required by Section
409A on a basis consistent with the regulations under Section 409A and
such basis for determination will be consistently applied to all plans,
programs, contracts, agreements, etc. maintained by the Corporation that
are subject to Section 409A. |
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|
(d) |
Each U.S Eligible Participant, any beneficiary or the U.S
Eligible Participants estate, as the case may be, is solely responsible
and liable for the satisfaction of all taxes and penalties that may be
imposed on or for the account of such U.S Eligible Participant in
connection with this Plan (including any taxes
and penalties under Section 409A), and neither the Corporation nor
any affiliate shall have any obligation to indemnify or otherwise hold such U.S
Eligible Participant or beneficiary or the U.S Eligible Participants estate
harmless from any or all of such taxes or penalties. |
|
(e) |
In the event that the Committee determines that any
amounts payable hereunder will be taxable to a Participant under Section
409A prior to payment to such Participant of such amount, the Corporation
may (i) adopt such amendments to the Plan and Deferred Share Units and
appropriate policies and procedures, including amendments and policies
with retroactive effect, that the Committee determines necessary or
appropriate to preserve the intended tax treatment of the benefits
provided by the Plan and Deferred Share Units hereunder and/or (ii) take
such other actions as the Committee determines necessary or appropriate to
avoid or limit the imposition of an additional tax under Section
409A. |
|
|
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(f) |
Notwithstanding the provisions in Section 7, upon
termination of the Plan payments will be made in accordance with the
regulations issued under 409A regarding payments upon the termination of a
nonqualified deferred compensation plan. |
8.12 |
Forfeiture Provision |
If a Participant is subject to tax under the Income Tax Act
(Canada) and also is a U.S. Eligible Participant with respect to DSUs, the
following special rules regarding forfeiture of such Deferred Share Units will
apply if the Participants DSUs are subject to Section 409A. For greater
clarity, these forfeiture provisions are intended to avoid adverse tax
consequences under Section 409A and/or under paragraph 6801(d) of the
regulations under the Income Tax Act (Canada), that may result because of
the different requirements as to the time of settlement of Deferred Share Units
with respect to a Participants separation from service (within the meaning of
Section 409A) (Separation From Service) and his retirement or loss of
office (under tax laws of Canada). If a Participant otherwise would be entitled
to payment of DSUs in any of the following circumstances, such DSUs shall
instead be immediately and irrevocably forfeited (for greater certainty, without
any compensation therefore):
|
(a) |
a Participant experiences a Separation From Service as a
result of a permanent decrease in the level of services provided to less
than 20% of his past service in circumstances that do not constitute a
retirement from, or loss of office or employment with, the Corporation or
an affiliate thereof, within the meaning of paragraph 6801(d) of the
regulations under the Income Tax Act (Canada); or |
|
|
|
|
(b) |
a Participant experiences a Separation From Service upon
ceasing to be a director while continuing to provide services as an
employee in circumstances that do not constitute a retirement from, or loss of office or employment
with, the Corporation or an affiliate thereof, within the meaning of paragraph
6801(d) of the regulations under the Income Tax Act (Canada); or |
|
(c) |
a Participant experiences a serious disability that
continues for more than 29 months in circumstances that constitute a
Separation from Service and do not constitute a retirement from, or loss
of office or employment with, the Corporation or an affiliate thereof,
within the meaning of paragraph 6801(d) of the regulations under the
Income Tax Act (Canada); or |
|
|
|
|
(d) |
a Participant experiences a retirement from, or loss of
office or employment with, the Corporation or an affiliate thereof, within
the meaning of paragraph 6801(d) of the regulations under the Income
Tax Act (Canada) by virtue of ceasing employment as both an employee
and as a director, but he continues to provide services as an independent
contractor such that he has not experienced a Separation From
Service. |
In this text, words importing the singular meaning shall
include the plural and vice versa, and words importing the masculine shall
include the feminine and neuter genders.
The validity, construction and effect of the Plan and any
actions taken or relating to the Plan shall be governed by the laws of the
Province of British Columbia and the federal laws of Canada applicable therein.
The invalidity or unenforceability of any provision of the Plan
shall not affect the validity or enforceability of any other provision and any
invalid or unenforceable provision shall be severed from the Plan.
The effective date of this Plan shall be .
VOTING RESULTS REPORT
Pursuant to Section 11.3 of
National Instrument 51-102
OF
NORTHERN DYNASTY MINERALS
LTD.
(the "Company")
The Company reports that the following matters were voted upon
by the Shareholders of the Company at the annual general meeting of the Company
held on July 7, 2015 (the Meeting):
1. |
The number of directors of the Company was set at nine
(9). Shares voted by proxy represented 56,557,766 votes for and
677,970 votes against. |
|
|
2. |
The following directors were elected at the
Meeting: |
|
DIRECTOR |
FOR |
WITHHELD |
|
|
|
|
|
Scott D. Cousens |
27,803,416 |
9,215,617 |
|
|
|
|
|
Robert A. Dickinson |
28,377,831 |
8,641,202 |
|
|
|
|
|
Gordon J. Fretwell |
36,092,766 |
926,267 |
|
|
|
|
|
Russell E. Hallbauer |
28,054,826 |
8,964,207 |
|
|
|
|
|
Wayne Kirk |
36,789,608 |
229,425 |
|
|
|
|
|
Ronald W. Thiessen |
28,529,016 |
8,490,017 |
|
|
|
|
|
Peter Mitchell |
36,538,780 |
480,253 |
|
|
|
|
|
Marchand Snyman |
28,116,388 |
8,902,645 |
|
|
|
|
|
Kenneth Pickering |
36,762,865 |
256,168 |
3. |
Deloitte LLP, Chartered Accountants, was re-appointed
auditor of the Company. Shares voted in person and proxies received
represented 58,444,606 votes for and 396,446 votes
withheld. |
|
|
4. |
The shareholders approved the adoption of a Deferred
Share Unit Plan. Shares voted in person and proxies received represented
26,644,931 votes for and 10,374,102 votes against. |
|
|
5. |
The shareholders approved the adoption of a Restricted
Share Unit Plan. Shares voted in person and proxies received represented
26,731,579 votes for and 10,287,454 votes
against. |
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