SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
From: April 7, 2010
IVANHOE MINES LTD.
(Translation of Registrants Name into English)
Suite 654 999 CANADA PLACE, VANCOUVER, BRITISH COLUMBIA V6C 3E1
(Address of Principal Executive Offices)
(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-
o
Form 40-F-
þ
(Indicate by check mark whether the registrant by furnishing the information contained in this form
is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.)
Yes:
o
No:
þ
(If Yes is marked, indicate below the file number assigned to the registrant in connection with
Rule 12g3-2(b):
82-____________.)
Enclosed:
Annual Meeting Materials
Notice of Annual and Special Meeting of Shareholders
and
Management Proxy Circular
of
IVANHOE MINES LTD.
DATED: April 5, 2010
IVANHOE MINES LTD.
Notice of Annual and Special Meeting of Shareholders
May 7, 2010
NOTICE IS HEREBY GIVEN
that the Annual and Special Meeting of shareholders of Ivanhoe Mines Ltd.
(the Corporation) will be held on Friday, May 7, 2010, at 9:00 AM local time, in the Presidents
Room of the Terminal City Club located at 837 West Hastings Street, Vancouver, British Columbia for
the following purposes:
1.
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to receive the annual report of the directors to the shareholders;
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2.
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to receive the audited consolidated financial statements of the Corporation for the year
ended December 31, 2009, and the auditors report thereon;
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3.
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to elect twelve (12) directors for the ensuing year;
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4.
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to appoint auditors for the ensuing year and to authorize the directors to fix the auditors
remuneration;
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5.
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to consider, and if thought advisable, to pass a special resolution authorizing the
Corporation to amend its Articles to set the number of directors of the Corporation as not
less than three (3), nor more than fourteen (14);
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6.
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to separately elect one additional director for the ensuing year, contingent upon the
approval of the special resolution to amend the Articles of the Corporation to increase the
maximum number of directors to fourteen (14);
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7.
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contingent upon the approval of the special resolution to amend the Articles of the
Corporation, to consider, and if thought advisable, to pass an ordinary resolution fixing the
number of directors at fourteen (14);
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8.
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to consider, and if thought advisable, to pass an ordinary resolution authorizing the
Corporation to amend and restate the Employees and Directors Equity Incentive Plan (the
Incentive Plan) to: (i) make certain amendments to the amending provisions of the existing
Incentive Plan; and (ii) make certain other technical amendments to the Incentive Plan;
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9.
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to consider, and if thought advisable, to pass an ordinary resolution approving and ratifying
the Shareholder Rights Plan adopted by the Corporation on April 5, 2010, as described in the
accompanying management proxy circular; and
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10.
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to transact such other business as may properly come before the meeting or any adjournment
thereof.
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The Board of Directors has fixed March 18, 2010 as the Record Date for the determination of
shareholders entitled to notice of, and to vote at, the meeting and at any adjournment thereof.
A management proxy circular, form of proxy, the audited consolidated financial statements and
managements discussion and analysis for the year ended December 31, 2009 and a return envelope
accompany this notice of meeting.
A shareholder who is unable to attend the meeting in person and who wishes to ensure that such
shareholders shares will be voted at the meeting, is requested to complete, date and execute the
enclosed form of proxy and deliver it by facsimile, by hand or by mail in accordance with the
instructions set out in the form of proxy and in the management proxy circular.
Dated at Vancouver, British Columbia this 5th day of April, 2010.
BY ORDER OF THE BOARD
Beverly A. Bartlett
Vice President and Corporate Secretary
IVANHOE MINES LTD.
World Trade Centre
654 999 Canada Place
Vancouver, British Columbia, V6C 3E1
MANAGEMENT PROXY CIRCULAR
SOLICITATION OF PROXIES
This Management Proxy Circular is furnished to the holders of common shares (shareholders) of
IVANHOE MINES LTD. (the Corporation) by management of the Corporation in connection with the
solicitation of proxies to be voted at the Annual and Special Meeting (the Meeting) of the
shareholders to be held at 9:00 AM, local time, on May 7, 2010 in the Presidents Room of the
Terminal City Club located at 837 W. Hastings Street, Vancouver, British Columbia, and at any
adjournment thereof, for the purposes set forth in the Notice of Meeting.
The solicitation of proxies by management will be primarily by mail, but proxies may be solicited
personally or by telephone by directors, officers and regular employees of the Corporation. All
costs of this solicitation will be borne by the Corporation.
The Board of Directors of the Corporation has fixed the close of business on March 18, 2010 as the
record date, being the date for the determination of the registered shareholders entitled to
receive notice of, and to vote at, the Meeting (the Record Date).
Unless otherwise stated, the information contained in this Management Proxy Circular is as of March
30, 2010. All dollar amounts are expressed in Canadian dollars (C$ or Cdn$), United States
dollars (US$) or Australian dollars (A$), as indicated.
APPOINTMENT OF PROXYHOLDERS
A shareholder entitled to vote at the Meeting may, by means of a proxy, appoint a proxyholder or
one or more alternate proxyholders, who need not be shareholders, to attend and act at the Meeting
for the shareholder and on the shareholders behalf.
The individuals named in the enclosed form of proxy (the Form of Proxy) are directors and/or
officers of the Corporation.
A shareholder may appoint, as proxyholder or alternate proxyholder, a
person or persons other than any of the persons designated in the enclosed Form of Proxy, and may
do so either by inserting the name or names of such persons in the blank space provided in the
enclosed Form of Proxy or by completing another proper Form of Proxy.
A shareholder forwarding the enclosed Form of Proxy may indicate the manner in which the
proxyholder is to vote with respect to any specific item by checking the appropriate position. If
the shareholder giving the proxy wishes to confer a discretionary authority with respect to any
item of business, then the position opposite the item is to be left blank. The shares represented
by the proxy submitted by a shareholder will be voted in accordance with the directions, if any, given in the
proxy.
An appointment of a proxyholder or alternate proxyholders will not be valid unless a form of proxy
making the appointment, signed by the shareholder or by an attorney of the shareholder authorized
in writing, is deposited with CIBC Mellon
Trust Company, by facsimile to 1-866-781-3111 or
1-416-368-2502, by mail to P.O. Box 721, Agincourt, Ontario, M1S 0A1 or by hand to The Oceanic
Plaza, 1600 1066 Hastings Street, Vancouver, British Columbia, V6E 3K9 or 320 Bay Street, Banking
Hall Level, Toronto, Ontario, M5H 4A6 and received by CIBC Mellon Trust Company not less than 48
hours (excluding Saturdays, Sundays and statutory holidays) before the Meeting or the adjournment
thereof at which the proxy is to be used.
REVOCATION OF PROXIES
A shareholder who has given a proxy may revoke the proxy
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(a)
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by depositing an instrument in writing executed by the shareholder or by the
shareholders attorney authorized in writing
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(i)
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with CIBC Mellon Trust Company, not less than 48
hours (excluding Saturdays, Sundays and statutory holidays) before the
Meeting or the adjournment thereof at which the proxy is to be used,
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(ii)
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at the registered office of the Corporation at any
time up to and including the last business day preceding the day of the
Meeting, or an adjournment thereof, at which the proxy is to be used,
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(iii)
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with the chairman of the Meeting on the day of the
Meeting or an adjournment thereof, or
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(b)
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in any other manner provided by law.
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A revocation of a proxy will not affect a matter on which a vote is taken before the revocation.
EXERCISE OF DISCRETION
The persons named in the enclosed Form of Proxy will vote or withhold from voting the shares in
respect of which they are appointed in accordance with the direction of the shareholders appointing
them.
In the absence of such direction in respect of a particular matter, such shares will be
voted in favour of such matter. The enclosed Form of Proxy confers discretionary authority upon
the persons named therein with respect to amendments or variations to matters identified or
referred to in the Notice of Meeting and this Management Proxy Circular and with respect to other
matters which may properly come before the Meeting.
As of the date of this Management Proxy
Circular, management of the Corporation knows of no such amendments, variations or other matters to
come before the Meeting. However, if any such or other matters which are not now known to
management should properly come before the Meeting, the shares will be voted on such matters in
accordance with the best judgment of the persons named in the Form of Proxy.
VOTES NECESSARY TO PASS RESOLUTIONS
The Corporations by-laws provide that the quorum for the transaction of business at the Meeting is
at least one individual present at the commencement of the Meeting holding, or representing by
Proxy the holder or holders of, common shares carrying, in the aggregate, not less than
thirty-three and one-third percent (33 1/3%) of the votes eligible to be cast at the Meeting.
-2-
Under the
Yukon Business Corporations Act
(the YBCA), a simple majority of the votes cast by
shareholders at the Meeting is required to pass an ordinary resolution and a majority of two-thirds
of the votes cast at the Meeting is required to pass a special resolution.
At the Meeting, shareholders will be asked to elect twelve (12) directors and to appoint auditors
for the ensuing year. Subject as provided below in connection with the separate resolution to
conditionally elect one additional director, if there are more nominees for election as directors
or appointment as the Corporations auditors than there are vacancies to fill (i.e. more than
twelve (12) nominees for election as directors and one (1) nominee for appointment as the
Corporations auditors), 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.
At the Meeting, shareholders will be asked to consider and, if thought advisable, to pass a special
resolution, the full text of which is set out in Schedule A-1 hereto (the Articles Amendment
Resolution), authorizing the Corporation to amend its Articles under section 175 of the YBCA to
set the number of directors of the Corporation as not less than three (3), nor more than fourteen
(14). The proposed amendment is to accommodate the Corporations current contractual obligations
to Rio Tinto plc and/or its subsidiaries (Rio Tinto). For further particulars, see Particulars
of Matters to Be Acted Upon Amendment to the Corporations Articles in this Management Proxy
Circular.
Shareholders will also be asked to separately elect one additional director for the ensuing year
and to fix the number of directors at fourteen (14), contingent upon the passing of the special
resolution to amend the Articles of the Corporation to increase the maximum number of directors to
fourteen (14). It is expected that the fourteenth director, an additional nominee of Rio Tinto,
will be appointed following the Meeting in accordance with Rio Tintos contractual rights. See
Conditional Election of One Additional Director and Future Size of Board of Directors.
At the Meeting, shareholders will be asked to consider and, if thought advisable, to pass an
ordinary resolution, the full text of which is set out in Schedule B hereto (the Equity
Incentive Plan Resolution), all as more particularly described in this Management Proxy Circular
under Particulars of Matters to Be Acted Upon Amended and Restated Equity Incentive Plan,
authorizing the Corporation to amend and restate the Employees and Directors Equity Incentive
Plan (the Incentive Plan) to: (i) make certain amendments to the amending provisions of the
existing Incentive Plan; and (ii) make certain other technical
amendments to the Incentive Plan, as outlined in the amended Incentive Plan attached hereto as
Schedule C.
Shareholders will also be asked at the Meeting to consider, and, if thought advisable, to pass an
ordinary resolution, the full text of which is set out in Schedule D hereto (the Shareholder
Rights Plan Resolution), approving and ratifying the Shareholder Rights Plan adopted by the
Corporation on April 5, 2010, as more particularly described in this Management Proxy Circular
under Particulars of Matters to Be Acted Upon Shareholder Rights Plan, and as summarized in
Schedule E.
-3-
VOTING BY NON-REGISTERED SHAREHOLDERS
Only registered shareholders of the Corporation or the persons they appoint as their proxyholder
are permitted to vote at the Meeting. Most shareholders of the Corporation are non-registered
shareholders (Non-Registered Shareholders) because the shares they own are not registered in
their names but are instead registered in the name of the brokerage firm, bank or trust company
through which they purchased the shares. Shares beneficially owned by a Non-Registered Shareholder
are registered either:
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(i)
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in the name of an intermediary (an Intermediary) that the Non-Registered
Shareholder deals with in respect of the shares of the Corporation (Intermediaries
include, among others, banks, trust companies, securities dealers or brokers and
trustees or administrators of self-administered RRSPs, RRIFs, RESPs, TFSAs and similar
plans); or
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(ii)
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in the name of a clearing agency (such as The Canadian Depository for
Securities Limited) of which the Intermediary is a participant.
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In accordance with applicable securities law requirements, the Corporation will have distributed
copies of the Notice of Meeting, this Management Proxy Circular, the Form of Proxy and the request
form (collectively, the Meeting Materials) to the clearing agencies and Intermediaries for
distribution to Non-Registered Shareholders.
Intermediaries are required to forward the Meeting Materials to Non-Registered Shareholders unless
a Non-Registered Shareholder has waived the right to receive them. Intermediaries often use service
companies to forward the Meeting Materials to Non-Registered Shareholders. Generally,
Non-Registered Shareholders who have not waived the right to receive Meeting Materials will either
be given:
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(a)
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a voting instruction form
which is not signed by the Intermediary
and which,
when properly completed and signed by the Non-Registered Shareholder and
returned to
the Intermediary or its service company
, will constitute voting instructions (often
called a voting instruction form) which the Intermediary must follow. Typically, the
voting instruction form will consist of a one page pre-printed form. Sometimes,
instead of the one page pre-printed form, the voting instruction form will consist of
a regular printed proxy form accompanied by a page of instructions which contains a
removable label with a bar-code and other information.
In order for the Form of Proxy to validly constitute a voting instruction form, the
Non-Registered Shareholder must remove the label from the instructions and affix it
to the Form of Proxy, properly complete and sign the Form of Proxy and submit it to
the Intermediary or its service company in accordance with the instructions of the
Intermediary or its service company; or
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(b)
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a Form of Proxy
which has already been signed by the Intermediary
(typically
by a facsimile, stamped signature), which is restricted as to the number of shares
beneficially owned by the Non-Registered Shareholder but which is otherwise not
completed by the Intermediary. Because the Intermediary has already signed the Form of
Proxy, this Form of Proxy is not required to be signed by the Non-Registered
Shareholder when submitting the proxy. In this case, the Non-Registered Shareholder
who wishes to submit a proxy should properly complete the Form of Proxy and deposit it
with the Corporation, c/o CIBC Mellon Trust Company, The Oceanic Plaza, 1600 1066
Hastings Street, Vancouver, British Columbia, V6E 3K9 or 320 Bay Street, Banking Hall
Level, Toronto, Ontario, M5H 4A6.
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-4-
In either case, the purpose of these procedures is to permit Non-Registered Shareholders to direct
the voting of the shares of the Corporation they beneficially own. Should a Non-Registered
Shareholder who receives one of the above forms wish to vote at the Meeting in person (or have
another person attend and vote on behalf of the Non-Registered Shareholder), the Non-Registered
Shareholder should strike out the persons named in the Form of Proxy and insert the Non-Registered
Shareholder or such other persons name in the blank space provided.
In either case, Non-Registered
Shareholders should carefully follow the instructions of their Intermediary, including those
regarding when and where the proxy or voting instruction form is to be delivered.
A Non-Registered Shareholder may revoke a Form of Proxy or voting instruction form given to an
Intermediary by contacting the Intermediary through which the Non-Registered Shareholders shares
of the Corporation are held and following the instructions of the intermediary respecting the
revocation of proxies. In order to ensure that an Intermediary acts upon a revocation of a proxy
form or voting instruction form, the written notice should be received by the Intermediary well in
advance of the Meeting.
VOTING SHARES AND PRINCIPAL HOLDERS
The Corporations authorized capital consists of an unlimited number of common shares without par
value (Common Shares) and an unlimited number of preferred shares without par value.
As of March 30, 2010, the Corporation had issued 441,146,905 fully paid and non-assessable Common
Shares, each carrying the right to one vote. As of such date, no preferred shares were issued or
outstanding.
A holder of record of one or more Common Shares on the securities register of the Corporation on
the Record Date who either attends the Meeting personally or
deposits a Proxy in the manner and subject to the provisions described above will be entitled to
vote or to have such share or shares voted at the Meeting, except to the extent that
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(a)
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the shareholder has transferred the ownership of any such share after the
Record Date, and
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(b)
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the transferee produces a properly endorsed share certificate for, or
otherwise establishes ownership of, any of the transferred shares and makes a demand
to CIBC Mellon Trust Company no later than 10 days before the Meeting that the
transferees name be included in the list of shareholders in respect thereof.
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To the knowledge of the directors and senior officers of the Corporation, the only persons who
beneficially own, or control or direct, directly or indirectly, Common Shares carrying 10% or more
of the voting rights attached to all outstanding Common Shares of the Corporation, the approximate
number of Common Shares so owned, controlled or directed and the percentage of voting shares of the
Corporation represented by such shares, and the share ownership by the current directors and senior
officers of the Corporation as a group, in each case as at March 30, 2010, are:
-5-
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Number of Shares Owned,
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Percentage of Shares
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Name and Address
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Controlled or Directed
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Outstanding
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Rio Tinto plc
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98,638,128
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(1)
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22.36
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%
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Robert M. Friedland
(2)
Singapore
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96,881,622
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21.96
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%
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Directors and Officers as a group
(2)
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97,609,361
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(3)(4)
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22.13
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%
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(1)
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Includes 15,000,000 Common Shares issued to Rio Tinto on March 19, 2010.
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(2)
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Common Shares are held directly (as to 19,810,801 shares) and indirectly through Newstar
Securities SRL (as to 30,818,992 shares) and Goldamere Holdings SRL (as to 46,251,829 shares),
each company beneficially owned and controlled as to 100% by Mr. Friedland. Common Shares held
directly and indirectly by Mr. Friedland do not include 1,750,000 unissued Common Shares
issuable upon the exercise of incentive stock options held by Mr. Friedland, 375,000 of which
are currently vested and exercisable.
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(3)
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Common Shares held by the directors and senior officers as a group do not include 11,013,875
unissued Common Shares issuable upon the exercise of incentive stock options, 4,319,875 of
which are currently vested and exercisable.
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(4)
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Includes 96,881,622 Common Shares held directly and indirectly by Robert M. Friedland.
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In addition to the foregoing:
(a)
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Rio Tinto also holds the following convertible securities entitling Rio Tinto to acquire
additional unissued Common Shares:
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(i)
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share purchase warrants to purchase up to: (i) 92,053,044 Common
Shares at prices between US$8.38 and US$9.02 per Common Share, (ii) 35,000,000
Common Shares at US$10.00 per Common Share, and (iii) 1,440,406 Common Shares at a
price of C$3.15 per Common Share; and
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(ii)
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a credit facility convertible into up to an additional 45,800,000
Common Shares at US$10.00 per Common Share.
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If all of the above-described convertible securities are exercised to acquire all of the
underlying unissued Common Shares, Rio Tinto would hold
approximately 44% of the Corporations issued and outstanding Common Shares.
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Concurrent with the Private Placement Agreement between the Corporation and Rio Tinto
entered into in 2006 (the 2006 Rio Tinto Agreement), Rio Tinto and Mr. Friedland entered
into a shareholders agreement, whereby Mr. Friedland has agreed to vote or cause to be
voted any Common Shares he controls, directly or indirectly, in favour of any transaction
contemplated by the 2006 Rio Tinto Agreement.
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(b)
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Fidelity Management & Research Company (Fidelity), a wholly-owned subsidiary of FMR LLC, of
Boston, Massachusetts, owns 32,259,100 (7.31%) of the issued and outstanding Common Shares.
Fidelity is an investment adviser to various U.S. investment companies.
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(c)
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CDP Capital World Markets (CDP), a direct and wholly-owned subsidiary of the Caisse de
dépôt et placement du Québec (Caisse de dépôt), of Montreal, Québec, owns 30,488,630 (6.91%)
of the issued and outstanding Common Shares. Caisse de dépôt is a global fund manager
managing funds deposited primarily by public and private pension funds and insurance plans in
the Province of Québec, Canada.
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-6-
Information relating to Fidelity and CDP and their parent corporations and subsidiaries are
not within the knowledge of management of the Corporation and have been derived from
filings with the U.S. Securities and Exchange Commission, and represents the number of
Common Shares held by Fidelity and CDP as of March 30, 2010.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
No person who has been a director or executive officer of the Corporation at any time since the
beginning of its last completed financial year, any proposed nominee for director of the
Corporation or any associate or affiliate of the foregoing, has any material interest, direct or
indirect, in any matter to be acted upon at the Meeting, except as disclosed in this Information
Circular.
ELECTION OF DIRECTORS
Term of Office
The Corporations Articles currently provide that the number of directors of the Corporation will
be a minimum of 3 and a maximum of 12. The term of office of each of the current directors will
end at the conclusion of the Meeting. Unless a directors office is earlier vacated in accordance
with the provisions of the YBCA, each director elected will hold office until the conclusion of the
next annual meeting of the Corporation or, if no director is then elected, until a successor is
elected.
The Corporation is requesting that shareholders consider and, if thought advisable, approve by
special resolution at the Meeting an amendment to the Corporations Articles to set the number of
directors as not less than three (3), nor more than fourteen (14), and then to conditionally elect
an additional director and fix the number of directors at fourteen (14). For further information,
see Particulars of Matters to be Acted Upon Amendment to the Corporations
Articles, and: Conditional Resolution to Fix the Number of Directors at Fourteen (14),
Conditional Election of One Additional Director, and Future Size of Board of Directors.
Management Nominees
The following table sets out the names of managements 12 nominees for election as directors, their
ages, all major offices and positions with the Corporation and any of its significant affiliates
each now holds, each nominees principal occupation, business or employment, the period of time
during which each has been a director of the Corporation, the number of Common Shares of the
Corporation beneficially owned, or controlled or directed, directly or indirectly, by each as at
March 30, 2010, and the number of options to purchase Common Shares of the Corporation and common
shares of the Corporations publicly traded affiliates held by each as at March 30, 2010.
-7-
Robert M. Friedland
Singapore
Age: 59
Executive Chairman
Director Since: 1994
(15)
Director Status:
Non-Independent
(Management)
Areas of Experience:
CEO/Board
Finance
Mining Industry
Public Capital Markets
Managing/Leading Growth
Mr. Friedland is the founder and Executive Chairman of the Corporation. He has been a member of the Corporations Executive Committee since its formation in March 2005.
He is Chairman and President of Ivanhoe Capital Corporation, a company based in Singapore and Beijing that specializes in venture capital and project financing for international business enterprises, predominantly in the fields of energy and minerals. He is a co-founder and the Executive Chairman, President
and Chief Executive Officer of Ivanhoe Energy Inc., which is implementing projects applying the companys advanced, proprietary technology which converts heavy oil into lighter crude oil.
Mr. Friedland was named 2006 Mining Person of the Year by the Northern Miner publishing group of Canada for his success in negotiating a strategic partnership between the Corporation and Rio Tinto to develop the Corporations Oyu Tolgoi copper-gold project in Mongolia. Following his earlier role in the
discovery and sale of the Voiseys Bay nickel-copper-cobalt deposit in Eastern Canada, he was named Developer of the Year in 1996 by the Prospectors and Developers Association of Canada for his work in establishing and financing companies engaged in mineral exploration and development around the world.
Mr. Friedland graduated from Reed College, Oregon, in 1974 with an undergraduate degree in political science.
Principal Occupation, Business or Employment
(1)
Chairman of the Corporation (March 1994 present); President of the Corporation (March 1994 July 1994; March 2003 January 2004); Chairman, Ivanhoe Capital Corporation (January 1991 present); President, Ivanhoe Capital Corporation (July 1988 present); Executive Chairman, President and Chief
Executive Officer, Ivanhoe Energy Inc. (May 2008 present); Chairman and Non-Executive Director, Ivanhoe Australia Limited (2007 present), Director and Chairman, Potash One Inc. (2009- present)
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2009
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Other Public Company Board Membership:
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Board/Committee Membership:
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Attendance:
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Company:
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Since:
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Board of Directors
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3 of 8
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38
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%
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Ivanhoe Energy Inc. (TSX; NASDAQ)(13)
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1995
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Executive Committee
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0 of 0
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N/A
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Ivanhoe Australia Limited (ASX)(13)
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2007
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Total:
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3 of 8
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38
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%
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Potash One Inc. (TSX) (Chair)
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2009
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Common Shares Beneficially Owned, Controlled or Directed
(1)(2)
:
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Company Name
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|
Year
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Common
Shares
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Total Market
Value of
Common Shares
(5)
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Ivanhoe Mines Ltd.
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2010
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96,881,622
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C$
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1,677,989,693
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2009
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96,881,622
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C$
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708,204,657
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SouthGobi Energy Resources Ltd.
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2010
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Nil
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Nil
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2009
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Nil
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Nil
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Ivanhoe Australia Limited
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2010
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|
|
2,000,000
|
|
|
A$
|
6,980,000
|
|
|
|
|
2009
|
|
|
Nil
|
|
Nil
|
Options Held:
(12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
|
|
|
|
|
Number
|
|
|
Vested/
|
|
|
Exercise
|
|
|
Total
|
|
|
Unexercised
|
|
Date Granted
|
|
Expiry Date
|
|
|
Granted
|
|
|
Unvested
|
|
|
Price
(6)
|
|
|
Unexercised
|
|
|
Options
(7)
|
|
May 8, 2009
|
|
May 8, 2016
|
|
|
1,500,000
|
|
|
|
375,000 / 1,125,000
(16)
|
|
|
C$
|
8.20
|
|
|
|
1,500,000
|
|
|
C$
|
13,680,000
|
|
Oct. 9, 2009
|
|
Oct. 9, 2016
|
|
|
250,000
|
|
|
Nil/250,000
(8)
|
|
C$
|
13.76
|
|
|
|
250,000
|
|
|
C$
|
890,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
C$
|
14,570,000
|
|
Options Held in Publicly Traded Affiliates of the Corporation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
Vested/
|
|
|
Exercise
|
|
|
Total
|
|
|
Unexercised
|
|
Name of Affiliate
|
|
Date Granted
|
|
|
Expiry Date
|
|
|
Granted
|
|
|
Unvested
|
|
|
Price
(6)
|
|
|
Unexercised
|
|
|
Options
(7)
|
|
SouthGobi Energy Resources Ltd.
|
|
Nov. 27, 2008
|
|
Nov. 27, 2013
|
|
|
125,000
|
|
|
|
41,250/ 83,750
|
|
|
C$
|
5.10
|
|
|
|
125,000
|
|
|
C$
|
1,405,000
|
|
SouthGobi Energy Resources Ltd.
|
|
July 9, 2008
|
|
July 9, 2013
|
|
|
250,000
|
|
|
|
82,500 /167,500
|
|
|
C$
|
18.86
|
|
|
|
250,000
|
|
|
Nil
|
Ivanhoe Australia Limited
|
|
Aug. 6, 2008
|
|
|
n/a
|
|
|
|
4,000,000
|
|
|
Nil / 2,000,000
|
|
Nil
(14)
|
|
|
2,000,000
|
|
|
|
A$6,980,000
|
|
Value of Equity at Risk:
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
Common Shares
(5)
|
|
|
Unexercised Options
(7)
|
|
|
Total
|
|
2010
|
|
C$
|
1,677,989,693
|
|
|
C$
|
14,570,000
|
|
|
C$
|
1,692,559,695
|
|
2009
|
|
C$
|
708,204,657
|
|
|
Nil
|
|
C$
|
708,204,657
|
|
-8-
Peter G. Meredith
Vancouver,
British Columbia, Canada
Age: 66
Deputy Chairman
Director Since:
2005
(15)
Director Status:
Non-Independent
(Management)
Areas of Experience:
CEO/Board
Finance
Mining Industry
Financially Literate
Public Capital Markets
Peter Meredith became the Corporations Deputy Chairman in May 2006 and oversees the Corporations business development and corporate relations. Mr. Meredith was the Corporations CFO from May 2004 to May 2006 and from June 1999 to November 2001. He was the CEO of SouthGobi Energy Resources Ltd. from June 2007 until October
2009, at which time he was appointed chairman of SouthGobi.
Prior to joining the Corporation, Mr. Meredith spent 31 years with Deloitte & Touche LLP, Chartered Accountants, and retired as a partner in 1996. Mr. Meredith is a Chartered Accountant, a Certified Management Accountant and a member of the Canadian Institute of Chartered Accountants.
Principal Occupation, Business or Employment
(1)
Deputy Chairman (May 2006 present); Chief Financial Officer of the Corporation (June 1999 November 2001; May 2004 May 2006); Chairman, SouthGobi Energy Resources Ltd. (October 2009 present); Chief Financial Officer, Ivanhoe Capital Corporation (1996 March 2009); Senior Partner, Deloitte & Touche LLP, chartered
accountants (1966 1996).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
Other Public Company Board Membership:
|
Board/Committee Membership:
|
|
Attendance:
|
|
|
Company:
|
|
Since:
|
|
Board of Directors
|
|
7 of 8
|
|
|
88
|
%
|
|
Ivanhoe Energy Inc. (TSX; NASDAQ)
(13)
|
|
|
2007
|
|
Currency Advisory Committee
|
|
2 of 2
|
|
|
100
|
%
|
|
SouthGobi Energy Resources Ltd.
(TSX)(SEHK)
(13)
|
|
|
2003
|
|
Executive Committee
|
|
0 of 0
|
|
|
N/A
|
|
|
Entrée Gold Inc. (TSX; AMEX)
(Audit Committee Chair; Compensation
Committee)
|
|
|
2002
|
|
Total:
|
|
9 of 10
|
|
|
90
|
%
|
|
Great Canadian Gaming Corporation (TSX)
(Compensation Committee Chair; Audit &
Risk Committee)
|
|
|
2000
|
|
|
|
|
|
|
|
|
|
|
|
Ivanhoe Australia Limited (ASX)
(13)
(Nomination, Governance and Remuneration Committee)
|
|
|
2007
|
|
Common Shares Beneficially Owned, Controlled or Directed
(1)(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
Company Name
|
|
Year
|
|
|
Common
Shares
|
|
|
Total Market
Value of
Common Shares
(5)
|
|
Ivanhoe Mines Ltd.
|
|
|
2010
|
|
|
|
48,500
|
|
|
C$
|
840,020
|
|
|
|
|
2009
|
|
|
|
45,000
|
|
|
C$
|
328,950
|
|
SouthGobi Energy Resources Ltd.
|
|
|
2010
|
|
|
Nil
|
|
Nil
|
|
|
|
2009
|
|
|
Nil
|
|
Nil
|
Ivanhoe Australia Limited
|
|
|
2010
|
|
|
|
250,000
|
|
|
A$
|
872,500
|
|
|
|
|
2009
|
|
|
Nil
|
|
Nil
|
Options Held:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
|
|
|
|
|
Number
|
|
|
Vested/
|
|
|
Exercise
|
|
|
Total
|
|
|
Unexercised
|
|
Date Granted
|
|
Expiry Date
|
|
|
Granted
|
|
|
Unvested
|
|
|
Price
(6)
|
|
|
Unexercised
|
|
|
Options
(7)
|
|
Oct. 9, 2009
|
|
Oct.9, 2016
|
|
|
250,000
|
|
|
Nil/250,000
(8)
|
|
C$
|
13.76
|
|
|
|
250,000
|
|
|
C$
|
890,000
|
|
July 23, 2009
|
|
July 23, 2016
|
|
|
200,000
|
|
|
Nil/200,000
(9)
|
|
C$
|
8.77
|
|
|
|
200,000
|
|
|
C$
|
1,710,000
|
|
May 8, 2009
|
|
May 8, 2016
|
|
|
750,000
|
|
|
|
187,500/ 562,500
|
(16)
|
|
C$
|
8.20
|
|
|
|
750,000
|
|
|
C$
|
6,840,000
|
|
Nov 13, 2008
|
|
Nov. 13, 2015
|
|
|
420,000
|
|
|
Nil/315,000
(11)(17)
|
|
C$
|
2.82
|
|
|
|
315,000
|
|
|
C$
|
4,567,500
|
|
Sept 22, 2008
|
|
Sept. 22, 2013
|
|
|
250,000
|
|
|
Nil/187,500
(12)(18)
|
|
C$
|
8.35
|
|
|
|
187,500
|
|
|
C$
|
1,681,875
|
|
Mar. 27, 2006
|
|
Mar. 27, 2013
|
|
|
400,000
|
|
|
400,000/Nil
|
|
C$
|
9.73
|
|
|
|
400,000
|
|
|
C$
|
3,036,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total:
|
|
|
C$
|
18,725,375
|
|
Options Held in Publicly Traded Affiliates of the Corporation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
Vested/
|
|
|
Exercise
|
|
|
Total
|
|
|
Unexercised
|
|
Name of Affiliate
|
|
Date Granted
|
|
|
Expiry Date
|
|
|
Granted
|
|
|
Unvested
|
|
|
Price
(6)
|
|
|
Unexercised
|
|
|
Options
(7)
|
|
SouthGobi Energy Resources Ltd
|
|
Aug. 5, 2009
|
|
Aug. 5, 2014
|
|
|
75,000
|
|
|
Nil/75,000
|
|
C$
|
12.99
|
|
|
|
75,000
|
|
|
C$
|
251,250
|
|
SouthGobi Energy Resources Ltd.
|
|
Nov. 27, 2008
|
|
Nov. 27, 2013
|
|
|
75,000
|
|
|
|
24,750/ 50,250
|
|
|
C$
|
5.10
|
|
|
|
75,000
|
|
|
C$
|
843,000
|
|
SouthGobi Energy Resources Ltd.
|
|
Aug. 27, 2008
|
|
Aug. 27, 2013
|
|
|
100,000
|
|
|
|
33,000/67,000
|
|
|
C$
|
15.07
|
|
|
|
100,000
|
|
|
C$
|
127,000
|
|
SouthGobi Energy Resources Ltd.
|
|
June 22, 2007
|
|
June 22, 2012
|
|
|
495,000
|
|
|
415,000/Nil
|
|
C$
|
6.00
|
|
|
|
415,000
|
(19)
|
|
C$
|
4,291,100
|
|
Ivanhoe Australia Limited
|
|
Aug. 6, 2008
|
|
|
n/a
|
|
|
|
500,000
|
|
|
Nil / 250,000
|
|
|
Nil
|
(14)
|
|
250,000
|
|
|
A$
|
872,500
|
|
Value of Equity at Risk:
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
Common Shares
(5)
|
|
|
Unexercised Options
(7)
|
|
|
Total
|
|
2010
|
|
C$
|
840,020
|
|
|
C$
|
18,725,375
|
|
|
C$
|
19,565,395
|
|
2009
|
|
C$
|
328,950
|
|
|
C$
|
1,885,800
|
|
|
C$
|
2,214,750
|
|
-9-
John A. Macken
Somerville, Massachusetts, U.S.A.
Age: 58
President and Chief Executive Officer
Director Since: 2003
(15)
Director Status:
Non-Independent
(Management)
Areas of Experience:
CEO/Board
Exploration
Engineering
Mining Industry
Project Development and Management
Managing/Leading Growth
John Macken joined the Corporation in November 2003 and is its President and Chief Executive Officer. He has been a member of the Corporations Executive Committee since its formation in March 2005. Prior to joining the Corporation, Mr. Macken had spent 19 years with Freeport McMoran Copper and Gold, most recently as Freeports Senior
Vice-President of Strategic Planning and Development. Mr. Macken was the Chairman of SouthGobi Energy Resources Ltd. from June 2007 until October 2009.
Mr. Macken spent a total of 13 years with Freeports operating unit, P.T. Freeport Indonesia. He culminated his tour of duty as Executive Director PT FI and the General Manager of the Grasberg open pit and underground mining complex in Papua, the worlds largest single copper and gold mine, and from 1996 to 2000 he held the position of
Senior Vice-President, Strategic Planning and Development at Freeports corporate office. Between 1996 and 1998, Mr. Macken headed and completed ahead of schedule and under budget an expansion valued at almost US$1 billion at the Grasberg mining complex. Mr. Macken graduated from Trinity College in Dublin in 1976 with a BA and BAI (Hon)
in engineering.
Principal Occupation, Business or Employment
(1)
Chief Executive Officer of the Corporation (May 2006 present); President of the Corporation (January 2004 present)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
Other Public Company Board Membership:
|
Board/Committee Membership:
|
|
Attendance:
|
|
Company:
|
|
|
Since:
|
Board of Directors
|
|
7 of 8
|
|
|
88
|
%
|
|
SouthGobi Energy Resources Ltd.
(TSX) (Hong Kong)
(13)
|
|
|
2007
|
|
Executive Committee
|
|
0 of 0
|
|
|
N/A
|
|
|
Western Lithium Corporation (TSX-V)
|
|
|
2008
|
|
Total:
|
|
7 of 8
|
|
|
88
|
%
|
|
Ivanhoe Australia Limited (ASX)
(Safety, Health and Environmental
Committee - Chair)
|
|
|
2007
|
|
Common Shares Beneficially Owned, Controlled or Directed
(1)(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
Company Name
|
|
Year
|
|
|
Common Shares
|
|
|
Total Market
Value of
Common Shares
(5)
|
|
Ivanhoe Mines Ltd.
|
|
|
2010
|
|
|
|
98,659
|
|
|
C$
|
1,708,774
|
|
|
|
|
2009
|
|
|
|
87,403
|
|
|
C$
|
638,916
|
|
SouthGobi Energy Resources Ltd.
|
|
|
2010
|
|
|
Nil
|
|
Nil
|
|
|
|
2009
|
|
|
Nil
|
|
Nil
|
Ivanhoe Australia Limited
|
|
|
2010
|
|
|
|
250,000
|
|
|
A$
|
872,500
|
|
|
|
|
2009
|
|
|
Nil
|
|
Nil
|
Options Held:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
|
|
|
|
|
Number
|
|
|
Vested/
|
|
|
Exercise
|
|
|
Total
|
|
|
Unexercised
|
|
Date Granted
|
|
Expiry Date
|
|
|
Granted
|
|
|
Unvested
|
|
|
Price
(6)
|
|
|
Unexercised
|
|
|
Options
(7)
|
|
Oct. 9, 2009
|
|
Oct. 9, 2016
|
|
|
250,000
|
|
|
Nil /250,000
(8)
|
|
C$
|
13.76
|
|
|
|
250,000
|
|
|
C$
|
890,000
|
|
May 8, 2009
|
|
May 8, 2016
|
|
|
1,500,000
|
|
|
|
375,000/ 1,125,000
(10)
|
|
|
C$
|
8.20
|
|
|
|
1,500,000
|
|
|
C$
|
13,680,000
|
|
Nov. 13, 2008
|
|
Nov. 13, 2015
|
|
|
900,000
|
|
|
|
225,000/ 675,000
(11)
|
|
|
C$
|
2.82
|
|
|
|
900,000
|
|
|
C$
|
13,050,000
|
|
Sept. 22, 2008
|
|
Sept. 22, 2013
|
|
|
250,000
|
|
|
|
62,500/ 187,500
(12)
|
|
|
C$
|
8.35
|
|
|
|
250,000
|
|
|
C$
|
2,242,500
|
|
Mar. 27, 2006
|
|
Mar. 27, 2013
|
|
|
2,000,000
|
|
|
|
1,000,000/ Nil
(20)
|
|
|
C$
|
9.73
|
|
|
|
1,000,000
|
|
|
C$
|
7,590,000
|
|
Mar. 30, 2004
|
|
Mar. 30, 2014
|
|
|
1,000,000
|
|
|
1,000,000 / Nil
|
|
C$
|
7.78
|
|
|
|
1,000,000
|
|
|
C$
|
9,540,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total:
|
|
|
C$
|
46,992,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options Held in Publicly Traded Affiliates of the Corporation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
Vested/
|
|
|
Exercise
|
|
|
Total
|
|
|
Unexercised
|
|
Name of Affiliate
|
|
Date Granted
|
|
|
Expiry Date
|
|
|
Granted
|
|
|
Unvested
|
|
|
Price
(6)
|
|
|
Unexercised
|
|
|
Options
(7)
|
|
SouthGobi Energy
Resources Ltd.
|
|
Aug. 5, 2009
|
|
Aug. 5, 2014
|
|
|
36,000
|
|
|
Nil/36,000
|
|
C$
|
12.99
|
|
|
|
36,000
|
|
|
C$
|
120,600
|
|
SouthGobi Energy Resources Ltd.
|
|
Nov. 27, 2008
|
|
Nov. 27, 2013
|
|
|
40,000
|
|
|
|
13,200/26,800
|
|
|
C$
|
5.10
|
|
|
|
40,000
|
|
|
C$
|
449,600
|
|
SouthGobi Energy Resources Ltd.
|
|
Aug. 27, 2008
|
|
Aug. 27, 2013
|
|
|
50,000
|
|
|
|
16,500/33,500
|
|
|
C$
|
15.07
|
|
|
|
50,000
|
|
|
C$
|
63,500
|
|
SouthGobi Energy
Resources Ltd.
|
|
June 22, 2007
|
|
June 22, 2012
|
|
|
250,000
|
|
|
250,000/Nil
|
|
C$
|
6.00
|
|
|
|
250,000
|
|
|
C$
|
2,585,500
|
|
Ivanhoe Australia
Limited
|
|
Aug. 6, 2008
|
|
|
n/a
|
|
|
|
500,000
|
|
|
|
Nil/250,000
|
|
|
Nil
(14)
|
|
|
250,000
|
|
|
A$
|
872,500
|
|
Value of Equity at Risk:
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
Common Shares
(5)
|
|
|
Unexercised Options
(7)
|
|
|
Total
|
|
2010
|
|
C$
|
1,708,774
|
|
|
C$
|
46,992,500
|
|
|
C$
|
48,701,274
|
|
2009
|
|
C$
|
638,916
|
|
|
C$
|
4,041,000
|
|
|
C$
|
4,679,916
|
|
-10-
David Huberman
Vancouver, British Columbia
Canada
Age: 75
Lead Director
Director Since: 2003
(15)
Director Status:
Independent
Areas of Experience:
Board
Legal
Finance
Governance
Compensation
Mining Industry
David Huberman is the President of Coda Consulting Corp., a law and business
consulting firm. He practiced business law from 1972 until 1996 as a senior
partner of a Canadian business law firm, specializing in corporate, commercial,
banking, securities, regulatory and mining law. From 1997 to 1999, he served
as Executive Vice President and General Counsel of Lions Gate Entertainment
Corp.
Mr. Huberman received his B.A. and LL.B. from the University of British
Columbia and his LL.M. from Harvard Law School. He was called to the British
Columbia bar in 1960 and was a full time member of the Faculty of Law at the
University of British Columbia from 1960 to 1972, focusing on corporate,
securities and administrative law.
Mr. Huberman was appointed to the Corporations Board of Directors as
Lead Independent Director in September, 2003 and as Chairman of the
Corporate Governance & Nominating Committee and the Compensation &
Benefits Committee in November, 2003. He has been a member of the
Corporations Executive Committee since its formation in March, 2005.
Mr. Huberman is a member of the Institute of Corporate Directors.
Principal Occupation, Business or Employment
(1)
President, Coda Consulting Corp. (1993 present)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
Other Public Company Board Membership:
|
|
Board/Committee Membership:
|
|
Attendance:
|
|
|
Company:
|
|
|
Since:
|
|
Board of Directors
Lead Director
|
|
8 of 8
|
|
|
100
|
%
|
|
|
n/a
|
|
|
|
n/a
|
|
Corporate Governance & Nominating
Committee
Chairman
|
|
4 of 4
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
Compensation & Benefits Committee
Chairman
|
|
5 of 5
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
Non-Management Directors
|
|
0 of 0
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
Executive Committee
|
|
0 of 0
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
Total:
|
|
17 of 17
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
Common Shares Beneficially Owned, Controlled or Directed
(1)(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Market
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
Minimum Share
|
|
Company Name
|
|
Year
|
|
Common Shares
|
|
|
Common Shares
(5)
|
|
|
Ownership Required
(4)
|
|
Ivanhoe Mines Ltd.
|
|
2010
|
|
|
70,558
|
|
|
C$
|
1,222,065
|
|
|
C$
|
120,000
|
|
|
|
2009
|
|
|
90,558
|
|
|
C$
|
661,979
|
|
|
(meets requirement)
|
SouthGobi Energy
Resources Ltd.
|
|
2010
|
|
Nil
|
|
Nil
|
|
|
|
|
|
|
2009
|
|
Nil
|
|
Nil
|
|
|
|
|
Ivanhoe Australia Limited
|
|
2010
|
|
Nil
|
|
Nil
|
|
|
|
|
|
|
2009
|
|
Nil
|
|
Nil
|
|
|
|
|
Options Held:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
Vested/
|
|
Exercise
|
|
|
Total
|
|
|
Value of Unexercised
|
|
Date Granted
|
|
Expiry Date
|
|
Granted
|
|
|
Unvested
|
|
Price
(6)
|
|
|
Unexercised
|
|
|
Options
(7)
|
|
May 8, 2009
|
|
May 8, 2016
|
|
|
50,000
|
|
|
Nil/50,000
(10)
|
|
C$
|
8.20
|
|
|
|
50,000
|
|
|
C$
|
456,000
|
|
Nov. 13, 2008
|
|
Nov. 13, 2015
|
|
|
22,500
|
|
|
Nil/16,875
(11)(21)
|
|
C$
|
2.82
|
|
|
|
16,875
|
|
|
C$
|
244,688
|
|
May 9, 2008
|
|
May 9, 2013
|
|
|
25,000
|
|
|
8,125/Nil
(22)
|
|
C$
|
9.64
|
|
|
|
8,125
|
|
|
C$
|
62,400
|
|
May 11, 2007
|
|
May 11, 2012
|
|
|
25,000
|
|
|
25,000/Nil
|
|
C$
|
13.35
|
|
|
|
25,000
|
|
|
C$
|
99,250
|
|
May 12, 2006
|
|
May 12, 2011
|
|
|
25,000
|
|
|
25,000/Nil
|
|
C$
|
10.56
|
|
|
|
25,000
|
|
|
C$
|
169,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total: C$1,031,338
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of Equity at Risk:
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
Common Shares
(5)
|
|
|
Unexercised Options
(7)
|
|
|
Total
|
|
2010
|
|
C$
|
1,222,065
|
|
|
C$
|
1,031,338
|
|
|
C$
|
2,253,402
|
|
2009
|
|
C$
|
661,979
|
|
|
C$
|
101,025
|
|
|
C$
|
763,004
|
|
-11-
David Korbin
West Vancouver, British Columbia, Canada
Age: 68
Director Since: 2006
(15)
Director Status:
Independent
Areas of Experience:
Board
Financial
Governance
Compensation
Financially Literate
David Korbin, a management and financial consultant, was appointed to the
Corporations Board of Directors in May 2006. From 2001 to May 2007, he was
Director of E-Comm Emergency Communications for Southwest British Columbia
Incorporated, serving as Chair of the Board of Directors from 2004 and Chair of
their audit committee from 2002 to 2003. From 1992 to 2000, he was a director
of the Vancouver General Hospital and the Vancouver Hospital and Health
Sciences Centre, serving as Chair of the Audit Committee from 1993 to 1994 and
Chair of the Vancouver Hospital and Health Sciences Centre from 1995 to 1998.
Mr. Korbin qualified as a Chartered Accountant in 1966, and prior to 1987
served as managing partner of a number of smaller accounting firms. From 1987
to 1990, he was a managing partner of the Vancouver office of Deloitte Haskins
and Sells and from 1990 to 1992 he was managing partner of Deloitte & Touche
LLP. Mr. Korbin was also on the national board of both Deloitte Haskins and
Sells and Deloitte & Touche during his tenure as managing partner.
Mr. Korbin is a member of the Institute of Corporate Directors.
Principal Occupation, Business or Employment
(1)
Independent Financial Consultant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
Other Public Company Board Membership:
|
|
Board/Committee Membership:
|
|
Attendance:
|
|
|
Company:
|
|
Since:
|
|
Board of Directors
|
|
7 of 8
|
|
|
88
|
%
|
|
Ivanhoe Australia Limited (ASX)
(17)
(Audit and Finance Committee)
|
|
|
2007
|
|
Audit Committee
Chairman
|
|
4 of 4
|
|
|
100
|
%
|
|
|
|
|
|
|
Compensation & Benefits Committee
|
|
5 of 5
|
|
|
100
|
%
|
|
|
|
|
|
|
Currency Advisory Committee
|
|
2 of 2
|
|
|
100
|
%
|
|
|
|
|
|
|
Non-Management Directors
|
|
0 of 0
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total:
|
|
18 of 19
|
|
|
95
|
%
|
|
|
|
|
|
|
Common Shares Beneficially Owned, Controlled or Directed
(1)(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Market
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
Minimum Share
|
|
Company Name
|
|
Year
|
|
Common Shares
|
|
|
Common Shares
(5)
|
|
|
Ownership Required
(4)
|
|
Ivanhoe Mines Ltd.
|
|
2010
|
|
|
20,000
|
|
|
C$
|
346,400
|
|
|
C$
|
120,000
|
|
|
|
2009
|
|
|
20,000
|
|
|
C$
|
146,200
|
|
|
(meets requirement)
|
SouthGobi Energy
Resources Ltd.
|
|
2010
|
|
|
1,000
|
|
|
C$
|
16,340
|
|
|
|
|
|
|
|
2009
|
|
Nil
|
|
Nil
|
|
|
|
|
Ivanhoe Australia Limited
|
|
2010
|
|
|
60,000
|
|
|
A$
|
209,400
|
|
|
|
|
|
|
|
2009
|
|
Nil
|
|
Nil
|
|
|
|
|
Options Held:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
Vested/
|
|
|
Exercise
|
|
|
Total
|
|
|
Value of Unexercised
|
|
Date Granted
|
|
Expiry Date
|
|
Granted
|
|
|
Unvested
|
|
|
Price
(6)
|
|
|
Unexercised
|
|
|
Options
(7)
|
|
May 8, 2009
|
|
May 8, 2016
|
|
|
50,000
|
|
|
Nil/50,000
(10)
|
|
C$
|
8.20
|
|
|
|
50,000
|
|
|
C$
|
456,000
|
|
Nov. 13, 2008
|
|
Nov. 13, 2015
|
|
|
22,500
|
|
|
Nil/16,875
(11)(23)
|
|
C$
|
2.82
|
|
|
|
16,875
|
|
|
C$
|
244,688
|
|
May 9, 2008
|
|
May 9, 2013
|
|
|
25,000
|
|
|
25,000/Nil
|
|
C$
|
9.64
|
|
|
|
25,000
|
|
|
C$
|
192,000
|
|
May 11, 2007
|
|
May 11, 2012
|
|
|
25,000
|
|
|
25,000/Nil
|
|
C$
|
13.35
|
|
|
|
25,000
|
|
|
C$
|
99,250
|
|
May 12, 2006
|
|
May 12, 2011
|
|
|
25,000
|
|
|
10,000/Nil
(34)
|
|
C$
|
10.56
|
|
|
|
10,000
|
|
|
C$
|
67,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total: C$1,059,538
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options Held in Publicly Traded Affiliates of the Corporation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
Vested/
|
|
|
Exercise
|
|
|
Total
|
|
|
Value of Unexercised
|
|
Name of Affiliate
|
|
Date Granted
|
|
|
Expiry Date
|
|
|
Granted
|
|
|
Unvested
|
|
|
Price
(6)
|
|
|
Unexercised
|
|
|
Options
(7)
|
|
Ivanhoe Australia
Limited
(14)
|
|
Aug. 6, 2008
|
|
|
n/a
|
|
|
|
100,000
|
|
|
Nil / 50,000
|
|
Nil
(14)
|
|
|
50,000
|
|
|
A$
|
174,500
|
|
Value of Equity at Risk:
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
Common Shares
(5)
|
|
|
Unexercised Options
(7)
|
|
|
Total
|
|
2010
|
|
C$
|
346,400
|
|
|
C$
|
1,059,538
|
|
|
C$
|
1,405,938
|
|
2009
|
|
C$
|
146,200
|
|
|
C$
|
101,025
|
|
|
C$
|
247,225
|
|
-12-
R. Edward Flood
Ketchum, Idaho
United States
Age: 64
Director Since: 1995
(15)
Director Status:
Non-Independent
(3)
Areas of Experience:
CEO/Board
Finance
Geology
Exploration
Mining Industry
Financially Literate
Project Development
Public Capital Markets
Ed Flood has been a director of Ivanhoe Mines since its founding in 1994 and
was also its founding President until May 1999. He is the Chairman of Western
Uranium Corporation, a mineral exploration corporation with a focus on uranium.
Mr. Flood served as Deputy Chairman of Ivanhoe Mines Ltd. until February 2007,
assisting in developing Ivanhoes growth and its establishment as a significant
presence in Asias mineral exploration and mining sectors. Prior to joining
Ivanhoe, from 1993 to 1995, Mr. Flood was a principal at Robertson Stephens &
Co., a U.S. investment bank, and a member of Robertson Stephens investment
team. From 1983 to 1993, he served as Manager, Project Evaluation for NERCO
Minerals Corporation. He also held the position of senior mining analyst with
Haywood Securities Inc. from 1999 to 2001 and Managing Director, Investment
Banking, Haywood Securities (UK) Ltd. from March 2007 to March 2010.
Mr. Flood holds a Master of Science in Geology from the University of Montana
and a Bachelor in Science in Geology from the University of Nevada. He is a
member of the Institute of Corporate Directors.
Principal Occupation, Business or Employment
(1)
Chairman of Western Uranium Corporation (March 2007 present); Managing
Director, Investment Banking, Haywood Securities (UK) Ltd. (March 2007 March
2010); Deputy Chairman of Ivanhoe (May 1999 February 2007); Senior Mining
Analyst, Haywood Securities Inc. (May 1999 November 2001), President of the
Corporation (1995 1999)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
Other Public Company Board Membership:
|
|
Board/Committee Membership:
|
|
Attendance:
|
|
|
Company:
|
|
Since:
|
|
Board of Directors
|
|
6 of 8
|
|
|
75
|
%
|
|
Western Uranium Corporation
(TSX-V) Chairman
|
|
|
2007
|
|
Non Management Directors
|
|
0 of 0
|
|
|
N/A
|
|
|
Western Lithium Canada Corporation (TSX-V)
|
|
|
2008
|
|
Total:
|
|
6 of 8
|
|
|
75
|
%
|
|
SouthGobi Energy Resources Ltd. (TSX) (Hong Kong)
|
|
|
2003
|
|
Common Shares Beneficially Owned, Controlled or Directed
(1)(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
Company Name
|
|
Year
|
|
|
Common Shares
|
|
|
Total Market
Value of
Common Shares
(5)
|
|
Ivanhoe Mines Ltd.
|
|
|
2010
|
|
|
|
102,534
|
|
|
C$
|
1,775,889
|
|
|
|
|
2009
|
|
|
|
102,534
|
|
|
C$
|
749,524
|
|
SouthGobi Energy
Resources Ltd.
|
|
|
2010
|
|
|
Nil
|
|
Nil
|
|
|
|
2009
|
|
|
Nil
|
|
Nil
|
Ivanhoe Australia
Limited
|
|
|
2010
|
|
|
Nil
|
|
Nil
|
|
|
|
2009
|
|
|
Nil
|
|
Nil
|
Options Held:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
Vested/
|
|
|
Exercise
|
|
|
Total
|
|
|
Value of Unexercised
|
|
Date Granted
|
|
Expiry Date
|
|
|
Granted
|
|
|
Unvested
|
|
|
Price
(6)
|
|
|
Unexercised
|
|
|
Options
(7)
|
|
May 8, 2009
|
|
May 8, 2016
|
|
|
50,000
|
|
|
Nil/50,000
(10)
|
|
C$
|
8.20
|
|
|
|
50,000
|
|
|
C$
|
456,000
|
|
Nov. 13, 2008
|
|
Nov. 13, 2015
|
|
|
64,500
|
|
|
|
16,125/48,375
(11)
|
|
|
C$
|
2.82
|
|
|
|
64,500
|
|
|
C$
|
935,250
|
|
May 9, 2008
|
|
May 9, 2013
|
|
|
25,000
|
|
|
25,000/Nil
|
|
C$
|
9.64
|
|
|
|
25,000
|
|
|
C$
|
192,000
|
|
May 11, 2007
|
|
May 11, 2012
|
|
|
25,000
|
|
|
25,000/Nil
|
|
C$
|
13.35
|
|
|
|
25,000
|
|
|
C$
|
99,250
|
|
Mar. 27, 2006
|
|
Mar. 27, 2013
|
|
|
300,000
|
|
|
165,000/Nil
|
|
C$
|
9.73
|
|
|
|
165,000
|
|
|
C$
|
1,252,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total: C$2,934,850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options Held in Publicly Traded Affiliates of the Corporation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
Vested/
|
|
|
Exercise
|
|
|
Total
|
|
|
Value of
Unexercised
|
|
Name of Affiliate
|
|
Date Granted
|
|
|
Expiry Date
|
|
|
Granted
|
|
|
Unvested
|
|
|
Price
(6)
|
|
|
Unexercised
|
|
|
Options
(7)
|
|
SouthGobi Energy
Resources Ltd.
|
|
May 6, 2009
|
|
May 6, 2014
|
|
|
35,000
|
|
|
Nil/35,000
|
|
C$
|
10.21
|
|
|
|
35,000
|
|
|
C$
|
214,550
|
|
SouthGobi Energy Resources Ltd.
|
|
Nov. 27, 2008
|
|
Nov. 27, 2013
|
|
|
20,000
|
|
|
|
6,600/13,400
|
|
|
C$
|
5.10
|
|
|
|
20,000
|
|
|
C$
|
224,800
|
|
SouthGobi Energy
Resources Ltd.
|
|
May 21, 2008
|
|
May 21, 2013
|
|
|
25,000
|
|
|
25,000/Nil
|
|
C$
|
13.80
|
|
|
|
25,000
|
|
|
C$
|
63,500
|
|
SouthGobi Energy
Resources Ltd.
|
|
June 22, 2007
|
|
June 22, 2012
|
|
|
50,000
|
|
|
33,334/Nil
|
|
C$
|
6.00
|
|
|
|
33,334
|
|
|
C$
|
344,674
|
|
SouthGobi Energy
Resources Ltd.
|
|
Apr. 17, 2007
|
|
Apr. 17, 2012
|
|
|
25,000
|
|
|
16,667/Nil
|
|
C$
|
4.81
|
|
|
|
16,667
|
|
|
C$
|
192,171
|
|
Value of Equity at Risk:
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
Common Shares
(5)
|
|
|
Unexercised Options
(7)
|
|
|
Total
|
|
2010
|
|
C$
|
1,775,889
|
|
|
C$
|
2,934,850
|
|
|
C$
|
4,710,739
|
|
2009
|
|
C$
|
749,524
|
|
|
C$
|
289,605
|
|
|
C$
|
1,039,129
|
|
-13-
Kjeld R. Thygesen
London, England
Age: 62
Director Since: 2001
(15)
Director Status:
Independent
Areas of Experience:
Finance
Banking
Governance
Compensation
Mining Industry
Financially Literate
Public Capital Markets
Kjeld Thygesen is the Managing Director of Lion Resource Management. He has over 30 years
experience as an analyst and fund manager in the resource sector. A graduate of the University of
Natal in South Africa, he joined African Selection Trust, a subsidiary of Selection Trust Limited,
in 1970, researching and managing a portfolio of South African mining companies.
In 1972, Mr. Thygesen joined James Capel & Co. in London, England and served as a member of their
gold and mining research team. In 1979, he joined N.M. Rothschild & Sons Limited as manager of its
Commodities and Natural Resources Department with overall responsibility for strategy and
management of commodity trusts and precious metal funds. Mr. Thygesen became an executive director
of N.M. Rothschild Asset Management Limited in 1984 and N.M. Rothschild International Asset
Management Limited in 1987. Mr. Thygesen left the N.M. Rothschild Group in 1989 to co-found Lion
Resource Management Limited, an FSA regulated and SEC registered specialist investment manager in
the mining and natural resources sector. Mr. Thygesen is a member of the Institute of Corporate
Directors.
Principal Occupation, Business or Employment
(1)
Managing Director of Lion Resource Management (May 1989 present)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
Other Public Company Board Membership:
|
|
Board/Committee Membership:
|
|
Attendance:
|
|
|
Company:
|
|
Since:
|
|
Board of Directors
|
|
7 of 8
|
|
|
88
|
%
|
|
Superior Mining International Corporation (TSX-V)
|
|
|
2005
|
|
Audit Committee
|
|
4 of 4
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
Corporate Governance &
Nominating Committee
|
|
4 of 4
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
Non-Management Directors
|
|
0 of 0
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
Total:
|
|
15 of 16
|
|
|
94
|
%
|
|
|
|
|
|
|
|
|
Common Shares Beneficially Owned, Controlled or Directed
(1)(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Market
|
|
|
Minimum Share
|
|
|
|
|
|
|
|
|
|
|
|
Value of Common
|
|
|
Ownership
|
|
Company Name
|
|
Year
|
|
|
Common Shares
|
|
|
Shares
(5)
|
|
|
Required
(4)
|
|
Ivanhoe Mines Ltd.
|
|
|
2010
|
|
|
|
175,000
|
|
|
C$
|
3,031,000
|
|
C$
|
120,000
|
|
|
|
2009
|
|
|
|
150,000
|
|
|
C$
|
1,096,500
|
|
|
(meets requirement)
|
SouthGobi Energy Resources
Ltd.
|
|
|
2010
|
|
|
Nil
|
|
Nil
|
|
|
|
|
|
|
|
2009
|
|
|
Nil
|
|
Nil
|
|
|
|
|
Ivanhoe Australia Limited
|
|
|
2010
|
|
|
Nil
|
|
Nil
|
|
|
|
|
|
|
|
2009
|
|
|
Nil
|
|
Nil
|
|
|
|
|
Options Held:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
Vested/
|
|
|
Exercise
|
|
|
Total
|
|
|
Value of Unexercised
|
|
Date Granted
|
|
Expiry Date
|
|
|
Granted
|
|
|
Unvested
|
|
Price
(6)
|
|
|
Unexercised
|
|
|
Options
(7)
|
|
May 8, 2009
|
|
May 8, 2016
|
|
|
50,000
|
|
|
Nil/50,000
(10)
|
|
C$
|
8.20
|
|
|
|
50,000
|
|
|
C$
|
456,000
|
|
Nov. 13, 2008
|
|
Nov. 13, 2015
|
|
|
30,000
|
|
|
|
7,500/22,500
|
(11)
|
|
C$
|
2.82
|
|
|
|
30,000
|
|
|
C$
|
435,000
|
|
May 9, 2008
|
|
May 9, 2013
|
|
|
25,000
|
|
|
25,000/Nil
|
|
C$
|
9.64
|
|
|
|
25,000
|
|
|
C$
|
192,000
|
|
May 11, 2007
|
|
May 11, 2012
|
|
|
25,000
|
|
|
25,000/Nil
|
|
C$
|
13.35
|
|
|
|
25,000
|
|
|
C$
|
99,250
|
|
May 12, 2006
|
|
May 12, 2011
|
|
|
25,000
|
|
|
25,000/Nil
|
|
C$
|
10.56
|
|
|
|
25,000
|
|
|
C$
|
169,000
|
|
May 10, 2005
|
|
May 10, 2010
|
|
|
25,000
|
|
|
25,000/Nil
|
|
C$
|
9.37
|
|
|
|
25,000
|
|
|
C$
|
198,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total: C$1,550,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of Equity at Risk:
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
Common Shares
(5)
|
|
|
Unexercised Options
(7)
|
|
|
Total
|
|
2010
|
|
C$
|
3,031,000
|
|
|
C$
|
1,550,000
|
|
|
C$
|
4,581,000
|
|
2009
|
|
C$
|
1,096,500
|
|
|
C$
|
142,450
|
|
|
C$
|
1,238,950
|
|
-14-
The Hon. Robert W. Hanson
London, England
United Kingdom
Age: 49
Director Since: 2001
(15)
Director Status:
Independent
Areas of Experience:
Board
Finance
Governance
Compensation
Public Capital Markets
Robert Hanson is the Chairman of Strand Hanson Ltd., a boutique investment bank and advisory firm,
Hanson Family Holdings Ltd., Hanson Capital Investments Limited and Sinojie Hanson, a specialty
chemicals company operating in China. He was formerly an Associate Director of N.M. Rothschild &
Sons from 1983 to 1990, serving in Hong Kong, Chile and Spain. From 1990 to 1997, he served on the
board of directors of Hanson plc and was responsible for strategy and mergers and acquisition
transactions.
Mr. Hanson was educated at Eton and received his MA in English Language & Literature from St
Peters College, Oxford.
Mr. Hanson is a member of the Institute of Corporate Directors.
Principal Occupation, Business or Employment
(1)
Chairman, Hanson Capital Investments Limited (February 1998 present); Chairman, Strand Hanson
Ltd. (October 2009 present), Sinojie Hanson (2010-present), and Hanson Family Holdings Ltd. (May
1990 present).
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
Other Public Company Board Membership:
|
Board/Committee Membership:
|
|
Attendance:
|
|
|
Company:
|
|
Since:
|
Board of Directors
|
|
8 of 8
|
|
|
100
|
%
|
|
SouthGobi Energy Resources Ltd. (TSX)(SEHK) (Nominating and Corporate
Governance Committee Chair, Compensation & Benefits Committee, Environmental, Health & Safety Committee)
|
|
2007
|
Corporate Governance & Nominating Committee
|
|
4 of 4
|
|
|
100
|
%
|
|
|
|
|
Compensation & Benefits Committee
|
|
5 of 5
|
|
|
100
|
%
|
|
|
|
|
Non-Management Directors
|
|
0 of 0
|
|
|
N/A
|
|
|
|
|
|
Total:
|
|
17 of 17
|
|
|
100
|
%
|
|
|
|
|
Common Shares Beneficially Owned, Controlled or Directed
(1)(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Market
|
|
|
Minimum
|
|
|
|
|
|
|
|
|
|
|
|
Value of Common
|
|
|
Share Ownership
|
|
Company Name
|
|
Year
|
|
|
Common Shares
|
|
|
Shares
(5)
|
|
|
Required
(4)
|
|
Ivanhoe Mines Ltd.
|
|
|
2010
|
|
|
|
50,000
|
|
|
C$
|
866,000
|
|
|
C$
|
120,000
|
|
|
|
|
2009
|
|
|
|
50,000
|
|
|
C$
|
365,500
|
|
|
(meets requirement)
|
SouthGobi Energy
Resources Ltd.
|
|
|
2010
|
|
|
|
34,000
|
|
|
C$
|
555,560
|
|
|
|
|
|
|
|
|
2009
|
|
|
|
44,000
|
|
|
C$
|
464,200
|
|
|
|
|
|
Ivanhoe Australia
Limited
|
|
|
2010
|
|
|
Nil
|
|
Nil
|
|
|
|
|
|
|
|
2009
|
|
|
Nil
|
|
Nil
|
|
|
|
|
Options Held:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
Vested/
|
|
|
Exercise
|
|
|
Total
|
|
|
Value of Unexercised
|
|
Date Granted
|
|
Expiry Date
|
|
Granted
|
|
|
Unvested
|
|
Price
(6)
|
|
|
Unexercised
|
|
|
Options
(7)
|
|
May 8, 2009
|
|
May 8, 2016
|
|
|
50,000
|
|
|
Nil/50,000
(10)
|
|
C$
|
8.20
|
|
|
|
50,000
|
|
|
C$
|
456,000
|
|
Nov. 13, 2008
|
|
Nov. 13, 2015
|
|
|
22,500
|
|
|
|
5,625/16,875
|
(11)
|
|
C$
|
2.82
|
|
|
|
22,500
|
|
|
C$
|
326,250
|
|
May 9, 2008
|
|
May 9, 2013
|
|
|
25,000
|
|
|
25,000/Nil
|
|
C$
|
9.64
|
|
|
|
25,000
|
|
|
C$
|
192,000
|
|
May 11, 2007
|
|
May 11, 2012
|
|
|
25,000
|
|
|
25,000/Nil
|
|
C$
|
13.35
|
|
|
|
25,000
|
|
|
C$
|
99,250
|
|
May 12, 2006
|
|
May 12, 2011
|
|
|
25,000
|
|
|
25,000/Nil
|
|
C$
|
10.56
|
|
|
|
25,000
|
|
|
C$
|
169,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total: C$1,242,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options Held in Publicly Traded Affiliates of the Corporation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
Vested/
|
|
|
Exercise
|
|
|
Total
|
|
|
Unexercised
|
|
Name of Affiliate
|
|
Date Granted
|
|
|
Expiry Date
|
|
|
Granted
|
|
|
Unvested
|
|
|
Price
(6)
|
|
|
Unexercised
|
|
|
Options
(7)
|
|
SouthGobi Energy
Resources Ltd.
|
|
May 6, 2009
|
|
May 6, 2014
|
|
|
35,000
|
|
|
Nil/35,000
|
|
C$
|
10.21
|
|
|
|
35,000
|
|
|
C$
|
214,550
|
|
SouthGobi Energy
Resources Ltd.
|
|
Nov. 27, 2008
|
|
Nov. 27, 2013
|
|
|
20,000
|
|
|
|
6,600/13,400
|
|
|
C$
|
5.10
|
|
|
|
20,000
|
|
|
C$
|
224,800
|
|
SouthGobi Energy
Resources Ltd.
|
|
May 21, 2008
|
|
May 21, 2013
|
|
|
25,000
|
|
|
25,000/Nil
|
|
C$
|
13.80
|
|
|
|
25,000
|
|
|
C$
|
63,500
|
|
SouthGobi Energy
Resources Ltd.
|
|
June 30, 2006
|
|
June 30, 2011
|
|
|
150,000
|
|
|
48,000/Nil
|
|
C$
|
2.30
|
|
|
|
48,000
|
|
|
C$
|
673,920
|
|
Value of Equity at Risk:
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
Common Shares
(5)
|
|
|
Unexercised Options
(7)
|
|
|
Total
|
|
2010
|
|
C$
|
866,000
|
|
|
C$
|
1,242,500
|
|
|
C$
|
2,108,500
|
|
2009
|
|
C$
|
365,500
|
|
|
C$
|
101,025
|
|
|
C$
|
466,525
|
|
-15-
Dr. Markus Faber
Hong Kong
Age: 64
Director Since: 2002
(15)
Director Status:
Independent
Areas of Experience:
Finance
Commodities
Financially Literate
Emerging Markets
Public Capital Markets
International Currencies
Markus Faber is the Managing Director of Marc Faber Ltd., an investment advisory and fund
management firm. Dr. Faber also acts as a director and advisor to a number of private investment
funds, publishes a widely read monthly investment newsletter entitled The Gloom, Boom & Doom
Report and is the author of several books including Tomorrows Gold Asias Age of Discovery.
Dr. Faber is a regular contributor to several leading financial publications around the world,
including Barrons. Dr. Faber has over 35 years experience in the finance industry, including
acting as manager of an investment bank in the U.S. in which he routinely performed financial
analysis on a range of companies.
Dr. Faber received his PhD in Economics magna cum laude from the University of Zurich. He is a
member of the Institute of Corporate Directors.
Principal Occupation, Business or Employment
(1)
Managing Director, Marc Faber Ltd. (June 1990 present)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
Other Public Company Board Membership:
|
|
Board/Committee Membership:
|
|
Attendance:
|
|
|
Company:
|
|
|
Since:
|
|
Board of Directors
|
|
7 of 8
|
|
|
88
|
%
|
|
|
n/a
|
|
|
|
n/a
|
|
Audit Committee
|
|
4 of 4
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
Currency Advisory Committee
|
|
2 of 2
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
Non-Management Directors
|
|
0 of 0
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
Compensation & Benefits Committee
|
|
5 of 5
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
Total:
|
|
18 of 19
|
|
|
95
|
%
|
|
|
|
|
|
|
|
|
Common Shares Beneficially Owned, Controlled or Directed
(1)(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Market
|
|
|
Minimum
|
|
|
|
|
|
|
|
|
|
|
|
Value of Common
|
|
|
Share Ownership
|
|
Company Name
|
|
Year
|
|
|
Common Shares
|
|
|
Shares
(5)
|
|
Required
(4)
|
Ivanhoe Mines Ltd.
|
|
|
2010
|
|
|
|
25,000
|
|
|
C$
|
433,000
|
|
C$
|
120,000
|
|
|
|
2009
|
|
|
|
25,000
|
|
|
C$
|
182,750
|
|
|
(meets requirement)
|
SouthGobi Energy
Resources Ltd.
|
|
|
2010
|
|
|
Nil
|
|
Nil
|
|
|
|
|
|
|
|
2009
|
|
|
Nil
|
|
Nil
|
|
|
|
|
Ivanhoe Australia
Limited
|
|
|
2010
|
|
|
Nil
|
|
Nil
|
|
|
|
|
|
|
|
2009
|
|
|
Nil
|
|
Nil
|
|
|
|
|
Options Held:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
Vested/
|
|
|
Exercise
|
|
|
Total
|
|
|
Value of Unexercised
|
|
Date Granted
|
|
Expiry Date
|
|
|
Granted
|
|
|
Unvested
|
|
|
Price
(6)
|
|
|
Unexercised
|
|
|
Options
(7)
|
|
May 8, 2009
|
|
May 8, 2016
|
|
|
50,000
|
|
|
Nil/50,000
(10)
|
|
C$
|
8.20
|
|
|
|
50,000
|
|
|
C$
|
456,000
|
|
Nov. 13, 2008
|
|
Nov. 13, 2015
|
|
|
30,000
|
|
|
|
7,500/22,500
|
(11)
|
|
C$
|
2.82
|
|
|
|
30,000
|
|
|
C$
|
435,000
|
|
May 9, 2008
|
|
May 9, 2013
|
|
|
25,000
|
|
|
25,000/Nil
|
|
C$
|
9.64
|
|
|
|
25,000
|
|
|
C$
|
192,000
|
|
May 11, 2007
|
|
May 11, 2012
|
|
|
25,000
|
|
|
25,000/Nil
|
|
C$
|
13.35
|
|
|
|
25,000
|
|
|
C$
|
99,250
|
|
May 12, 2006
|
|
May 12, 2011
|
|
|
25,000
|
|
|
25,000/Nil
|
|
C$
|
10.56
|
|
|
|
25,000
|
|
|
C$
|
169,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total: C$1,351,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of Equity at Risk:
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
Common Shares
(5)
|
|
|
Unexercised Options
(7)
|
|
|
Total
|
|
2010
|
|
C$
|
433,000
|
|
|
C$
|
1,351,250
|
|
|
C$
|
1,784,250
|
|
2009
|
|
C$
|
182,750
|
|
|
C$
|
134,700
|
|
|
C$
|
317,450
|
|
-16-
Howard R. Balloch
Beijing, China
Age: 58
Director Since: 2005
(15)
Director Status:
Independent
Areas of Experience:
Finance
CEO/Board
Governance
Compensation
International Politics
Public Capital Markets
Howard Balloch is President and founding member of the investment advisory firm, The Balloch Group. He is currently Vice Chairman of the Canada China Business Council. Mr. Balloch was Canadas Ambassador to China from 1996 to 2001.
Mr. Balloch received his BA (Honours) in Political Science and Economics from McGill University in 1971 and his M.A. in International Relations from McGill University in 1972, and was enrolled in further post-graduate studies at the University of Toronto and at
the Fondation Nationale de Sciences politiques in Paris from 1973 to 1976. Mr. Balloch is a member of the Institute of Corporate Directors.
Principal Occupation, Business or Employment
(1)
President, The Balloch Group (July 2001 present); Vice Chairman, Canada China Business Council (July 2001 present); Canadian Ambassador to China, Mongolia and Democratic Republic of Korea (April 1996 July 2001)
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
Other Public Company Board Membership:
|
Board/Committee Membership:
|
|
Attendance:
|
|
|
Company:
|
|
Since:
|
Board of Directors
|
|
6 of 8
|
|
|
75
|
%
|
|
Methanex Corporation (TSX; NASDAQ)
(Human Resources Committee, Corporate Governance Committee, Public Policy Committee (Chair))
|
|
2004
|
Corporate Governance & Nominating Committee
|
|
3 of 3
|
|
|
100
|
%
|
|
Tiens Biotech Group (USA) Ltd. (OTCBB) (Audit Committee)
|
|
2003
|
Compensation & Benefits Committee
|
|
4 of 5
|
|
|
80
|
%
|
|
Ivanhoe Energy Inc. (TSX; NASDAQ) (Audit Committee, Compensation and
Benefits Committee (Chair), Nominating and Corporate Governance Committee (Chair))
|
|
2002
|
Non-Management Directors
|
|
0 of 0
|
|
|
N/A
|
|
|
|
|
|
Total:
|
|
13 of 17
|
|
|
76
|
%
|
|
|
|
|
Common Shares Beneficially Owned, Controlled or Directed
(1)(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Market
|
|
|
Minimum Share
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
Ownership
|
|
Company Name
|
|
Year
|
|
|
Common Shares
|
|
|
Common Shares
(5)
|
|
|
Required
(4)
|
|
Ivanhoe Mines Ltd.
|
|
|
2010
|
|
|
|
47,500
|
|
|
C$
|
822,700
|
|
|
C$
|
120,000
|
|
|
|
|
2009
|
|
|
|
40,000
|
|
|
C$
|
292,400
|
|
|
(meets requirement)
|
SouthGobi Energy Resources Ltd.
|
|
|
2010
|
|
|
Nil
|
|
Nil
|
|
|
|
|
|
|
|
2009
|
|
|
Nil
|
|
Nil
|
|
|
|
|
Ivanhoe Australia Limited
|
|
|
2010
|
|
|
Nil
|
|
Nil
|
|
|
|
|
|
|
|
2009
|
|
|
Nil
|
|
Nil
|
|
|
|
|
Options Held:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
Vested/
|
|
|
Exercise
|
|
|
Total
|
|
|
Value of Unexercised
|
|
Date Granted
|
|
Expiry Date
|
|
|
Granted
|
|
|
Unvested
|
|
Price
(6)
|
|
|
Unexercised
|
|
|
Options
(7)
|
|
May 8, 2009
|
|
May 8, 2016
|
|
|
50,000
|
|
|
Nil/50,000
(10)
|
|
C$
|
8.20
|
|
|
|
50,000
|
|
|
C$
|
456,000
|
|
Nov. 13, 2008
|
|
Nov. 13, 2015
|
|
|
30,000
|
|
|
Nil/22,500
(11)(25)
|
|
C$
|
2.82
|
|
|
|
22,500
|
|
|
C$
|
326,250
|
|
May 9, 2008
|
|
May 9, 2013
|
|
|
25,000
|
|
|
25,000/Nil
|
|
C$
|
9.64
|
|
|
|
25,000
|
|
|
C$
|
192,000
|
|
May 11, 2007
|
|
May 11, 2012
|
|
|
25,000
|
|
|
25,000/Nil
|
|
C$
|
13.35
|
|
|
|
25,000
|
|
|
C$
|
99,250
|
|
May 12, 2006
|
|
May 12, 2011
|
|
|
25,000
|
|
|
25,000/Nil
|
|
C$
|
10.56
|
|
|
|
25,000
|
|
|
C$
|
169,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total: C$1,242,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of Equity at Risk:
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
Common Shares
(5)
|
|
|
Unexercised Options
(7)
|
|
|
Total
|
|
2010
|
|
C$
|
433,000
|
|
|
C$
|
1,242,500
|
|
|
C$
|
1,675,500
|
|
2009
|
|
C$
|
292,400
|
|
|
C$
|
134,700
|
|
|
C$
|
427,100
|
|
-17-
Andrew Harding
Age: 43
Director Since: 2009
(15)
Director Status:
Non-Independent
(3)
Areas of Experience:
CEO/Board
Mining Industry
Financially Literate
Project Development
Managing/Leading Growth
Andrew Harding was appointed as Chief Executive of Rio Tintos Global Copper Product Group on November 1, 2009 and is based in London, England. Prior to his current position, Mr. Harding was President and Chief Executive Officer at Rio Tintos Kennecott
Utah Copper in Salt Lake City.
Mr. Harding has also previously served as Global Practice Leader for Mining in Rio Tintos Technology and Innovation Group where he focused on leading performance improvement initiatives, and he has held a variety of operations positions throughout his
career in Rio Tintos iron ore, energy and aluminum businesses in Australia. Mr. Harding has been with Rio Tinto for 18 years.
Mr. Harding holds an MBA from Deakin University in Australia and a Bachelor of Mining Engineering degree from University of New South Wales in Australia.
Principal Occupation, Business or Employment
(1)
Chief Executive, Rio Tinto Global Copper Product Group
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Board/Committee
|
|
2009
|
|
|
Other Public Company Board Membership:
|
|
Membership:
|
|
Attendance:
|
|
|
Company
|
|
|
Since
|
|
Board of Directors
|
|
|
n/a
(26)
|
|
|
|
n/a
|
|
|
|
n/a
|
|
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares Beneficially Owned, Controlled or Directed
(1)(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
Company Name
|
|
Year
|
|
|
Common Shares
|
|
|
Total Market
Value of
Common Shares
(5)
|
|
Ivanhoe Mines Ltd.
|
|
|
2010
|
|
|
Nil
|
|
Nil
|
|
|
|
2009
|
|
|
Nil
|
|
Nil
|
SouthGobi Energy Resources Ltd.
|
|
|
2010
|
|
|
Nil
|
|
Nil
|
|
|
|
2009
|
|
|
Nil
|
|
Nil
|
Ivanhoe Australia Limited
|
|
|
2010
|
|
|
Nil
|
|
Nil
|
|
|
|
2009
|
|
|
Nil
|
|
Nil
|
Options Held:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expiry
|
|
|
Number
|
|
|
Vested/
|
|
|
Exercise
|
|
|
Total
|
|
|
Value of Unexercised
|
|
Date Granted
|
|
Date
|
|
|
Granted
|
|
|
Unvested
|
|
|
Price
(6)
|
|
|
Unexercised
|
|
|
Options
(7)
|
|
n/a
|
|
|
n/a
|
|
|
Nil
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
Value of Equity at Risk:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unexercised
|
|
|
|
|
Year
|
|
Common Shares
(5)
|
|
|
Options
(7)
|
|
|
Total
|
|
2010
|
|
Nil
|
|
Nil
|
|
Nil
|
2009
|
|
Nil
|
|
Nil
|
|
Nil
|
-18-
Livia Mahler
Vancouver, British Columbia, Canada
Age: 50
Director Since: March 2009
(15)
Director Status:
Independent
Areas of Experience:
Board
Finance
Public Company
Financially Literate
Public Capital Markets
Finance and International Business
Livia Mahler is a partner and co-founder of Greenstone Venture Partners, a Vancouver based venture capital fund targeting private early-stage technology companies in the area of information technologies. The $40M fund was formed in 2000 and attracted institutional investors from
Canada, USA and Asia. Ms. Mahlers role includes all aspects of fund management such as fundraising, identifying investment opportunities, performing due diligence and ongoing monitoring of portfolio companies.
A venture capitalist since 1994, she has invested broadly across the technology sector. Prior to Greenstone, Ms. Mahler spent 6 years as a Senior Investment Manager for the Business Development Bank of Canada and was a founding General Partner for the Western Technology Seed
Investment Fund. Her previous experience also includes 7 years as a medical researcher at the University of British Columbia and a financial analyst position with the City of Vancouver. Her teaching assignments include lecturing for five years at the Financial Institutions for
Private Enterprise Development program at Harvard University.
Ms. Mahler received a Bachelor of Science degree from the Hebrew University of Jerusalem in 1981 and an MBA from the University of British Columbia in 1991. Ms. Mahler is a member of the Canadian Venture Capital Association, Institutional Investors Committee. Ms. Mahler is a member of
the Institute of Corporate Directors and sits on the Advisory Board of the Maurice Young Entrepreneurship and Venture Capital Research Centre at the University of British Columbias Sauder School of Business.
Principal Occupation, Business or Employment
(1)
Partner and co-founder, Greenstone Venture Partners (February 2000 present)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Board/Committee
|
|
2009
|
|
|
Other Public Company Board Membership:
|
|
Membership:
|
|
Attendance:
|
|
|
Company
|
|
|
Since
|
|
Board of Directors
|
|
8 of 8
|
|
|
100
|
%
|
|
|
n/a
|
|
|
|
n/a
|
|
Audit
|
|
2 of 2
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
Corporate Governance
|
|
2 of 2
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total:
|
|
12 of 12
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
Common Shares Beneficially Owned, Controlled or Directed
(1)(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Market
|
|
|
Minimum
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
Share Ownership
|
|
Company Name
|
|
Year
|
|
|
Common Shares
|
|
|
Common Shares
(5)
|
|
|
Required
(4)
|
|
Ivanhoe Mines Ltd.
|
|
|
2010
|
|
|
Nil
|
|
Nil
|
|
C$
|
120,000
|
|
|
|
|
|
|
|
|
|
|
|
|
(requirement not yet met)
|
|
|
|
|
2009
|
|
|
Nil
|
|
Nil
|
|
|
|
|
SouthGobi Energy Resources Ltd.
|
|
|
2010
|
|
|
Nil
|
|
Nil
|
|
|
|
|
|
|
|
2009
|
|
|
Nil
|
|
Nil
|
|
|
|
|
Ivanhoe Australia Limited
|
|
|
2010
|
|
|
Nil
|
|
Nil
|
|
|
|
|
|
|
|
2009
|
|
|
Nil
|
|
Nil
|
|
|
|
|
Options Held:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vested/
|
|
|
Exercise
|
|
|
|
|
|
|
Value of Unexercised
|
|
Date Granted
|
|
Expiry Date
|
|
|
Number Granted
|
|
|
Unvested
|
|
|
Price
(6)
|
|
|
Total Unexercised
|
|
|
Options
(7)
|
|
May 8, 2009
(10)
|
|
May 8, 2016
|
|
|
50,000
|
|
|
Nil/50,000
(10)
|
|
C$
|
8.20
|
|
|
|
50,000
|
|
|
C$
|
456,000
|
|
Value of Equity at Risk:
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
Common Shares
(5)
|
|
|
Unexercised Options
(7)
|
|
|
Total
|
|
2010
|
|
|
n/a
|
|
|
C$
|
456,000
|
|
|
C$
|
456,000
|
|
2009
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
-19-
NOTES:
(1)
|
|
The information as to principal occupation, business or employment and shares beneficially
owned, controlled or directed by a nominee is not within the knowledge of the management of
the Corporation and has been furnished by the nominee.
|
|
(2)
|
|
Does not include unissued Common Shares issuable upon the exercise of incentive stock
options.
|
|
(3)
|
|
Pursuant to the provisions of the 2006 Rio Tinto Agreement (see Voting Shares and Principal
Holders), Rio Tinto is entitled, but not obliged, to nominate directors to the Corporations
board of directors in proportion to Rio Tintos holdings of the issued and outstanding Common
Shares. On November 5, 2009, Mr. Harding was appointed as the nominee director for Rio Tinto.
He is considered to be non-independent by virtue of the significant investment of Rio Tinto
in the Corporation. Except as otherwise agreed, when Rio Tinto is entitled to nominate more
than one director, at least half of Rio Tintos nominees must be independent directors
within the meaning of applicable securities laws. Rio Tinto is also entitled to nominate one
financially literate and independent director to the Companys audit committee. See
Particulars of Matters to Be Acted Upon Amendment to the Corporations Articles, and:
Conditional Resolution to Fix the Number of Directors at Fourteen (14), Conditional Election
of One Additional Director, and Future Size of Board of Directors.
|
|
(4)
|
|
All non-management directors, with the exception of Mr. Andrew Harding, are required to
beneficially own and hold Common Shares having a market value of at least three (3) times his
or her annual cash retainer for as long as they are a director of the Corporation. These
Common Shares may be held either directly in the name of the director or indirectly in the
name of a company controlled by the director. The value of the Common Shares is determined
annually at Dec. 31st, based on the preceding six month volume weighted average. All current
independent director nominees have met this minimum shareholding requirement except for Ms.
Mahler, who joined the board on March 10, 2009, and will be required to meet the requirement
by March 10, 2012.
|
|
(5)
|
|
The Total Market Value of Common Shares is calculated by multiplying the closing price of
the Common Shares of the Corporation on the Toronto Stock Exchange on March 30, 2010
(Cdn$17.32) and March 27, 2009 (Cdn$7.31), respectively, by the number of Common Shares held
by the nominee as at March 30, 2010 and March 27, 2009, respectively.
|
|
(6)
|
|
The Exercise Price is the Fair Market Value on the date of approval by the Board of
Directors, pursuant to the Employees and Directors Equity Incentive Plan.
|
|
(7)
|
|
In the case of options to acquire Common Shares of the Corporation and options to acquire
common shares of the Corporations affiliate SouthGobi Energy Resources Ltd., Value of
Unexercised Options is calculated on the basis of the difference between the closing price of
such shares on the Toronto Stock Exchange on March 30, 2010 and the Exercise Price of the
options, multiplied by the number of unexercised options on March 30, 2010. In the case of
the Corporations affiliate Ivanhoe Australia Limited, Value of Unexercised Options is
calculated similarly but using the closing price of the common shares of Ivanhoe Australia
Limited on the ASX on March 30, 2010.
|
|
(8)
|
|
The October 9, 2009 option grant vests 25% on the first anniversary of the grant, and 25% on
each of the three anniversaries thereafter, and will be fully vested on October 9, 2013.
|
|
(9)
|
|
The July 23, 2009 option grant vests 25% on the first anniversary of the grant, and 25% on
each of the following three anniversaries thereafter, and will be fully vested on July 23,
2013.
|
|
(10)
|
|
The May 8, 2009 option grant vests 100% on the first anniversary of the grant and will
therefore become fully vested on May 8, 2010.
|
|
(11)
|
|
The November 13, 2008 option grant vests 25% on the first anniversary of the grant, and 25%
on each of the three anniversaries thereafter, and will be fully vested on November 13, 2012.
|
|
(12)
|
|
The September 22, 2008 option grant vests 25% on the first anniversary of the grant, and 25%
on each of the three anniversaries thereafter, and will be fully vested on September 22, 2012.
|
|
(13)
|
|
Each of Messrs. Meredith, Macken, Hanson and Flood currently serve on the board of directors
of SouthGobi Energy Resources Ltd.; each of Messrs. Friedland, Meredith and Balloch currently
serve on the board of directors of Ivanhoe Energy Inc.; each of Messrs. Friedland, Macken,
Meredith and Korbin currently serve on the board of directors of Ivanhoe Australia Limited;
and each of Messrs. Friedland, Meredith and Faber currently serve on the board of directors of
Ivanhoe Nickel & Platinum
Ltd., a non-public company of which the Corporation owned 6.3% of the common equity as of
March 30, 2010. In addition, Mr. Friedland is Executive Chairman, President and CEO of Ivanhoe
Energy Inc.
|
-20-
(14)
|
|
Each of Messrs. Friedland, Meredith, Macken and Korbin received performance rights in
Ivanhoe Australia Limited, a subsidiary of the Corporation, concurrent with its initial public
offering on the Australian Stock Exchange. Further details of such performance rights are
provided in the table entitled Outstanding share-based awards and option-based awards under
the heading Summary Compensation Table for the Corporation (inclusive of the Public
Subsidiaries).
|
|
(15)
|
|
As of December 31, 2009, the average tenure of each member of the board of directors (not
including Mr. Harding) is approximately seven (7) years.
|
|
(16)
|
|
The May 8, 2009 option grant vests 100% on the first anniversary of the grant and will
therefore become fully vested on May 8, 2010.
|
|
(17)
|
|
Mr. Meredith exercised 5,000 options on January 26, 2010 and exercised 100,000 options on
November 24, 2009.
|
|
(18)
|
|
Mr. Meredith exercised 62,500 options on January 26, 2010.
|
|
(19)
|
|
Mr. Meredith exercised 40,000 stock options on December 3, 2009 and 40,000 on December 10,
2009.
|
|
(20)
|
|
Each of Messrs. Friedland, Meredith and Macken voluntarily surrendered options in January
2009. On January 19, 2009, Mr. Meredith surrendered 2,000,000 options granted November 7,
2007 with an exercise price of C$13.19, and 50,000 options granted November 4, 2004 with an
exercise price of C$7.69. On January 26, 2009 Mr. Friedland surrendered 2,000,000 options
granted March 27, 2006 with an exercise price of C$9.73. On January 27, 2009 Mr. Macken
surrendered 1,000,000 options granted November 1, 2003 with an exercise price of C$12.70 and
1,000,000 options granted March 27, 2006 with an exercise price of C$9.73. The surrendered
options have been returned to the Corporations Equity Incentive Plan and are available for
new option grants.
|
|
(21)
|
|
Mr. Huberman exercised 16,875 options on January 8, 2010.
|
|
(22)
|
|
Mr. Huberman exercised 5,625 option on January 8, 2010.
|
|
(23)
|
|
Mr. Korbin exercised 5,635 options on December 2, 2009.
|
|
(24)
|
|
Mr. Korbin exercised 15,000 options on January 12, 2010.
|
|
(25)
|
|
Mr. Balloch exercised 7,500 stock options on November 18, 2009.
|
|
(26)
|
|
Mr. Harding was appointed as a director following the Board meeting on November 5, 2009 and
attended the meeting as an observer.
|
Summary of Board and Committee Meetings Held
The following table summarizes Board and Committee meetings held during the year ended December 31,
2009:
|
|
|
|
|
Board of Directors
|
|
|
8
|
|
Compensation and Benefits Committee
|
|
|
5
|
|
Audit Committee
|
|
|
4
|
|
Corporate Governance and Nominating Committee
|
|
|
4
|
|
Currency Advisory Committee
|
|
|
2
|
|
Non-Management Directors
|
|
|
0
|
|
Executive Committee
|
|
|
0
|
|
During 2009, there were two meetings of the Board and its committees held by teleconference. There
were 21 resolutions passed in writing by the Board, five by the Compensation and Benefits
Committee, four by the Corporate Governance and Nominating Committee and five by the Executive
Committee. No resolutions in writing were passed by the Audit or Currency Advisory Committees in
2009. Resolutions in writing must be executed by all of the directors entitled to vote on a
matter.
-21-
CONDITIONAL ELECTION OF ONE ADDITIONAL DIRECTOR
Pursuant to the 2006 Rio Tinto Agreement referred to above under Voting Shares and Principal
Holders, Rio Tinto is entitled to nominate a person or persons for appointment or election to the
Board from time to time in proportion to the percentage of the Corporations issued and outstanding
Common Shares it holds. As at the date of this Management Proxy Circular, Rio Tinto is entitled to
nominate up to three (3) nominees for appointment or election to the Board. Mr. Andrew Harding, an
executive officer of Rio Tinto, has been nominated as one of managements nominees for election as
a Director of the Corporation at the Meeting. See Election of Directors Management Nominees.
To accommodate the Corporations current contractual obligations to Rio Tinto, shareholders will be
asked to consider, and, if thought advisable, to pass the Articles Amendment Resolution at the
Meeting to increase the maximum number of directors to 14. Such resolution, if adopted, will
become effective on the receipt of Articles of Amendment by the Yukon Registrar of Corporations
under the Yukon Business Corporations Act and the issuance of a Certificate of Amendment in
connection therewith. The Corporation intends to take such steps forthwith following completion of
the Meeting if the Articles Amendment Resolution is adopted.
Rio Tinto has advised the Corporation that it wishes to nominate one additional Director for
election to the Board at the Meeting. If the Articles Amendment Resolution is passed and the
additional nominee is elected at the Meeting, it is intended that such nominee would join the Board
immediately upon the issuance of the Certificate of Amendment forthwith after the Meeting. If the
Articles Amendment Resolution is not passed, an existing Director will need to resign to
accommodate the Corporations contractual obligation to appoint such Rio Tinto nominee Director
within 30 days of the Meeting.
The following table sets out particulars of the additional nominee for election as a Director at
the Meeting, in addition to the twelve management nominees set forth above, conditional upon the
adoption of the Articles Amendment Resolution:
-22-
Tracy Stevenson
Age: 59
Director Status:
Non-Independent
Areas of Experience:
Executive/Board
Finance
Mining Industry
Financially Literate
Governance
Information Systems
Tracy Stevenson is a senior mining industry executive with international experience in finance, mergers and acquisitions, strategic planning, corporate governance, auditing, administration and information
systems and technology. He worked for Rio Tinto plc and related companies for 26 years, where he held a number of senior leadership positions and was involved with many major exploration, development and
financing projects.
Mr. Stevenson has served as a director of Quaterra Resources Inc. since July 2007, as its Non-Executive Chairman since February 2008, and as an independent director of Vista Gold Corp since November 2007.
Mr. Stevenson is also a founding member of Bedrock Resources, LLC, a private resources financial advisory firm, since 2010, and SOS Investors LLC, a private resources investment firm, since 2008. Prior to
his retirement from Rio Tinto in 2007, Mr. Stevenson was the global head of information systems and shared services for Rio Tinto. He previously served for four years as Executive Vice President, CFO and a
director of Comalco Ltd., an Australia-based international aluminum company partially owned by Rio Tinto, and a further four years as CFO and a director of Kennecott Corporation, a $3.5 billion diversified
North American mining company owned by Rio Tinto. He also has Big 5 public accounting experience with Coopers & Lybrand (now PriceWaterhouseCoopers).
Mr. Stevenson has a B.S. Accounting Magna Cum Laude from the University of Utah and is a Certified Public Accountant (license inactive).
Principal Occupation, Business or Employment
(1)
Independent businessman and company director (2007 present); Global Head of Information Systems & Technology, Rio Tinto plc (2006-2007); Global Head of Business Process Improvement, Rio Tinto plc
(2000-2006); Interim CEO, Quadrem International Holdings Limited (2000); Executive Vice President Financial Services & Strategy, CFO and director, Comalco Ltd. (1997-2000); Senior Vice President Finance and
Control, CFO and director, Kennecott Corporation (1993-97); various positions, Kennecott Corporation (1980-86; 1987-93)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Board/Committee
|
|
2009
|
|
|
Other Public Company Board Membership:
|
|
Membership:
|
|
Attendance:
|
|
|
Company
|
|
|
Since
|
|
Board of Directors
|
|
|
|
|
|
|
N/A
|
|
|
Vista Gold Corp. (TSX; AMEX)
|
|
|
2007
|
|
Total:
|
|
|
|
|
|
|
|
|
|
Quaterra Resources Inc. (TSX) (Chairman)
|
|
|
2007
|
|
Common Shares Beneficially Owned, Controlled or Directed
(1)(2)
:
|
|
|
|
|
|
|
|
|
Year
|
|
Common Shares
|
|
|
Total market Value of Common Shares
|
|
2010
|
|
Nil
|
|
Nil
|
2009
|
|
Nil
|
|
Nil
|
Options Held:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
|
Vested/
|
|
|
Exercise
|
|
|
Total
|
|
|
Value of Unexercised
|
|
Date Granted
|
|
Expiry Date
|
|
|
Granted
|
|
|
Unvested
|
|
|
Price
(6)
|
|
|
Unexercised
|
|
|
Options
|
|
n/a
|
|
|
n/a
|
|
|
Nil
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
Value of Equity at Risk:
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
Common Shares
|
|
|
Unexercised Options
|
|
|
Total
|
|
2010
|
|
Nil
|
|
Nil
|
|
Nil
|
2009
|
|
Nil
|
|
Nil
|
|
Nil
|
If Mr. Stevenson is elected as a Director, it is expected that he will qualify as an independent
Director effective June 1, 2010 and will be appointed at that time as an additional member of the
Corporations Audit Committee in compliance with the Corporations contractual obligations to Rio
Tinto.
-23-
FUTURE SIZE OF BOARD OF DIRECTORS
The Corporation and Rio Tinto have agreed that the size of the Board from and after the Meeting
will be fourteen (14) Directors, and the shareholders will be asked to consider and, if thought
advisable, to pass an ordinary resolution fixing the number of directors at fourteen (14),
contingent upon the approval of the special resolution to amend the Articles of the Corporation.
Rio Tinto has advised the Corporation that it intends to nominate a third director who is
independent of the Corporation but has not yet determined such nominee. Pursuant to its
contractual obligations to Rio Tinto, the Board is required to appoint such nominee no later than
30 days after the nomination. Rio Tinto and the Corporation expect that such appointment will be
effected as soon as possible after the Meeting. Following such appointment, the Board will consist
of 14 directors. If Rio Tinto becomes entitled to nominate additional Directors in accordance with
its contractual rights, existing Directors will need to resign to accommodate the Corporations
contractual obligation to make such appointments within 30 days of nomination. Although Rio Tinto
may exercise its share purchase warrants or convert its convertible debt (all as set forth under
Voting Shares and Principal Holders) earlier, the Corporation intends to plan for such
resignations and appointments based on the expiry dates of the warrants and maturity date of the
convertible debt.
APPOINTMENT OF AUDITORS
Deloitte & Touche LLP, Chartered Accountants, will be nominated at the Meeting for re-appointment
as auditors of the Corporation with their remuneration to be fixed by the Board of Directors.
Deloitte & Touche LLP have been the Corporations auditors since January 1995.
Fees billed by Deloitte & Touche LLP and its affiliates during fiscal 2009 and fiscal 2008 were
approximately Cdn$2,403,000 and Cdn$3,330,000, respectively. The aggregate fees billed by the
auditors in fiscal 2009 and fiscal 2008 are detailed below.
|
|
|
|
|
|
|
|
|
(Canadian $ in 000s)
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
Audit Fees (a)
|
|
$
|
873
|
|
|
$
|
1,030
|
|
Audit Related Fees (b)
|
|
|
1,469
|
|
|
|
1,960
|
|
Tax Fees (c)
|
|
|
26
|
|
|
|
43
|
|
All Other Fees (d)
|
|
|
35
|
|
|
|
297
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
2,403
|
|
|
$
|
3,330
|
|
|
|
|
|
|
|
|
(a)
|
|
Fees for audit services billed or expected to be billed relating to fiscal 2009 and 2008
consists of:
|
|
|
|
audit of the Corporations annual statutory financial statements; and
|
|
|
|
|
audit of its subsidiaries, SouthGobi Energy Resources Ltd.s and Ivanhoe Australia
Limiteds annual statutory financial statements.
|
|
|
In addition, in 2009 and 2008, fees were paid for services provided in connection with
review pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 and the required
attestations relating to internal controls.
|
-24-
(b)
|
|
Fees for audit-related services provided during fiscal 2009 and 2008 consisted of:
|
|
|
|
translation services;
|
|
|
|
|
financial accounting and reporting consultations;
|
|
|
|
|
reviews of the Corporations quarterly financial statements; and
|
|
|
|
|
comfort letters, consents, and other services related to SEC, Canadian and other
securities regulatory authorities matters.
|
(c)
|
|
Fees for tax services provided during fiscal 2009 and 2008 consisted of income tax compliance
and tax planning and advice relating to transactions and proposed transactions of the
Corporation and its subsidiaries.
|
|
(d)
|
|
The Corporation incurred fees of Cdn$35,000 and Cdn$297,000 for products and services
provided by its principal accountant during fiscal 2009 and 2008 not disclosed in subsections
(a), (b) or (c).
|
Pre-Approval Policies and Procedures
All services to be performed by the Corporations independent auditor must be approved in advance
by the Audit Committee or a designated member of the Audit Committee (Designated Member). The
Designated Member is a member of the Audit Committee who has been given the authority to grant
pre-approvals of permitted audit and non-audit services.
The Audit Committee has considered whether the provision of services other than audit services is
compatible with maintaining the auditors independence and has adopted a policy governing the
provision of these services. This policy requires the pre-approval by the Audit Committee or the
Designated Member of all audit and non-audit services provided by the external auditor, other than
any
de minimis
non-audit services allowed by applicable law or regulation. The decisions of the
Designated Member to pre-approve a permitted service are reported to the Audit Committee at its
regularly scheduled meetings.
Pre-approval from the Audit Committee or Designated Member can be sought for planned engagements
based on budgeted or committed fees. No further approval is required to pay pre-approved fees.
Additional pre-approval is required for any increase in scope or in final fees.
Pursuant to these procedures, 100% of each of the services provided by the Corporations external
auditors relating to the fees reported as audit, audit-related, tax and all other fees were
pre-approved by the Audit Committee or the Designated Member.
PARTICULARS OF MATTERS TO BE ACTED UPON
Amendment to Corporations Articles
The Corporation is seeking authorization from its shareholders by special resolution at the Meeting
to amend its Articles to set the number of directors of the Corporation at a minimum of three (3)
and a maximum of fourteen (14). The Articles of the Corporation currently set a minimum of three
(3) and a maximum of twelve (12) directors.
-25-
Since 2006, Rio Tinto, a major shareholder of the Corporation, has had the right to appoint one
director to the Board and has exercised this right consistently. On October 27, 2009, Rio Tinto
acquired additional Common Shares by way of private placement and, pursuant to the 2006 Rio Tinto
Agreement, currently has the right to appoint two additional directors to the board. The board has
considered Rio Tintos rights and believes that increasing the number of directors to fourteen (14)
to add two additional Rio Tinto nominees is in the best interests of the Corporation and its
shareholders. Rio Tinto has requested that the Corporation nominate one additional director for
election to the Board at the Meeting, and has advised the Corporation that it intends to nominate a
further nominee as soon as possible. See Conditional Election of One Additional Director and
Future Size of Board of Directors.
The Corporation proposes to amend Article 4 of its Articles by deleting the existing Article 4 and
replacing it with the following: 4. The number of Directors of the Corporation shall be not less
than three (3), nor more than fourteen (14). The Articles Amendment Resolution is attached to this
Circular as Schedule A-1.
Conditional Resolution to Fix the Number of Directors at Fourteen (14)
The Corporation and Rio Tinto have agreed that the size of the Board from and after the Meeting
will be fourteen (14) Directors. The shareholders will be asked to consider, and, if thought
advisable, to pass an ordinary resolution fixing the number of directors at fourteen (14),
contingent upon the approval of the special resolution to amend the Articles of the Corporation.
See Future Size of Board of Directors.
The full text of the proposed resolution is attached to this Circular as Schedule A-2.
Amended and Restated Equity Incentive Plan
Purpose
The Corporation is also seeking authorization from its shareholders at the Meeting to amend and
restate the Corporations existing Employees and Directors Equity Incentive Plan (the Existing
Plan) to: (i) make certain amendments to the amending provisions of the Existing Plan; and (ii)
make certain other technical amendments to the Existing Plan (the Equity Incentive Plan Amendment
Resolution). The Toronto Stock Exchange (TSX) has approved the proposed amendments to the
Existing Plan (the Amended Plan), subject to approval by the shareholders at the Meeting.
The Equity Incentive Plan Amendment Resolution is attached to this Management Proxy Circular as
Schedule B and the Amended Plan is attached as Schedule C.
Summary of Existing Plan
Overview
The Existing Plan has three components: an Option Plan, which provides for the grant to eligible
participants of incentive stock options exercisable to purchase Common Shares of the Corporation; a
Bonus Plan, which provides for awards of fully paid Common Shares to eligible participants as and
when determined to be warranted on the basis of past performance; and a Purchase Plan, under which
eligible participants have the opportunity to purchase Common Shares through payroll deductions
which are supplemented by Corporation contributions.
-26-
The eligible participants in the Existing Plan include directors of the Corporation or any
affiliate, any full time and part time employees (including officers) of the Corporation or any
affiliate thereof that the Board determines to be employees eligible for participation in the
Existing Plan. Persons or companies engaged by the Corporation or an affiliate to provide services
for an initial, renewable or extended period of 12 months or more are eligible for participation in
the Existing Plan as the Board determines.
The Existing Plan is administered by the Compensation and Benefits Committee (the Committee)
appointed by the Board.
Option Plan
Option Grants
The Option Plan authorizes the Board, on the recommendation of the Committee, to grant options to
purchase Common Shares. The number of Common Shares, the exercise price per Common Share, the
vesting period and any other terms and conditions of options granted pursuant to the Option Plan,
from time to time are determined by the Board, on the recommendation of the Committee, at the time
of the grant, subject to the defined parameters of the Option Plan.
Exercise Price
The exercise price of any option granted under the Existing Plan cannot be less than the volume
weighted average price of the Common Shares on the Toronto Stock Exchange for the five days on
which Common Shares were traded immediately preceding the date of grant (the Fair Market Value).
Exercise Period and Vesting
Options are exercisable for seven years unless otherwise determined by the Board. Options may be
earlier terminated in the event of death or termination of employment or appointment. Vesting of
options is determined by the Board. Failing a specific vesting determination by the Board, options
automatically become exercisable incrementally over a period of four years from the date of grant,
as to one-quarter of the total number of shares under option after each such year. The right to
exercise an option may be accelerated in the event a takeover bid in respect of the Common Shares
is made.
Blackout Expiration Term
Under the Corporations Corporate Disclosure, Confidentiality and Securities Trading Policy,
trading of the Corporations securities, including the exercise by directors,
officers, employees and certain others of options to purchase Common Shares of the Corporation, is
restricted during certain blackout periods. These blackout periods are imposed from time to time
by the Corporation in circumstances where material non-public information exists, including periods
where financial statements are being prepared but results have not yet been publicly disclosed.
Under the Incentive Plan, the expiration of the terms of Options held by insiders and other plan
participants is the later of the original expiry date and a date that is ten business days
following the end of such blackout period.
-27-
Cashless Exercise
Optionees under the Existing Plan also have a cashless exercise right which effectively allows an
optionee to exercise an option on a cashless basis by electing to relinquish, in whole or in
part, the right to exercise the option and receive, in lieu thereof, a number of fully paid Common
Shares. The number of Common Shares issuable on the exercise of share appreciation rights is equal
to the quotient obtained by dividing the difference between the aggregate Fair Market Value and the
aggregate option price of all Common Shares subject to the option by the Fair Market Value of one
Common Share.
Financial Assistance
The Board may, in its discretion, but subject to applicable law, authorize the Corporation to make
loans to employees (excluding any director or executive officer) to assist them in exercising
options. The terms of any such loans include security, in favour of the Corporation, in the Common
Shares issued upon exercise of the options, which security may be granted on a non-recourse basis.
No such loans are currently outstanding.
Termination or Death
If an optionee dies while employed by the Corporation, any option held by him will be exercisable
for a period of 12 months or prior to the expiration of the options (whichever is sooner) by the
person to whom the rights of the optionee shall pass by will or applicable laws of descent and
distribution. If an optionee is terminated for cause, no option will be exercisable unless the
Board determines otherwise. If an optionee is terminated for any reason other than cause, then the
options will be exercisable for a period of up to 12 months or prior to the expiration of the
options (whichever is sooner).
Bonus Plan
The Bonus Plan permits the Board, on the recommendation of the Committee, to authorize the
issuance, from time to time, of Common Shares to employees and directors of the Corporation and its
affiliates. The criteria for determining if and when such awards should be made and the quantum of
such awards is within the discretion of the Board. The Bonus Plan provides for the issuance of a
maximum of 4,500,000 Common Shares in respect of bonus awards. Common Shares allocated to the Bonus
Plan may be reallocated for issuance under the Option Plan or Purchase Plan and are then no longer
available for issuance under the Bonus Plan.
Purchase Plan
Participation Criteria
Participants in the Purchase Plan are full-time employees of the Corporation who have completed at
least one year (or less, at the discretion of the Board on the recommendation of the Committee) of
continuous service and who elect to participate.
Contribution Limits
The Existing Plan provides that the Board, on the recommendation of the Committee, may determine
contribution limits for the Share Purchase Plan, subject to a maximum 10% contribution of plan
participants base salaries. The Share Purchase Plan established by the Board provides that, until
an eligible participant withdraws or the
Board terminates or suspends the Share Purchase Plan, such eligible employee is entitled to
contribute up to seven per cent (7%) of his or her annual basic salary to the Purchase Plan in
semi-monthly instalments. The Corporation (at the discretion of the Board) makes a contribution of
up to one hundred per cent (100%) of the employees contribution on a quarterly basis.
-28-
Number of Shares
Each participant receives, at the end of each calendar quarter during which he or she participates
in the Purchase Plan, a number of Common Shares equal to the quotient obtained by dividing the
aggregate amount of all contributions to the Purchase Plan by the participant, and by the
Corporation on the participants behalf, during the preceding quarter by the volume weighted
average trading price of the Common Shares on the Toronto Stock Exchange during the quarter.
Termination of Employment
If the participants employment with the Corporation is terminated for any reason, any portion of
the participants contribution then held in trust for a participant pending a quarterly purchase of
Common Shares is returned to him or her or to his or her estate.
Transferability
Benefits, rights and options under the Existing Plan are non-transferable and during the lifetime
of an Existing Plan participant, may only be exercised by such participant.
Amendment Procedure
The Board, based on the recommendation of the Committee, has the authority and discretion to amend
the Existing Plan and awards granted thereunder without shareholder approval for all matters,
including the matters set forth in Section 5.7 of the Existing Plan, except for those matters
requiring shareholder approval. Subject to regulatory approval, shareholder approval will only be
required for: (i) an amendment to the aggregate number of Shares that may be reserved for issuance
under the Share Bonus Plan component of the Existing Plan; (ii) an amendment to the aggregate
percentage of Common Shares issuable under the Existing Plan; (iii) an amendment to the limitations
on the maximum number of Shares that may be reserved for issuance, or issued, to Insiders under
the Existing Plan; (iv) an amendment that would reduce the exercise price, or extend the expiry
date, of an outstanding Option granted to an Insider under the Existing Plan; (v) an amendment
that would extend the expiry date of the Option Period in respect of any Option granted under the
Plan to an Insider; and (vi) an amendment to the amending provisions under the Existing Plan.
Share Issuance Limits
The aggregate number of Common Shares which may be reserved for issuance under the Existing Plan
(together with all other securities-based compensation arrangements of the Corporation in effect
from time to time) shall not exceed 6.5% of the Common Shares outstanding from time to time. The
aggregate number of Common Shares which the Corporation may at any time reserve for issuance under
the Existing Plan to any one person may not exceed five per cent (5%), and to Insiders under the
Existing Plan may not exceed ten per cent (10%), of the issued and outstanding Common Shares at
such time. The aggregate number of Common Shares that may be issued within any one-year period to
Insiders under the Existing Plan shall not exceed ten per cent (10%), and to any one Insider and
his or her Associates under the Existing Plan may not exceed five per cent (5%), of the issued and
outstanding Common Shares at such time.
-29-
Securities Issued and Unissued under the Existing Plan
There are 441,146,905 Common Shares of the Corporation issued and outstanding as at March 30, 2010.
Since the date of inception of the Existing Plan on June 26, 1996, the Common Shares authorized for
issuance under the Existing Plan have been issued or reserved for issuance as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Issued and
|
|
|
|
Number of Common
|
|
|
Outstanding Common
|
|
|
|
Shares
|
|
|
Shares
|
|
Common Shares reserved for future
issuance pursuant to unexercised
options under Option Plan
|
|
|
20,344,520
|
|
|
|
4.6
|
%
|
Common Shares previously issued
pursuant to Purchase Plan
|
|
|
779,043
|
|
|
|
0.2
|
%
|
Common Shares previously issued
pursuant to Bonus Plan
|
|
|
1,008,861
|
|
|
|
0.2
|
%
|
Unissued Common Shares available
for future awards under Bonus
Plan
|
|
|
3,491,139
|
|
|
|
0.8
|
%
|
Unissued Common Shares available
for future option grants under
Option Plan and purchases under
Purchase Plan(1)
|
|
|
3,050,986
|
|
|
|
0.7
|
%
|
Maximum number of Common Shares
available for issuance
|
|
|
28,674,549
|
|
|
|
6.5
|
%
|
|
|
|
(1)
|
|
Does not include unissued Common Shares available for future awards under the Bonus Plan
which may be used for grants under the Option Plan and Share Purchase Plan.
|
There are no entitlements to Common Shares under the Existing Plan which are subject to
ratification by shareholders. There are no equity incentive plans which have not been approved by
shareholders. As of the date of this Circular, the weighted average exercise price of outstanding
options under the Existing Plan is C$8.82.
Proposed Amendments
Amending Provision Amendments
The Corporation proposes amending the provisions of section 5.7(d) of the Existing Plan such that
shareholder approval would be required of any amendment that: (i) would reduce the exercise price
or extend the expiry date of any outstanding option (not just to those options held by Insiders);
and (ii) would accelerate the vesting of any option held by an optionee, except upon the death,
disability or retirement of such optionee, a change in control of the Company, or in the case of a
non-material variation of any performance milestone required for the vesting of options.
-30-
The proposed amendment to the Amending Provision appears in section 5.7 of the Amended Plan which
is attached as Schedule C to this Circular.
Other Amendments
Consequential or other technical amendments to the Existing Plan appear in sections 2.6, 4.3, 5.1
and 5.5 of the Amended Plan which is attached as Schedule C to this Circular.
SHAREHOLDER RIGHTS PLAN
The Corporation adopted and entered into a shareholder rights plan agreement (the Shareholder
Rights Plan) with CIBC Mellon Trust Company summarized herein on April 5, 2010. The purpose of the
Shareholder Rights Plan is to provide the Board of Directors of the Corporation and holders of the
Common Shares of the Corporation with sufficient time to properly consider any take-over bid made
for the Corporation and to allow enough time for competing bids and alternative proposals to
emerge. The Shareholder Rights Plan also seeks to ensure that all shareholders are treated fairly
in any transaction involving a change of control of the Corporation and that all shareholders have
an equal opportunity to participate in the benefits of a take-over bid. The Shareholder Rights Plan
encourages potential acquirers to negotiate the terms of any offer for Common Shares with the Board
of Directors or, alternatively, to make a Permitted Bid (as defined in the Shareholder Rights Plan)
without the approval of the Board of Directors.
At the Meeting, shareholders will be asked to consider and, if thought advisable, pass, as an
ordinary resolution, the Shareholder Rights Plan Resolution, the full text of which is attached
hereto as Schedule D. If the Shareholder Rights Plan Resolution is approved at the Meeting by the
shareholder votes described below under Form of Resolution and Vote Required, the Shareholder
Rights Plan will continue in effect. If the Shareholder Rights Plan Resolution is not approved, the
Shareholder Rights Plan will terminate as of the date of the Meeting.
Background
On January 6, 2010, the Corporation announced that it had retained leading global investment
banking firm Citigroup Global Markets Inc. and independent mining sector specialist Hatch Corporate
Finance to evaluate and advise the Corporation on a range of strategic options to further enhance
shareholder value. Both financial advisors have been involved in the preparation and structuring
of the Shareholder Rights Plan and have advised the Board that they view the plan to be consistent
with the objective of value enhancement.
The Shareholder Rights Plan was reviewed by the Corporations Corporate Governance Committee, which
held two separate meetings to review and consider the plan with the Corporations legal and
financial advisors as well as independent legal counsel to the committee. In addition to the
Corporate Governance Committee (the members of which are all independent of the Corporations
management and its principal shareholders), the other independent directors of the Company
participated in these meetings. Beyond these meetings, the Corporations lead independent director
was involved in numerous discussions with financial and legal advisors, including independent
counsel to the Corporations Corporate Governance Committee, respecting the Shareholder Rights
Plan.
-31-
Purpose of the Shareholder Rights Plan
The purpose of the Shareholder Rights Plan is to provide the Board and shareholders with sufficient
time to properly consider any take-over bid made for the Corporation and to allow enough time for
competing bids and alternative proposals to emerge. The Shareholder Rights Plan also seeks to
ensure that all shareholders are treated fairly in any transaction involving a change of control of
the Corporation and that all shareholders have an equal opportunity to participate in the benefits
of a take-over bid. The Shareholder Rights Plan encourages potential acquirers to negotiate the
terms of any offer for Common Shares with the Board of Directors or, alternatively, to make a
Permitted Bid (as defined in the Shareholder Rights Plan) without the approval of the Board. The
Shareholder Rights Plan addresses several concerns that are widely believed to be inherent in the
provisions of current legislation governing take-over bids in Canada. These concerns are described
in greater detail below.
Time to consider bid
Under current securities legislation, the minimum period that a take-over bid must remain open for
acceptance is 35 days. The Board of Directors is of the view that 35 days constitutes an
insufficient amount of time to permit the directors and shareholders to assess an offer, and to
allow the directors to negotiate with the offeror, solicit competing offers, consider alternative
transactions, and otherwise attempt to maximize shareholder value. The Shareholder Rights Plan
gives the Board and shareholders more time to consider a take-over bid by requiring an offeror to
make a Permitted Bid if it wishes to proceed without negotiating with the Board of Directors and
without triggering the Shareholder Rights Plan. In order to qualify as a Permitted Bid, the bid
must meet certain minimum conditions. A Permitted Bid must, among other things, be open for at
least 60 days and must remain open for a further period of 10 business days after the offeror
publicly announces that more than 50% of the outstanding Voting Shares (as defined in the
Shareholder Rights Plan) held by Independent Shareholders (as defined below) have been deposited or
tendered and not withdrawn. Independent Shareholders includes all holders of Voting Shares other
than (i) a person (or a group of affiliated or associated persons) who has publicly announced that
it has acquired beneficial ownership of 20% or more of the Common Shares (an Acquiring Person)
(ii) any offeror making a take-over bid; (iii) any affiliate or associate of an Acquiring Person or
offeror; (iv) persons acting jointly or in concert with an Acquiring Person or offeror; and (v)
employee benefit, stock purchase or certain other plans or trusts for employees of the Corporation
or its wholly-owned subsidiaries unless the beneficiaries of such plans or trusts direct the voting
and tendering to a takeover bid of the Voting Shares.
Pressure to tender
A shareholder may feel compelled to tender to a take-over bid that the shareholder considers to be
inadequate because, in failing to tender, the shareholder may be left with illiquid or minority
discounted shares. This is particularly so in the case of a partial bid where the Acquiring Person
or an offeror wishes to obtain a control position but does not wish to acquire all of the Common
Shares. The Shareholder Rights Plan contains a shareholder approval mechanism in the Permitted Bid
definition, which is that no Voting Shares may be taken up and paid for under the bid unless more
than 50% of the outstanding Voting Shares held by Independent Shareholders have been deposited or
tendered and not withdrawn. In addition, a Permitted Bid must remain open for acceptance for a
further period of 10 business days following public announcement that more than 50% of the
outstanding Voting Shares have been deposited. The Shareholder
Rights Plan therefore effectively separates a Shareholders decision to accept a bid from the
decision to tender, thereby lessening concern about undue pressure to tender to the bid.
-32-
Unequal treatment of shareholders
Under current securities legislation, an offeror may obtain control or effective control of a
corporation without paying full value, without obtaining shareholder approval and without treating
all shareholders equally. For example, an acquirer could acquire blocks of shares by private
agreement from one or a small group of shareholders at a premium to market price, which premium is
not shared by the other shareholders. In addition, a person could slowly accumulate shares through
stock exchange acquisitions which may result, over time, in an acquisition of control or effective
control without paying a control premium or fair sharing of any control premium among shareholders.
Under the Shareholder Rights Plan, if it is to qualify as a Permitted Bid, any offer to acquire 20%
or more of the Corporations Voting Shares must be made to all holders of Voting Shares.
How the Shareholder Rights Plan Works and Effect of the Shareholder Rights Plan
One right (a Right) has been issued in respect of each of the outstanding Common Shares to the
shareholders as of the close of business on April 5, 2010. One Right will also be issued in respect
of each Common Share issued after April 5, 2010 and prior to the Separation Time (as defined
below).
Notwithstanding the effectiveness of the Shareholder Rights Plan, the Rights are not exercisable
until the Separation Time. Unless waived or deferred by the board of directors in the circumstances
permitted by the Shareholder Rights Plan, the Separation Time would generally be the close of
business on the tenth trading day after the earliest to occur of:
|
(a)
|
|
a public announcement that a person or a group of affiliated or associated
persons has acquired beneficial ownership of 20% or more of the outstanding Common
Shares (i.e. become an Acquiring Person) other than as a result of, among other
things, (i) a reduction in the number of Common Shares outstanding, (ii) a Permitted
Bid or a Competing Permitted Bid (each as defined under the Shareholder Rights
Plan), (iii) certain specified Exempt Acquisitions (as defined below), (iv) an
acquisition by a person of Voting Shares pursuant to a stock dividend or other Pro
Rata Acquisition (as defined in the Shareholder Rights Plan); and (v) an acquisition
by a person of Voting Shares upon the exercise, conversion or exchange of a security
convertible, exercisable or exchangeable into a Voting Share received by a person
pursuant to (ii), (iii) or (iv), above;
|
|
|
(b)
|
|
the date of commencement of, or the first public announcement of an intention
of any person (other than the Corporation or any of its subsidiaries) to commence a
take-over bid (other than a Permitted Bid or a Competing Permitted Bid) where the
Voting Shares that are subject to the bid together with the Voting Shares beneficially
owned by that person (including affiliates, associates and others acting jointly or in
concert therewith) would constitute 20% or more of the outstanding Voting Shares; and
|
|
|
(c)
|
|
the date upon which a Permitted Bid or a Competing Permitted Bid ceases to be
such.
|
-33-
An Exempt Acquisition would include the acquisition of Voting Shares or securities convertible
into Voting Shares (i) in respect of which the Board of Directors has waived the application of the
Shareholder Rights Plan, (ii) pursuant to a distribution made under a prospectus or private
placement provided that the person does not increase his, her or its ownership percentage (e.g.
pursuant to a rights offering), (iii) pursuant to an amalgamation, arrangement or other statutory
procedure requiring shareholder approval, (iv) pursuant to certain equity incentive stock options
plans of the Corporation, (v) pursuant to contractual arrangements currently in place between Rio
Tinto and each of (a) the Corporation, and (b) Robert M. Friedland, (vi) pursuant to other
contractual arrangements in respect of a Voting Share acquisition from treasury entered into by the
Corporation with one or more Grandfathered Persons after the date of the Shareholder Rights Plan,
and (vii) pursuant to the exercise of Rights.
After the Separation Time, each Right entitles the holder thereof to purchase one Common Share at
the Exercise Price (as defined under the Shareholder Rights Plan). The initial Exercise Price under
each Right is five times the Market Price at the Separation Time. Market Price is generally
defined as the average of the daily closing prices per share of such securities on each of the 20
consecutive trading days through and including the trading day immediately preceding the Separation
Time.
Following a transaction that results in a person becoming an Acquiring Person (a Flip-in-Event),
each Right entitles the holder thereof to receive, upon exercise, such number of Common Shares as
have an aggregate market value (as of the date of the Flip-in Event) equal to twice the then
Exercise Price of the Rights for an amount in cash equal to the Exercise Price. In such event,
however, any Rights beneficially owned by an Acquiring Person (including affiliates, associates and
others acting jointly or in concert therewith), or certain transferees of any such person, will be
void. A Flip-in Event does not include acquisitions approved by the board of directors (to the
extent permitted by the Shareholder Rights Plan) or acquisitions pursuant to a Permitted Bid or
Competing Permitted Bid.
By way of example, assume that the Common Shares have a Market Price of $20.00 at the date relevant
for determination. Following the Separation Time but prior to a Flip-in Event, a shareholder who
owns one Common Share would be entitled to exercise a Right and acquire one additional Common Share
in exchange for a cash payment of $100.00. Following a Flip-in Event, the same shareholder (unless
it has become as Acquiring Person) would be entitled to exercise the Right and acquire 10
additional Common Shares for the Exercise Price of $100.00, i.e. one-half of the Market Price.
In the event of an unsolicited take-over bid or a bid that is not a Permitted Bid under the
Shareholder Rights Plan, the board of directors believes that the effect of the Shareholder Rights
Plan will be to enhance shareholder value, ensure equal treatment of shareholders in the context of
an acquisition of control, and lessen the pressure on shareholders to tender to a bid.
It is not the intention of the Board of Directors to entrench themselves or avoid a bid for control
that is fair and in the best interest of shareholders. For example, shareholders may tender to a
bid that meets the Permitted Bid criteria without triggering the Shareholder Rights Plan,
regardless of the acceptability of the bid to the Board of Directors.
-34-
The Shareholder Rights Plan does not diminish or detract from the duty of the Board to act
honestly, in good faith and in the best interests of the Corporation and its
shareholders, or to consider on that basis any take-over bid that is made, nor does the Shareholder
Rights Plan alter the proxy mechanism to change the Board of Directors, create dilution on the
initial issue of the rights, or change the way in which the Corporations Common Shares trade.
A summary of the principal terms and conditions of the Shareholder Rights Plan is contained in
Schedule E attached to this Management Proxy Circular. The complete text of the Shareholder
Rights Plan is available for viewing by the public at the System for Electronic Document Analysis
and Retrieval (SEDAR) via the Internet at www.sedar.com or upon request from the Corporation.
Shareholders wishing to receive a copy of the Shareholder Rights Plan should submit their request
to the Corporation.
Form of Resolution and Vote Required
A copy of the full text of the Shareholder Rights Plan Resolution is attached to this Information
Circular as Schedule D. In order to be effective, the Shareholder Rights Plan Resolution must be
approved by not less than a majority of the votes cast by both (a) all shareholders present or
represented by proxy at the Meeting, and (b) all shareholders present or represented by proxy at
the Meeting that are not Grandfathered Persons (i.e. shareholders who already beneficially own
20% or more of the outstanding Voting Shares on the effective date) under the Shareholder Rights
Plan. As of the date of this Information Circular, the only Grandfathered Persons under the
Shareholder Rights Plan are Rio Tinto International Holdings Limited and Robert M. Friedland and
their respective affiliates.
Under the Shareholder Rights Plan, the Grandfathered Persons will be permitted, without triggering
a Flip-in Event, to acquire additional Common Shares pursuant to any rights to acquire such Common
Shares held by them on the effective date of the Shareholder Rights Plan. Otherwise, a Flip-in
Event would be triggered upon the Grandfathered Person acquiring any additional Voting Shares
(unless such acquisition is completed pursuant to one of the exemptions set out in the Shareholder
Rights Plan).
Directors Recommendation
After careful consideration, including a thorough review of the terms and conditions of the
Shareholder Rights Plan by the Corporations Corporate Governance Committee and by the Board of
Directors, in consultation with their financial and legal advisors, on April 5, 2010 the Board of
Directors, following the unanimous recommendation of the Corporate Governance Committee, determined
that the adoption of the Shareholder Rights Plan is in the best interests of the Corporation, its
shareholders and other stakeholders. The Board of Directors therefore recommends that all
Shareholders vote FOR the Shareholder Rights Plan Resolution attached as Schedule D to this
Management Information Circular.
INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS
Other than as disclosed below or elsewhere in this Management Proxy Circular, no director, proposed
director or executive officer of the Corporation, or person or company who beneficially owns, or
controls or directs, directly or indirectly, 10% or more of the issued and outstanding Common
Shares, or any director or executive officer of such 10% shareholder, nor any associate or
affiliate of the foregoing, has any material interest, direct or indirect, in any transaction since
the commencement of the
Corporations most recently completed financial year or in any proposed transaction that has
materially affected or would materially affect the Company or any of its subsidiaries.
-35-
The Corporation is a party to cost sharing agreements with other companies in which the
Corporations Chairman and significant shareholder, Robert Friedland, has a material direct or
indirect beneficial interest. Through these agreements, the Corporation shares, on a cost-recovery
basis, office space, furnishings, equipment and communications facilities in Vancouver, Singapore
and London, and an aircraft. The Corporation also shares the costs of employing administrative and
non-executive management personnel in these offices. During the year ended December 31, 2009, the
Corporations share of these costs was $15.8 million (2008 $12.6 million and 2007 $13.4
million). The companies with which the Corporation is a party to the cost sharing agreements, and
Mr. Friedlands ownership interest in each of them, as at December 31, 2009, are as follows:
|
|
|
|
|
|
|
Robert Friedland Ownership
|
|
Company Name
|
|
Interest
|
|
Ivanhoe Energy Inc.
|
|
|
17.5
|
%
|
Ivanhoe Capital Corporation
|
|
|
100
|
%
|
Ivanhoe Nickel & Platinum Ltd.
|
|
|
33.7
|
%
|
SouthGobi Energy Resources Ltd.
|
|
|
(1
|
)
|
GoviEx Gold Inc.
|
|
|
(1
|
)
|
GoviEx Uranium Inc.
|
|
Nil
|
|
|
|
(1)
|
|
As at December 31, 2009, Mr. Friedland owned 22.8% of the Common Shares of the Corporation,
which owned 78.6% of the common shares of SouthGobi Energy Resources Ltd. (57.4% as of March
30, 2010) and 1.5% of GoviEx Gold Inc.
|
As at December 31, 2009, the Corporation held a 10.3% voting equity interest in Ivanhoe Nickel &
Platinum Ltd. (Ivanplats), on a fully diluted basis, after having acquired the following
Ivanplats securities during 2009:
|
|
1.2 million common shares of Ivanplats from two institutional investors at an aggregate
acquisition cost of $1,842,000;
|
|
|
|
220,000 common shares at a cost of $1,320,000 and 250,000 special warrants, convertible into
250,000 common shares, at a cost of $1,500,000 from Kjeld Thygesen and Robert Hanson,
respectively, both directors of the Corporation; and
|
|
|
|
1.1 million units of Ivanplats at a cost of $9,900,000 pursuant to a private placement. Each
unit is comprised of one common share, one liquidity right and one-half of one share purchase
warrant.
|
Each liquidity right is convertible into 0.1 of a common share of Ivanplats for no additional
consideration if a liquidity event (an initial public offering (IPO) or other transaction that
results in a public listing of Ivanplats common shares) does not occur on or before December 31,
2010. The share purchase warrants vest upon the closing of an IPO. If an IPO occurs prior to
December 31, 2010, each share purchase warrant entitles the holder to purchase one Ivanplats common
share at the IPO price up until two years after the closing of the IPO. If an IPO occurs after
December 31, 2010, each share purchase warrant entitles the holder to purchase 1.1 common shares at
the IPO price up until two years after the closing of the IPO.
-36-
Rio Tinto is the Corporations largest shareholder, holding 22.36% of the Corporations issued and
outstanding Common Shares. Within the Corporations three most recently completed financial years,
and within the current financial year, Rio Tinto has been a party to a series of transactions that
have materially affected, or could materially affect, the Corporation. During the year ended
December 31, 2009, Rio Tinto provided engineering-related services to the Corporation for the Oyu
Tolgoi Project on a cost-recovery basis for which the Rio Tinto Group was paid $8.6 million (2008
$4.8 million and 2007 $1.3 million).
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
During 2009, there were no significant changes in the Corporations compensation policy or in the
Corporations executive management. The Compensation Committee continued in 2009 to benchmark
compensation levels for its executive officers against updated compensation levels for the
Corporations peer group of companies while maintaining flexibility in its compensation decisions,
which the Compensation Committee has determined is (i) appropriate for this stage in the
Corporations growth; and (ii) necessary to incentivize and retain its executive leadership during
a significant time in the Corporations development of its Oyu Tolgoi project, including the
activities leading to the approved Investment Agreement with the Government of Mongolia.
Compensation Committee, Philosophy and Goals
Our Compensation and Benefits Committee (the Compensation Committee) assists the Board in
fulfilling its responsibilities relating to compensation issues and human resources. The
Compensation Committee is composed solely of independent directors. The Compensation Committee
endeavours to ensure that the Corporation has an executive management compensation plan that is
both competitive and motivational so that it will help attract, retain and inspire performance of
the Corporations executive management of a quality and nature that will enhance the sustainable
growth and success of the Corporation.
The guiding principles for the Corporations executive compensation philosophy, in approximately an
equal level of importance, are as follows:
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to ensure a strong link between compensation levels and performance in relation to our
key short-and long-term performance metrics;
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to facilitate the attraction, motivation, and retention of high quality executive
talent;
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to provide fair, transparent, and defensible compensation;
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to encourage and reward high performance; and
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to align our executives interests with those of our shareholders.
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In applying these principles during what is still the developmental period of the Corporations
growth, the Compensation Committee maintains a degree of flexibility and subjectivity in making
compensation recommendations, rather than applying structural
objective compensation processes that are appropriate for a company whose major assets are in
production.
-37-
Recent Modifications to Executive Compensation Programme
The Compensation Committee engages Mercer (Canada) Limited (Mercer) to assist the Corporation
with compensation matters and, in 2007, Mercer assisted the Corporation in preparing a model for
executive compensation for the Corporation. Mercer also provides support to the Compensation
Committee in determining compensation for the Corporations senior officers. This model was
approved by the Compensation Committee in October 2007 and was formally adopted by the Board of
Directors of the Corporation in March 2008. For 2009, the Corporations named executive officers
(NEOs) were Robert Friedland Chairman, Peter Meredith Deputy Chairman, John Macken Chief
Executive Officer and President, Tony Giardini Chief Financial Officer and Steve Garcia
Executive Vice President. There were no changes in personnel in those positions during 2009.
The Compensation Committee considers market information to determine appropriate salary ranges,
target bonus award opportunities, and the target long-term equity incentive award values for each
of its five top senior executives positions. Each salary grade is expressed as a range with a
minimum, midpoint, and maximum.
For compensation recommendations for 2009, the Compensation Committee set the midpoint for
salaries, target bonus award levels, and target annual long-term incentive award values for our
executive officer positions (other than the Chief Executive Officer and the Deputy Chairman
positions) at roughly the median percentile for the executives in equivalent positions in the
Corporations peer comparator group, while retaining the ability to deliver compensation at a
higher percentile of the market when performance warrants, through the annual and long-term
incentive programs. The targets for the Chief Executive Officer and the Deputy Chairman positions
were set by the Compensation Committee at the 75th percentile, rather than the median percentile,
given the high importance of those two positions in terms of the Corporations strategy and
relationships, for competitive and retention considerations, and, in the case of the Chief
Executive Officer, for his operational experience. In setting compensation levels, the Compensation
Committee takes into account both an executives past performance and future expectations for
performance. At the current stage of the Corporations growth, the Committee maintains flexibility
to allocate a higher percentage of overall targeted compensation in the form of stock options
rather than cash compensation. During 2009, Mercer conducted a review of a peer comparator group of
companies and such list was updated for 2009. See Peer Comparator Group below.
How We Make Compensation Recommendations
The Compensation Committee reviews and recommends the compensation philosophy and guidelines for
the Corporation which includes reviewing, for recommendation to the Board, the compensation of
senior executive officers and employees, including annual salary and incentive policies and
programs. The Compensation Committee bases its recommendations to the Board on its compensation
philosophy and on the performance of the individual and the Corporation. The Compensation Committee
seeks compensation advice from its compensation consultants to provide support to the Compensation
Committee in determining compensation for the Corporations officers.
-38-
The Compensation Committee periodically reviews the terms of reference for the Corporations Chief
Executive Officer and recommends any changes to the Board for approval. It reviews corporate goals
and objectives with respect to the Chief Executive Officers compensation and leads the Chief
Executive Officer review process.
In the fall of each year, the Compensation Committee reviews the total compensation of the
President & CEO and the executive officers reporting to the President & CEO, including salaries,
target bonus award opportunities, target annual long-term incentive award values, other
compensation elements, and other practices related to compensation. The Compensation Committee then
sets each executives compensation target for the following year. Typically, this involves
establishing their salary, annual bonus opportunities and granting long-term equity incentive
awards. Regular salary adjustments become effective on January 1 of the following year. The
Compensation Committees recommendations are reviewed and, when deemed appropriate, ratified by the
Board.
The Compensation Committee works with the President & CEO to evaluate the performance and set the
compensation for his position and for other senior executives of the Corporation. The President &
CEO presents compensation recommendations for each of the executive officers, including proposed
salary adjustments, target bonus awards and long-term incentive award values. The Compensation
Committee determines the appropriateness of the recommendations based on the market data and
recommended framework provided by Mercer and its own evaluation of the individuals past and
expected future performance.
Ultimately, recommendations made by the Compensation Committee are the responsibility of the
Compensation Committee and may reflect factors and considerations other than the information and
recommendations provided by Mercer. The Compensation Committee also considers a variety of
qualitative factors, including the business environment in which the Corporation operates, as well
as the stage of the Corporations development. Thus, the compensation of our executives is not
determined by any specific formula.
Executive compensation (including the salary ranges, target bonuses, and long-term incentive
grants) are reviewed on an annual basis and adjusted in accordance with changes in the market and
market conditions, while also taking into account the Corporations stage of development, to ensure
that our compensation remains competitive and aligns with the Corporations compensation philosophy
and market conditions.
Compensation Elements
The compensation of the Corporations senior executives is comprised of three principal components
- base salary, annual performance bonuses (in cash or fully paid Common Shares, or a combination
thereof) and long term equity incentives. The Corporation does not maintain a pension plan or other
long term compensation plan for its senior executives. Eligible employees, including officers,
designated by the Board on the recommendation of the Compensation Committee may participate in the
Corporations Share Purchase Plan under the Corporations Employees and Directors Incentive Plan.
The following summarizes the primary purpose of each rewards element and its emphasis within the
total rewards package:
-39-
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Base salary Base salary is paid in cash and is the fixed amount of compensation for
performing day-to-day responsibilities.
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Annual Performance Bonus Annual bonus awards (paid in cash or Common Shares, or a
combination thereof) are earned for achieving short-term goals and other strategic
objectives measured over the current year. Bonuses are structured to provide competitively
based incentives to our executives to drive corporate, business unit, and individual
performance.
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Long-Term Incentive Awards Long-term incentive awards are granted to retain
executives, build executive ownership, and align compensation with achievement of the
Corporations long-term goals, creating shareholder value and achieving strategic
objectives as measured over multi-year periods.
|
In making compensation recommendations in respect of these elements, the Compensation Committee
considers both the cumulative compensation being granted to executives from the Corporation as well
as internal comparisons amongst the Corporations executives.
In September 2008, the President & CEO recommended bonus payments for each of the Corporations
senior executive officers for the 2008 fiscal year, as well as salary, target bonus and long term
incentive compensation for each of such officers for 2009. The Compensation Committee had Mercer
model the proposed levels versus the market. Based on the modeling provided by Mercer, it was
determined that the proposed levels were in line with the market and our compensation philosophy.
In October 2009 similar determinations were made for 2010.
Salary Compensation
Under the Corporations compensation plan, salary ranges for executive positions for 2009 were made
with reference on the market review of total cash compensation (salary and bonus) levels within the
comparator group and a median target pay position (75th percentile of market target for Chief
Executive Officer and Deputy Chairman positions). Guidelines for the administration of salaries
within the salary ranges are as follows:
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New hires would typically be paid a salary between the minimum of the salary range and 90% of the
target salary rate.
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Employees that consistently meet all job expectations should be paid a salary within 90% and 110%
of the target salary rate; and
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Employees that consistently demonstrate superior performance should be paid above 110% of the
target salary rate.
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Under the Corporations compensation plan, salaries are reviewed on an annual basis in conjunction
with the annual performance review, and salary adjustments for the following year are considered
based on a variety of factors, including the individuals performance and contributions,
improvements in job proficiency, retention risks and concerns, succession requirements, and
compensation changes in the market.
The Corporations Executive Chairman, Robert Friedland, received no salary in 2009.
-40-
In the third quarter of 2008, the Compensation Committee recommended, and the Board of Directors
approved, salary increases for the year commencing January 1, 2009, which reflect the decision to
target base pay for the Corporations President & CEO, Deputy Chairman and CFO at the 75th
percentile of our peer comparator group, the salary of Mr. Macken was increased to US$714,000, Mr.
Meredith to US$562,000
*
and Mr. Giardini to US$338,165 (Cdn$375,000)
*
and
Mr. Garcias base salary for 2009 was set at US$450,000.
The following table sets forth the percentage increase in salary levels in 2009 over the previous
year.
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Salary 2008
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Salary 2009
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Name and Position
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US$
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US$
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% increase
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John
Macken
Chief Executive Officer
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$
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635,000
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$
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714,000
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12.5
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%
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Tony Giardini
Chief Financial Officer
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$
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281,426
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(2)
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$
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338,165
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(2)
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20.1
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%
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Peter Meredith
Deputy Chairman
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$
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500,000
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(1)
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$
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562,000
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(1)
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12.4
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%
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Robert Friedland
Executive Chairman
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n/a
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n/a
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n/a
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Steve Garcia
Executive Vice President
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$
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400,000
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$
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450,000
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12.5
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%
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(1)
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Mr. Merediths salary is set by the Corporation but is allocated among the Corporation and
certain other related companies. For 2008, a salary of $211,071 was paid by the Corporation
and for 2009 US$349,389 was paid by the Corporation. The calculation in this table assumes
100% of Mr. Merediths salary is paid by the Corporation.
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(2)
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Mr. Giardinis salary is payable in Canadian dollars. The US dollar equivalent of Mr.
Giardinis salary was obtained by multiplying his Canadian dollar salary in 2009 by
Cdn$1.1089/US$1.00, the Bank of Canada average noon exchange rate for 2009; and in 2008 by
Cdn$1.0660/US$1.00, the Bank of Canada average noon exchange rate for 2008.
|
Certain adjustments were made to the salaries of two NEOs to be in effect for January 1, 2010 as
follows: Mr. Merediths salary was increased to US$714,000, reflecting his important ongoing role
leading the Corporations relationships with the Government of Mongolia and Rio Tinto, as well as
his leadership role as Chairman of SouthGobi Energy Resources Ltd. Mr. Giardinis salary was
increased to US$382,190 (Cdn$400,000)
*
.
Bonus Compensation
Executive officers are eligible for annual bonus compensation. Annual bonus awards are earned for
achieving short-term goals and other strategic objectives measured over the fiscal year. Among the
factors considered are the individuals performance and contributions, improvements in job
proficiency and compensation changes in the market, corporate performance, and business unit
performance (for certain executives with business unit responsibilities).
Bonuses are structured to provide competitively based incentives to our executives to drive
corporate, business unit, and the individuals performance. Corporate performance is assessed
relative to overall corporate objectives such as achievement of milestones in
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*
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Mr. Merediths salary is set by the Corporation but is
allocated among the Corporation and certain other related companies. During
2009, the portion of Mr. Merediths salary paid by the Corporation was
US$349,389.
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*
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Mr. Giardinis salary is payable in Canadian dollars.
The US dollar equivalent of Mr. Giardinis salary was obtained by multiplying
his Canadian dollar salary by Cdn$1.0466/US$1.00, the Bank of Canada noon
exchange rate on December 31, 2009.
|
-41-
connection with the Corporations Oyu Tolgoi project, expansion, through discovery or acquisition,
or both, of additional mineral resources and reserves and performance and value of the
Corporations subsidiaries. Business unit performance is assessed on objectives that relate to the
primary functions of the business unit and the key activities that support the broader corporate
goals. Individual performance is assessed based on how well the individual has carried out his
responsibilities and contributed to the operations and success of his business unit and to the
achievement of the Corporations goals for that year.
Under the annual bonus plan, target awards (as a percentage of base salary) are based on relevant
market data for the peer comparator group and target pay positioning. Financial and strategic goals
are established prior to the beginning of the plan year at the corporate, business unit and
individual levels. At or near the end of the year, performance is assessed as follows: target
awards will be paid when performance meets expectations, and such awards will be adjusted upwards
or downwards where performance exceeds or is less than expectations, respectively. For 2009, these
target levels for total cash compensation (salary and bonus) were set at the median target level
(75th percentile of market target for Chief Executive Officer and Deputy Chairman positions) for
similar positions at the peer group companies.
The process followed by the Compensation Committee in recommending bonus compensation in 2009 was
to assess each Named Executive Officer within the context of the peer company target level (for
total cash compensation) and allocate bonus compensation based largely on achievement of overall
corporate objectives and individual performance related to those corporate objectives, using
approximately the percentage allocations in the table below. This allocation for 2009 was
necessarily and largely subjective for 2009, given the over-riding focus of the executive team on
its Oyu Tolgoi project and activities leading to the Investment Agreement with the Government of
Mongolia. Accordingly, bonus decisions were not expressly contingent upon specific objectively
measured performance metrics or other goals.
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Proportion of Annual Incentive Award
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Company
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Business Unit
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Individual
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Position
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Performance
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|
Performance
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|
|
Performance
|
|
John Macken
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President & CEO
|
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80
|
%
|
|
|
|
|
|
|
20
|
%
|
Peter Meredith
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Deputy Chairman
|
|
|
80
|
%
|
|
|
|
|
|
|
20
|
%
|
Tony Giardini
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|
Chief Financial Officer
|
|
|
50
|
%
|
|
|
20
|
%
|
|
|
30
|
%
|
Robert Friedland
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|
Executive Chairman
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
Steve Garcia
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|
Executive VP
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30
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%
|
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40
|
%
|
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30
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%
|
For 2009, the senior executive officers of the Corporation were awarded bonuses as follows: each of
Messrs. Macken and Meredith received a cash bonus of US$550,000, Mr. Giardini received a cash bonus
of US$210,158 and Mr. Garcia received a bonus of US$270,000. Mr. Friedland did not participate in
the annual incentive award compensation during 2009. The table below sets forth the percentage
increase in total cash compensation in 2009 over the previous year, and the percentage that the
NEOs bonus compensation represents as a percentage of salary compensation.
-42-
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2008 Cash
|
|
|
2009 Cash
|
|
|
% Increase in
|
|
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|
|
|
|
|
2009 Bonus
|
|
|
Compensation
|
|
|
Compensation
|
|
|
Cash
|
|
|
|
2009 Bonus
|
|
|
as % of
|
|
|
(Salary and
|
|
|
(Salary and
|
|
|
Compensation
|
|
|
|
US$
|
|
|
Salary
|
|
|
Bonus) US$
|
|
|
Bonus) US$
|
|
|
(2008-2009)
|
|
John Macken Chief
Executive Officer
|
|
$
|
550,000
|
|
|
|
77.0
|
%
|
|
$
|
1,185,000
|
|
|
$
|
1,264,000
|
|
|
|
6.7
|
%
|
Tony Giardini Chief
Financial Officer
|
|
$
|
210,158
|
|
|
|
62.1
|
%
|
|
$
|
469,043
|
(2)
|
|
$
|
548,323
|
(2)
|
|
|
16.9
|
%
|
Peter Meredith
Deputy Chairman
|
|
$
|
550,000
|
(1)
|
|
|
97.8
|
%
|
|
$
|
1,050,000
|
|
|
$
|
1,112,000
|
|
|
|
5.9
|
%
|
Robert Friedland
Executive Chairman
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
Steve Garcia
Executive Vice
President
|
|
$
|
270,000
|
|
|
|
60.0
|
%
|
|
$
|
600,000
|
|
|
$
|
720,000
|
|
|
|
20.0
|
%
|
|
|
|
(1)
|
|
Mr. Merediths salary is set by the Corporation but is allocated among the Corporation and
certain other related companies. For 2008, a salary of $211,071 was paid by the Corporation
and for 2009 US$349,389 was paid by the Corporation. The calculation in this table assumes
100% of Mr. Merediths salary is paid by the Corporation.
|
|
(2)
|
|
Mr. Giardinis salary is payable in Canadian dollars. The US dollar equivalent of Mr.
Giardinis salary was obtained by multiplying his Canadian dollar salary: in 2009 by
Cdn$1.1089/US$1.00, the Bank of Canada average noon exchange rate for 2009; and in 2008 by
Cdn$1.0660/US$1.00, the Bank of Canada average noon exchange rate for 2008.
|
Mr. Macken was awarded his bonus in recognition of his leadership skills and personal performance,
as well as the significant contributions he made to the Corporation in 2009, particularly his
services in leading the team responsible for advancing the design, planning and development for the
Oyu Tolgoi project facilities and his activities as a key member of the Oyu Tolgoi technical
committee.
Mr. Meredith was awarded his bonus in recognition of his personal performance and the significant
contributions he made to the Corporation in 2009, particularly his role as one of the principal
negotiators and team leaders of the Corporations working group that led to an Investment Agreement
with the Government of Mongolia, his business development efforts in respect of the Corporation
itself and his active and ongoing role as Chair of SouthGobi Energy Resources Ltd.
Mr. Giardini was awarded his bonus in recognition of his personal performance and his leadership
and supervision of the Corporations entire financial team, as well as for providing vital support
and advice as an integral member of our senior management team.
Mr. Garcia was awarded his bonus in recognition of his personal performance and his contributions
in respect of the planning and development of the Oyu Tolgoi facilities.
Long-Term Incentives Stock Option Awards
An equity incentive component in the form of options is a key part of the executives overall
compensation package, reflecting our belief that stock options offer an effective mechanism for
incentivizing management and aligning the interests of our executive officers with those of our
shareholders. Since we do not grant incentive stock options at a discount to the prevailing market
price of the Corporations Common Shares, the incentive stock options we grant to our executive
officers accrete value only if, and to the extent that, the market price of the Corporations
Common Shares increases, thereby linking equity-based executive compensation to shareholder
returns.
-43-
Target long-term incentive awards under the Corporations compensation plan are based on relevant
market data for the peer comparator group and target pay positioning at the appropriate market
level for total direct compensation (base salary, bonus and annual
and long-term incentive compensation). As a benchmark for annual grants of options, market target
levels were at the median percentile target level (75th percentile target level for Chief Executive
Officer and Deputy Chairman positions). The dollar value of the long-term incentive award is
converted to the appropriate number of stock options at the time of the award, using a valuation
methodology and the details of the grant.
The Compensation Committee also considers the current total potential dilution under the plan
(i.e., the number of stock options issued and unexercised, full-value share grants outstanding, and
the number of shares reserved for the future issuance of equity, expressed as a percentage of
common shares outstanding) of the Corporation and the peer comparator companies.
The actual award to the executive will be adjusted upwards or downwards, depending on the
Compensation Committees evaluation of each executive officers ability to influence long-term
success of the Corporation, and to provide an incentive to encourage outstanding individual
performance and contributions. The Compensation Committee also considers each executives stock
option position, and may, in certain circumstances, grant options with performance-based vesting
criteria.
The Compensation Committee accepts in principle the merits of performance related vesting for stock
options, and the Corporation has in the past included performance contingent or performance
accelerated vesting for many of its stock option grants. The vesting of such options was generally
tied to the attainment of various milestones, mainly related to the orderly construction and
development at, or in connection with, the Corporations Oyu Tolgoi project. All of such milestones
anticipated, and so were predicated on, the early achievement of an Investment Agreement with the
Government of Mongolia. However, in view of the fact that the timetable for reaching such an
agreement with the Government of Mongolia and then being able to proceed with the orderly
construction and development of operations at Oyu Tolgoi was severely delayed (for several years
and for a variety of reasons beyond the control of the Corporation or its personnel), in the recent
past the principal focus has been on achieving an Investment Agreement with the Government of
Mongolia. As a result of, and in recognition of the impact of, such unforeseen and lengthy delays,
the Compensation Committee has determined that the objectives of incentivizing and retaining key
personnel through long-term incentive stock option grants are, at the current time, still
principally best met using time-related vesting for stock option grants. The Compensation Committee
will continue to monitor the appropriateness of reintroducing performance related vesting for stock
option grants once the Corporation has reached an appropriate later stage in its development and
operations.
Under the Corporations compensation plan, new stock option grants will normally have terms of
seven years and will be made to executive officers on an annual basis. Vesting of the stock
options will generally be based on time, with 25% instalments vesting only on each anniversary of
the original date of grant.
In May 2009, each of Messrs. Friedland, Macken, Meredith and Giardini were granted the following
number of options to purchase common shares of the Corporation: Messrs. Friedland and Macken
1,500,000 each; Mr. Meredith 750,000; and Mr. Giardini 100,000. Each of such options is
exercisable at a price of $8.20. In July 2009, Mr. Meredith was also granted options to purchase a
further 200,000 common shares of the Corporation. Each option is exercisable at $8.77. All of these
options were priced based on the five day volume weighted market price at the date of grant and
have a term of seven years. The May 2009 options vest as to 25% on the date of grant and an
additional 25% each
-44-
anniversary thereafter until fully vested. The July 2009 options vest as to 25% on the first
anniversary of the date of grant and an additional 25% on each anniversary thereafter until fully
vested. The foregoing grants of options were special grants of options. The special grants were
based on a review of the overall stock option positions held by a number of key employees and
officers, including NEOs with a view to ensuring such optionees were fairly positioned and
incentivized given (i) the relative stock option grants held by other employees and officers; and
(ii) the voluntary relinquishment for cancellation by Messrs. Friedland, Macken, Giardini and
Meredith, amongst other key employees, of stock options at the request of the Corporation in
January 2009 to allow room for further incentive grants to be made by the Corporation under the
Directors and Officers Equity Incentive Plan (which had reached its limit at that time for
available grants) pending the Corporations shareholders amending such plan to authorize more
grants (which authorization was granted in May, 2009). Accordingly, these grants were not made
with reference to relevant market dates for the peer comparator group or target pay positioning at
the appropriate market level for total direct compensation.
As part of the annual executive compensation review, in October 2009, each of Messrs. Friedland,
Macken, Meredith, Giardini and Garcia received the following number of options to purchase common
shares of the Corporation. Each of Messrs. Friedland, Macken and Meredith 250,000; and each of
Messrs. Giardini and Garcia 150,000. Each option is exercisable at $13.76, has a term of seven
years and vests as to 25% on the first anniversary of the date of grant and an additional 25% on
each anniversary thereafter until fully vested.
Peer Comparator Group
A specific comparator group of publicly-traded companies has been developed annually based on
research conducted by Mercer and input from the Compensation Committee and management
representatives. The selection criteria for the companies included:
|
|
|
Mining companies with significant project development activities underway;
|
|
|
|
|
Mining companies with project development and/or operations in complex, international
locations; and
|
|
|
|
|
Mining companies with a comparable market capitalization.
|
For 2009 compensation, Mercer conducted a review of market executive compensation levels. At the
outset of the review, updated background information on the Corporation, the executives roles and
responsibilities, and current compensation philosophy and programs was provided to Mercer by
representatives of the Compensation Committee and management. The peer comparator group of
companies was reviewed, to confirm whether or not the companies included were still relevant to the
Corporation. Mercer then compiled and analyzed market compensation information about the peer
comparator companies.
-45-
The list of comparator organizations used for 2009 (and their approximate market capitalizations at
September 7, 2009 for purposes of establishing the comparator companies) was comprised of the
following companies:
|
|
|
|
|
|
|
Approximate Market
|
|
|
|
Capitalization Cdn$
|
|
Comparator Company
|
|
(in millions)
|
|
Kinross Gold Corp.
|
|
$
|
16,050
|
|
Newcrest Mining Ltd.
|
|
$
|
14,395
|
(2)
|
Cameco Corp.
|
|
$
|
11,760
|
|
Fortescue Metals Group Ltd.
|
|
$
|
11,216
|
(2)
|
Agnico Eagle Mines Ltd.
|
|
$
|
10,920
|
|
Yamana Gold
|
|
$
|
8,110
|
|
First Quantum Minerals Ltd.
|
|
$
|
5,750
|
|
Imagold Corp.
|
|
$
|
5,200
|
|
Eldorado Gold Corp.
|
|
$
|
4,500
|
|
Rangold Resources Ltd.
|
|
$
|
3,877
|
(1)
|
Peter Hambro Mining
|
|
$
|
2,768
|
(1)
|
Lundin Mining Corp.
|
|
$
|
2,330
|
|
Centerra Gold
|
|
$
|
1,770
|
|
|
|
|
(1)
|
|
A monthly average exchange rate (up to September 2009) of 1.182 was used by Mercer for
converting $US to $Cdn for purposes of the study.
|
|
(2)
|
|
A monthly average exchange rate (up to September 2009) of 0.8688 was used by Mercer for
converting from $A to $Cdn
|
The Compensation Committee compares our executives to the incumbents in the comparator group that
appear to be performing similar job functions. Where market data for the functional roles was not
available, data was provided on a ranking basis (for the ranking match, the top five executives
in the comparator organizations are ranked in order of their total cash compensation from highest
to lowest). Our executives are matched to the comparator group executives on the same basis.
Other Elements of Executive Compensation
The Corporation does not provide a pension plan for its executive officers.
Executive officers, once eligible, are entitled to participate in the Corporations share purchase
plan, pursuant to which the Corporation will contribute a sum equal to 50% of such officers
contributions up to a maximum of 7% of base salary. Each of Messrs. Macken, Giardini, Meredith and
Garcia participate in the share purchase plan. Mr. Friedland does not participate in the plan. See
Summary Compensation Table for the Corporation below.
In addition, the Corporation provides a life insurance benefit to each of Messrs. Macken, Meredith,
Giardini and Garcia. See Summary Compensation Table for the Corporation below.
As part of Mr. Garcias contractual arrangements, he receives a housing and living allowance
benefit, given his location in Mongolia, which in 2009 was valued at US$129,495 and car lease
payments which in 2009 was valued at US$26,961. See Summary Compensation Table for the
Corporation below.
-46-
Compensation in relation to Public Company Subsidiaries
National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) requires inclusion of
compensation details in respect of income earned from, or in respect of, subsidiaries of the
Corporation. See Summary Compensation Table for the Corporation (Inclusive of Public
Subsidiaries) below.
SouthGobi Energy Resources Ltd.
The Corporation owns, directly and indirectly, 105,782,155 common shares of SouthGobi Energy
Resources Ltd. (SouthGobi) as at December 31, 2009, representing 78.6% of the issued and
outstanding common shares of SouthGobi as at such date. The common shares of SouthGobi are listed
on the Toronto Stock Exchange and, since January 29, 2010, on the Hong Kong Stock Exchange. While
SouthGobi is managed by its own public company board of directors and has its own compensation
policies, certain of the officers and directors of the Corporation also served as officers and/or
directors of SouthGobi and accordingly compensation received from SouthGobi is included in this
Circular.
Mr. Macken, CEO and President, and a director of the Corporation was Chairman of SouthGobi until
October, 2009. Mr. Macken does not receive a salary from SouthGobi.
Mr. Meredith, Deputy Chairman of the Corporation was Chief Executive Officer of SouthGobi until
October, 2009 at which time he became Chairman. Mr. Meredith received salary from SouthGobi during
2009 of US$140,008. In respect of his responsibilities at SouthGobi, Mr. Meredith also received
bonus compensation from SouthGobi of US$50,000 in recognition of his efforts toward raising capital
for SouthGobi and his contribution to the public listing of its shares on the Hong Kong Stock
Exchange.
In August 2009, options to purchase common shares of SouthGobi were granted with a five year term
and an exercise price of Cdn$12.99 to Mr. Macken (36,000 options), Mr. Meredith (75,000 options)
and Mr. Giardini (15,000 options). The grants of options by SouthGobi were made as long term
incentives to further encourage retention and/or as an incentive to provide a high level of
performance for the benefit of SouthGobi.
Ivanhoe Australia Limited
The Corporation owns 259,536,627 of the issued and outstanding common shares of Ivanhoe Australia
Limited (Ivanhoe Australia) as at December 31, 2009, representing 81.5% of the issued and
outstanding common shares of Ivanhoe Australia as at such date. None of the Corporations NEOs
received compensation from Ivanhoe Australia during 2009.
Other Corporate Policies
While it has not been a formal requirement of the Corporation, the Corporations senior executives
are encouraged to hold a share ownership position in the Corporation. In light of market prices
and as part of its ongoing review of corporate governance practices, this policy is currently under
review. The Corporation does not have a policy to recoup or claw back incentive compensation based
on achieving performance targets that were later restated as the Corporation at this stage does not
base incentive plan compensation on the achievement of objective metrics. The Corporation does not
have a policy in place to prohibit executives from hedging the economic risk of their ownership and
from pledging shares as collateral for margin loans.
-47-
Performance Graph
The following graph and table compares the cumulative shareholder return on a Cdn$100 investment in
Common Shares of the Corporation to a similar investment in companies comprising the S&P/TSX
Composite Index, including dividend reinvestment, for the period from December 31, 2004 to December
31, 2009.
The trend in overall compensation paid to the Corporations executive officers over the past five
years has not tracked the performance of the market price of the Corporations common shares, or
the S&P/TSX Composite Index, particularly since 2007. Cash compensation, has increased over this
period in response to both competitive and retention demands and market benchmarking. Given the
Corporations stage of development current share price is not a significant factor in cash
compensation consideration. The value of long term incentive compensation in the form of stock
options is influenced by the Corporations share price performance.
-48-
Summary
Compensation Table for the Corporation
The following executive compensation disclosure is provided as at December 31, 2009 and December
31, 2008, in respect of the Chief Executive Officer, Chief Financial Officer and each of the
Corporations three highest paid executive officers in accordance with NI 51-102 in the year ended
December 31, 2009 (collectively the Named Executive Officers or NEOs).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-equity incentive plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-
|
|
|
|
|
|
|
|
|
|
|
Long-term
|
|
|
|
|
|
|
|
|
|
|
Name and
|
|
|
|
|
|
|
|
|
|
based
|
|
|
Option-based
|
|
|
Annual
|
|
|
incentive
|
|
|
Pension
|
|
|
All Other
|
|
|
Total
|
|
Principal
|
|
|
|
Income
|
|
|
|
|
|
awards
|
|
|
awards(11)
|
|
|
incentive
|
|
|
plans(10)
|
|
|
Value
|
|
|
Compensation
|
|
|
Compensation
|
|
Position
|
|
Year
|
|
Source
|
|
Salary (US$)
|
|
|
(US$)
|
|
|
(US$)
|
|
|
plans (US$)
|
|
|
(US$)
|
|
|
(US$)
|
|
|
(US$)
|
|
|
(US$)
|
|
John Macken (CEO & President)
|
|
2009
|
|
Ivanhoe Mines Ltd.
|
|
$
|
714,000
|
|
|
Nil
|
|
$
|
7,460,000
|
|
|
$
|
550,000
|
|
|
Nil
|
|
Nil
|
|
$
|
32,292
|
(1)
|
|
$
|
8,756,292
|
|
|
|
|
|
SouthGobi Energy Resources Ltd.
|
|
Nil
|
|
Nil
|
|
$
|
270,000
|
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
270,000
|
|
|
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
|
|
TOTAL 2009:
|
|
$
|
714,000
|
|
|
Nil
|
|
$
|
7,730,000
|
|
|
$
|
550,000
|
|
|
Nil
|
|
Nil
|
|
$
|
32,292
|
|
|
$
|
9,026,292
|
(9)
|
|
|
2008
|
|
Ivanhoe Mines Ltd.
|
|
$
|
635,000
|
|
|
Nil
|
|
$
|
1,784,000
|
|
|
$
|
550,000
|
|
|
Nil
|
|
Nil
|
|
$
|
30,425
|
(2)
|
|
$
|
2,999,425
|
|
|
|
|
|
SouthGobi Energy Resources Ltd.
|
|
Nil
|
|
Nil
|
|
$
|
488,782
|
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
488,782
|
|
|
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
$
|
929,400
|
(12)
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
929,400
|
|
|
|
|
|
TOTAL 2008:
|
|
$
|
635,000
|
|
|
Nil
|
|
$
|
3,202,182
|
|
|
$
|
550,000
|
|
|
Nil
|
|
Nil
|
|
$
|
30,425
|
|
|
$
|
4,417,607
|
(9)
|
Tony Giardini (CFO)
|
|
2009
|
|
Ivanhoe Mines Ltd.
|
|
$
|
338,165
|
|
|
Nil
|
|
$
|
1,412,000
|
|
|
$
|
210,158
|
|
|
Nil
|
|
Nil
|
|
$
|
13,354
|
(3)
|
|
$
|
1,973,677
|
|
|
|
|
|
SouthGobi Energy Resources Ltd.
|
|
Nil
|
|
Nil
|
|
$
|
112,500
|
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
112,500
|
|
|
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
|
|
TOTAL 2009:
|
|
$
|
338,165
|
|
|
Nil
|
|
$
|
1,524,500
|
|
|
$
|
210,158
|
|
|
Nil
|
|
Nil
|
|
$
|
13,354
|
|
|
$
|
2,086,177
|
|
|
|
2008
|
|
Ivanhoe Mines Ltd.
|
|
$
|
281,426
|
|
|
Nil
|
|
$
|
625,200
|
|
|
$
|
187,617
|
|
|
Nil
|
|
Nil
|
|
$
|
47,568
|
(4)
|
|
$
|
1,141,811
|
|
|
|
|
|
SouthGobi Energy Resources Ltd.
|
|
Nil
|
|
Nil
|
|
$
|
234,356
|
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
234,356
|
|
|
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
$
|
92,940
|
(12)
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
92,940
|
|
|
|
|
|
TOTAL 2008
|
|
$
|
281,426
|
|
|
Nil
|
|
$
|
952,496
|
|
|
$
|
187,617
|
|
|
Nil
|
|
Nil
|
|
$
|
47,568
|
|
|
$
|
1,469,107
|
|
Peter Meredith (Deputy Chairman)
|
|
2009
|
|
Ivanhoe Mines Ltd.
|
|
$
|
349,389
|
(13)
|
|
Nil
|
|
$
|
5,469,500
|
|
|
$
|
550,000
|
|
|
Nil
|
|
Nil
|
|
$
|
33,018
|
(5)
|
|
$
|
6,401,907
|
|
|
|
|
|
SouthGobi Energy Resources Ltd.
|
|
$
|
140,008
|
|
|
Nil
|
|
$
|
562,500
|
|
|
$
|
50,000
|
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
752,508
|
|
|
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
|
|
TOTAL 2009:
|
|
$
|
489,397
|
|
|
Nil
|
|
$
|
6,032,000
|
|
|
$
|
600,000
|
|
|
Nil
|
|
Nil
|
|
$
|
33,018
|
|
|
$
|
7,154,415
|
(9)
|
|
|
2008
|
|
Ivanhoe Mines Ltd.
|
|
$
|
211,071
|
(13)
|
|
Nil
|
|
$
|
1,275,200
|
|
|
$
|
550,000
|
|
|
Nil
|
|
Nil
|
|
$
|
93,466
|
(6)
|
|
$
|
2,129,737
|
|
|
|
|
|
SouthGobi Energy Resources Ltd.
|
|
$
|
153,032
|
|
|
Nil
|
|
$
|
963,092
|
|
|
$
|
98,357
|
|
|
Nil
|
|
Nil
|
|
$
|
642
|
|
|
$
|
1,215,123
|
|
|
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
$
|
929,400
|
(12)
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
929,400
|
|
|
|
|
|
TOTAL 2008:
|
|
$
|
364,103
|
|
|
Nil
|
|
$
|
3,167,692
|
|
|
$
|
648,357
|
|
|
Nil
|
|
Nil
|
|
$
|
94,108
|
|
|
$
|
4,274,260
|
(9)
|
-49-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-equity incentive plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-
|
|
|
|
|
|
|
|
|
|
|
Long-term
|
|
|
|
|
|
|
|
|
|
|
Name and
|
|
|
|
|
|
|
|
|
|
based
|
|
|
Option-based
|
|
|
Annual
|
|
|
incentive
|
|
|
Pension
|
|
|
All Other
|
|
|
Total
|
|
Principal
|
|
|
|
Income
|
|
|
|
|
|
awards
|
|
|
awards(11)
|
|
|
incentive
|
|
|
plans(10)
|
|
|
Value
|
|
|
Compensation
|
|
|
Compensation
|
|
Position
|
|
Year
|
|
Source
|
|
Salary (US$)
|
|
|
(US$)
|
|
|
(US$)
|
|
|
plans (US$)
|
|
|
(US$)
|
|
|
(US$)
|
|
|
(US$)
|
|
|
(US$)
|
|
Robert Friedland (Executive Chairman)
|
|
2009
|
|
Ivanhoe Mines Ltd.
|
|
Nil
|
|
Nil
|
|
$
|
7,460,000
|
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
7,460,000
|
|
|
|
|
|
SouthGobi Energy Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
|
|
TOTAL 2009:
|
|
Nil
|
|
Nil
|
|
$
|
7,460,000
|
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
7,460,000
|
(9)
|
|
|
2008
|
|
Ivanhoe Mines Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
|
|
SouthGobi Energy Resources Ltd.
|
|
Nil
|
|
Nil
|
|
$
|
2,567,646
|
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
2,567,646
|
|
|
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
$
|
7,435,200
|
(12)
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
7,435,200
|
|
|
|
|
|
TOTAL 2008:
|
|
Nil
|
|
Nil
|
|
$
|
10,002,846
|
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
10,002,846
|
(9)
|
Steve Garcia (Executive VP)
|
|
2009
|
|
Ivanhoe Mines Ltd.
|
|
$
|
450,000
|
|
|
Nil
|
|
$
|
1,029,000
|
|
|
$
|
270,000
|
|
|
Nil
|
|
Nil
|
|
$
|
175,018
|
(7)
|
|
$
|
1,924,018
|
|
|
|
|
|
SouthGobi Energy Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
|
|
TOTAL 2009:
|
|
$
|
450,000
|
|
|
Nil
|
|
$
|
1,029,000
|
|
|
$
|
270,000
|
|
|
Nil
|
|
Nil
|
|
$
|
175,018
|
|
|
$
|
1,924,018
|
|
|
|
2008
|
|
Ivanhoe Mines Ltd.
|
|
$
|
400,000
|
|
|
Nil
|
|
$
|
657,000
|
|
|
$
|
200,000
|
|
|
Nil
|
|
Nil
|
|
$
|
139,373
|
(8)
|
|
$
|
1,396,373
|
|
|
|
|
|
SouthGobi Energy Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
|
|
TOTAL 2008:
|
|
$
|
400,000
|
|
|
Nil
|
|
$
|
657,000
|
|
|
$
|
200,000
|
|
|
Nil
|
|
Nil
|
|
$
|
139,373
|
|
|
$
|
1,396,373
|
|
|
|
|
(1)
|
|
Life insurance premium of $7,302 and share purchase plan amounts of $24,990.
|
|
(2)
|
|
Life insurance premiums of $8,200 and share purchase plan amounts of $22,225.
|
|
(3)
|
|
Life insurance premium of $1,861 and share purchase plan of $11,493.
|
|
(4)
|
|
Life insurance premiums of $1,993, share purchase plan amounts of $10,397 and vacation
liability payout of $35,178.
|
|
(5)
|
|
Life insurance premiums of $12,636 and share purchase plan amounts of $20,382.
|
|
(6)
|
|
Life insurance premiums of $8,189, share purchase plan amounts of $16,646 and vacation
liability payout of $68,631.
|
|
(7)
|
|
Life insurance premiums of $2,812, share purchase plan amounts of $15,750, housing allowance
amounts of $129,495 and car lease payments of $26,961.
|
|
(8)
|
|
Share purchase plan amounts of $13,998, housing allowance amounts of $98,276 and car lease
payments of $27,099.
|
|
(9)
|
|
Mr. Macken, Mr. Friedland and Mr. Meredith are also directors of the Corporation. Pursuant
to the Corporations policies regarding non-independent directors, none of Mr. Macken, Mr.
Friedland or Mr. Meredith received compensation from the Corporation for acting as a director,
and no portion of the Total Compensation disclosed above was received by Mr. Macken, Mr.
Friedland or Mr. Meredith as compensation for acting as a director.
|
|
(10)
|
|
The Corporation does not presently have a pension incentive plan for any of its executive
officers, including its Named Executive Officers.
|
|
(11)
|
|
The Corporation uses the Black-Scholes option-pricing model for determining fair value of
stock options issued as at the grant date. The practice of the Corporation is to grant all
option based awards in Canadian currency (although the grants of performance rights of its
subsidiary, Ivanhoe Australia Limited in 2008, were awarded in Australian currency see
option table under the heading Outstanding share-based awards and option-based awards for
more information), then convert the grant date fair value amount to U.S. currency for
reporting the value of the grants in the Corporations financials. The conversion rate for
each grant is the rate quoted by the Bank of Canada as its noon spot rate (BOC Rate) on the
date the grant is made for each grant in Canadian currency (or the rate quoted by the Reserve
Bank of Australia as its daily rate (Australian Rate) on the date of the grant is made for
each grant in Australian currency). The conversion rates for the purpose of the grants to the
NEOs in the Summary Compensation Chart are presented below and are based on the applicable BOC
Rate or Australian Rate on the date of grant, each as supplied by Bloomberg. See 2009 Options
Granted and 2008 Options Granted charts below.
|
-50-
|
|
|
(12)
|
|
These values represent the Black-Scholes valuations in accordance with Note 11 in respect of
performance rights in Ivanhoe Australia Limited, a subsidiary of the Corporation, which were
granted concurrent with its initial public offering on the Australian Stock Exchange in 2008.
Further details of such performance rights are provided in the table entitled Outstanding
share-based awards and option-based awards.
|
|
(13)
|
|
Mr. Merediths salary is set by the Corporation but is allocated among the Corporation and
certain other related companies. For 2009, Mr. Merediths salary was US$562,000 of which
US$349,389 was paid by the Corporation. For 2008, Mr. Merediths salary was US$500,000 of
which US$211,071 was paid by the Corporation.
|
2009 Options Granted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange Rates to
|
|
Name
|
|
Company that Granted Options
|
|
Date of Grant
|
|
|
Option Granted
|
|
|
USD
(1)
|
|
John Macken
|
|
Ivanhoe Mines Ltd
|
|
|
5/8/2009
|
|
|
|
1,500,000
|
|
|
Cdn$1.1488/US$1
|
John Macken
|
|
Ivanhoe Mines Ltd
|
|
|
10/9/2009
|
|
|
|
250,000
|
|
|
Cdn.$1.0408/US$1
|
John Macken
|
|
SouthGobi Energy Resources Ltd.
|
|
|
8/5/2009
|
|
|
|
36,000
|
|
|
Cdn.$1.0720/US$1
|
Tony Giardini
|
|
Ivanhoe Mines Ltd
|
|
|
5/8/2009
|
|
|
|
100,000
|
|
|
Cdn.$1.1488/US$1
|
Tony Giardini
|
|
Ivanhoe Mines Ltd
|
|
|
10/9/2009
|
|
|
|
150,000
|
|
|
Cdn.$1.0408/US$1
|
Tony Giardini
|
|
SouthGobi Energy Resources Ltd.
|
|
|
8/5/2009
|
|
|
|
15,000
|
|
|
Cdn.$1.0720/US$1
|
Robert Friedland
|
|
Ivanhoe Mines Ltd
|
|
|
5/8/2009
|
|
|
|
1,500,000
|
|
|
Cdn.$1.1488/US$1
|
Robert Friedland
|
|
Ivanhoe Mines Ltd
|
|
|
10/9/2009
|
|
|
|
250,000
|
|
|
Cdn.$1.0408/US$1
|
Peter Meredith
|
|
Ivanhoe Mines Ltd
|
|
|
5/8/2009
|
|
|
|
750,000
|
|
|
Cdn.$1.1488/US$1
|
Peter Meredith
|
|
Ivanhoe Mines Ltd
|
|
|
7/23/2009
|
|
|
|
200,000
|
|
|
Cdn.$1.0884/US$1
|
Peter Meredith
|
|
Ivanhoe Mines Ltd
|
|
|
10/9/2009
|
|
|
|
250,000
|
|
|
Cdn.$1.0408/US$1
|
Peter Meredith
|
|
SouthGobi Energy Resources Ltd.
|
|
|
8/5/2009
|
|
|
|
75,000
|
|
|
Cdn.$1.0720/US$1
|
Steve Garcia
|
|
Ivanhoe Mines Ltd
|
|
|
10/9/2009
|
|
|
|
150,000
|
|
|
Cdn.$1.0408/US$1
|
2008 Options Granted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange Rates to
|
|
Name
|
|
Company that Granted Options
|
|
Date of Grant
|
|
|
Option Granted
|
|
|
USD
(1)
|
|
John Macken
|
|
Ivanhoe Mines Ltd.
|
|
|
9/22/2008
|
|
|
|
250,000
|
|
|
Cdn.$1.0370/US$1
|
John Macken
|
|
Ivanhoe Mines Ltd.
|
|
|
11/13/2008
|
|
|
|
900,000
|
|
|
Cdn.$1.2075/US$1
|
John Macken
|
|
SouthGobi Energy Resources Ltd.
|
|
|
8/27/2008
|
|
|
|
50,000
|
|
|
Cdn.$1.0485/US$1
|
John Macken
|
|
SouthGobi Energy Resources Ltd.
|
|
|
11/27/2008
|
|
|
|
40,000
|
|
|
Cdn.$1.2329/US$1
|
John Macken
|
|
Ivanhoe Australia Limited
|
|
|
8/6/2008
|
|
|
|
500,000
|
|
|
A$1.0760/US$1
|
Tony Giardini
|
|
Ivanhoe Mines Ltd.
|
|
|
9/22/2008
|
|
|
|
150,000
|
|
|
Cdn.$1.0370/US$1
|
Tony Giardini
|
|
Ivanhoe Mines Ltd.
|
|
|
11/13/2008
|
|
|
|
120,000
|
|
|
Cdn.$1.2075/US$1
|
Tony Giardini
|
|
SouthGobi Energy Resources Ltd.
|
|
|
7/9/2008
|
|
|
|
20,000
|
|
|
Cdn.$1.0108/US$1
|
Tony Giardini
|
|
SouthGobi Energy Resources Ltd.
|
|
|
11/27/2008
|
|
|
|
20,000
|
|
|
Cdn.$1.2329/US$1
|
Tony Giardini
|
|
Ivanhoe Australia Limited
|
|
|
8/6/2008
|
|
|
|
50,000
|
|
|
A$1.0760/US$1
|
Robert Friedland
|
|
SouthGobi Energy Resources Ltd.
|
|
|
7/9/2008
|
|
|
|
250,000
|
|
|
Cdn.$1.0108/US$1
|
Robert Friedland
|
|
SouthGobi Energy Resources Ltd.
|
|
|
11/28/2008
|
|
|
|
125,000
|
|
|
Cdn.$1.2329/US$1
|
Robert Friedland
|
|
Ivanhoe Australia Limited
|
|
|
8/6/2008
|
|
|
|
4,000,000
|
|
|
A$1.0760/US$1
|
Peter Meredith
|
|
Ivanhoe Mines Ltd.
|
|
|
9/22/2008
|
|
|
|
250,000
|
|
|
Cdn.$1.0370/US$1
|
Peter Meredith
|
|
Ivanhoe Mines Ltd.
|
|
|
11/13/2008
|
|
|
|
420,000
|
|
|
Cdn.$1.2075/US$1
|
Peter Meredith
|
|
SouthGobi Energy Resources Ltd.
|
|
|
8/27/2008
|
|
|
|
100,000
|
|
|
Cdn.$1.0485/US$1
|
Peter Meredith
|
|
SouthGobi Energy Resources Ltd.
|
|
|
11/27/2008
|
|
|
|
75,000
|
|
|
Cdn.$1.2329/US$1
|
Peter Meredith
|
|
Ivanhoe Australia Limited
|
|
|
8/6/2008
|
|
|
|
500,000
|
|
|
A$1.0760/US$1
|
Steve Garcia
|
|
Ivanhoe Mines Ltd.
|
|
|
9/22/2008
|
|
|
|
150,000
|
|
|
Cdn.$1.0370/US$1
|
Steve Garcia
|
|
Ivanhoe Mines Ltd.
|
|
|
11/13/2008
|
|
|
|
150,000
|
|
|
Cdn.$1.2075/US$1
|
|
|
|
(1)
|
|
Where other compensation is in currency other than USD it has been translated at the average
2009 and 2008 Bank of Canada noon exchange rate, where applicable.
|
-51-
Outstanding share-based awards and option-based awards as at December 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards Name
|
|
|
|
Option-based Awards
|
|
|
Number of
|
|
|
Market or
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
Market Value
|
|
|
Shares or
|
|
|
Payout Value
|
|
|
|
|
|
Securities
|
|
|
Option
|
|
|
|
|
|
|
of Unexercised
|
|
|
Units of
|
|
|
of Share-based
|
|
|
|
Issuer of
|
|
Underlying
|
|
|
Exercise
|
|
|
Option
|
|
|
in-the-Money
|
|
|
Shares that
|
|
|
Awards that
|
|
|
|
Option-based
|
|
Unexercised
|
|
|
Price
|
|
|
Expiration
|
|
|
Options
|
|
|
have not
|
|
|
have not
|
|
Name
|
|
Award
|
|
Options
|
|
|
(Cdn$/ Option)
|
|
|
Date
|
|
|
(US$)(1)
|
|
|
Vested
|
|
|
Vested (Cdn$)
|
|
John Macken
|
|
Ivanhoe Mines Ltd.
|
|
|
1,000,000
|
|
|
$
|
9.73
|
|
|
|
3/27/2013
|
|
|
$
|
5,488,036
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
250,000
|
|
|
$
|
8.35
|
|
|
|
9/22/2013
|
|
|
$
|
1,699,582
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
1,000,000
|
|
|
$
|
7.78
|
|
|
|
3/30/2014
|
|
|
$
|
7,339,537
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
900,000
|
|
|
$
|
2.82
|
|
|
|
11/13/2015
|
|
|
$
|
10,844,094
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
1,500,000
|
|
|
$
|
8.20
|
|
|
|
5/8/2016
|
|
|
$
|
10,411,128
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
250,000
|
|
|
$
|
13.76
|
|
|
|
10/9/2016
|
|
|
$
|
415,401
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
|
250,000
|
|
|
$
|
6.00
|
|
|
|
6/22/2012
|
|
|
$
|
2,634,827
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
|
50,000
|
|
|
$
|
15.07
|
|
|
|
8/27/2013
|
|
|
$
|
96,373
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
|
40,000
|
|
|
$
|
5.10
|
|
|
|
11/27/2013
|
|
|
$
|
455,754
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
|
36,000
|
|
|
$
|
12.99
|
|
|
|
8/5/2014
|
|
|
$
|
140,486
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia
Limited
|
|
|
250,000
|
|
|
Nil
|
(3)
|
|
|
n/a
|
(2)
|
|
$
|
821,396
|
|
|
Nil
|
|
Nil
|
Tony Giardini
|
|
Ivanhoe Mines Ltd.
|
|
|
250,000
|
|
|
$
|
9.73
|
|
|
|
3/27/2013
|
|
|
$
|
1,372,009
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
150,000
|
|
|
$
|
8.35
|
|
|
|
9/22/2013
|
|
|
$
|
1,019,749
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
120,000
|
|
|
$
|
2.82
|
|
|
|
11/13/2015
|
|
|
$
|
1,445,879
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
100,000
|
|
|
$
|
8.20
|
|
|
|
5/8/2016
|
|
|
$
|
694,075
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
150,000
|
|
|
$
|
13.76
|
|
|
|
10/9/2016
|
|
|
$
|
249,240
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
|
20,000
|
|
|
$
|
18.86
|
|
|
|
7/9/2013
|
|
|
Nil
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
|
20,000
|
|
|
$
|
5.10
|
|
|
|
11/27/2013
|
|
|
$
|
227,877
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
|
15,000
|
|
|
$
|
12.99
|
|
|
|
8/5/2014
|
|
|
$
|
58,536
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia
Limited
|
|
|
25,000
|
|
|
Nil
|
(3)
|
|
|
n/a
|
(2)
|
|
$
|
82,140
|
|
|
Nil
|
|
Nil
|
Peter Meredith
|
|
Ivanhoe Mines Ltd.
|
|
|
400,000
|
|
|
$
|
9.73
|
|
|
|
3/27/2013
|
|
|
$
|
2,195,215
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
250,000
|
|
|
$
|
8.35
|
|
|
|
9/22/2013
|
|
|
$
|
1,699,582
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
320,000
|
|
|
$
|
2.82
|
|
|
|
11/13/2015
|
|
|
$
|
3,855,678
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
750,000
|
|
|
$
|
8.20
|
|
|
|
5/8/2016
|
|
|
$
|
5,205,564
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
200,000
|
|
|
$
|
8.77
|
|
|
|
7/23/2016
|
|
|
$
|
1,279,909
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
250,000
|
|
|
$
|
13.76
|
|
|
|
10/9/2016
|
|
|
$
|
415,401
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
|
415,000
|
|
|
$
|
6.00
|
|
|
|
6/22/2012
|
|
|
$
|
4,373,813
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
|
100,000
|
|
|
$
|
15.07
|
|
|
|
8/27/2013
|
|
|
$
|
192,746
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
|
75,000
|
|
|
$
|
5.10
|
|
|
|
11/27/2013
|
|
|
$
|
854,539
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
|
75,000
|
|
|
$
|
12.99
|
|
|
|
8/5/2014
|
|
|
$
|
292,679
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia
Limited
|
|
|
250,000
|
|
|
Nil
|
(3)
|
|
|
n/a
|
(2)
|
|
$
|
821,396
|
|
|
Nil
|
|
Nil
|
Robert Friedland
|
|
Ivanhoe Mines Ltd.
|
|
|
1,500,000
|
|
|
$
|
8.20
|
|
|
|
5/8/2016
|
|
|
$
|
10,411,128
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
250,000
|
|
|
$
|
13.76
|
|
|
|
10/9/2016
|
|
|
$
|
415,401
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
|
250,000
|
|
|
$
|
18.86
|
|
|
|
7/9/2013
|
|
|
Nil
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
|
125,000
|
|
|
$
|
5.10
|
|
|
|
11/27/2013
|
|
|
$
|
1,424,231
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia
Limited
|
|
|
2,000,000
|
|
|
Nil
|
(3)
|
|
|
n/a
|
(2)
|
|
$
|
6,571,164
|
|
|
Nil
|
|
Nil
|
-52-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards Name
|
|
|
|
Option-based Awards
|
|
|
Number of
|
|
|
Market or
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
Market Value
|
|
|
Shares or
|
|
|
Payout Value
|
|
|
|
|
|
Securities
|
|
|
Option
|
|
|
|
|
|
|
of Unexercised
|
|
|
Units of
|
|
|
of Share-based
|
|
|
|
Issuer of
|
|
Underlying
|
|
|
Exercise
|
|
|
Option
|
|
|
in-the-Money
|
|
|
Shares that
|
|
|
Awards that
|
|
|
|
Option-based
|
|
Unexercised
|
|
|
Price
|
|
|
Expiration
|
|
|
Options
|
|
|
have not
|
|
|
have not
|
|
Name
|
|
Award
|
|
Options
|
|
|
(Cdn$/ Option)
|
|
|
Date
|
|
|
(US$)(1)
|
|
|
Vested
|
|
|
Vested (Cdn$)
|
|
Steve Garcia
|
|
Ivanhoe Mines Ltd.
|
|
|
100,000
|
|
|
$
|
8.41
|
|
|
|
5/1/2010
|
|
|
$
|
674,136
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
250,000
|
|
|
$
|
9.73
|
|
|
|
3/27/2013
|
|
|
$
|
1,372,009
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
150,000
|
|
|
$
|
8.35
|
|
|
|
9/22/2013
|
|
|
$
|
1,019,749
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
150,000
|
|
|
$
|
13.71
|
|
|
|
11/14/2014
|
|
|
$
|
256,362
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
112,500
|
|
|
$
|
2.82
|
|
|
|
11/13/2015
|
|
|
$
|
1,355,512
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
150,000
|
|
|
$
|
13.76
|
|
|
|
10/9/2016
|
|
|
$
|
249,240
|
|
|
Nil
|
|
Nil
|
|
|
|
(2)
|
|
The Value of Unexercised in-the-Money Options is calculated on the basis of the difference
between the closing price of the common shares of the Corporation on the Toronto Stock
Exchange on December 31, 2009, and the Exercise Price of the options. With respect to the
Rights (as defined in footnote (2)) issued to each NEO in Ivanhoe Australia, the Value of
Unexercised in-the-Money Options is based upon the closing price of the common shares of
Ivanhoe Australia on the Australian Stock Exchange (the ASX) on December 31, 2009 as the
rights have an Exercise Price of nil.
|
|
(3)
|
|
The Rights granted to each of the NEOs do not have an expiry date.
|
|
(4)
|
|
The Rights do not require any additional payment by their respective holders to exercise such
Rights for shares of Ivanhoe Australia.
|
Incentive Plan Awards value vested or earned during 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option-based
|
|
|
Share-based
|
|
|
Non-Equity
|
|
|
|
|
|
Awards
|
|
|
Awards
|
|
|
Incentive Plan
|
|
|
|
|
|
Value
|
|
|
Value
|
|
|
Compensation
|
|
|
|
|
|
Vested During
|
|
|
Vested During
|
|
|
Value earned
|
|
|
|
|
|
the Year
|
|
|
the Year
|
|
|
During the Year
|
|
Name
|
|
Issuer of Option-based Award
|
|
(US$)
|
|
|
(US$)
|
|
|
(US$)
|
|
John Macken
|
|
Ivanhoe Mines Ltd.
|
|
$
|
2,531,182
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy Resources Ltd.
|
|
$
|
412,499
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
$
|
294,263
|
|
|
Nil
|
|
Nil
|
Tony Giardini
|
|
Ivanhoe Mines Ltd.
|
|
$
|
805,181
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy Resources Ltd.
|
|
$
|
59,051
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
$
|
29,426
|
|
|
Nil
|
|
Nil
|
Peter Meredith
|
|
Ivanhoe Mines Ltd.
|
|
$
|
1,877,882
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy Resources Ltd.
|
|
$
|
710,140
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
$
|
294,263
|
|
|
Nil
|
|
Nil
|
Robert Friedland
|
|
Ivanhoe Mines Ltd.
|
|
$
|
48,939
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy Resources Ltd.
|
|
$
|
369,067
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
$
|
2,354,100
|
|
|
Nil
|
|
Nil
|
Steve Garcia
|
|
Ivanhoe Mines Ltd.
|
|
$
|
623,636
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
Option and SAR Repricings
No options or stock appreciation rights were re-priced during the year ended December 31, 2009.
Defined Benefit and Pension Plans
The Corporation does not presently provide any defined benefit or pension plan to its directors,
executive officers or employees.
Indemnity Insurance
During 2009, the Corporation purchased director and officer liability insurance with an aggregate
US$110 million limit. The total premiums paid by the Corporation in respect of this insurance
coverage for the twelve month term were US$1,411,000.
-53-
Termination and Change of Control Benefits Provisions in Employment Contracts
The Corporations original employment contract as of November 1, 2003 with John Macken, President
and CEO was amended and restated as of January 1, 2008. The employment contract provides for an
initial base salary, discretionary performance bonuses and stock option grants from time to time if
and when awarded by the Corporation, housing benefit and other benefits and entitlements available
to the Corporations other executive officers. Mr. Mackens employment contract provides that: (a)
the Corporation may terminate Mr. Mackens employment for cause; (b) the Corporation may terminate
Mr. Mackens employment without cause, or upon his disability, in each case upon payment to Mr.
Macken of 24 months base salary together with an amount equal to the average of the two highest
value aggregate annual performance bonuses paid to Mr. Macken during the five completed fiscal
years of the Corporation preceding the date of termination; and, (c) in the event of (i) a change
of control of the Corporation; and (ii) within 24 months thereafter, the employment contract is
either terminated by the Corporation other than for cause or disability, or Mr. Macken resigns for
good reason as defined in the employment contract, Mr. Macken would be entitled to receive a
payment equal to the product of 2.99 times the sum of Mr. Mackens then base salary and the average
of the two highest value aggregate annual performance bonuses paid to Mr. Macken by the Corporation
during the five completed fiscal years of the Corporation preceding the date of termination. Good
reason under the contract includes certain adverse changes in Mr. Mackens status or position in
the Corporation, certain adverse changes to his compensation, benefits or employment terms, and
acts constituting constructive dismissal at law. In the event of a termination on disability or
without cause, or on a change of control followed by a termination or resignation with good
reason, all of Mr. Mackens then unvested incentive stock options would vest and all his options
would remain exercisable for six months following the date of termination of employment, and
certain of Mr. Mackens benefits would continue for 12 months following termination. The
Corporation has provided Mr. Macken, a United States citizen and resident, with an indemnity in
respect of certain United States excise taxes under Section 4999 of the Internal Revenue Code
(United States) and certain interest and penalties in the event such excise taxes, interest and
penalties were levied on compensation and benefits payable to Mr. Macken following a termination of
Mr. Macken following a change of control of the Corporation.
The following is an estimate of incremental payments to Mr. Macken in the above scenarios (a)
(c), based on his annual salary as at December 31, 2009, and the value of his options as at
December 31, 2009: (a) no further wages, no lump sum payments, and no acceleration of unvested
options, for a total of nil; (b) a lump sum based on salary of US$1,428,000, a lump sum based on
historical bonuses of US$550,000, a benefit amount of US$32,292, and acceleration of unvested
options for an in the money value of US$17,631,504, for a total of US$19,641,796; (c) a lump sum
based on salary of US$2,134,860, a lump sum based on historical bonuses of US$1,664,500, a benefit
amount of US$32,292, and acceleration of unvested options for an in the money value of
US$17,631,504, for a total of US$21,443,156.
The Corporation has entered into an employment contract with Peter Meredith, Deputy Chairman, dated
December 18, 2007. The agreement provides for an initial base salary, discretionary performance
bonuses and stock option grants from time to time if and when awarded by the Corporation, and other
benefits and entitlements available to the Corporations other executive officers. Mr. Merediths
employment contract provides that: (a) the Corporation may terminate Mr. Merediths employment for
cause; (b) the Corporation may terminate Mr. Merediths employment without cause or upon his
-54-
disability upon payment to Mr. Meredith of 18 months base salary together with an amount equal to
the average of the two highest value aggregate annual performance bonuses paid to Mr. Meredith
during the five completed fiscal years preceding the date of termination; and, (c) in the event of
(i) a change of control of the Corporation; and (ii) within 24 months thereafter, Mr. Merediths
employment contract is either terminated by the Corporation other than for cause or disability or
Mr. Meredith resigns for good reason as defined in the employment contract; Mr. Meredith would be
entitled to receive a payment equal to the product of 2.99 times the sum of Mr. Merediths then
base salary and the average of the two highest value aggregate annual performance bonuses paid to
Mr. Meredith by the Corporation during the five completed fiscal years of the Corporation preceding
the date of termination. Good reason under the contract includes material adverse changes in Mr.
Merediths status or position in the Corporation, certain adverse changes to his compensation,
benefits or employment terms, and acts constituting constructive dismissal at law. In the event of
a termination on disability or without cause, or on a change of control followed by a termination
or resignation with good reason, all of Mr. Merediths then unvested incentive stock options
would vest and remain exercisable for six months following the date of termination of employment,
and certain of Mr. Merediths benefits would continue for 12 months following such termination.
The following is an estimate of incremental payments to Mr. Meredith in the above scenarios (a)
(c), based on his annual salary as at December 31, 2009, and the value of his options as at
December 31, 2009: (a) no further wages, no lump sum payments, and no acceleration of unvested
options, for a total of nil; (b) a lump sum based on salary of US$843,000, a lump sum based on
historical bonuses of US$775,000, a benefit amount of US$33,018, and acceleration of unvested
options for an in the money value of US$10,669,602, for a total of US$12,320,620; (c) a lump sum
based on salary of US$1,680,380, a lump sum based on historical bonuses of US$2,317,250, a benefit
amount of US$33,018, and acceleration of unvested options for an in the money value of
US$10,669,602, for a total of US$14,700,250.
Mr. Giardini was employed by the Corporation on May 1, 2006 as Chief Financial Officer. The
employment contract provides for an initial base salary, discretionary performance bonuses and
stock option grants from time to time if and when awarded by the Corporation, housing benefit and
other benefits and entitlements available to the Corporations other executive officers. Mr.
Giardinis employment contract provides that: (a) the Corporation may terminate Mr. Giardinis
employment for cause; (b) the Corporation may terminate Mr. Giardinis employment without cause, or
upon his disability, in each case upon payment to Mr. Giardini of 12 months base salary; and, (c)
in the event of (i) a change of control of the Corporation; and (ii) within 24 months thereafter,
the employment contract is either terminated by the Corporation other than for cause or disability
or Mr. Giardini resigns for good reason as defined in the employment contract; Mr. Giardini would
be entitled to receive a payment equal to the product of two (2) times the sum of Mr. Giardinis
then base salary and the average of the two highest value aggregate annual performance bonuses paid
to Mr. Giardini by the Corporation during the five completed fiscal years of the Corporation
preceding the date of termination. Good reason under the contract includes certain adverse
changes in Mr. Giardinis status or position in the Corporation, certain adverse changes to his
compensation, benefits or employment terms, and acts constituting constructive dismissal at law.
In the event of a termination on disability or without cause, or on a change of control followed by
a termination or resignation with good reason, all of Mr. Giardinis then unvested incentive
stock options would vest and all his options would
remain exercisable for six months following the date of termination of employment, and certain of
Mr. Giardinis benefits would continue for 12 months following termination.
-55-
The following is an estimate of incremental payments to Mr. Giardini in the above scenarios (a)
(c), based on his annual salary as at December 31, 2009, and the value of his options as at
December 31, 2009: (a) no further wages, no lump sum payments, and no acceleration of unvested
options, for a total of nil; (b) a lump sum based on salary of US$358,303, a benefit amount of
US$13,354, and acceleration of unvested options for an in the money value of US$2,619,018, for a
total of US$2,990,675; (c) a lump sum based on salary of US$716,606, a lump sum based on historical
bonuses of US$420,409, a benefit amount of US$13,354, and acceleration of unvested options for an
in the money value of US$2,619,018, for a total of US$3,769,387.
The Corporation is also party to an employment contract with Steve Garcia dated May 23, 2007. Mr.
Garcia is currently employed as the Corporations Executive Vice President. Mr. Garcias
employment contract provides that: (a) the Corporation may terminate Mr. Garcias employment for
cause; (b) the Corporation may terminate Mr. Garcias employment without cause upon payment to Mr.
Garcia of 3 months base salary; and, (c) in the event that the Corporation terminates Mr. Garcias
employment within six (6) months of a change of control, Mr. Garcia would be entitled to receive
a lump sum payment equal to twelve (12) months base salary.
The following is an estimate of incremental payments to Mr. Garcia in the above scenarios (a)
(c), based on his annual salary as at December 31, 2009: (a) no further wages, for a total of nil;
(b) a lump sum equal to 3 months base salary of US$112,500; and, (c) a lump sum equal to twelve
(12) months base salary of US$450,000.
The Corporation does not have employment contracts with any other of its Named Executive Officers.
Composition of the Compensation and Benefits Committee
During the year ended December 31, 2009, the Compensation and Benefits Committee was comprised of
Messrs. David Huberman (Chair), Robert Hanson, David Korbin, Howard Balloch and Markus Faber. Mr.
Kjeld Thygesen was a member of the Compensation Committee until May, 2009. All of the members of
the Compensation Committee during 2009 were independent directors.
Other than as described elsewhere in this information circular, since the beginning of the most
recently completed financial year, which ended on December 31, 2009, none of Messrs. Huberman,
Thygesen, Hanson, Korbin, Balloch or Faber, nor Ms. Mahler, was indebted to the Corporation or any
of its subsidiaries or had any material interest in any transaction or proposed transaction which
has materially affected or would materially affect the Corporation or any of its subsidiaries. None
of the Corporations executive officers serve as a member of the Compensation and Benefits
Committee or Board of Directors of any entity that has an executive officer serving as a member of
the Compensation and Benefits Committee or Board of Directors of the Corporation.
-56-
COMPENSATION OF DIRECTORS
Each non-management director receives Cdn$40,000 per annum (from January 1, 2009 to May 7, 2009,
Cdn$25,000). Mr. David Huberman receives an additional payment per annum for acting as the Lead
Director of the Board of Directors, which compensation
increased from Cdn$60,000 per annum to Cdn$80,000 per annum in May 2009 and to Cdn$150,000 per
annum in October 2009. Mr. David Korbin receives an additional payment per annum for acting as the
Chairman of the Audit Committee which compensation increased in October 2009 from Cdn$15,000 per
annum to Cdn$20,000. The Chair of the Compensation and Benefits Committee and the Chair of the
Corporate Governance and Nominating Committee each receives an additional payment for acting as a
director of the Corporation, which increased from Cdn$15,000 to Cdn$20,000 per annum in October,
2009. The increases in annual retainers and for the Lead Director and Committee chairs were made
to reflect the increased amount of work and effort these positions now require in the regulatory
and disclosure regimes facing the Corporation. Each non-management director receives a fee of
Cdn$2,000 for each Board of Directors meeting and each Committee meeting attended in person and,
Cdn$1,000 for each Director and Committee conference call in which they participate. Fees payable
to Rio Tintos nominee are paid directly to Rio Tinto in accordance with Rio Tintos corporate
policy. Each non-management director (other than the nominee of Rio Tinto in accordance with Rio
Tintos corporate policy) also receives an annual grant of incentive stock options exercisable to
purchase up to 50,000 Common Shares of the Corporation (which increased from up to 25,000 Common
Shares on May 7, 2009), such options having a seven year term (prior to May 7, 2009, a five year
term), and fully vesting on the first anniversary of the date of the grant. Each executive
director and non-management director is also entitled to be reimbursed for actual expenses
reasonably incurred in the performance of his duties as a director.
Directors Share Ownership Requirements
Each existing non-management director, except any nominee of Rio Tinto who is an employee of Rio
Tinto, is required to own Common Shares having a market value of at least three times his or her
annual cash retainer and to continue to hold this minimum number of shares as long as he or she
continues to serve as a director. Any new non-management director will have three years after
becoming a director to acquire this minimum number of shares. Common shares for this purpose are
valued annually at December 31 based on the preceding six month volume weighted average market
price of Common shares.
The following table reflects compensation earned by directors in respect of fiscal 2009 under the
compensation arrangements described above.
-57-
Directors Compensation for Fiscal
2009
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCENTIVE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHARE-
|
|
|
OPTION-
|
|
|
PLAN
|
|
|
|
|
|
|
ALL OTHER
|
|
|
TOTAL
|
|
|
|
|
|
FEES
|
|
|
BASED
|
|
|
BASED
|
|
|
COMPEN-
|
|
|
PENSION
|
|
|
COMPEN-
|
|
|
COMPEN-
|
|
|
|
Issuer of Option-based
|
|
EARNED
|
|
|
AWARDS
|
|
|
AWARDS
(5)
|
|
|
SATION
|
|
|
VALUE
|
|
|
SATION
|
|
|
SATION
|
|
NAME
|
|
Award
|
|
(US$)
(2)
|
|
|
(US$)
|
|
|
(US$)
|
|
|
(US$)
|
|
|
(US$)
|
|
|
(US$)
|
|
|
(US$)
|
|
David Huberman
|
|
Ivanhoe Mines Ltd.
|
|
$
|
171,297
|
(3)
|
|
Nil
|
|
$
|
186,515
|
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
357,812
|
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Total:
|
|
$
|
171,297
|
|
|
Nil
|
|
$
|
186,515
|
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
357,812
|
|
Kjeld Thygesen
|
|
Ivanhoe Mines Ltd.
|
|
$
|
58,060
|
|
|
Nil
|
|
$
|
186,515
|
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
244,575
|
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Total:
|
|
$
|
58,060
|
|
|
Nil
|
|
$
|
186,515
|
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
244,575
|
|
Robert Hanson
|
|
Ivanhoe Mines Ltd.
|
|
$
|
57,369
|
|
|
Nil
|
|
$
|
186,515
|
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
243,884
|
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
$
|
58,766
|
|
|
Nil
|
|
$
|
154,342
|
|
|
Nil
|
|
Nil
|
|
$
|
1,339
|
|
|
$
|
214,447
|
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Total:
|
|
$
|
116,135
|
|
|
Nil
|
|
$
|
340,857
|
|
|
Nil
|
|
Nil
|
|
$
|
1,339
|
|
|
$
|
458,331
|
|
Markus Faber
|
|
Ivanhoe Mines Ltd.
|
|
$
|
58,997
|
|
|
Nil
|
|
$
|
186,515
|
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
245,512
|
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Total:
|
|
$
|
58,997
|
|
|
Nil
|
|
$
|
186,515
|
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
245,512
|
|
Howard Balloch
|
|
Ivanhoe Mines Ltd.
|
|
$
|
52,658
|
|
|
Nil
|
|
$
|
186,515
|
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
239,173
|
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Total:
|
|
$
|
52,658
|
|
|
Nil
|
|
$
|
186,515
|
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
239,173
|
|
David Korbin
|
|
Ivanhoe Mines Ltd.
|
|
$
|
74,247
|
(4)
|
|
Nil
|
|
$
|
186,515
|
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
260,762
|
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
$
|
40,875
|
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
40,875
|
|
|
|
Total:
|
|
$
|
115,122
|
|
|
Nil
|
|
$
|
186,515
|
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
301,637
|
|
R. Edward Flood
|
|
Ivanhoe Mines Ltd.
|
|
$
|
43,161
|
|
|
Nil
|
|
$
|
186,515
|
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
229,676
|
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
$
|
28,591
|
|
|
Nil
|
|
$
|
154,342
|
|
|
Nil
|
|
Nil
|
|
$
|
599
|
|
|
$
|
183,532
|
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Total:
|
|
$
|
71,752
|
|
|
Nil
|
|
$
|
340,857
|
|
|
Nil
|
|
Nil
|
|
$
|
599
|
|
|
$
|
413,208
|
|
Bret Clayton
|
|
Ivanhoe Mines Ltd.
|
|
$
|
31,768
|
(6)
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
31,768
|
(6)
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Total:
|
|
$
|
31,768
|
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
31,768
|
|
Livia Mahler
|
|
Ivanhoe Mines Ltd.
|
|
$
|
50,397
|
|
|
Nil
|
|
$
|
186,515
|
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
236,912
|
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Total:
|
|
$
|
50,397
|
|
|
Nil
|
|
$
|
186,515
|
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
236,912
|
|
Andrew Harding
|
|
Ivanhoe Mines Ltd.
|
|
$
|
5,755
|
(7)
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
5,755
|
(7)
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Total:
|
|
$
|
5,755
|
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
$
|
5,755
|
|
|
|
|
(1)
|
|
Messrs. Friedland, Macken and Meredith were members of management in fiscal 2009 and did not
receive compensation as directors of the Corporation. Accordingly, the compensation details
for Messrs. Friedland, Macken and Meredith have been excluded from the table, as such
information is included in the Named Executive Officer table set forth under the heading
Summary Compensation for the Corporation.
|
-58-
|
|
|
(2)
|
|
The sums represented in the Fees Earned column of this table represent director retainers,
fees earned from acting as Chairman of each of the director committees, remuneration for
attending meetings and conference calls of the directors.
|
|
(3)
|
|
The Fees Earned by Mr. Huberman includes the fees for acting as lead independent director,
and the separate retainers for being Chairman of both the Corporate Governance & Nominating
Committee and the Compensation & Benefits Committee.
|
|
(4)
|
|
The Fees Earned by Mr. Korbin include the retainer for acting as Chairman of the Audit
Committee.
|
|
(5)
|
|
The Corporation uses the Black-Scholes option-pricing model for determining fair value of
stock options issued as at the grant date. The practice of the Corporation is to grant all
option based awards in Canadian currency, and then convert the grant date fair value amount to
U.S. currency for reporting the value of the grants in the Corporations financials. The
conversion rate for each grant is the rate quoted by the Bank of Canada as its noon spot rate
(BOC Rate) on the date the grant is made for each grant in Canadian currency. The
conversion rates for the purpose of the grants to the Directors in the Summary Compensation
Chart above are as follows: (i) for options granted on May 8, 2009, US$1/Cdn.$1.1494. The
conversion rates are on the applicable BOC Rate, as supplied by Bloomberg.
|
|
(6)
|
|
Mr. Claytons non-management director retainer and fees are paid directly to Rio Tinto.
|
|
(7)
|
|
Mr. Hardings non-management director retainer and fees are paid directly to Rio Tinto.
|
Outstanding share-based awards and option-based awards for Directors
as at December 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option-based Awards
|
|
|
Share-based Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market Value
|
|
|
Number of
|
|
|
Market or
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
of
|
|
|
Shares or
|
|
|
Payout Value
|
|
|
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
|
Unexercised
|
|
|
Units of
|
|
|
of Share-
|
|
|
|
|
|
Underlying
|
|
|
Option
|
|
|
|
|
|
|
in-the-Money
|
|
|
Shares that
|
|
|
based Awards
|
|
|
|
Issuer of Option-based
|
|
Unexercised
|
|
|
Exercise Price
|
|
|
Option
|
|
|
Options
|
|
|
have not
|
|
|
that have not
|
|
Name
|
|
Award
|
|
Options
|
|
|
(Cdn$/ Option)
|
|
|
Expiration Date
|
|
|
(US$)
(1)
|
|
|
Vested
|
|
|
Vested (US$)
|
|
David Huberman
|
|
Ivanhoe Mines Ltd.
|
|
|
25,000
|
|
|
$
|
10.56
|
|
|
May 12, 2011
|
|
$
|
117,499
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
25,000
|
|
|
$
|
13.35
|
|
|
May 11, 2012
|
|
$
|
51,272
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
25,000
|
|
|
$
|
9.65
|
|
|
May 9, 2013
|
|
$
|
139,100
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
22,500
|
|
|
$
|
2.82
|
|
|
Nov. 13, 2015
|
|
$
|
271,102
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
50,000
|
|
|
$
|
8.20
|
|
|
May 8, 2016
|
|
$
|
347,038
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
Kjeld Thygesen
|
|
Ivanhoe Mines Ltd.
|
|
|
25,000
|
|
|
$
|
9.37
|
|
|
May 10, 2010
|
|
$
|
145,746
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
25,000
|
|
|
$
|
10.56
|
|
|
May 12, 2011
|
|
$
|
117,499
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
25,000
|
|
|
$
|
13.35
|
|
|
May 11, 2012
|
|
$
|
51,272
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
25,000
|
|
|
$
|
9.65
|
|
|
May 9, 2013
|
|
$
|
139,100
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
30,000
|
|
|
$
|
2.82
|
|
|
Nov. 13, 2015
|
|
$
|
361,470
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
50,000
|
|
|
$
|
8.20
|
|
|
May 8, 2016
|
|
$
|
347,038
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
Robert Hanson
|
|
Ivanhoe Mines Ltd.
|
|
|
25,000
|
|
|
$
|
10.56
|
|
|
May 12, 2011
|
|
$
|
117,499
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
25,000
|
|
|
$
|
13.35
|
|
|
May 11, 2012
|
|
$
|
51,272
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
25,000
|
|
|
$
|
9.65
|
|
|
May 9, 2013
|
|
$
|
139,100
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
22,500
|
|
|
$
|
2.82
|
|
|
Nov. 13, 2015
|
|
$
|
271,102
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
50,000
|
|
|
$
|
8.20
|
|
|
May 8, 2016
|
|
$
|
347,038
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
|
150,000
|
|
|
$
|
2.30
|
|
|
June 30, 2011
|
|
$
|
2,107,862
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
|
25,000
|
|
|
$
|
13.80
|
|
|
May 21, 2013
|
|
$
|
78,333
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
|
20,000
|
|
|
$
|
5.10
|
|
|
Nov 27, 2013
|
|
$
|
227,877
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
|
35,000
|
|
|
$
|
10.21
|
|
|
May 6, 2014
|
|
$
|
228,969
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
-59-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option-based Awards
|
|
|
Share-based Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market Value
|
|
|
Number of
|
|
|
Market or
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
of
|
|
|
Shares or
|
|
|
Payout Value
|
|
|
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
|
Unexercised
|
|
|
Units of
|
|
|
of Share-
|
|
|
|
|
|
Underlying
|
|
|
Option
|
|
|
|
|
|
|
in-the-Money
|
|
|
Shares that
|
|
|
based Awards
|
|
|
|
Issuer of Option-based
|
|
Unexercised
|
|
|
Exercise Price
|
|
|
Option
|
|
|
Options
|
|
|
have not
|
|
|
that have not
|
|
Name
|
|
Award
|
|
Options
|
|
|
(Cdn$/ Option)
|
|
|
Expiration Date
|
|
|
(US$)
(1)
|
|
|
Vested
|
|
|
Vested (US$)
|
|
Markus Faber
|
|
Ivanhoe Mines Ltd.
|
|
|
25,000
|
|
|
$
|
10.56
|
|
|
May 12, 2011
|
|
$
|
117,499
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
25,000
|
|
|
$
|
13.35
|
|
|
May 11, 2012
|
|
$
|
51,272
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
25,000
|
|
|
$
|
9.65
|
|
|
May 9, 2013
|
|
$
|
139,100
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
30,000
|
|
|
$
|
2.82
|
|
|
Nov. 13, 2015
|
|
$
|
361,470
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
50,000
|
|
|
$
|
8.20
|
|
|
May 8, 2016
|
|
$
|
347,038
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
Howard Balloch
|
|
Ivanhoe Mines Ltd.
|
|
|
25,000
|
|
|
$
|
10.56
|
|
|
May 12, 2011
|
|
$
|
117,499
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
25,000
|
|
|
$
|
13.35
|
|
|
May 11, 2012
|
|
$
|
51,272
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
25,000
|
|
|
$
|
9.65
|
|
|
May 9, 2013
|
|
$
|
139,100
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
22,500
|
|
|
$
|
2.82
|
|
|
Nov. 13, 2015
|
|
$
|
271,102
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
50,000
|
|
|
$
|
8.20
|
|
|
May 8, 2016
|
|
$
|
347,038
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
David Korbin
|
|
Ivanhoe Mines Ltd.
|
|
|
25,000
|
|
|
$
|
10.56
|
|
|
May 12, 2011
|
|
$
|
117,499
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
25,000
|
|
|
$
|
13.35
|
|
|
May 11, 2012
|
|
$
|
51,272
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
25,000
|
|
|
$
|
9.65
|
|
|
May 9, 2013
|
|
$
|
139,100
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
16,875
|
|
|
$
|
2.82
|
|
|
Nov. 13, 2015
|
|
$
|
203,327
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
50,000
|
|
|
$
|
8.20
|
|
|
May 8, 2016
|
|
$
|
347,038
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
|
50,000
|
|
|
Nil
(3)
|
|
|
n/a
|
(2)
|
|
$
|
164,279
|
|
|
Nil
|
|
Nil
|
R. Edward Flood
|
|
Ivanhoe Mines Ltd.
|
|
|
25,000
|
|
|
$
|
13.35
|
|
|
May 11, 2012
|
|
$
|
51,272
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
165,000
|
|
|
$
|
9.73
|
|
|
Mar 27, 2013
|
|
$
|
905,526
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
25,000
|
|
|
$
|
9.65
|
|
|
May 9, 2013
|
|
$
|
139,100
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
64,500
|
|
|
$
|
2.82
|
|
|
Nov. 13, 2015
|
|
$
|
777,160
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Mines Ltd.
|
|
|
50,000
|
|
|
$
|
8.20
|
|
|
May 8, 2016
|
|
$
|
347,038
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
|
16,667
|
|
|
$
|
4.81
|
|
|
Apr 17, 2012
|
|
$
|
194,491
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
|
33,334
|
|
|
$
|
6.00
|
|
|
Jun 22, 2012
|
|
$
|
351,317
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
|
25,000
|
|
|
$
|
13.80
|
|
|
May 21, 2013
|
|
$
|
78,333
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
|
20,000
|
|
|
$
|
5.10
|
|
|
Nov 27, 2013
|
|
$
|
227,877
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
|
35,000
|
|
|
$
|
10.21
|
|
|
May 6, 2014
|
|
$
|
228,969
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
Bret Clayton
|
|
Ivanhoe Mines Ltd.
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
Livia Mahler
|
|
Ivanhoe Mines Ltd.
|
|
|
50,000
|
|
|
$
|
8.20
|
|
|
May 8, 2016
|
|
$
|
347,038
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
Andrew Harding
|
|
Ivanhoe Mines Ltd.
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy
Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
|
(1)
|
|
The Value of Unexercised in-the-Money Options is calculated on the basis of the difference
between the closing price of the common shares of the Corporation on the Toronto Stock
Exchange on December 31, 2009 and the Exercise Price of the options. With respect to the
Rights (as defined in footnote (2)) issued to each NEO in Ivanhoe Australia, the value of
Unexercised in-the-Money Options is based upon the closing price of the common shares of
Ivanhoe Australia on the Australian Stock Exchange (the ASX) on December 31, 2009 as the
rights have an Exercise Price of nil.
|
-60-
|
|
|
(2)
|
|
The Rights granted to each of the directors do not have an expiry date.
|
|
(3)
|
|
The Rights do not require any additional payment by their respective holders to exercise such
Rights for shares of Ivanhoe Australia
|
Incentive Plan Awards value vested or earned during 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
Option-based
|
|
|
Share-based
|
|
|
Incentive Plan
|
|
|
|
|
|
Awards Value
|
|
|
Awards Value
|
|
|
Compensation
|
|
|
|
|
|
Vested During the
|
|
|
Vested During the
|
|
|
Value earned
|
|
|
|
|
|
Year
|
|
|
Year
|
|
|
During the Year
|
|
Name
|
|
Issuer of Option-based Award
|
|
(US$)
|
|
|
(US$)
|
|
|
(US$)
|
|
David Huberman
|
|
Ivanhoe Mines Ltd.
|
|
$
|
55,502
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
Kjeld Thygesen
|
|
Ivanhoe Mines Ltd.
|
|
$
|
73,602
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
Robert Hanson
|
|
Ivanhoe Mines Ltd.
|
|
$
|
55,202
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy Resources Ltd.
|
|
$
|
59,641
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
Markus Faber
|
|
Ivanhoe Mines Ltd.
|
|
$
|
73,602
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
Howard Balloch
|
|
Ivanhoe Mines Ltd.
|
|
$
|
73,602
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
David Korbin
|
|
Ivanhoe Mines Ltd.
|
|
$
|
55,202
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
$
|
58,853
|
|
|
Nil
|
|
Nil
|
R. Edward Flood
|
|
Ivanhoe Mines Ltd.
|
|
$
|
569,847
|
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy Resources Ltd.
|
|
$
|
159,886
|
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
Bret Clayton
|
|
Ivanhoe Mines Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
Livia Mahler
|
|
Ivanhoe Mines Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
Andrew Harding
|
|
Ivanhoe Mines Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
SouthGobi Energy Resources Ltd.
|
|
Nil
|
|
Nil
|
|
Nil
|
|
|
Ivanhoe Australia Limited
|
|
Nil
|
|
Nil
|
|
Nil
|
CORPORATE GOVERNANCE
In April 2005, the Canadian Securities Adminstrators (the CSA) announced the adoption of
Multilateral Policy 58-201 and National Instrument 58-101 (NI 58-101), which each took effect as
of June 30, 2005 (collectively, the CSA Corporate Governance Disclosure Requirements). The CSA
Corporate Governance Disclosure Requirements apply to the Corporations disclosure of its corporate
governance practices and are substantially consistent with the revised corporate governance listing
standards of the New York Stock Exchange. The CSA Corporate Governance Disclosure Requirements
require the Corporation to make certain prescribed disclosures respecting its particular corporate
governance practices and recommend a series of non-prescriptive corporate governance guidelines
(the CSA Corporate Governance Guidelines) that Canadian public companies are encouraged to
consider in developing their own corporate governance practices.
-61-
The Corporation is engaged in an ongoing review of its corporate governance practices against the
CSA Corporate Governance Guidelines. The Board intends to consider additional changes to its
corporate governance practices with a view to furthering its adherence to the CSA Corporate
Governance Guidelines.
The Board of Directors has implemented several changes in its corporate governance procedures to
reflect applicable Canadian and U.S. governance guidelines. As part of those changes the Board:
|
(i)
|
|
approved and adopted a new mandate for the Board;
|
|
|
(ii)
|
|
appointed an independent director as lead director, with specific
responsibility for maintaining the independence of the Board and ensuring the
Board carries out its responsibilities contemplated by applicable statutory and
regulatory requirements and stock exchange listing standards;
|
|
|
(iii)
|
|
appointed a Corporate Governance and Nominating Committee consisting
solely of independent directors;
|
|
|
(iv)
|
|
changed the membership of the Compensation and Benefits Committee to
consist solely of independent directors instead of a majority of independent
directors;
|
|
|
(v)
|
|
approved charters for each of the Corporations Board committees,
being the Audit Committee, the Compensation and Benefits Committee and the
Corporate Governance and Nominating Committee, formalizing the mandates of those
committees;
|
|
|
(vi)
|
|
established a management Disclosure Committee for the Corporation,
with the mandate to oversee the Corporations disclosure practices;
|
|
|
(vii)
|
|
formalized the Corporations Corporate Disclosure, Confidentiality
and Securities Trading Policy, and Disclosure Controls and Procedures;
|
|
|
(viii)
|
|
instituted meetings of non-management Directors by teleconference between
regularly scheduled Board meetings;
|
|
|
(ix)
|
|
updated, adopted and published a Statement of Values and
Responsibilities;
|
|
|
(x)
|
|
adopted a formal Code of Business Conduct and Ethics for the
Corporation that governs the behaviour of directors, officers and employees;
|
|
|
(xi)
|
|
adopted formalized written position descriptions for the Chairman,
Lead Director, chair of each Board committee. CEO and CFO, clearly defining their
respective roles and responsibilities;
|
|
|
(xii)
|
|
adopted a whistleblower policy administered by an independent third
party;
|
-62-
|
(xiii)
|
|
formalized a process for assessing the effectiveness of the Board as a whole,
the committees of the Board and the contribution of individual directors, on a
regular basis; and
|
|
|
(xiv)
|
|
adopted a new model for executive compensation for the Corporation.
|
The Corporations Common Shares are listed on the New York Stock Exchange (NYSE) and quoted on
the NASDAQ Stock Market (NASDAQ) and the Corporation is subject to applicable provisions of U.S.
securities laws and regulations relating to corporate governance, which have been the subject of
sweeping changes in recent years. Both as part of the Sarbanes Oxley Act of 2002 (the
Sarbanes-Oxley Act) and independently, the SEC has enacted a number of new regulations relating
to corporate governance standards for U.S. listed companies. In addition, the NYSE and NASDAQ have
implemented numerous rule changes (the NYSE Corporate Governance Rules and the NASDAQ Corporate
Governance Rules, respectively) that revise the corporate governance standards for NYSE and
NASDAQ-listed companies.
THE CSA Audit Committee Rules, the CSA Corporate Governance Guidelines, the NYSE Corporate
Governance Rules, and the NASDAQ Corporate Governance Rules address, among other things, the
composition and independence of Boards of directors and Board committees. The CSA Corporate
Governance Guidelines are recommendations only and reflect a best practice standard to which
Canadian public companies are encouraged to adhere. For example, the CSA Corporate Governance
Guidelines recommend that a Board should be comprised of a majority of independent directors. On
the other hand, the NYSE Corporate Governance Rules and the NASDAQ Corporate Governance Rules are
prescriptive and require that the Board of a NYSE or NASDAQ-listed company be comprised of a
majority of independent directors.
Each of the Sarbanes-Oxley Act, the NYSE Corporate Governance Rules, the NASDAQ Corporate
Governance Rules and the CSA Corporate Governance Guidelines define independence in a slightly
different way. Although a finding of independence remains a matter of judgment and perception
based on a particular directors circumstances, the Sarbanes-Oxley Act, the NYSE Corporate
Governance Rules, the NASDAQ Corporate Governance Rules and the CSA Corporate Governance Guidelines
prescribe certain per se bars to a finding of independence. In addition, there is a heightened
independence requirement for members of audit committees under the Sarbanes-Oxley Act, the NYSE
Corporate Governance Rules, the NASDAQ Corporate Governance Rules and the CSA Audit Committee
Rules. Unlike the CSA Corporate Governance Guidelines, compliance with the requirements of the CSA
Audit Committee Rules relating to the composition of audit committees and the heightened standard
of independence for audit committee members is mandatory.
Subject to certain exceptions, including the requirement pertaining to the composition and
independence of audit committees, foreign private issuers, like the Corporation, are exempt from
any requirement of the NASDAQ Corporate Governance Rules and the NYSE Corporate Governance Rules
which is contrary to a law, rule or regulation of any public authority exercising jurisdiction over
such issuer or contrary to generally accepted business practices in the issuers country of
domicile. The Corporation believes that it is in full compliance with all of the applicable
requirements of the CSA Audit Committee Rules and all requirements of the Sarbanes-Oxley Act, the
NASDAQ Corporate Governance Rules and the NYSE Corporate Governance Rules applicable to foreign
private issuers for which no exemption is available. The Corporation also believes that
most, but not all, of its corporate governance practices are consistent with the CSA
Corporate Governance Guidelines. The Corporation intends to continue its efforts to improve its corporate
governance practices in order to make them wholly consistent with the CSA Corporate Governance
Guidelines.
-63-
Board Composition
The CSA Corporate Governance Guidelines recommend that a majority of the directors of a corporation
be independent directors. Under the CSA Corporate Governance Guidelines, the applicable provisions
of the NYSE Corporate Governance Rules and the NASDAQ Corporate Governance Rules, an independent
director is a director who has no direct or indirect material relationship with the Corporation,
including as a partner, shareholder or officer of an organization that has a relationship with the
Corporation. A material relationship is one that would, or in the view of the Board of Directors
could, be reasonably expected to interfere with the exercise of a Directors independent judgment.
A total of twelve persons have been nominated for election as directors at the Meeting. The Board
has determined that if all such nominees are elected, the Board will consist of seven independent
directors (as defined in the CSA Corporate Governance Guidelines, the NYSE Corporate Governance
Rules and the NASDAQ Corporate Governance Rules) and five non-independent directors, as follows:
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Independent Director
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Non-independent Director
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Nominees
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Nominees
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David Huberman
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Robert Friedland
(1)
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David Korbin
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John Macken
(1)
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Markus Faber
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Peter Meredith
(1)
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Robert Hanson
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R. Edward Flood
(2)
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Kjeld Thygesen
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Andrew Harding
(3)
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Howard Balloch
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Livia Mahler
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(1)
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Each of Messrs. Friedland, Macken and Meredith are non-independent director nominees in
their capacities as senior officers of the Corporation and/or one or more of its subsidiaries
and members or former members of management.
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(2)
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As at the date of this Management Proxy Circular, Mr. Flood is considered to be a
non-independent director nominee in his capacity as a former senior officer of one of the
Corporations subsidiaries. It is expected that Mr. Flood will qualify as an independent
director effective June 26, 2010.
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(3)
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Mr. Harding, an executive officer of Rio Tinto Group, is considered to be a non-independent
director nominee as a result of the material relationship between the Corporation and the Rio
Tinto Group.
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The Chairman of the Corporation holds approximately 21.96% and Rio Tinto holds approximately 22.36
% of the Corporations voting securities as of March 30, 2010. The Board has determined that the
Corporation currently has seven of twelve directors in David Huberman, Markus Faber, Robert Hanson,
Kjeld Thygesen, Howard Balloch, David Korbin and Livia Mahler, all of whom are nominees of
management for re-election as Directors at the Meeting and who are independent as defined in the
CSA Corporate Governance Guidelines, the NYSE Corporate Governance Rules and the NASDAQ Corporate
Governance Rules of each of the Corporation, the Chairman of the Corporation, and Rio Tinto.
Effective June 26, 2010, R. Edward Flood will also qualify as a Director who is independent of each
of the Corporation, the Chairman of the Corporation, and Rio Tinto.
-64-
If the shareholders of the Corporation approve the Articles Amendment Resolution, Rio Tinto has
nominated one additional member for election by the shareholders at the
Meeting to hold office
until the next annual general meeting of the Corporation. See Conditional Election of One
Additional Director. Effective June 1, 2010, it is expected that such additional nominee will
qualify as an independent director. Rio Tinto has also advised the Corporation that it intends to
nominate a further nominee for appointment to the Board following the Meeting, and that such
nominee will qualify as an independent director. See Future Size of Board of Directors.
Accordingly, if both Rio Tinto nominees become members of the Board, and effective upon Mr. Floods
expected qualification as an independent director in June 2010 as set forth above, if such person
is elected the Board will consist of ten independent directors (as defined in the CSA Corporate
Governance Guidelines, the NYSE Corporate Governance Rules and the NASDAQ Corporate Governance
Rules) and four non-independent directors.
The Board believes that it includes a majority of directors who do not have an interest in or
relationships with either the Corporation or its principal shareholders and which fairly reflects
the investment in the Corporation by shareholders other than the principal shareholders. The Board
is satisfied with the size and composition of the Board and believes that the resulting Board
composition is a balanced representation among management and non-management directors, and the
Corporations major shareholders. While the Board functions effectively given the Corporations
stage of development and the size and complexity of its business, the Board, through its Corporate
Governance and Nominating Committee, will continue to seek qualified candidates to augment its
experience and expertise and to enhance the Corporations ability to effectively develop its
business interests.
Mandate of the Board
Under the YBCA, the directors of the Corporation are required to manage the Corporations business
and affairs, and in doing so to act honestly and in good faith with a view to the best interests of
the Corporation. In addition, each director must exercise the care, diligence and skill that a
reasonably prudent person would exercise in comparable circumstances.
The Board of Directors is responsible for supervising the conduct of the Corporations affairs and
the management of its business. The Boards mandate includes setting long term goals and
objectives for the Corporation, formulating the plans and strategies necessary to achieve those
objectives and supervising senior management in their implementation. Although the Board delegates
the responsibility for managing the day to day affairs of the Corporation to senior management
personnel, the Board retains a supervisory role in respect of, and ultimate responsibility for, all
matters relating to the Corporation and its business.
The Boards mandate requires that the Board be satisfied that the Corporations senior management
will manage the affairs of the Corporation in the best interest of the shareholders, in accordance
with the Corporations principles, and that the arrangements made for the management of the
Corporations business and affairs are consistent with their duties described above. The Board is
responsible for protecting shareholder interests and ensuring that the incentives of the
shareholders and of management are aligned. The obligation of the Board must be performed
continuously, and not merely from time to time, and in times of crisis or emergency the Board may
have to assume a more direct role in managing the affairs of the Corporation.
-65-
In discharging this responsibility, the Boards mandate provides that the Board oversees and
monitors significant corporate plans and strategic initiatives. The Boards strategic
planning
process includes annual budget reviews and approvals, and discussions with management relating to
strategic and budgetary issues. At least one Board meeting per year is devoted to a comprehensive
review of strategic corporate plans proposed by management.
As part of its ongoing review of business operations, the Board periodically reviews the principal
risks inherent in the Corporations business, including financial risks, through periodic reports
from management of such risks, and assesses the systems established to manage those risks.
Directly and through the Audit Committee, the Board also assesses the integrity of internal control
over financial reporting and management information systems.
In addition to those matters that must, by law, be approved by the Board, the Board is required
under its mandate to approve annual operating and capital budgets, any material dispositions,
acquisitions and investments outside of the ordinary course of business or not provided for in the
approved budgets, long-term strategy, organizational development plans and the appointment of
senior executive officers. Management is authorized to act, without Board approval, on all
ordinary course matters relating to the Corporations business.
The mandate provides that the Board also expects management to provide the directors, on a timely
basis, with information concerning the business and affairs of the Corporation, including financial
and operating information and information concerning industry developments as they occur, all with
a view to enabling the Board to discharge its stewardship obligations effectively. The Board
expects management to efficiently implement its strategic plans for the Corporation, to keep the
Board fully apprised of its progress in doing so and to be fully accountable to the Board in
respect to all matters for which it has been assigned responsibility.
The Board has instructed management to maintain procedures to monitor and promptly address
shareholder concerns and has directed and will continue to direct management to apprise the Board
of any major concerns expressed by shareholders.
Each Committee of the Board is empowered to engage external advisors as it sees fit. Any
individual director is entitled to engage an outside advisor at the expense of the Corporation
provided such director has obtained the approval of the Corporate Governance and Nominating
Committee to do so.
The Board has adopted a strategic planning process which involves, among other things, the
following:
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(a)
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at least one meeting per year will be devoted substantially to review of
strategic plans that are proposed by management;
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(b)
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meetings of the Board, at least quarterly, to discuss strategic issues;
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(c)
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the Board reviews and assists management in forming short and long term
objectives of the Corporation on an ongoing basis; and
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(d)
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the Board also maintains oversight of managements strategic planning
initiatives through annual and quarterly budget reviews and
approvals. The strategic planning process adopted by the Board takes into account,
among other things, the opportunities and risks of the business.
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-66-
In order to ensure that the principal business risks borne by the Corporation are identified and
appropriately managed, the Board receives periodic reports from management of the Corporations
assessment and management of such risks. In conjunction with its review of operations, the Board
considers risk issues when appropriate and approves corporate policies addressing the management of
the risk of the Corporations business.
The Board takes ultimate responsibility for the appointment and monitoring of the Corporations
senior management. The Board approves the appointment of senior management and reviews their
performance on an ongoing basis.
The Corporation has a disclosure policy addressing, among other things, how the Corporation
interacts with analysts and the public, and contains measures for the Corporation to avoid
selective disclosure. The Corporation has a Disclosure Committee responsible for overseeing the
Corporations disclosure practices. This committee consists of the President & Chief Executive
Officer, the Chief Financial Officer, the Vice- President & Corporate Secretary, the Corporations
senior Corporation Communications and Investor Relations officers, the Vice President Project
Evaluation & Development, and the Resource Manager Project Evaluation & Development, and receives
advice from the Corporations outside legal counsel. The Disclosure Committee assesses materiality
and determines when developments justify public disclosure. The committee will review the
disclosure policy annually and as otherwise needed to ensure compliance with regulatory
requirements. The Board reviews and approves the Corporations material disclosure documents,
including its annual report, annual information form and management proxy circular. The
Corporations annual and quarterly financial statements, Managements Discussion and Analysis and
other financial disclosure is reviewed by the Audit Committee and recommended to the Board prior to
its release.
Meetings of the Board
The Board holds regular quarterly meetings. Between the quarterly meetings, the Board meets as
required, generally by means of telephone conferencing facilities. As part of the quarterly
meetings, the non-management directors also have the opportunity to meet separate from management.
If required, between regularly scheduled Board meetings, a meeting of non-management Directors,
chaired by the Lead Director, is held by teleconference to update the Directors on corporate
developments since the last Board meeting. Management also communicates informally with members of
the Board on a regular basis, and solicits the advice of the Board members on matters falling
within their special knowledge or experience.
Board Committees
The Corporation has an Audit Committee, Compensation and Benefits Committee, Corporate Governance
and Nominating Committee, Currency Advisory Committee and an Executive Committee.
Audit Committee
The mandate of the Audit Committee is to oversee the Corporations financial reporting obligations,
systems and disclosure, including monitoring the integrity of the Corporations financial
statements, monitoring the independence and performance of the Corporations external auditors and
acting as a liaison between the Board and the Corporations auditors. The activities of the Audit
Committee typically include reviewing
-67-
interim financial statements and annual financial statements,
management discussion and analysis and earnings press releases before they are publicly disclosed,
ensuring that internal controls over accounting and financial systems are maintained and that
accurate financial information is disseminated to shareholders. Other responsibilities include
reviewing the results of internal and external audits and any change in accounting procedures or
policies, and evaluating the performance of the Corporations auditors. The Audit Committee
communicates directly with the Corporations external auditors in order to discuss audit and
related matters whenever appropriate.
The Audit Committee currently consists of Messrs. Korbin (Chair), Thygesen, Faber and Ms. Mahler,
all of whom are nominees of management for re-election as Directors at the Meeting. The CSA Audit
Committee Rules provide for audit committees to consist solely of independent directors. Each of
Messrs. Korbin, Thygesen, Faber and Ms. Mahler are independent directors for the purposes of the
CSA Audit Committee Rules, the NYSE Corporate Governance Rules and the NASDAQ Corporate Governance
Rules, having regard to the heightened independence requirements applicable to audit committee
members. Mr. Stevenson, the additional nominee for election to the Board as set forth under
Conditional Election of One Additional Director, will be an independent director within the
meaning of such rules effective June 1, 2010, and will be eligible to join the Audit Committee at
that time.
The Board has determined that all members of the Audit Committee are financially literate since
each member has the ability to read and understand a set of financial statements that present a
breadth and level of complexity of accounting issues that are generally comparable to the breadth
and complexity of the issues that can reasonably be expected to be raised by the Corporations
financial statements.
Mr. Korbin (a nominee of management for re-election as a Director at the Meeting) has been
determined by the Board of Directors to be an Audit Committee Financial Expert, as such term is
defined in the U.S. Securities Exchange Act of 1934, as amended. The Corporation believes that Mr.
Korbin, a Chartered Accountant with over 30 years experience as an auditor with a major accounting
firm is qualified to be an Audit Committee Financial Expert.
The Corporation has adopted an Audit Committee charter which codifies the mandate of the Audit
Committee to, and specifically defines its relationship with, and expectations of, the external
auditors, including the establishment of the independence of the external auditor and the approval
of any non-audit mandates of the external auditor; the engagement, evaluation, remuneration and
termination of the external auditor; its relationship with, and expectations of, the internal
auditor function and its oversight of internal control; and the disclosure of financial and related
information. The Board will review and reassess the adequacy of the Audit Committee charter on an
annual basis.
The Audit Committee has regular access to the Chief Financial Officer of the Corporation. The
external auditors regularly attend all meetings of the Audit Committee. At each meeting of the
Audit Committee, a portion of the meeting is set aside to discuss
matters with the external auditors without management being present. In addition, the Audit
Committee has the authority to call a meeting with the external auditors without management being
present, at the Committees discretion. Additional information regarding the Audit Committee is
located in the Directors and Officers section of the Corporations Annual Information Form.
-68-
Compensation and Benefits Committee
The role of the Compensation and Benefits Committee is primarily to review the adequacy and form of
compensation of senior management and the directors with such compensation realistically reflecting
the responsibilities and risks of such positions, to administer the Corporations Employees and
Directors Equity Incentive Plan, to determine the recipients of, and the nature and size of share
compensation awards granted from time to time, to determine the remuneration of executive officers
and to determine any bonuses to be awarded.
The Compensation and Benefits Committee currently consists of Messrs. Huberman (Chair), Hanson,
Korbin, Faber and Balloch. Each member of the committee qualifies as an independent director for
the purposes of the CSA Corporate Governance Guidelines, the NYSE Corporate Governance Rules and
the NASDAQ Corporate Governance Rules.
Corporate Governance and Nominating Committee
The Corporate Governance and Nominating Committee is responsible for making recommendations to the
Board with respect to developments in the area of corporate governance and the practices of the
Board. The Corporate Governance and Nominating Committee have expressly assumed responsibility for
developing the Corporations approach to governance issues. The Committee is also responsible for
reporting to the Board with respect to appropriate candidates for nomination to the Board, for
overseeing the execution of an assessment process appropriate for the Board and its committees and
for evaluating the performance and effectiveness of the Board and its committees.
The Corporate Governance and Nominating Committee of the Board currently consists of Messrs.
Huberman (Chair), Hanson, Thygesen, Balloch, and Ms. Mahler, all of whom are nominees of management
for re-election as Directors at the Meeting. Each member of the Committee qualifies as an
independent director for the purposes of the CSA Corporate Governance Guidelines, the NYSE
Corporate Governance Rules and the NASDAQ Corporate Governance Rules.
Executive Committee
The Executive Committee, which currently consists of Messrs. Friedland, Meredith, Macken and
Huberman, was created by the Board to meet as required, between meetings of the full Board. The
Executive Committee has authority to approve expenditures of up to US$10,000,000. Any decisions
taken by the Executive Committee must be reported to, and ratified by, the full Board at its next
meeting.
Code of Business Conduct and Ethics
The Corporation has adopted a Code of Business Conduct and Ethics applicable to all employees,
consultants, officers and directors regardless of their position in the organization, at all times
and everywhere the Corporation does business. The Code of Business Conduct and Ethics provides that
the Corporations employees, consultants,
officers and directors will uphold its commitment to a culture of honesty, integrity and
accountability and the Corporation requires the highest standards of professional and ethical
conduct from its employees, consultants, officers and directors. A number of housekeeping
amendments to the Code were made in 2007 to clarify consulting and reporting procedures and to
recognize the Corporations whistleblower mechanism. A copy of the Corporations Code of Business
Conduct and Ethics, as amended, has been filed on SEDAR and is available on the Corporations
website (www.ivanhoemines.com). A copy may also be obtained, without charge, by request to the
Vice-President and Corporate Secretary, 654 999 Canada Place, Vancouver, British Columbia,
Canada V6C 3E1, telephone to (604) 688-5755.
-69-
CSA Corporate Governance Guidelines
The Corporations statement of corporate governance practices with reference to each of the CSA
Corporate Governance Guidelines is set out in Schedule F to this Management Proxy Circular.
OTHER BUSINESS
Management of the Corporation is not aware of any matter to come before the Meeting other than the
matters referred to in the Notice of the Meeting.
DIRECTORS APPROVAL
The contents of this Management Proxy Circular and its distribution to shareholders have been
approved by the Board of Directors of the Corporation.
ADDITIONAL INFORMATION
Copies of the Corporations Annual Information Form, annual financial statements, and Management
Discussion and Analysis for its most recently completed financial year filed pursuant to applicable
Canadian provincial securities laws are available free of charge on or through the Corporations
website at www.IvanhoeMines.com or through the System for Electronic Document Analysis and
Retrieval (SEDAR) at www.sedar.com. Finally, securityholders may contact the Corporation directly
to receive copies of, such filings, without charge, upon written or oral request to Beverly A.
Bartlett, Vice President and Corporate Secretary, Suite 654-999 Canada Place, Vancouver, British
Columbia, V6C 3E1, or by telephone at (604) 688-5755.
DATED
at Vancouver, British Columbia, as of the 5th day of April, 2010.
BY ORDER OF THE BOARD
BEVERLY A. BARTLETT
VICE PRESIDENT AND CORPORATE SECRETARY
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SCHEDULE A-1
ARTICLES AMENDMENT RESOLUTION
BE IT RESOLVED, as a special resolution of the shareholders of Ivanhoe Mines Ltd., that:
1.
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the proposed amendments to the Articles of the Corporation as described in the Management
Proxy Circular of the Corporation dated April 5, 2010, which provide for the amendment of
Article 4 of the Corporations Articles, be and are hereby approved;
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2.
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Article 4 of the Corporations Articles be deleted and replaced with the following:
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4. The number of Directors of the Corporation shall be not less than
three (3), nor more than fourteen (14); and
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3.
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any one director or any one officer of the Corporation is hereby authorized and directed to
execute, whether under the corporate seal of the Corporation or otherwise, and to deliver all
such other confirmations, instruments, agreements, certificates and other documents and to do
all such other acts and things as in his or her opinion may be necessary or desirable in
connection with the foregoing.
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SCHEDULE A-2"
RESOLUTION TO FIX NUMBER OF DIRECTORS
BE IT RESOLVED, as an ordinary resolution of the shareholders of Ivanhoe Mines Ltd., that:
1.
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upon the amendment of Article 4 of the Corporations Articles to permit the maximum of
fourteen (14) directors, that the number of directors of the Corporation be fixed at fourteen
(14); and
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2.
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any one director or any one officer of the Corporation is hereby authorized and directed to
execute, whether under the corporate seal of the Corporation or otherwise, and to deliver all
such other confirmations, instruments, agreements, certificates and other documents and to do
all such other acts and things as in his or her opinion may be necessary or desirable in
connection with the foregoing.
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SCHEDULE B
EQUITY INCENTIVE PLAN RESOLUTION
BE IT RESOLVED, as an ordinary resolution of the shareholders of Ivanhoe Mines Ltd., that:
1.
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the proposed amendments to the existing Amended and Restated Employees and Directors Equity
Incentive Plan of the Corporation dated May 8, 2009 (the Existing Plan) as described in, and
as attached as Schedule C to the Management Proxy Circular of the Corporation dated April
5, 2010, which (i) amend the amending provisions of Section 5.7 of the Existing Plan; (ii)
amend section 4.3 of the Existing Plan by specifying 1,000,000 shares as the aggregate maximum
number of shares that may be issued pursuant to the Share Purchase Plan; and (iii) make
certain other technical amendments to Sections 2.6, 4.4, 5.1 and 5.5 of the Existing Plan, be
and are hereby approved; and
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2.
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any one director or any one officer of the Corporation is hereby authorized and directed to
execute, whether under the corporate seal of the Corporation or otherwise, and to deliver all
such other confirmations, instruments, agreements, certificates and other documents and to do
all such other acts and things as in his or her opinion may be necessary or desirable in
connection with the foregoing.
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SCHEDULE C
EQUITY INCENTIVE PLAN
IVANHOE MINES LTD.
EMPLOYEES AND DIRECTORS EQUITY INCENTIVE PLAN
AMENDED AND RESTATED
MAY 8, 2009
May 7, 2010
PART 1 INTRODUCTION
The purpose of the Plan is to secure for the Company and its shareholders the benefits of incentive
inherent in share ownership by the employees and directors of the Company and its affiliates who,
in the judgment of the Board, will be largely responsible for its future growth and success. It is
generally recognized that share plans of the nature provided for herein aid in retaining and
encouraging employees and directors of exceptional ability because of the opportunity offered them
to acquire a proprietary interest in the Company.
1.2
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Definitions
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(a)
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Affiliate has the meaning set forth in Section 1(2) of the Ontario Securities Act, as
amended, and includes those issuers that are similarly related, whether or not any of the
issuers are corporations, companies, partnerships, limited partnerships, trusts, income trusts
or investment trusts or any other organized entity issuing securities.
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(b)
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Associate has the meaning assigned to it in the Ontario Securities Act, as amended.
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(c)
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Board means the board of directors of the Company.
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(d)
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Blackout Period means a period in which the trading of Shares or other securities of the
Company is restricted under the Companys Corporate Disclosure, Confidentiality and Securities
Trading Policy, or under an insider trading policy or other policy of the Company then in
effect.
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(e)
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Company means Ivanhoe Mines Ltd., a company continued under the laws of the Yukon
Territory.
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(f)
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Committee has the meaning attributed thereto in Section 6.1.
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(g)
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Eligible Directors means the directors of the Company or any Affiliate thereof who are, as
such, eligible for participation in the Plan.
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C1
(h)
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Eligible Employees means employees (including employees who are officers and directors) of
the Company or any Affiliate thereof, whether or not they have a written employment contract
with Company, determined by the Board, upon recommendation of the Committee, as employees
eligible for participation in the Plan. Eligible Employees shall include Service Providers
eligible for participation in the Plan as determined by the Board.
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(i)
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Fair Market
Value means, with respect to a Share subject to Option,
the
volume
weighted average price of the Shares on The Toronto Stock Exchange for the five days on which
Shares were traded immediately preceding the date in respect of which Fair Market Value is to
be determined or, if the Shares are not, as at that date listed on The Toronto Stock Exchange,
on such other exchange or exchanges on which the Shares are listed on that date. If the
Shares are not listed and posted for trading on an exchange on such day, the Fair Market Value
shall be such price per Share as the Board, acting in good faith, may determine.
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(j)
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Insider has the meaning assigned to it in the Ontario Securities Act, as amended, and also
includes an Associate or Affiliate of any person who is an Insider.
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(k)
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Option means an option granted under the terms of the Share Option Plan.
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(l)
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Option Period means the period during which an Option is outstanding.
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(m)
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Optionee means an Eligible Employee or Eligible Director to whom an Option has been granted
under the terms of the Share Option Plan.
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(n)
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Participant means, in respect of any Plan, an Eligible Employee or Eligible Director who
participates in such Plan.
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(o)
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Plan means, collectively the Share Option Plan, the Share Bonus Plan and the Share Purchase
Plan and Plan means any such plan as the context requires.
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(p)
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Service Provider means any person or company engaged by the Company or an Affiliate to
provide services for an initial, renewable or extended period of 12 months or more.
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(q)
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Share Bonus Plan means the plan established and operated pursuant to Part 3 and Part 5
hereof.
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(r)
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Share Option Plan means the plan established and operated pursuant to Part 2 and Part 5
hereof.
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(s)
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Share Purchase Plan means the plan established and operated pursuant to Part 4 and Part 5
hereof.
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(t)
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Shares means the common shares of the Company.
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C2
PART 2 SHARE OPTION PLAN
Options shall be granted only to Eligible Employees and Eligible Directors.
2.2
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Administration of Share Option Plan.
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The Share Option Plan shall be administered by the Committee.
The exercise price per Share of any Option shall be not less than one hundred per cent (100%) of
the Fair Market Value on the date of grant.
The Board, on the recommendation of the Committee, may at any time authorize the granting of
Options to such Eligible Employees and Eligible Directors as it may select for the number of Shares
that it shall designate, subject to the provisions of the Share Option Plan. The date of grant of
an Option shall be (i) the date such grant was approved by the Committee for recommendation to the
Board, provided the Board approves such grant; or (ii) for a grant of an Option not approved by the
Committee for recommendation to the Board, the date such grant was approved by the Board.
Each Option granted to an Eligible Employee or to an Eligible Director shall be evidenced by a
stock option agreement with terms and conditions consistent with the Share Option Plan and as
approved by the Board on the recommendation of the Committee (which terms and conditions need not
be the same in each case and may be changed from time to time, subject to section 5.7 of the Plan,
and the approval of any material changes by The Toronto Stock Exchange or such other exchange or
exchanges on which the Shares are then traded).
The Option Period shall be seven years from the date such Option is granted or such greater or
lesser duration as the Board, on the recommendation of the Committee, may determine at the date of
grant, and may thereafter be reduced with respect to any such Option as provided in Section 2.8
hereof covering termination of employment or death of the Optionee; provided, however, that at any
time the expiry date of the Option Period in respect of any outstanding Option under this Plan
(either before or after its amendment and restatement on May 11, 2007) should be determined to
occur either during a Blackout Period or within ten business days following the expiry of the
Blackout Period, the expiry date of such Option Period shall be deemed to be the date that is the
tenth business day following the expiry of the Blackout Period.
C3
Unless otherwise determined from time to time by the Board, on the recommendation of the Committee,
Options shall vest and may be exercised (in each case to the nearest full Share) during the Option
Period as follows:
(a)
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at any time after the first year of the Option Period, the Optionee may purchase up to 25% of
the total number of Shares reserved for issuance pursuant to his or her Option; and
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(b)
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at any time during each successive further year of the Option Period the Optionee may
purchase an additional 25% of the total number of Shares reserved for issuance pursuant to his
or her Option plus any Shares not purchased in accordance with the preceding subsection (a)
and this subsection (b) until, in the fourth year of the Option Period, 100% of the Option
will be exercisable.
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Except as set forth in Section 2.8, no Option may be exercised unless the Optionee is at the time
of such exercise:
(a)
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in the case of an Eligible Employee, in the employ of the Company or an Affiliate and shall
have been continuously so employed since the grant of his Option, but absence on leave, having
the approval of the Company or such Affiliate, shall not be considered an interruption of
employment for any purpose of the Share Option Plan; or
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(b)
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in the case of an Eligible Director, a director of the Company or an Affiliate and shall have
been such a director continuously since the grant of his Option.
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Subject to Section 2.6, the exercise of any Option will be contingent upon the Optionee having
entered into an Option agreement with the Company on such terms and conditions as have been
approved by the Board, on the recommendation of the Committee, and which incorporates by reference
the terms of the Plan. Subject to Section 2.6, the exercise of any Option will also be contingent
upon receipt by the Company of cash payment of the full purchase price of the Shares being
purchased. No Optionee or his legal representatives or legatees will be, or will be deemed to be,
a holder of any Shares subject to an Option, unless and until certificates for such Shares are
issued to him or them under the terms of the Share Option Plan.
2.6
Cashless Exercise
Share Appreciation
Right
Participants have the right (the Right), in lieu of the right to exercise an Option, to terminate
such Option in whole or in part (the Terminated Option) by notice in writing delivered by the
Participant to the Company electing to exercise the Right and, in lieu of receiving the Shares (the
Option Shares) to which the Terminated Option relates, to receive the number of Shares,
disregarding fractions, which is equal to the quotient obtained by:
(a)
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subtracting the Option exercise price per Share from the Fair Market Value per Share on the
day immediately prior to the exercise of the Right and multiplying the remainder by the number
of Option Shares; and
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(b)
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dividing the product obtained under subsection 2.6(a) by the Fair Market Value per Share on
the day immediately prior to the exercise of the Right.
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If a Participant exercises a Right in connection with an Option, it is exercisable only to the
extent and on the same conditions that the related Option is exercisable under the Plan.
C 4
If Options are surrendered, terminated or expire without being exercised in whole or in part, new
Options may be granted covering the Shares not purchased under such
lapsed Options, subject in the case of the cancellation of an Option in connection with the grant
of a new Option to the same person on different terms, to the consent of the Toronto Stock
Exchange.
2.8
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Effect of Termination of Employment or Death
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If an Optionee:
(a)
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dies while employed by or while a director of the Company or its Affiliate, any Option held
by him at the date of death shall become exercisable in whole or in part, but only by the
person or persons to whom the Optionees rights under the Option shall pass by the Optionees
will or applicable laws of descent and distribution. Unless otherwise determined by the
Board, on the recommendation of the Committee, all such Options shall be exercisable only to
the extent that the Optionee was entitled to exercise the Option at the date of his death and
only for 12 months after the date of death or prior to the expiration of the Option Period in
respect thereof, whichever is sooner; or
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(b)
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ceases to be employed by or act as a director of the Company or its Affiliate for cause, no
Option held by such Optionee will, unless otherwise determined by the Board, on the
recommendation of the Committee, be exercisable following the date on which such Optionee
ceases to be so employed or ceases to be a director, as the case may be. If an Optionee
ceases to be employed by or act as a director of the Company or its Affiliate for any reason
other than cause then, unless otherwise determined by the Board, on the recommendation of the
Committee, any Option held by such Optionee at the effective date thereof shall become
exercisable for a period of up to 12 months thereafter or prior to the expiration of the
Option Period in respect thereof, whichever is sooner.
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2.9
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Effect of Takeover Bid
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If a bona fide offer (the Offer) for Shares is made to the Optionee or to shareholders generally
or to a class of shareholders which includes the Optionee, which Offer, if accepted in whole or in
part, would result in the offeror exercising control over the Company within the meaning of
subsection 1(3) of the Ontario Securities Act (as amended from time to time), then the Company
shall, immediately upon receipt of notice of the Offer, notify each Optionee currently holding an
Option of the Offer, with full particulars thereof, whereupon, notwithstanding Section 2.5 hereof,
such Option may be exercised in whole or in part by the Optionee so as to permit the Optionee to
tender the Shares received upon such exercise (the Optioned Shares) pursuant to the Offer.
2.10
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Effect of Amalgamation or Merger
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If the Company amalgamates or merges with or into another corporation, any Shares receivable on the
exercise of an Option shall be converted into the securities, property or cash which the
Participant would have received upon such amalgamation or merger if the Participant had exercised
his Option immediately prior to the record date applicable to such amalgamation or merger, and the
option price shall be adjusted appropriately by the Board and such adjustment shall be binding for
all purposes of the Share Option Plan.
C5
2.11
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Adjustment in Shares Subject to the Plan
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If there is any change in the Shares through the declaration of stock dividends of Shares or
consolidations, subdivisions or reclassification of Shares, or otherwise, the number of Shares
available under the Share Option Plan, the Shares subject to any Option, and the option price
thereof shall be adjusted appropriately by the Board and such adjustment shall be effective and
binding for all purposes of the Share Option Plan.
Subject to applicable law, the Board may at any time authorize the Company to loan money to an
Eligible Employee (which for purposes of this Section 2.12 excludes any director or executive
officer (or equivalent thereof) of the Company), on such terms and conditions as the Board may
reasonably determine, to assist such Eligible Employee to exercise an Option held by him or her.
Such terms and conditions shall include, in any event, interest at prevailing market rates, a term
not in excess of one year, and security in favour of the Company represented by that number of
Shares issued pursuant to the exercise of an Option in respect of which such loan was made or
equivalent security which equals the loaned amount divided by the Fair Market Value of the Shares
on the date of exercise of the Option, which security may be granted on a non-recourse basis.
PART 3 SHARE BONUS PLAN
The Board, on the recommendation of the Committee, shall have the right, subject to Section
3.2, to issue or reserve for issuance, for no cash consideration, to any Eligible Employee or any
Eligible Director any number of Shares as a discretionary bonus subject to such provisos and
restrictions as the Board may determine.
The aggregate maximum number of shares that may be issued pursuant to Section 3.1 will be limited
to 4,500,000 Shares. Shares reserved for issuance and issued under the Share Bonus Plan shall be
subject to the limitations set out in Section 5.1.
The Board, on the recommendation of the Committee, in its absolute discretion, shall have the right
to reallocate any of the Shares reserved for issuance under the Share Bonus Plan for future
issuance under the Share Option Plan or the Share Purchase Plan and, in the event that any Shares
specifically reserved under the Share Bonus Plan are reallocated to the Share Option Plan or the
Share Purchase Plan, as the case may be, the aggregate maximum number of Shares reserved under the
Share Bonus Plan will be reduced to that extent. In no event will the number of Shares allocated
for issuance under the Share Bonus Plan exceed 4,500,000 Shares.
C6
3.3 Necessary Approvals
The obligation of the Company to issue and deliver any Shares pursuant to an award made under the
Share Bonus Plan will be subject to all necessary approvals of any exchange or securities
regulatory authority having jurisdiction over the Shares.
PART 4 SHARE PURCHASE PLAN
4.1 Participants
Participants in the Share Purchase Plan will be Eligible Employees who have been continuously
employed by the Company or any of its Affiliates on a full-time basis for at least 12 consecutive
months and who have been designated by the Board, on the recommendation of the Committee, as
participants in the Share Purchase Plan (Share Purchase Plan Participants). The Board, on the
recommendation of the Committee, shall have the right, in its absolute discretion, to waive such
12-month period or to refuse any Eligible Employee or group of Eligible Employees the right of
participation or continued participation in the Share Purchase Plan.
4.2 Election to Participate in the Share Purchase Plan and Participants Contribution
Any Share Purchase Plan Participant may elect to contribute money (the Participants
Contribution) to the Share Purchase Plan in any calendar year if the Share Purchase Plan
Participant delivers to the Company a written direction in form and substance satisfactory to the
Company authorizing the Company to deduct from the Share Purchase Plan Participants salary, in
equal instalments, the Participants Contribution. Such direction will remain effective until
revoked in writing by the Share Purchase Plan Participant or until the Board terminates or suspends
the Share Purchase Plan, whichever is earlier.
The Share Purchase Plan Participants Contribution as determined by the Board, on the
recommendation of the Committee, shall not exceed 10% of the Share Purchase Plan Participants
basic annual salary from the Company and its Affiliates at the time of delivery of the direction,
before deductions, exclusive of any overtime pay, bonuses or allowances of any kind whatsoever (the
Basic Annual Salary). In the case of a Share Purchase Plan Participant for whom the Board, on
the recommendation of the Committee, has waived the 12-month employment requirement, the Share
Purchase Plan Participants Contribution shall not exceed 10% of his Basic Annual Salary from the
Company and its Affiliates at the time of delivery of the direction, prorated over the remainder of
the calendar year, before deductions and exclusive of any overtime pay, bonuses or allowances of
any kind whatsoever.
4.3 Companys Contribution
Immediately prior to the date any Shares are issued to a Share Purchase Plan Participant in
accordance with Section 4.4, the Company will credit the Share Purchase Plan Participant with, and
thereafter hold in trust for the Share Purchase Plan Participant, an amount determined by the Board
(the Companys Contribution) not to exceed the Participants Contribution then held in trust by
the Company.
The aggregate maximum number of shares that may be issued pursuant to the Share
Purchase Plan will be limited to 1,000,000 Shares
.
C7
4.4 Issue of Shares
On March 31, June 30, September 30 and December 31 in each calendar year the Company will issue to
each Share Purchase Plan Participant fully paid and non-assessable Shares, disregarding fractions,
which is equal to the aggregate amount of the Participants Contribution and the Companys
Contribution divided by the Issue Price. For the purposes of this Section 4.4, Issue Price means
the weighted average price of the Shares on The Toronto Stock Exchange, or such exchange or
exchanges on which the Shares may be traded at such time for the 90-day period immediately
preceding the date of issuance. If the Shares are not traded on an exchange on the date of
issuance, the Issue Price shall be such price per Share as the Board, acting in good faith, may
determine.
The Company shall hold any unused balance of the Participants Contribution for a Share Purchase
Plan Participant until used in accordance with the Share Purchase Plan.
4.5 Delivery of Shares
As soon as reasonably practicable following each issuance of Shares to a Share Purchase Plan
Participant pursuant to Section 4.4, the Company will cause to be delivered to the Share Purchase
Plan Participant a certificate in respect of such Shares provided that, if required by applicable
law or the rules and policies of The Toronto Stock Exchange or such other exchange or exchanges on
which the Shares are traded, a restrictive legend shall be inscribed on the certificate, which
legend shall state that the Shares shall not be transferable for such period as may be prescribed
by law or by any regulatory authority or stock exchange on which the Shares are listed.
4.6 Effect of Termination of Employment or Death
If a Participant dies or otherwise ceases to be employed by the Company or any of its Affiliates
for any reason or receives notice from the Company of the termination of his or her employment, the
Share Purchase Plan Participants participation in the Share Purchase Plan will be deemed to be
terminated and any portion of the Participants Contribution then held in trust shall be paid to
the Share Purchase Plan Participant or his estate or successor as the case may be.
4.7 Effect of Amalgamation or Merger
If the Company amalgamates or merges with or into another corporation, each Share Purchase Plan
Participant to whom Shares are to be issued will receive, on the date on which any Shares would
otherwise have been delivered to the Share Purchase Plan Participant in accordance with Section
4.5, the securities, property or cash to which the Share Purchase Plan Participant would have been
entitled on such amalgamation, consolidation or merger had the Shares been issued immediately prior
to the record date of such amalgamation or merger.
PART 5 GENERAL
5.1 Number of Shares
The aggregate number of Shares that may be reserved for issuance under this Plan (together with any
other securities based
on
compensation arrangements of the Company in effect from time to time) shall not exceed 6.5% of the issued and outstanding Shares
from time to time. This prescribed maximum may be subsequently increased to any other specified
amount, provided the increase is authorized by a vote of the shareholders of the Company. In
addition, the aggregate number of Shares reserved for issuance under the Plan:
C8
(a)
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that may be reserved for issuance to Insiders under the Plan (or when combined with all of
the Companys other security based compensation arrangements) shall not exceed 10% of the
Companys outstanding issue from time to time;
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(b)
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that may be issued to Insiders under the Plan (or when combined with all of the Companys
other security based compensation arrangements) within any one-year period shall not exceed
10% of the Companys outstanding issue from time to time; and
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(c)
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that may be issued to any one Insider and his or her Associates under the Plan within any
one-year period shall not exceed 5% of the Companys outstanding issue from time to time.
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In no event will the number of Shares at any time reserved for issuance to any Participant exceed
5% of the Companys outstanding issue from time to time.
For the purposes of this Section 5.1, outstanding issue means the total number of Shares, on a
non-diluted basis, that are issued and outstanding immediately prior to the date that any Shares
are issued or reserved for issuance pursuant to an award under the Plan.
For greater certainty, as this Plan is a rolling plan, the reloading of Options is permitted under
the Plan and Options that are exercised, surrendered, terminated or expire without being exercised
no longer represent Shares reserved for issuance under this Plan and do not decrease the number of
Shares issuable under this Section 5.1 as determined from time to time, subject to the provisions
in Section 2.7.
5.2 Transferability
Any benefits, rights and options accruing to any Participant in accordance with the terms and
conditions of the Plan shall not be transferable unless specifically provided herein. During the
lifetime of a Participant all benefits, rights and options may only be exercised by the
Participant. Options are non-transferable except by will or by the laws of descent and
distribution.
5.3 Employment
Nothing contained in any Plan shall confer upon any Participant any right with respect to
employment or continuance of employment with the Company or any, Affiliate, or interfere in any way
with the right of the Company or any Affiliate to terminate the Participants employment at any
time. Participation in any Plan by a Participant is voluntary.
C9
5.4 Record Keeping
The Company shall maintain a register in which shall be recorded:
(a)
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the name and address of each Participant;
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(b)
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the Plan or Plans in which the Participant participates;
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(c)
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any Participants Contributions;
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(d)
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the number of unissued Shares reserved for issuance pursuant to an Option or pursuant to an
award made under the Share Bonus Plan in favour of a Participant; and
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(e)
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such other information as the Board may determine.
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5.5 Necessary Approvals
The Plan shall be effective only upon formal adoption by the Board following the approval of the
shareholders of the Company in accordance with the rules and policies of The Toronto Stock
Exchange.
The obligation of the Company to sell and deliver Shares in accordance with the Plan is subject to
the approval of any governmental authority having jurisdiction in respect of the Shares or any
exchanges on which the Shares are then listed which may be required in connection with the
authorization, issuance or sale of such Shares by the Company. If any Shares cannot be issued to
any Participant for any reason including, without limitation, the failure to obtain such approval,
the obligation of the Company to issue such
Share
Shares
shall terminate and any
Participants Contribution or option price paid to the Company shall be returned to the
Participant.
5.6 Income Taxes
The Company may withhold from any remuneration or consideration whatsoever payable to such
Participant hereunder, any amounts required by any taxing authority to be withheld for taxes of any
kind as a consequence of such participation in the Plan.
5.7 Amendments to Plan
The Board shall have the power to, at any time and from time to time, either prospectively or
retrospectively, amend, suspend or terminate the Plan or any Option or other award granted under
the Plan without shareholder approval, including, without limiting the generality of the foregoing:
changes of a clerical or grammatical nature, changes regarding the persons eligible to participate
in the Plan, changes to the exercise price, vesting, term and termination provisions of Options,
changes to the cashless exercise right provisions, changes to the share bonus plan provisions
(other than the maximum number of Shares issuable under the Bonus Plan in Section 3.2 of the Plan),
changes to the authority and role of the Compensation and Benefits Committee under the Plan,
changes to the acceleration and vesting of Options in the event of a takeover bid, and any other
matter relating to the Plan and the Options and awards granted thereunder, provided however that:
a)
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such amendment, suspension or termination is in accordance with applicable laws and the rules
of any stock exchange on which the Shares are listed;
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C10
b)
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no amendment to the Plan or to an Option granted hereunder will have the effect of impairing,
derogating from or otherwise adversely affecting the terms of an Option which is outstanding at the time of such amendment without the written consent of
the holder of such Option;
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c)
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the expiry date of an Option Period in respect of an Option shall not be more than ten years
from the date of grant of an Option except as expressly provided in Section 2.5;
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d)
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the Directors shall obtain shareholder approval of:
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(i)
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any amendment to the aggregate maximum number of Shares
specified in subsection 3.2 (Share Bonus Plan);
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(ii)
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any amendment to the aggregate percentage of Shares specified
in subsection 5.1;
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(iii)
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any amendment to the limitations on Shares that may be
reserved for issuance, or issued, to Insiders under subsections 5.1(a) (b) and
(c);
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(iv)
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any amendment that would reduce the exercise price of an
outstanding Option
of an Insider
other than pursuant to section 2.11;
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(v)
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any amendment that would extend the expiry date of the Option
Period in respect of any Option granted under the
Plan
to an Insider
except as expressly contemplated in subsection 2.5;
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(vi)
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any amendment which would accelerate the vesting of any
Option held by an Optionee, except upon the death, disability or retirement of
such Optionee, a change in control of the Company, or in the case of
a non-material variation of any performance
milestone required for the
vesting of Options; and
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(vii)
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Any amendment to the amending provision set out in Section
5.7 (Amendments to Plan)
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If the Plan is terminated, the provisions of the Plan and any administrative guidelines and other
rules and regulations adopted by the Board and in force on the date of termination will continue in
effect as long as any Option or any rights pursuant thereto remain outstanding and, notwithstanding
the termination of the Plan, the Board shall remain able to make such amendments to the Plan or the
Options as they would have been entitled to make if the Plan were still in effect.
5.8 No Representation or Warranty
The Company makes no representation or warranty as to the future market value of any Shares issued
in accordance with the provisions of the Plan.
C11
5.9 Compliance with Applicable Law, etc
If any provision of the Plan or any agreement entered into pursuant to the Plan contravenes any law
or any order, policy, by-law or regulation of any regulatory body or stock exchange having
authority over the Company or the Plan then such provision shall be deemed to be amended to the extent required to bring such provision into compliance therewith.
PART 6 ADMINISTRATION OF THE PLAN
6.1 Administration by the Committee
(a)
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Unless otherwise determined by the Board, the Plan shall be administered by the Compensation
and Benefits Committee (the Committee) appointed by the Board and constituted in accordance
with such Committees charter. The members of the Committee serve at the pleasure of the
Board and vacancies occurring in the Committee shall be filled by the Board.
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(b)
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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, to:
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(i)
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adopt and amend rules and regulations relating to the
administration of the Plan and make all other determinations necessary or
desirable for the administration of the Plan. The interpretation and
construction of the provisions of the Plan and related agreements by the
Committee shall be final and conclusive. The Committee may correct any defect
or supply any omission or reconcile any inconsistency in the Plan or in any
related agreement in the manner and to the extent it shall deem expedient to
carry the Plan into effect and it shall be the sole and final judge of such
expediency; and
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(ii)
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otherwise exercise the powers delegated to the Committee by
the Board and under the Plan as set forth herein.
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6.2 Board Role
(a)
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The Board, on the recommendation of the Committee, shall determine and designate from time to
time the individuals to whom awards shall be made, the amounts of the awards and the other
terms and conditions of the awards.
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(b)
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The Board may delegate any of its responsibilities or powers under the Plan to the Committee,
provided that the grant of all Shares, Options or other awards under the Plan shall be subject
to the approval of the Board. No Option shall be exercisable in whole or in part unless and
until such approval is obtained.
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(c)
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In the event the Committee is unable or unwilling to act in respect of a matter involving the
Plan, the Board shall fulfill the role of the Committee provided for herein.
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C12
SCHEDULE D
SHAREHOLDER RIGHTS PLAN RESOLUTION
BE IT RESOLVED THAT:
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(a)
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the shareholder rights plan agreement effective as of April 5, 2010 between the
Corporation and CIBC Mellon Trust Company, as rights agent, is hereby approved, ratified
and confirmed; and
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(b)
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any one director or any one officer of the Corporation is hereby authorized and
directed to execute, whether under the corporate seal of the Corporation or otherwise, and
to deliver all such other confirmations, instruments, agreements, certificates and other
documents and to do all such other acts and things as in his or her opinion may be
necessary or desirable in connection with the foregoing.
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SCHEDULE E
SUMMARY OF SHAREHOLDER RIGHTS PLAN
Ivanhoe Mines Ltd. (the Corporation) adopted and entered into a shareholder rights plan agreement
(the Shareholder Rights Plan) with CIBC Mellon Trust Company summarized herein on April 5, 2010.
The purpose of the Shareholder Rights Plan is to provide the Board of Directors of the Corporation
and holders (the Shareholders) of the common shares (the Common Shares) of the Corporation with
sufficient time to properly consider any take-over bid made for the Corporation and to allow enough
time for competing bids and alternative proposals to emerge. The Shareholder Rights Plan also seeks
to ensure that all Shareholders are treated fairly in any transaction involving a change of control
of the Corporation and that all Shareholders have an equal opportunity to participate in the
benefits of a take-over bid. The Shareholder Rights Plan encourages potential acquirers to
negotiate the terms of any offer for Common Shares with the Board of Directors or, alternatively,
to make a Permitted Bid (as defined in the Shareholder Rights Plan) without the approval of the
Board of Directors.
The summary of the Shareholder Rights Plan set out herein only includes the material terms and
conditions of the Shareholder Rights Plan. The summary is qualified by and is subject to the full
terms and conditions of the Shareholder Rights Plan. The full text of the Shareholder Rights Plan
is contained in an agreement (the Agreement) dated as of April 5, 2010, between the Corporation
and CIBC Mellon Trust Company, as rights agent. The Agreement is subject to confirmation by
Shareholders at the Corporations 2010 annual and special meeting of Shareholders (the Meeting),
where it must be approved by not less than a majority of the votes cast by both (a) all
Shareholders present or represented by proxy at the Meeting, and (b) all Shareholders present or
represented by proxy at the Meeting that are not Grandfathered Persons (i.e. Shareholders who
already beneficially own 20% or more of the outstanding Voting Shares on the effective date) under
the Shareholder Rights Plan. As of the date of this Information Circular, the only Grandfathered
Persons under the Shareholder Rights Plan are Rio Tinto International Holdings Limited, Robert M.
Friedland and their respective affiliates.
Issuance of Rights
The Shareholder Rights Plan provides that one right (a Right) be issued in respect of each of the
outstanding Common Shares to Shareholders as of the effective date of the Agreement, as well as in
respect of each Common Share issued after the effective date of the Agreement and prior to the
Separation Time (as defined below).
Trading of Rights
Notwithstanding the effectiveness of the Shareholder Rights Plan, the Rights are not exercisable
until the Separation Time and certificates representing the Rights will not be sent to the
Shareholders. Certificates for the Common Shares issued after the effective date of the Shareholder
Rights Plan will contain a notation incorporating the Shareholder Rights Plan by reference. Until
the Separation Time, or earlier termination or expiry of the Rights, the Rights are evidenced by
and transferred with the associated Common Shares and the surrender for transfer of any certificate
representing Common Shares will also constitute the surrender for transfer of the Rights associated
with those Common Shares. After the Separation Time, the Rights will become exercisable and begin
to trade separately from the associated Common Shares. The initial Exercise Price under each Right in order to acquire a Common Share is five times the Market Price at the
Separation Time. Market Price is generally defined as the average of the daily closing prices per
share of such securities on each of the 20 consecutive trading days through and including the
trading day immediately preceding the Separation Time.
E 1
Separation of Rights
The Rights will become exercisable and begin to trade separately from the associated Common Shares
at the Separation Time which, unless waived or deferred by the Board of Directors in the
instances permitted by the Shareholder Rights Plan, is generally the close of business on the tenth
trading day after the earliest to occur of:
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(a)
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a public announcement that a person or a group of affiliated or associated persons
has acquired beneficial ownership of 20% or more of the outstanding Voting Shares (as
defined in the Shareholder Rights Plan) (i.e. become an Acquiring Person) other than as a
result of, among other things, (i) a reduction in the number of Common Shares outstanding,
(ii) a Permitted Bid or a Competing Permitted Bid (each as defined below), (iii)
certain specified Exempt Acquisitions (as defined below), (iv) an acquisition by a
person of Voting Shares pursuant to a stock dividend or other Pro Rata Acquisition (as
defined in the Shareholder Rights Plan), and (v) an acquisition by a person of Voting
Shares upon the exercise, conversion or exchange of a security convertible, exercisable or
exchangeable into a Voting Share received by a person pursuant to (ii), (iii) or (iv),
above;
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(b)
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the date of commencement of, or the first public announcement of an intention of any
person (other than the Corporation or any of its subsidiaries) to commence, a take-over
bid (other than a Permitted Bid or a Competing Permitted Bid) where the Voting Shares
subject to the bid, together with the Voting Shares beneficially owned by that person
(including affiliates, associates and others acting jointly or in concert therewith),
would constitute 20% or more of the outstanding Voting Shares; and
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(c)
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the date upon which a Permitted Bid or Competing Permitted Bid ceases to be such.
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An Exempt Acquisition would include the acquisition of Voting Shares or securities convertible
into Voting Shares (i) in respect of which the Board of Directors has waived the application of the
Shareholder Rights Plan, (ii) pursuant to a distribution made under a prospectus or private
placement provided that the person does not increase his, her or its ownership percentage (e.g.
pursuant to a rights offering), (iii) pursuant to an amalgamation, arrangement or other statutory
procedure requiring Shareholder approval, (iv) pursuant to certain equity incentive stock options
plans of the Corporation, (v) pursuant to contractual arrangements currently in place between Rio
Tinto International Holdings Limited, and each of (a) the Corporation, and (b) Robert M. Friedland,
(vi) pursuant to other contractual arrangements in respect of a Voting Share acquisition from
treasury entered into by the Corporation with one or more Grandfathered Persons after the date of
the Shareholder Rights Plan, and (vii) pursuant to the exercise of Rights.
An Acquiring Person does not include a holder of 20% or more of the outstanding Voting Shares on
the date the Shareholder Rights Plan was implemented (a Grandfathered Person), provided that such
Grandfathered Person acquires no more Voting Shares, other than through one of the exemptions set out in the Shareholder Rights Plan. When the
Shareholder Rights Plan was initially adopted, the only Grandfathered Persons were Rio Tinto
International Holdings Limited, Robert M. Friedland and their respective affiliates.
E 2
As soon as practicable following the Separation Time, separate certificates evidencing rights
(Rights Certificates) will be mailed to the holders of record of the Common Shares as of the
Separation Time and the Rights Certificates alone will evidence the Rights.
When Rights Become Exercisable
After the Separation Time, each Right entitles the holder thereof to purchase one Common Share at
the Exercise Price. Following a transaction which results in a person becoming an Acquiring Person
(a Flip-in-Event), the Rights entitle the holder thereof to receive, upon exercise, such number
of Common Shares that have an aggregate market value (as of the date of the Flip-in Event) equal to
twice the then Exercise Price of the Rights for an amount in cash equal to the Exercise Price. In
such event, however, any Rights beneficially owned by an Acquiring Person (including affiliates,
associates and others acting jointly or in concert therewith), or certain transferees or any such
person, will be void.
Permitted Bids
The Shareholder Rights Plan includes a Permitted Bid concept whereby a take-over bid will not
trigger a separation of the Rights (and will not cause the Rights to become exercisable) if the bid
meets certain conditions. A Permitted Bid is defined as an offer to acquire Voting Shares (which
means Common Shares and any other shares in the capital of the Corporation entitled to vote
generally in the election of all directors, or securities that are eligible to be converted into
Voting Shares for cash or securities) made by means of a take-over bid circular where the Voting
Shares (including Voting Shares that may be acquired upon conversion of securities convertible into
Voting Shares) subject to the offer, together with Voting Shares beneficially owned by the offeror
at the date of the offer (including its affiliates, associates and others acting jointly or in
concert therewith), constitute 20% or more of the outstanding Voting Shares and that also complies
with the following additional provisions:
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(a)
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the bid must be made to all the holders of Voting Shares as registered on the books
of the Corporation, other than the offeror; and
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(b)
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the bid must also contain the following irrevocable and unqualified conditions: (i)
no Voting Shares will be taken up or paid for prior to the close of business on the 60th
day following the date of the bid and then only if more than 50% of the Voting Shares held
by Independent Shareholders (as defined below) have been deposited or tendered to the bid
and not withdrawn; (ii) Voting Shares may be deposited pursuant to the bid, unless it is
withdrawn, at any time prior to the date shares are first taken up or paid for under the
bid: (iii) Voting Shares deposited pursuant to the bid may be withdrawn until taken up or
paid for; and (iv) if the deposit condition referred to in (b)(i) above is satisfied, the
offeror will extend the bid for deposit of Voting Shares for at least 10 business days
from the date such extension is publicly announced and, if such bid is a partial bid, not
take up any Voting Shares under the bid until the expiry of such 10 business day period.
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E 3
Independent Shareholders is defined generally as holders of Voting Shares other than (i) an
Acquiring Person, (ii) any offeror making a take-over bid, (iii) any affiliate or associate of an
Acquiring Person or offeror, (iv) persons acting jointly or in concert with an Acquiring Person or
offeror, and (v) employee benefit, stock purchase or certain other plans or trusts for employees of
the Corporation or its wholly-owned subsidiaries unless the beneficiaries of such plans or trusts
direct the voting or tendering to a take-over bid of the Voting Shares.
Competing Permitted Bids
A Competing Permitted Bid is a take-over bid made after a Permitted Bid has been made and prior
to expiry of such Permitted Bid that satisfies all of the provisions of a Permitted Bid, except
that it must remain open for acceptance until at least the later of (i) 35 days after the date of
the bid and (ii) 60 days after the earliest date on which another Permitted Bid then in existence
was made, and only if at that date more than 50% of the Voting Shares owned by Independent
Shareholders have been deposited to the Competing Permitted Bid and not withdrawn.
Redemption and Waiver
Under the Shareholder Rights Plan, the Board of Directors can (i) waive the application of the
Shareholder Rights Plan to enable a particular take-over bid to proceed, in which case the
Shareholder Rights Plan will be deemed to have been waived with respect to any other take-over bid
made prior to the expiry of any bid subject to such waiver, or (ii) with the prior approval of the
holders of Voting Shares or Rights, as the case may be, redeem the Rights at a redemption price of
$0.00001 per Right at any time prior to a Flip-in-Event. Rights are deemed to have been redeemed if
a bidder successfully completes a Permitted Bid or a Competing Permitted Bid.
Protection Against Dilution
The Exercise Price, the number and nature of securities which may be purchased upon the exercise of
Rights and the number of Rights outstanding are subject to adjustment from time to time to prevent
dilution in the event of stock dividends, subdivisions, consolidations, reclassifications or other
changes in the outstanding Common Shares, pro rata distributions to holders of Common Shares and
other circumstances where adjustments are required to appropriately protect the interests of the
holders of Rights.
E 4
SCHEDULE F
STATEMENT OF CORPORATE GOVERNANCE PRACTICES
Effective June 30, 2005, the Canadian Securities Administrators adopted National Instrument 58-101
(NI 58-101) and the associated National Policy 58-201 (NP 58-201) which require the Corporation
to disclose its corporate governance practices. These new rules replace the former corporate
governance guidelines of the TSX.
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CORPORATE GOVERNANCE
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DISCLOSURE REQUIREMENT
(1)
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COMMENTS
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1. Board of Directors (the Board)
(a) Disclose the identity of directors who are independent.
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The Board has reviewed the independence of
each Director on the basis of the definitions
in section 1.4 of MI 52-110, as amended, and
the applicable provisions of the NYSE
Corporate Governance Rules and the NASDAQ
Corporate Governance Rules. A Director is
independent if he or she has no direct or
indirect material relationship with the
Corporation, including as a partner,
shareholder or officer of an organization
that has a relationship with the Corporation.
A material relationship is one that would,
or in the view of the Board could, be
reasonably expected to interfere with the
exercise of a Directors independent
judgment. The Board has determined, after
reviewing the roles and relationships of each
of the Directors, that 58.3% (seven out of
twelve) of the nominees proposed by
management for election to the Board are
independent from the Corporation. The
following nominees have been affirmatively
determined to be independent by the Board:
David Huberman
David Korbin
Markus Faber
Robert Hanson
Kjeld Thygesen
Howard Balloch
Livia Mahler
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This determination was made on the basis that:
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(a) they (and their immediate family members)
are not and have not been within the last
three years an employee or executive officer
of the Corporation;
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(b) they (and their spouse, minor child or
step child) are not and have not been within
the last three years a partner or employee of
the Corporations external auditors firm;
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(c) they (and their immediate family members)
are not and have not been within the last
three years an executive officer of an entity
of which the Corporations executives served
on that entitys compensation committee;
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(d) they (and their immediate family members)
did not receive more than US$60,000 in direct
compensation from the Corporation (exclusive
of any remuneration received for acting as a
Board or Committee member) during any 12
month period during the last three years;
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(e) they and their immediate family members
are not a current executive officer of a
company that has made payments to, or
received payments from, the Corporation for
property or services in an amount which, in
any of the last three fiscal years, exceeds
the greater of US$1 million or 2% of such
other companys consolidated gross revenues;
and
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F 1
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CORPORATE GOVERNANCE
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DISCLOSURE REQUIREMENT
(1)
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COMMENTS
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(f) they are not a partner in, or a
continuing shareholder or executive officer
of any for-profit business organization to
which the Corporation made, or from which the
Corporation received payments (other than
those arising solely from investments in the
Corporations securities) that exceed 5% of
the Corporations or business organizations
consolidated gross revenues for that year, or
US$200,000, whichever is more, in any of the
past three years.
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(b) Disclose the identity of directors who are not
independent, and describe the basis for that determination.
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The Board and Corporate Governance and
Nominating Committee have determined, after
reviewing the roles and relationships of each
of the Directors, that the following five (5)
out of twelve (12) nominees proposed by
management for election to the Board are not
independent from the Corporation as defined
in the CSA Corporate Governance Guidelines,
the NYSE Corporate Governance Rules and the
NASDAQ Corporate Governance Rules:
Robert M. Friedland: Executive Chairman
Peter G. Meredith: Deputy Chairman
John Macken: President and CEO
Andrew Harding
R. Edward Flood
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Messrs. Friedland, Meredith and Macken, as
senior officers of the Corporation and/or one
or more of its subsidiaries and members of
management, are considered to be
non-independent directors.
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As at the date of this Management Proxy
Circular, Mr. Flood is considered to be a
non-independent director nominee in his
capacity as a former senior officer of one of
the Corporations subsidiaries. It is
expected that Mr. Flood will qualify as an
independent director effective June 26, 2010.
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In the case of Mr. Harding, the Board noted
he has a position as an executive officer of
the Rio Tinto Group (Rio Tinto) and
considered the relationship between Rio Tinto
and the Corporation resulting from Rio
Tintos significant investment in the
Corporation, the terms and conditions of the
investment agreement between Rio Tinto and
the Corporation and the shareholders
agreement between Rio Tinto and Mr. Robert
Friedland, Executive Chairman of the
Corporation, each dated October 18, 2006, and
the interim funding arrangement between Rio
Tinto and the Corporation dated October 24,
2007. The Board concluded that such
relationship was a material relationship
within the meaning of the applicable
provisions of the CSA Corporate Governance
Guidelines, the NYSE Corporate Governance
Rules and the NASDAQ Corporate Governance
Rules, and accordingly considers Mr. Harding
to be a non-independent nominee director.
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F 2
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CORPORATE GOVERNANCE
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DISCLOSURE REQUIREMENT
(1)
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COMMENTS
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As at the date of this Management Proxy
Circular, Rio Tinto has advised the
Corporation that it wishes to nominate Mr.
Tracy Stevenson as an additional director for
election to the Board. Mr. Stevenson is
considered to be a non-independent director
nominee in his capacity as a former senior
officer of Rio Tinto. It is expected that
Mr. Stevenson will qualify as an independent
director effective June 1, 2010.
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(c) Disclose whether or not a
majority of the directors are
independent. If a majority of
directors are not independent,
describe what the Board of
Directors does to facilitate
its exercise of independent
judgment in carrying out its
responsibilities.
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58.3% or seven of the twelve nominees
proposed by management for election to the
Board are independent directors as defined
in the CSA Corporate Governance Guidelines,
the NYSE Corporate Governance Rules and the
NASDAQ Corporate Governance Rules.
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If the shareholders of the Corporation
approve the Articles Amendment Resolution,
Rio Tinto has nominated one additional member
for election by the shareholders at the
Meeting, to hold office until the next annual
general meeting of the Corporation.
Effective June 1, 2010 such additional
nominee will be an independent director.
Rio Tinto has also advised the Corporation
that it intends to nominate a further nominee
for appointment to the Board following the
Meeting, and that such nominee will qualify
as an independent director. Accordingly, if
both Rio Tinto nominees become members of the
Board, and effective upon Mr. Floods
qualification as an independent director in
June 2010 as set forth above, the Board will
consist of ten independent directors (as
defined in the CSA Corporate Governance
Guidelines, the NYSE Corporate Governance
Rules and the NASDAQ Corporate Governance
Rules) and four non-independent directors.
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The Board is satisfied with the size and
composition of the Board and believes that
the resulting Board composition is a balanced
representation among management and
non-management directors, and the
Corporations major shareholder. While the
Board functions effectively given the
Corporations stage of development and the
size and complexity of its business, the
Board, through its Corporate Governance and
Nominating Committee, will continue to seek
qualified candidates to augment its
experience and expertise and to enhance the
Corporations ability to effectively develop
its business interests.
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F 3
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CORPORATE GOVERNANCE
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DISCLOSURE REQUIREMENT
(1)
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COMMENTS
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(d) If a director is presently
a director of any other issuer
that is a reporting issuer (or
the equivalent) in a
jurisdiction or a foreign
jurisdiction, identify both the
director and the other issuer.
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All directorships with other public entities
for each of the nominees are set out next to
the individuals name under the heading
Election of Directors Management
Nominees in this Circular.
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(e) Interlocking Directorships
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All interlocking directorships are set out in
footnote (13) to the table under the heading
Election of Directors Management
Nominees.
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(f) Disclose whether or not the
independent directors hold
regularly scheduled meetings at
which members of management are
not in attendance. If the
independent directors hold such
meetings, disclose the number
of meetings held since the
beginning of the issuers most
recently completed financial
year. If the independent
directors do not hold such
meetings, describe what the
Board does to facilitate open
and candid discussion among its
independent directors.
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All committees, with the exception of the
audit committee, meet without management
being present unless the committee
specifically requests the presence of one or
more such persons.
The Corporate Governance and Nominating
Committee, in particular, provides a forum
without management being present to receive
any expression of concern from a director,
including a concern regarding the
independence of the Board from management.
During 2009, there were eight (8) Board
meetings, five (5) meetings of the
Compensation and Benefits Committee, four (4)
meetings of the Audit Committee and four (4)
meetings of the Corporate Governance and
Nominating Committee.
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In addition, meetings of non-management
Directors, chaired by the Lead Director, are
held, as required, by teleconference to
update the non-management Directors on
developments since the last Board meeting.
No such meetings were held in 2009.
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The results of discussions of all Board
committees, and of the meetings of
non-management Directors, are communicated to
the rest of the Board at its next scheduled
meeting, or more promptly, if required, by
the committee Chairs to the other Directors
and members of management.
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(g) Disclose whether or not the
chair of the Board is an
independent director. If the
Board has a chair or lead
director who is an independent
director, disclose the identity
of the independent chair or
lead director, and describe his
or her role and
responsibilities. If the Board
has neither a chair that is
independent nor a lead director
that is independent, describe
what the Board does to provide
leadership for its independent
directors.
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Mr. Friedland currently serves as Chairman of
the Board of Directors. The Board is of the
view that appropriate structures and
procedures are in place to allow the Board to
function independently of management while
continuing to provide the Corporation with
the benefit of having a Chairman of the Board
with extensive experience and knowledge of
the Corporations business.
The Board has created the position of lead
director, with specific responsibility for
maintaining the independence of the Board and
ensuring that the Board carries out its
responsibilities. Mr. Huberman, who also
serves as chair of the Corporate Governance
and Nominating Committee and the Compensation
and Benefits Committee, has served as the
Corporations Lead Director since 2003. Mr.
Huberman does not serve in a similar capacity
with any other corporation.
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F 4
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CORPORATE GOVERNANCE
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DISCLOSURE REQUIREMENT
(1)
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COMMENTS
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(h) Disclose the attendance
record of each director for all
Board meetings held since the
beginning of the issuers most
recently completed financial
year.
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A record of attendance by Director(s) at
meetings of the Board and its Committees as
well as the number of Board and Board
Committee meetings held during the financial
year ended December 31, 2009, is set out next
to each individuals name under the heading
Election of Directors Management
Nominees in this Circular.
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2. Board Mandate
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The Board has assumed
responsibility for the stewardship of the Corporation and has
adopted a formal mandate as described in this
Circular under the heading Corporate
Governance Mandate of the Board, setting
out its stewardship responsibilities.
The mandate of the Board is available on the
Corporations website (www.IvanhoeMines.com).
A copy may also be obtained upon request to
the Vice President and Corporate Secretary of
the Corporation, 654 999 Canada Place,
Vancouver, British Columbia V6C 3E1,
telephone (604) 688-5755.
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Disclose the text of the
Boards written mandate. If the
Board does not have a written
mandate, describe how the Board
delineates its role and
responsibilities.
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3. Position Descriptions
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The Board has developed written
position descriptions for the Chairman, Lead Director,
the chair of each Board committee, CEO and
CFO, clearly defining their respective roles
and responsibilities. Such position
descriptions were reviewed by the Corporate
Governance and Nominating Committee and
approved by the Board and are subject to
annual review by the Corporate Governance and
Nominating Committee.
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(a) Disclose whether or not the
Board has developed written
position descriptions for the
chair and the chair of each
Board committee. If the Board
has not developed written
position descriptions for the
chair and/or the chair of each
Board committee, briefly
describe how the Board
delineates the role and
responsibilities of each such
position.
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(b) Disclose whether or not the
Board and CEO have developed a
written position description
for the CEO. If the Board and
CEO have not developed such a
position description, briefly
describe how the Board
delineates the role and
responsibilities of the CEO.
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4. Orientation and Continuing
Education
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The Corporation takes steps to ensure that
prospective directors fully understand the role of the Board and its committees and the
contribution individual directors are
expected to make, including in particular the commitment of time and energy that the
Corporation expects of its directors. In
addition, new directors are provided with a comprehensive information package, including
pertinent corporate documents and a
directors manual containing information on
the duties, responsibilities and liabilities
of directors. New directors are also briefed
by management as to the status of the
Corporations business. Directors are also
encouraged to make site visits to the
Corporations properties.
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(a) Briefly describe what
measures the Board takes to
orient new members regarding:
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(i) the role of the
Board, its committees and
its directors, and
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(ii) the nature and
operation of the issuers
business
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(b) Briefly describe what
measures, if any, the Board
takes to provide continuing
education for its directors. If
the Board does not provide
continuing education, describe
how the Board ensures that its
directors maintain the skill
and knowledge necessary to meet
their obligations as directors.
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Management and outside advisors provide
information and education sessions to the
Board and its committees on a continuing
basis as necessary to keep the directors
up-to-date with the Corporation, its business
and the environment in which it operates as
well as with developments in the
responsibilities of directors, corporate
governance, ethics and compliance.
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F 5
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CORPORATE GOVERNANCE
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DISCLOSURE REQUIREMENT
(1)
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COMMENTS
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Presentations are made to the Board from time
to time to educate and keep them informed of
changes within the Corporation and of
regulatory and industry requirements and
standards.
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In addition, Directors are encouraged to take
courses relevant to the Corporation and its
business, particularly with respect to
corporate governance and the mining industry,
at the Corporations expense
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As part of the
Corporations continuing education program,
in December, 2009 Mr. Huberman attended an
intensive NASDAQ sponsored conference, The
High-Performing Director Navigating 2010.
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All of the Corporations independent
Directors are members of Canadas Institute
of Corporate Directors, whose mission is to
foster excellence in directors to strengthen
the governance and performance of Canadian
corporations. Mr. David Huberman, the
Corporations Lead Director, has completed
the Institutes Director Education Program,
which reviews governance expectations and
promotes best practices in the boardroom. In
2009, Ms. Mahler and Mr. Korbin attended the
13
th
Annual North American School
of Mines held in Scottsdale, Arizona.
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5. Ethical Business Conduct
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The Corporation has adopted a Code of
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(a) Disclose whether or not the
Board has adopted a written
code for its directors,
officers and employees. If the
Board has adopted a written
code:
(i)
disclose how a person
or company may obtain a
copy of the code;
(ii)
describe how the
Board monitors compliance
with its code, or if the
Board does not monitor
compliance, explain
whether and how the Board
satisfies itself
regarding compliance with
its code; and disclose
how a person or company
may obtain a copy of the
code;
(iii) provide a
cross-reference to any
material change report
filed since the beginning
of the issuers most
recently completed
financial year that
pertains to any conduct
of a director or
executive officer that
constitutes a departure
from the code.
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Business Conduct and Ethics applicable to all
employees, consultants, officers and
directors regardless of their position in the
organization, at all times and everywhere the
Corporation does business. The Code of
Business Conduct and Ethics provides that the
Corporations employees, consultants,
officers and directors will uphold its
commitment to a culture of honesty, integrity
and accountability and the Corporation
requires the highest standards of
professional and ethical conduct from its
employees, consultants, officers and
directors. A number of housekeeping
amendments to the Code were made in 2007 to
clarify consulting and reporting procedures
and to recognize the Corporations
whistleblower mechanism.
In 2009 the Code of Business Conduct and
Ethics was amended to state that, should an
employee refuse to sign the acknowledgement
form the refusal could result in termination
of employment, the non-renewal of a contract,
or a reassignment to another position. In
2009 the Corporation also adopted a companion
booklet to the Code of Business Conduct and
Ethics that was prepared to provide
directors, officers, employees, consultants,
advisors and contractors with general
information with respect to the anti-bribery
laws in both Canada and the United States.
Violations of Canadian or United States
anti-bribery law could subject both the
Company and the relevant individuals to
substantial criminal and civil penalties.
The Company takes any violation of these laws
very seriously and any employee who violates
these laws will be subject to disciplinary
measures up to and including termination of
employment.
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F 6
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CORPORATE GOVERNANCE
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DISCLOSURE REQUIREMENT
(1)
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COMMENTS
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The Corporations Code of Business Conduct
and Ethics, as amended, has been filed on
SEDAR and is available on the Corporations
website (www.IvanhoeMines.com). A copy may
also be obtained, without charge, by request
to the Vice President and Corporate
Secretary, 65
4 999 Canada Place,
Vancouver, British Columbia, Canada V6C 3E1,
telephone to (604) 688-5755.
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All Directors and employees are provided with
a booklet containing the Corporations Code
of Business Conduct and Ethics and Corporate
Securities Trading Policy (which has been
translated into other languages as required
for use in the Corporations international
operations) and are required to sign a
written acknowledgement confirming that they
have received, reviewed and understand its
contents and agree to abide by the Code.
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Corporate supervisors and employees are
required to confirm, on an annual basis, that
they have reviewed the Corporations Code of
Business Conduct and Ethics as part of their
annual performance appraisal.
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The Corporate Governance and Nominating
Committee monitors compliance with the Code
of Business Conduct and Ethics and also
ensures that management encourages and
promotes a culture of ethical business
conduct.
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The Board has not granted any waiver of the
Code of Business Conduct and Ethics in favour
of a Director or executive officer.
Accordingly, no material change report has
been required or filed.
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(b) Describe any steps the
Board takes to ensure directors
exercise independent judgment
in considering transactions and
agreements in respect of which
a director or executive officer
has a material interest.
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The Corporate Governance and Nominating
Committee monitors the disclosure of
conflicts of interest to the Board by
Directors and ensures that no Director will
vote or participate in a discussion on a
matter in respect of which such Director has
a material interest. Committee Chairs
perform the same function with respect to
meetings of each Board committee.
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(c) Describe any other steps
the Board takes to encourage
and promote a culture of
ethical business conduct.
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The Corporation has published a Statement of
Values and Responsibilities. An updated
Statement was approved by the Board on March
11, 2008. It has also developed various
corporate policies including Corporate
Disclosure, Confidentiality and Securities
Trading policies, and a Whistleblower Policy,
administered by an independent third party.
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F 7
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CORPORATE GOVERNANCE
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DISCLOSURE REQUIREMENT
(1)
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COMMENTS
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The Corporation encourages participation in
education programs for its personnel dealing
with matters of corporate ethics and best
practices.
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During 2009 the Corporate Governance and
Nominating Committee met with the
Corporations CEO and CFO to discuss
corporate ethics and best practices and were
satisfied that they are a focus of the CEO,
CFO and throughout the Corporations
international operations.
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6. Nomination of Directors
(a) Describe the process by
which the Board identifies new
candidates for Board
nomination.
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The Board has a Corporate
Governance and Nominating Committee consisting of Messrs.
Huberman (Chair), Hanson, Thygesen, Balloch
and Ms. Mahler, all of whom are nominees of
management for re-election as Directors at
the Meeting. All members of the committee
are independent directors under the CSA
Corporate Governance Guidelines, the NYSE
Corporate Governance Rules and the NASDAQ
Corporate Governance Rules. Mr. Huberman has
been appointed as Chairman of the committee.
The full Board determines, in light of the
opportunities and risks facing the
Corporation, what competencies, skills and
personal qualities it should seek in new
Board members in order to add value to the
Corporation. Based on this framework, the
Corporate Governance and Nominating Committee
developed a skills matrix outlining the
Corporations desired complement of
Directors competencies, skills and
characteristics. The specific make-up of the
matrix includes such items and experiences as
international experience, leading growth
orientated companies, mining exploration,
diversity, financial literacy, legal
knowledge, corporate governance, etc. The
Committee annually assesses the current
competencies and characteristics represented
on the Board and utilize the matrix to
determine the Boards strengths and identify
any gaps that need to be filled. This
analysis assists the Committee in discharging
its responsibility for approaching and
proposing to the full Board new nominees to
the Board, and for assessing directors on an
ongoing basis.
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The Corporate Governance and Nominating
Committee has been given the responsibility
for developing an evergreen list of potential
nominees who the Committee feels would be
appropriate to be asked to join the Board if,
as and when there are vacancies pending and
such persons are available to do so and who
complement the current skills matrix. The
Committee receives and reviews
recommendations from Directors and members of
management in determining whether to add the
names of new candidates to the list, and has
the authority to hire outside consultants to
help to identify additional qualified
candidates as required.
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F 8
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CORPORATE GOVERNANCE
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DISCLOSURE REQUIREMENT
(1)
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COMMENTS
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The Corporation does not have a shareholder
with the ability to exercise a majority of
the votes for the election of the Board.
However, the Chairman of the Corporation
holds approximately 21.96% of the
Corporations voting securities as at the
date of this Circular and Rio Tinto, which is
entitled to nominate a qualified individual
or individuals for appointment or election to
the Board in proportion to its shareholdings
from time to time, holds approximately 22.36%
of the Corporations voting securities at
such date. The Corporation has a majority of
directors who do not have an interest in or
relationship with either the Corporation, its
Chairman or Rio Tinto and, which fairly
reflects the investment in the Corporation by
shareholders other than the Chairman or Rio
Tinto.
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The Board seeks to achieve a balanced
representation of skilled and experienced
independent directors and has determined to
continue to seek, through its Corporate
Governance and Nominating Committee,
additional qualified candidates as required
to augment its experience and expertise and
to enhance the Corporations ability to
effectively develop its business interests.
In so doing, the Corporate Governance and
Nominating Committee will seek candidates
that meet all Canadian, U.S. and other
standards of independence applicable to the
Corporation.
The charter of the Corporate Governance and
Nominating Committee is available on the
Corporations website (www.IvanhoeMines.com).
A copy may also be obtained upon request to
the Vice President & Corporate Secretary, 654
999 Canada Place, Vancouver, British
Columbia, V6C 3E1, telephone (604) 688-5755.
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7. Compensation
(a) Describe the process by
which the Board determines the
compensation for the issuers
directors and officers.
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The Compensation and Benefits
Committee has responsibility for recommending compensation
for the Corporations senior executive
officers to the Board. CEO compensation is
approved by the Compensation and Benefits
Committee. See Report on Executive
Compensation.
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The Compensation and Benefits Committee
periodically reviews and makes
recommendations to the Board regarding the
adequacy and form of the compensation for
non-management Directors to ensure that such
compensation realistically reflects the
responsibilities and risks involved in being
an effective director, without compromising a
Directors independence. Directors who are
executives of the Corporation receive no
additional remuneration for their services as
Directors.
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F 9
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CORPORATE GOVERNANCE
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DISCLOSURE REQUIREMENT
(1)
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COMMENTS
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Effective March 2009, all non-management
directors receive C$40,000 per annum for
acting as such, with the exception of any Rio
Tinto nominee, whose director compensation is
remitted directly to Rio Tinto. Effective
October 2009, Mr. David Huberman receives an
additional C$150,000 per annum for acting as
the Lead Director of the Board. The Chair of
the Audit Committee receives an additional
C$40,000 per annum, for acting in such
capacity. The respective Chairs of the
Compensation and Benefits Committee and the
Corporate Governance Committee each receive
an additional payment of C$20,000 per annum
for acting as such. Additionally,
non-management directors receive C$2,000 per
in-person Board or Committee meeting attended
and C$1,000 per Board or Committee conference
call in which they participate.
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In addition to their cash compensation,
non-management directors (other than any
nominee of Rio Tinto in accordance with Rio
Tintos corporate policy) also receive an
annual grant of 50,000 stock options, such
options having a seven year term and fully
vesting on the first anniversary of the date
of the grant.
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(b) Disclose whether or not the
Board has a compensation
committee composed entirely of
independent directors. If the
Board does not have a
compensation committee composed
entirely of independent
directors, describe what steps
the Board takes to ensure an
objective process for
determining such compensation.
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The Compensation and Benefits Committee
comprises five Directors, all of whom have
been affirmatively determined by the Board to
be independent directors as defined by the
CSA Corporate Governance Guidelines, the NYSE
Corporate Governance Rules and the NASDAQ
Corporate Governance Rules.
The members of the committee have diverse
professional backgrounds, with prior
experience in executive compensation. None
of the members of the committee serve as CEOs
or senior executive officers of other public
corporations.
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(c) If the Board has a
compensation committee,
describe the responsibilities,
powers and operation of the
compensation committee.
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The duties and responsibilities of the
Compensation and Benefits Committee include
the development of a compensation philosophy
and policy; evaluating the performance of the
Corporations senior executive officers,
reviewing their compensation, and monitoring
equity incentive arrangements.
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The role of the Compensation and Benefits
Committee is primarily to review the adequacy
and form of compensation of executive
management and the directors with such
compensation realistically reflecting the
responsibilities and risks of such positions,
to administer the Corporations Equity
Incentive Plan, to determine the recipients
of, and the nature and size of share
compensation awards granted from time to time
and to determine the remuneration of
executive management and any bonuses to be
awarded. The committee also conducts a
formal review of the Corporations executive
compensation on an annual basis and otherwise
as required to satisfy itself and the Board
that the Corporations compensation
objectives are being met.
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F 10
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CORPORATE GOVERNANCE
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DISCLOSURE REQUIREMENT
(1)
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COMMENTS
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The members of the Compensation and Benefits
Committee are Messrs. Huberman (Chair),
Hanson, Korbin, Balloch, Thygesen and Faber
(a member since May 2008). Mr. Thygesen was
a member of the Compensation and Benefits
Committee until March 10, 2009. Each member
of the committee is an independent director
for the purposes of the CSA Corporate
Governance Guidelines, the NYSE Corporate
Governance Rules and the NASDAQ Corporate
Governance Rules.
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The charter of the Compensation and Benefits
Committee is available on the Corporations
website (www.IvanhoeMines.com). A copy may
also be obtained upon request to the Vice
President and Corporate Secretary, 654 999
Canada Place, Vancouver, British Columbia V6C
3E1, telephone (604) 688-5755.
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(d) If a compensation
consultant or advisor has, at
any time since the beginning of
the issuers most recently
completed financial year, been
retained to assist in
determining compensation for
any of the issuers directors
and officers, disclose the
identity of the consultant or
advisor and briefly summarize
the mandate for which they have
been retained. If the
consultant or advisor has been
retained to perform any other
work for the issuer, state that
fact and briefly describe the
nature of the work.
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Towers Perrin was retained in 2004 by the
Compensation and Benefits Committee to
prepare a director compensation report to
assist the committee in the determination of
independent director compensation. They were
mandated to provide the review based on
compensation levels provided to similarly
sized international mining companies. Towers
Perrins fee for its 2004 report was
Cdn$19,821.
Gurr Lane & Associates was retained in 2005
by the Compensation and Benefits Committee to
prepare reports to assist the committee in
developing a compensation strategy for the
position of President and for the other
executive and senior management positions.
They were mandated to develop a justifiable
compensation strategy which benchmarks such
positions in terms of the competitive
marketplace of similar-sized international
mining companies and, where appropriate,
larger operating mining companies. The
proposals were intended to address salary,
bonus and stock options. Gurr Lane &
Associates fee for the reports was
Cdn$39,697.
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Towers Perrin was retained in 2006 by the
Compensation and Benefits Committee to
prepare a report on industry standards and
best practices relating to change of
control provisions in executive employment
agreements. Towers Perrins fee for this
report was C$10,788.
Mercer (Canada) Limited (Mercer) was
retained in 2007 to prepare a model for
executive compensation for the Corporation
and to provide support to the Compensation
and Benefits Committee in determining
compensation for the Corporations officers
for the 2007 fiscal year. Mercers fee for
these services was C$67,089.
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F 11
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CORPORATE GOVERNANCE
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DISCLOSURE REQUIREMENT
(1)
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COMMENTS
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Mercer was retained in 2008 to review the
executive compensation plan with the
Committee following its inception the
previous year and to update the section of
the report on current compensation amongst a
peer group of companies. Mercer was also
requested to consider and prepare a report
for the Committee with respect to director
compensation. Mercers fee for these
services was C$50,000.
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For 2009 Mercer provided additional executive
compensation services which included an
updating of the Corporations peer comparator
group of companies. Mercer received C$34,913
for these services.
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None of the compensation consultants or
advisors retained by the Compensation and
Benefits Committee has performed other work
for the Corporation. The Committee will
require any such consultant or advisor to
obtain its written approval prior to
undertaking any work for management of the
Corporation in order to protect the
independence of such consultant or advisor.
Recommendations of the Compensation and
Benefits Committee to the Board are the
responsibility of the committee and may
reflect factors and considerations outside of
surveys or consultants recommendations.
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8. Other Board Committees If the
Board has standing committees other
than the audit, compensation and
nominating committees, identify the
committees and describe their
function.
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In addition to the Audit Committee, the
Compensation and Benefits Committee and the
Corporate Governance and Nominating
Committee, in March 2005 the Board approved
the establishment of an Executive Committee,
consisting of Messrs. Friedland, Huberman,
Meredith and Macken, to meet between formal
meetings of the Board as necessary, with
authority to approve expenditures of up to
US$10,000,000. No meetings of the Executive
Committee were held in 2009, however the
Executive Committee did consider and pass
five consent resolutions during 2009.
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The Board has also established a Currency
Advisory Committee, consisting of Mr. David
Korbin, the Chairman of the Audit Committee,
Mr. Peter Meredith (the Corporations Deputy
Chairman), Dr. Markus Faber and Mr. Tony
Giardini, the CFO, to make recommendations to
the CFO on managing the Corporations
currency exposures and to report to the
Board. The Currency Advisory Committee met
twice in 2009.
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9. Assessments Disclose whether or
not the Board, its committees and
individual directors are regularly
assessed with respect to their
effectiveness and contribution. If
assessments are regularly conducted,
describe the process used for the
assessments. If assessments are not
regularly conducted, describe how the
Board satisfies itself that the
Board, its committees, and its
individual directors are performing
effectively.
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The Corporate Governance and Nominating
Committee has the responsibility for
developing and recommending to the Board, and
overseeing the execution of, a process for
assessing the effectiveness of the Board as a
whole, the committees of the Board and the
contribution of individual directors, on a
regular basis. The Corporate Governance and
Nominating Committee has developed and is
continuing to refine an assessment process
for the Board, each of its committees, and
the contribution of individual directors.
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F 12
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CORPORATE GOVERNANCE
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DISCLOSURE REQUIREMENT
(1)
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COMMENTS
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The Corporate Governance and Nominating
Committee has, for the last six years,
reviewed and approved a performance
evaluation questionnaire that was forwarded
to all of the members of the Board of
Directors. This questionnaire covers a wide
range of issues providing for quantitative
ratings and subjective comments and
recommendations in each area. In 2004, all
Directors assessed the performance of the
Board as a whole, its Committees, the Chair
of each Committee, and the Lead Director.
Issues addressed included Board composition,
Board discussion and the relationship with
the CEO, Director orientation and ongoing
development, definition of roles and
responsibilities, Board and Director
evaluation, Director compensation, CEO and
management succession, strategic planning and
supporting plans, Committees, and the role of
the Lead Director. Responses were tabulated
and analyzed through independent Board
governance consultants, without attribution
of comments to individual directors, and a
summary report was provided to the Lead
Director, and through him, to the Committee
and the full Board, with recommendations for
improvement where required. In 2005, each
Director assessed his own performance.
Issues addressed included skills and
experience, preparation, attendance and
availability, communication and interaction,
strategies and plans, business, corporation
and industry knowledge, and an overall
assessment. Responses were provided to the
Lead Director. In 2006, a peer review was
completed by the Directors. Each Director
was asked to evaluate the contribution of
each of the other Directors in the following
areas: preparation and availability,
accountability and transparency, contribution
to strategic planning, oversight of
performance and risk, contribution to
supervision and relationship with management,
contribution to Board internal effectiveness,
and overall contribution of the individual
Director. Each Director was also asked to
comment on what additional skills, experience
and information could benefit the Board and
how they might be accessed, what were his and
his fellow Directors most recent
accomplishments for the Corporation, and what
each Director sought to accomplish with his
fellow Directors over the next 1-2 years at
the Corporation. The Lead Director was
provided with a report detailing the average
(mean) ratings for all Directors of the
portion of the questionnaire dealing with the
contribution of individual Directors, and a
summary of the
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F 13
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CORPORATE GOVERNANCE
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DISCLOSURE REQUIREMENT
(1)
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COMMENTS
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responses to the portion
dealing with overall Board contribution, on a
non-attributed basis. Each individual
Director was provided with a confidential
report card containing their peers
assessment of their contribution. The Lead
Director met with each Director to discuss
individual and Board performance, and
reported the overall results to the Board of
Directors.
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In each of 2008 and 2009, the Board completed
collective, and/or self-assessment and peer
reviews, as described above. The Corporate
Governance and Nominating Committee intend to
continue these processes on a regular basis.
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These evaluations showed that the Board, its
Committees, the Committee Chairs, the Lead
Director and individual Directors were
effectively fulfilling their
responsibilities.
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(1) Reference is made to the items in Form 58-101F.
F 14
IVANHOE MINES LTD.
654 - 999 Canada Place, Vancouver, British Columbia V6C 3E1
Tel: (604) 688 5755
P R O X Y
This proxy is solicited by the management of IVANHOE MINES LTD. (the Corporation) for the Annual
and Special General Meeting of its shareholders (the Meeting) to be held on May 7, 2010.
The undersigned hereby appoints,
Peter Meredith
, Deputy Chairman and Director, or failing him,
Beverly A. Bartlett
, Vice President and Corporate Secretary of the Corporation, or instead of
either of the foregoing, (insert name)
______________________________________________, as nominee of the undersigned, with full power of
substitution, to attend and vote on behalf of the undersigned at the Meeting to be held in the
Presidents Room of the Terminal City Club, 837 West Hastings Street, Vancouver, British Columbia,
on May 7, 2010 at 9:00 AM, local time, and at any adjournments thereof, and directs the nominee to
vote or abstain from voting the shares of the undersigned in the manner indicated below:
1.
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ELECTION OF DIRECTORS
The nominees proposed by management of the Corporation are:
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ROBERT M. FRIEDLAND
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FOR
o
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WITHHOLD
o
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PETER MEREDITH
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FOR
o
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WITHHOLD
o
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JOHN MACKEN
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FOR
o
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WITHHOLD
o
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DAVID HUBERMAN
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FOR
o
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WITHHOLD
o
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HOWARD BALLOCH
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FOR
o
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WITHHOLD
o
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MARKUS FABER
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FOR
o
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WITHHOLD
o
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R. EDWARD FLOOD
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FOR
o
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WITHHOLD
o
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ROBERT HANSON
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FOR
o
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WITHHOLD
o
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ANDREW HARDING
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FOR
o
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WITHHOLD
o
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DAVID KORBIN
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FOR
o
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WITHHOLD
o
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LIVIA MAHLER
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FOR
o
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WITHHOLD
o
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KJELD THYGESEN
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FOR
o
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WITHHOLD
o
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2.
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APPOINTMENT OF AUDITORS
To appoint Deloitte & Touche, LLP, Chartered Accountants, as auditors of the Corporation at a
remuneration to be fixed by the board of directors.
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FOR
o
WITHHOLD
o
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3.
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AMENDMENT OF THE ARTICLES
To approve, by special resolution, the amendment of the Corporations Articles to set the
number of directors of the Corporation as not less than three (3), nor more than fourteen
(14).
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FOR
o
AGAINST
o
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4.
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ELECTION OF ADDITIONAL DIRECTOR
Contingent upon the approval of the special resolution to amend the Articles of the
Corporation, to elect the following additional director:
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TRACY STEVENSON FOR
o
WITHHOLD
o
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5.
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FIXING NUMBER OF DIRECTORS
Contingent upon the approval of the special resolution to amend the Articles of the
Corporation, to approve, by ordinary resolution, the fixing of the number of directors at
fourteen (14).
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FOR
o
AGAINST
o
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6.
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EQUITY INCENTIVE PLAN RESOLUTION
To approve, by ordinary resolution, amending and restating the Employees and Directors
Equity Incentive Plan to make certain amendments thereto, as more particularly described in
the Management Proxy Circular.
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FOR
o
AGAINST
o
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7.
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SHAREHOLDER RIGHTS PLAN
To approve and ratify, by ordinary resolution, the adoption of a Shareholder Rights Plan, all
as more particularly described in the Management Proxy Circular.
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FOR
o
AGAINST
o
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8.
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To transact any other business as may properly come before the Meeting or at any adjournment
thereof.
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9.
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Upon any permitted amendment to or variation of any matter identified in the Notice of
Meeting.
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THE UNDERSIGNED HEREBY REVOKES ANY PRIOR PROXY OR PROXIES.
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DATED:
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,
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2010.
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Signature of Shareholder
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(Please print name here)
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Note:
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If not dated, this proxy is deemed to be dated on the day sent by the Corporation.
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NOTES:
A proxy will not be valid unless the completed, and signed form of proxy is faxed to CIBC Mellon
Trust Company, Attention: Proxy Department 1-416-368-2502 or 1-866-781-3111 or delivered by mail to
P.O. Box 721, Agincourt, Ontario, M1S 0A1 or delivered by hand to The
Oceanic Plaza, 1600 - 1066
Hastings Street, Vancouver, British Columbia, V6E 3K9 or 320 Bay Street, Banking Hall Level,
Toronto, Ontario, M5H 4A6, and received by CIBC Mellon Trust Company not less than 48 hours
(excluding Saturdays, Sundays and statutory holidays) before the time at which the Meeting is to be
held, or any adjournment thereof.
Any one of the joint holders of a share may sign a form of proxy in respect of the share but, if
more than one of them is present at the Meeting or represented by proxyholder, that one of them
whose name appears first in the register of members in respect of the share, or that ones
proxyholder, will alone be entitled to vote in respect thereof. Where the form of proxy is signed
by a corporation, either its corporate seal must be affixed or the form should be signed by the
corporation under the hand of an officer or attorney duly authorized in writing.
A shareholder has the right to appoint a person, who need not be a shareholder, other than either
of the nominees designated in this form of proxy to attend and act for the shareholder and on the
shareholders behalf at the Meeting, and may do so by inserting the name of that other person in
the blank space provided for that purpose in this form of proxy or by completing another suitable
form of proxy.
The shares represented by this proxy will be voted in accordance with the instructions of the
shareholder on any ballot, and where a choice with respect to a matter to be acted on is specified
the shares will be voted on a ballot in accordance with that specification. This proxy confers
discretionary authority with respect to amendments or variations to matters identified or referred
to in the accompanying Notice of Meeting for which no instruction is given, and with respect to
other matters that may properly come before the Meeting.
If the position opposite an item of business in this proxy is left blank, no instruction is given
by the shareholder in respect of that matter.
IN RESPECT OF A MATTER SO IDENTIFIED OR REFERRED TO FOR WHICH NO INSTRUCTION IS GIVEN, THE NOMINEES
NAMED IN THIS PROXY WILL VOTE SHARES REPRESENTED THEREBY FOR THE APPROVAL OF SUCH MATTER.
Affix label here
Name of Shareholder
Address of Shareholder
(Please advise the Corporation of any change of address)
SHAREHOLDER CONSENT TO DELIVERY OF ELECTRONIC MATERIALS
Ivanhoe Mines Ltd. (the Company) is introducing a voluntary option for the delivery of Company
documents to its shareholders (Shareholders) by electronic means rather than traditional mailing
of paper copies. This option allows the Company to provide its shareholders a convenient method of
receiving materials meant to increase timeliness for Shareholders, provide benefits to our
environment and reduce costs.
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I consent to the electronic delivery of the documents listed below that the Company elects
to deliver to me electronically, all in accordance with the terms hereof. The consent granted
herein will last until revoked by the Shareholder.
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1.
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The following documents that are filed with securities regulators and mailed to other
Shareholders will at the same time be delivered electronically to me (collectively referred to
as the Documents or each of them as a Document):
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a)
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annual reports including financial statements;
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b)
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quarterly reports, including financial statements;
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c)
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management information circulars; and
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d)
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such other disclosure documents that the Company makes available by electronic means.
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2.
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The Documents will be delivered to me by the Company by making them available for my viewing,
downloading and/or saving on the Internet website
www.IvanhoeMines.com
(the
Website).
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I must then go to Investor Information and Financial Reports and locate the document of
interest for viewing.
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The Company will advise me by e-mail when the documents are available on the Website.
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3.
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The viewing, downloading and/or saving of a Document requires me to use:
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a)
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a computer with a 486/33 processor (or MacIntosh LC III) or higher with at least 16
megabytes of RAM (Random Access Memory) and Windows 3.1;
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b)
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access to an Internet service provider;
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c)
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the program Netscape Navigator 3.0 (or higher) or Microsoft Internet Explorer 3.0 (or
higher);
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d)
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the program Adobe Acrobat Reader 3.0 (or higher) to read the material; and
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e)
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an electronic mail account to receive notification.
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For Shareholders without Adobe Acrobat Reader, a link will be provided to allow the downloading
of this program. Accordingly, I acknowledge that I understand the above technical requirements
and that I possess the technical ability and resources to receive electronic delivery in the
manner outlined in this Consent to Electronic Delivery of Documents.
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4.
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I acknowledge that I may receive at no cost a paper copy of any Document to be delivered if
the Company cannot make electronic delivery available or if I contact the Companys transfer
agent, CIBC Mellon by telephone at (800) 387-0825, regular mail at
Ivanhoe Mines Ltd. c/o CIBC Mellon Trust Company, PO Box 1900, Vancouver, BC, V6C 3K9 or via
electronic mail at
inquiries@cibcmellon.com
. I further acknowledge that my request of
a paper copy of any Document does not constitute revocation of this Consent to Electronic
Delivery of Documents.
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5.
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The Documents will be posted on the Website for delivery for a period of time corresponding
to the notice period stipulated under applicable legislation and the Documents will remain
posted on the Website thereafter for a period of time which is appropriate and relevant, given
the nature of the document.
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6.
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I understand that my consent may be revoked or changed at any time by notifying the Companys
transfer agent of such revocation or changed by telephone, regular mail or e-mail as specified
in paragraph 4 above.
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7.
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I understand that the Company maintains in confidence the personal information I provide as a
Shareholder and uses it only for the purpose of Shareholder communication.
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8.
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I understand that I am not required to consent to the electronic delivery of Documents. I
have read and understand this Consent to Electronic Delivery of Documents and I consent to
the electronic delivery of Documents on the foregoing terms.
|
I have read and understand this Consent for Electronic Delivery of Documents for
Ivanhoe
Mines Ltd.
and consent to the electronic delivery of the Documents on the terms outlined above.
Please complete the sections below then mail or fax the form to CIBC Mellon Trust Company at the
address below.
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Print Shareholder(s) Name
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Mailing Address
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(as it appears on your cheques,
certificates, statements or correspondence)
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Address 1
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E-mail Address
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Address 2
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Date:
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City, Province/State
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Shareholder Signature(s)
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Country
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Post Code/Zip Code
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Print and mail this form to:
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Or mail to:
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CIBC Mellon Trust Company
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CIBC Mellon Trust Company
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PO Box 1900
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PO Box 7010
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Vancouver, BC V6C 3K9
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Adelaide Street Postal Station
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Or Fax to
: 1- 604-688-4301
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Toronto, ON M5C 2W9
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Or Fax to:
1-416-643-5501
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IVANHOE MINES LTD.
Dear Shareholder:
As a non-registered shareholder of
Ivanhoe Mines Ltd.,
you are entitled to receive our interim
financial statements, annual financial statements, or both. If you wish to receive them, please
either complete and return this card by mail or submit your request online (see address below).
Your name will then be placed on the Supplemental Mailing List maintained by our Transfer Agent and
Registrar, CIBC Mellon Trust Company.
As long as you remain a non-registered shareholder, you will receive this card each year and will
be required to renew your request to receive these financial statements. If you have any questions
about this procedure, please contact CIBC Mellon Trust Company by phone at 1-800-387-0825 or (416)
643-5500 or at
www.cibcmellon.com/InvestorInquiry.
We encourage you to submit your request online at:
www.cibcmellon.com/FinancialStatements
.
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Our Company Code Number is 3086B.
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NOTE: Do not return this card by mail if you have submitted your
request online
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REQUEST FOR FINANCIAL STATEMENTS
TO: CIBC Mellon Trust Company
Please add my name to the Supplemental Mailing List for
Ivanhoe Mines Ltd.
and send me their
financial statements as indicated below:
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Interim Financial Statements
o
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(Please Print)
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Annual Financial Statements
o
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Name
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Address
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Postal Code/Zip Code
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SIGNATURES
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.
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IVANHOE MINES LTD.
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Date:
April 7, 2010
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By:
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/s Beverly A. Bartlett
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BEVERLY A. BARTLETT
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Vice President &
Corporate Secretary
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