(1) | Title of each class of securities to which transaction applies: |
(2) | Aggregate number of securities to which transaction applies: |
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): |
(4) | Proposed maximum aggregate value of transaction: |
(5) | Total fee paid: |
(1) | Amount Previously Paid: |
(2) | Form, Schedule or Registration Statement No.: |
(3) | Filing Party: |
(4) | Date Filed: |
1224 Washington Avenue, Miami Beach,
1. | To elect |
2. | To approve the Stock Option Plan Resolution. The Board recommends that Stockholders vote "FOR" this proposal. |
3. | To ratify the appointment of MNP LLP, Chartered Accountants, as the |
4. | To consider and, if deemed advisable, |
5. | To transact such other business as may properly come before the |
5. To consider and, if deemed advisable, approve an advisory vote on executive compensation.
6. To consider an advisory vote determining the frequency of future executive compensation advisory votes.
7. To transact such other business as may properly come before the Meeting.
2, 2015
REGARDLESS OF THE NUMBER OF SHARES YOU OWN OR WHETHER YOU PLAN TO ATTEND THE MEETING, IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AND VOTED. Whether
1224 Washington Avenue, Miami Beach,
22, 2015
.
Our registered United States office is located at 1224 Washington Avenue, Miami Beach, FL 33139525 93 Street, Surfside, Florida 33154 USA and our principal business office is located at 520 – 141 Adelaide Street West, Toronto, Ontario, M5H 3L5, Canada.
of the Meeting
To Be Considered By Stockholders
Election of Directors |
Approval of the Stock Option Plan Resolution. |
3. | Ratification of the appointment of an Independent Registered Public Accounting Firm |
To approve an amendment, by Disinterested Shareholder Approval as defined in this document, to the Company’s Amended and Restated Stock Option Plan (the “Plan”) to increase the authorized number of options for Shares of the Company authorized to be issued to 37,500,000 from 32,500,000.
(4) Ratify and Approve the Company completing a private placement of Subscription Receipts where the number of Shares and share purchase warrants issuable on exercise of the Subscription is likely to exceed 25% of the current outstanding Share capital and where the purchase price of the Shares may be sold at a discount to market price
The funds raised via this private placement will be primarily used for the completion of a Bankable Feasibility Study, which includes a comprehensive Environmental and Geo-Technical Study in preparation for finalizing mine design parameters and as a prerequisite for future project financing. A portion of funds will also be allocated to producing larger quantities (40-50 tonnes) of Molo graphite concentrate to provide potential off-take partners with additional material for product evaluation purposes.
Approve an advisory vote on executive compensation. |
As required by the rules of the Securities Exchange Commission, to approve an advisory vote determining the frequency required to hold a vote on executive compensation.
compensation as outlined within this document.
Election of Directors |
Approval of the Stock Option Plan Resolution. |
3. | Ratification of the appointment of an Independent Registered Public Accounting Firm |
Disinterested Shareholder Approval, as defined in this document, of an amendment to the Company’s Plan to increase the authorized number of options exercisable to acquire Shares of the Company authorized to be issued to 37,500,000 from 32,500,000 will require the affirmative vote of a majority of the votes cast. This proposal will require the affirmative vote of a majority of the votes cast. For purposes of this vote, votes to abstain will have the same effect as votes against.
(4) Ratify and Approve the Company completing a private placement of Subscription Receipts where the number of Shares and share purchase warrants issuable on exercise of the Subscription is likely to exceed 25% of the current outstanding Share capital and where the purchase price of the Shares may be sold at a discount to market price
The proposal to ratify and approve completing the private placement of Subscription Receipts requires an affirmative vote of the majority of votes cast. For purposes of this vote, votes to abstain will have the same effect as votes against.
Approve an advisory vote on executive compensation |
The proposal to determine the frequency of advisory votes on executive compensation is a non-binding resolution. The proposal will pass with an affirmative vote received by the majority
Voting of Proxies
discretionary authority to vote, or otherwise act, with respect to such matters in accordance with their judgment.
TO approve by an advisory vote on executive officer compensation.
Attendance at the Meeting will not by itself constitute revocation of a proxy. If an adjournment occurs, it will have no effect on the ability of stockholders of record as of the record date to exercise their voting rights or to revoke any previously delivered proxies. We do not expect to adjourn the meeting for a period of time long enough to require the setting of a new record date.
& Trust Company, which will contain information on how to obtain electronic and paper copies of the Meeting Materials in advance of the Meeting.
SOLICITATION OF PROXIES
STATEMENTS REGARDING FORWARD-LOOKING INFORMATION
This proxy statement contains forward-looking statements within the meaning As a result, public companies are now permitted to advise their shareholders of the Private Securities Litigation Reform Actavailability of 1995. These forward-looking statements relate to the financial condition, results of operations, cash flows, financing plans, business strategies, capital and other expenditures, competitive positions, growth opportunities for existing products, plans and objectives of management and other matters. Statements in this document that are not historical facts are identified as forward-looking statements for the purposeall proxy-related materials on an easily accessible website, rather than mailing physical copies of the safe harbor provided by Section 21E ofmaterials.
When we use the words "anticipate," "estimate," "project," "intend," "expect," "plan," "believe," "should," "likely" and similar expressions, we are making forward-looking statements. These forward-looking statements are found at various places throughout this proxy statement and any other documents we incorporate by reference in this proxy statement. We caution you not to place undue reliance on these forward-looking statements, which speak only as of the date they were made. We do not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this proxy statement or to reflect the occurrence of unanticipated events. These forward-looking statements, including statements relating to future business prospects, revenues, working capital, liquidity, capital
needs and income, wherever they occur in this proxy statement, are estimates reflecting judgment. These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Forward-looking statements should, therefore, be considered in light of various important factors, including those set forth in this proxy statement and those discussed from time to time in our Securities and Exchange Commission or SEC, reports, including ourpublished the Notice of Internet Availability of Proxy Materials (amended from the 2007 rule). The rule provided that a corporation may now post searchable and printable copies of its regulatory shareholder documents and proxy materials on a public website; a corporation must then mail its shareholders at least 40 days prior to its annual report on Form 10-K formeeting informing them where and how they can access the year ended June 30, 2013 filed with the SEC on September 26, 2013information; a corporation must mail a printed copy of all materials to a shareholder that requests one, and our filed quarterly reports on Form 10-Q. You should read and consider carefully the information about these and other risks set forth under the caption "Risk Factors" in such filings.
Voting Securities and Principal Holders Thereof
The authorized share capitalthis must be mailed within three business days of the request; and that corporations can solicit and store a shareholder's future regulatory communication preferences.
Meeting.
Nominees
The following table sets forth the name, age and position of each executive officer and director the Company as at October 1, 2013. Directors of the Company hold their offices until the next annual meeting of the Company’s shareholders or until their successors have been duly elected and qualified or until their earlier resignation, removal of office or death. Executive officers of the Company are appointed by the Board of Directors (the “Board”) to serve until their successors are elected and qualified.There are no family relationships between any director or executive officer of the Company.
Name |
Age |
Position |
Principal Occupation |
Director Since | # of Voting Securities Beneficially Owned, or Controlled or Directed, Directly or Indirectly(1) |
V. Peter Harder (Manotick, Canada) | 61 | Director, Chairman of the Board of Directors | Senior Policy Advisor-Dentons | July 2009 | 350,000 |
Richard E. Schler (Toronto, Canada) | 60 | Director, Chief Executive Officer | Mining Executive | April 2006 | 4,130,000 |
Craig Scherba (Oakville, Canada) | 41 | Director, President and Chief Operating Officer | Professional Geologist | January 2010 | Nil |
John Sanderson (Vancouver, Canada) | 78 | Director, Vice-Chairman of the Board of Directors | Lawyer and arbitrator | January 2009 | 250,000 |
Quentin Yarie (Toronto, Canada) | 48 | Director | Professional Geologist | December 2008 | 325,000 |
Johann de Bruin (Pretoria, South Africa) | 43 | Director | Professional Engineer, Partner-DRA Mineral Projects | February 2012 | 300,000 |
Albert A. Thiess, Jr. (Bluffton, USA) | 66 | Director | Retired, Certified Public Accountant (CPA) | May 2012 | 100,000 |
The information as to principal occupation and shares beneficially owned, or controlled or directed, directly or not directly, not being within the knowledge of the Company, has been furnished by the respective nominees.
Name | Age | Company Position | Principal Occupation | Director Since | # of Voting Securities Beneficially Owned, or Controlled or Directed, Directly or Indirectly (3) |
V. Peter Harder(1) (Manotick, Canada) | 63 | Director, Chairman of the Board of Directors | Senior Policy Advisor-Dentons | July 2009 | 3,150,000 |
John Sanderson(1) (Vancouver, Canada) | 80 | Director, Vice-Chairman of the Board of Directors | Lawyer and arbitrator | January 2009 | 1,700,000 |
Craig Scherba(2) (Oakville, Canada) | 43 | Director, President & Chief Executive Officer | President & CEO of the Company | January 2010 | 3,900,000 |
Quentin Yarie(2) (Toronto, Canada) | 50 | Director | President & CEO of Red Pine Exploration Inc. and Honey Badger Exploration Inc. and President of MacDonald Mines Exploration Inc. | December 2008 | 3,100,000 |
Robin Borley(2) (Johannesburg, South Africa) | 47 | Director, Senior Vice President – Mine Development | SVP-Mine Development of the Company | December 2013 | 850,000 |
Albert A. Thiess, Jr. (1) (Bluffton, USA) | 68 | Director | Retired, U.S. Certified Public Accountant (CPA) | May 2012 | 725,000 |
Dean Comand (1) (Ancaster, Canada) | 49 | Director | Professional Engineer. Consultant - mining and energy sectors | October 2014 | 400,000 |
Dalton Larson (1) (Surrey, Canada) | 75 | Director | Lawyer and arbitrator | October 2014 | 1,300,000 |
legal issues.
John Sanderson Q.C. (Vancouver, Canada): Mr. Sanderson has been the Company’s Vice Chairman of the Board since October 2009 and a director of our Company since January 2009. Mr. Sanderson is a mediator, arbitrator, consultant and lawyer called to the bar in the Canadian provinces of Ontario and British Columbia. Mr. Sanderson’s qualifications to serve as a director include his many years of legal and mediation experience in various industries. He has acted as mediator, facilitator and arbitrator in British Columbia, Alberta, Ontario and the Northwest Territories, in numerous commercial transactions, including insurance claims, corporate contractual disputes, construction matters and disputes, environmental disputes, inter-governmental disputes, employment matters, and in relation to aboriginal claims. He is a member of mediation and arbitration panels with the British Columbia Arbitration and Mediation Institute, the British Columbia International Commercial Arbitration Centre & Mediate BC.
December 2012.
Recommendation
the Law Society of British Columbia. He commenced practice as a member of the Faculty of Law, University of British Columbia, subsequently becoming a partner of a major Vancouver Law firm, now McMillan LLP. Currently, he maintains a private practice along with a vigorous investment business. He is a recognized expert in alternate dispute resolution and has extensive experience as a professional arbitrator and mediator. He has three degrees, including a Masters Degree in law from the University of London, England. His business activities include more than 25 years as a director of several investment funds managed by the CW Funds group of companies, affiliated with Ventures West Management Inc., which is one of the largest venture capital firms in Canada. The CW Funds raised and invested in a wide variety of businesses totalling more than $130 million, primarily from overseas investors. In that period he served as Chairman of the board of directors of a Philippine ethanol company. He was the founding shareholder of the First Coal Corporation, which raised in excess of $65 million in equity to finance its development activities and started operations in 2014. This company was sold to Xstrata in excess of $150 million.
STATEMENT
Corporate Governance
In accordance with National Instrument 58-101 –DisclosureTHE STOCK OPTION PLAN RESOLUTION
the Stock Option Plan as more particularly described in the management information circular dated November 2, 2015 is hereby ratified and approved, subject to regulatory approval and such changes, additions or alterations thereto as the board of directors of the Company may approve on advice of counsel; and |
(2) | any one director or officer of the Company be authorized for and on behalf of the Company to execute and deliver such documents and instruments and to take all such other actions as such director or officer may determine necessary or desirable to implement the foregoing resolutions and the matters authorized herein, such determination to be conclusively evidenced by the execution and delivery of such documents and instruments or the taking of such actions. |
The Board is committed to sound corporate governance practices, which are both in the interest of its shareholders and contribute to effective and efficient decision making. The Board is
Directorships
The following directorsany shareholder of the Company are presently directorsat or prior to the Meeting upon request to the Secretary of the Company. If shareholders approve the Stock Option Plan, no additional option grants will be made under the Previous Plan.
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“TSX-V” = Toronto Venture Stock Exchange, NYSE = New York Stock Exchange
Other Board Committees
The Company’s Board has established four committees: the Audit Committee, Special Advisors Committee, Disclosure Committee and Capital Projects Committee. The Company’s Board does not currently have any nominating, compensation, or committees not listed above. The entire Board performs the functions performed by those other committees. DueAppendix B to the sizeproxy statement.
Audit Committee and its Compensation
The following directors serve ondetermined by the Audit Committee, all of whom are independent as per the independence standards of the NYSE Amex in the United States of America and the standards of NI 58-101 in Canada: John Sanderson, V. Peter Harder and Albert A. Thiess Jr., all of whom are financially literate (see biographies under “Nominees” section above). Each are independent directors as they do not have involvement in the day-to-day operations of the Company. The audit committee is a key component of the Company’s commitment to maintaining a higher standard of corporate responsibility.
The audit committee assists our Board in its oversightsole discretion) after the date on which the optionee's employment is terminated for any reason other than by reason of (a) cause, (b) the termination of the company’s accounting and financial reporting processes and the audits of the company’s financial statements, including (i) the quality and integrity of the company’s financial statements, (ii) the company’s compliance with legal and regulatory requirements, (iii) the independent auditors’ qualifications and independence and (iv) the performance of the company’s internal audit functions and independent auditors, as well as other matters which may come before it as directed by the board of directors. Further, the audit committee, to the extent it deems necessary or appropriate, among its several other responsibilities, shall:
Orientation and Continuing Education
The Company does not provide a formal orientation and education program for new directors. New directors are given an opportunity to familiarize themselvesoptionee's employment with the Company by visitingsuch optionee following less than 60 days' prior written notice to the Company of such termination, (c) a mental or physical disability, or (d) death; (ii) immediately upon (a) the termination by the Company of the optionee's employment for cause, or (b) an improper termination; (iii) the later of (a) the expiration of a period not to exceed one year (such period to be determined by the Board in its sole discretion) after the date on which the optionee's employment is terminated by reason of a mental or physical disability, or (b) one year after the date on which the optionee shall die if such death shall occur during such period; (iv) one year after the date of termination of the optionee's employment by reason of death of the employee; or (v) the expiration date of the Option established on the date of grant and set forth in the option agreement. Upon termination of optionee's employment any Option (or portion thereof) not previously vested or not yet exercisable pursuant to the terms of the Plan shall be immediately cancelled.
Ethical Business Conduct
The roleextent of the Boardspread, and the Company can claim a tax deduction for the same amount.
Special Advisory Committee
The Company has establishedStock Option Plan Resolution. In order to be approved, this resolution must be approved by not less than a special advisory committee to help oversee its project in Madagascar. The Special Advisory Committee consists of Robin Borley, Kirk McKinnon, Anthony G. Toldo and Marc Hein LL.D. The purpose of this committee is to assist the Company in securing financing and strategic partners for the development of the Madagascar properties, including liaison with governmental and regulatory bodies in Madagascar.
Disclosure Policy and Disclosure Committee
During fiscal 2010, the Board adopted a Disclosure Policy and created a Disclosure Policy Committee. This committee consists of the Chairman, the Chief Executive Officer, the President, the Chief Financial Officer and the Senior Vice President of Corporate Development. The majority of the Committee must approve all disclosure made by the Company with such majority being made up of at least two directors. The objective of the Disclosure Policy is to ensure that communications with the investing public are timely, factual and accurate, and broadly disseminated in accordance with all applicable legal and regulatory requirements. The Disclosure Policy extends to all employees of the Company, its Board, those authorized to speak on its behalf and all other insiders. It covers disclosures in documents filed with securities regulators, financial and non-financial disclosure, including management's discussion and analysis, written statements made in the Company's annual and interim reports, news releases, letters to shareholders, presentations by senior management, information on the Company's web site and other electronic communications. It extends to oral statements made in meetings and telephone conversations with analysts and investors, media interviews, speeches and press conferences.
Capital Projects Committee
The Capital Projects Committee was formed in 2010 to advance the Madagascar. Currently, Richard Schler (Chairperson), Albert A. Thiess, Jr., Craig Scherba and Peter Liabotis are members of this committee.
The Board of Directors Relationship with Management
Both the Chief Executive Officer and President of the Company are members of the Board, as is usual in a company of this size. The Board feels that this is not an impediment to the proper discharge of its responsibilities. Interaction between management and the Board, inside and outside Board meetings, ensures that the Board is informed and the Board members' experience utilized by management. The Board remains cognizant to corporate governance issues and seeks to set up structures to ensure the effective discharge of its responsibilities without creating additional costs. The Board is committed to ensuring the Company’s long-term viability, and the well-being of its employees, consultants and of the communities in which it operates. The Board has also adopted a policy of permitting individual directors under appropriate circumstances to engage legal, financial or other expert advisorsvotes cast at the Company’s expense.
Nomination of Directors
The Board performs the functions of a nominating committee who appoints and assesses of directors. There are no specific criteria for Board membership. The Company seeks to attract and maintain directors with business expertise, and in particular, knowledge of mineral development, geology, investment banking, corporate law and finance. Nominations tend to be the result of recruitment efforts by management and directors, which are then presented to the Board for consideration.
Compensation and Assessment
The Board determines the compensation for the Company’s directors and officers, based on industry standards and the Company’s financial situation. Other than stock options granted to directors from time to time, directors currently do not receive any remuneration for their acting in such capacity. The Board assesses, on an annual basis, the contribution of the Board as a whole and each individual director, in order to determine whether each is functioning effectively. If prudent, changes are made.
Code of Ethics
The Company has adopted a code of business conduct and ethics that applies to its directors, officers, and employees, including its principal executive officers, principal financial officer, principal accounting officer, controller or persons performing similar functions. The Financial Code of Business Conduct was filed as Exhibit 14.1 to our Annual Report on Form 10-QSB for June 30, 2004 as filed on May 19, 2004.
Meetings of the Board and Committees
The Board and the Audit Committee each met either in person or by telephone three times during the 2013 fiscal year. Each director attended all the meetings of the Board, and each Audit Committee member attended all meetings of that committee.
Audit Committee Information
National Instrument 52-110 (“NI 52-110”) requires that certain information regarding the Audit Committee be included in the management information circular sent to shareholders in connection with the issuer’s annual meeting.
Audit Committee Charter
The full text of the charter of the Company’s Audit Committee is attached hereto as “Appendix A”.
Audit Committee Oversight
Since January 1, 2009, no recommendation of the audit committee to nominate or compensate an external auditor has been adopted by the Board.
Pre-approval Policies and Procedures
The Company has not yet adopted any specific policies or procedures for the engagement of non-audit services but such matters are the subject of review and pre-approval by the Audit Committee.
Compensation of Executives
Summary Compensation
The table below sets forth certain summary information concerning the compensation paid or accrued during each of our last three completed fiscal years to our principal executive officer and four other most highly compensated executive officers who received compensation over $100,000 for the fiscal year ended June 30, 2013 (collectively, the “Named Executive Officers”). This chart includes J.A. Kirk McKinnon who resigned as Chief Executive Officer and Chairman of the Board of Directors on September 12, 2013:
Name and Principal Position |
Fiscal Year | Salary ($) | Bonus ($) | Stock Awards NOTE 2 | Option Awards ($) | Non Equity Inventive Plan Compens-aton ($) | Change in Pension Value and Non Qualified Deferred Compensation Earnings ($) |
All Other Compens-ation NOTE 1 |
Total ($) NOTE 1 |
J.A. Kirk McKinnon, Former CEO and Director | 2013 | 268,360(5) | 0 | 0 | 0 | 0 | 0 | 380,118 (1) | 648,478(1) |
2012 | 248,207(4) | 0 | 0 | 0 | 0 | 0 | 739,062 (1) | 987,269(1) | |
2011 | 261,810(3) | 0 | 0 | 0 | 0 | 0 | 0 | 261,810 | |
Richard E. Schler, CEO and Director ** | 2013 | 197,008(5) | 0 | 0 | 0 | 0 | 0 | 280,428 (1) | 477,438(1) |
2012 | 201,407(4) | 0 | 0 | 0 | 0 | 0 | 557,033 (1) | 758,440(1) | |
2011 | 189,490(3) | 0 | 0 | 0 | 0 | 0 | 0 | 189,490 | |
Craig Scherba President, COO and Director | 2013 | 130,000(5) | 0 | 0 | 0 | 0 | 0 | 134,700 (1) | 264,700(1) |
2012 | 105,214(4) | 0 | 0 | 0 | 0 | 0 | 260,035 (1) | 365,249(1) | |
2011 | 71,048(3) | 0 | 0 | 0 | 0 | 0 | 0 | 71,048 | |
Brent Nykoliation, Senior Vice President | 2013 | 190,009 (5) | 0 | 0 | 0 | 0 | 0 | 125,720 (1) | 315,729(1) |
2012 | 162,085(4) | 0 | 0 | 0 | 0 | 0 | 275,345(1) | 437,430(1) | |
2011 | 99,488 (3) | 0 | 0 | 0 | 0 | 0 | 0 | 99,488 | |
Peter D. Liabotis, Chief Financial Officer | 2013 | 171,500(5) | 0 | 0 | 0 | 0 | 0 | 98,780 (1) | 270,280(1) |
2012 | 168,764(4) | 0 | 0 | 0 | 0 | 0 | 247,975(1) | 416,739(1) | |
2011 | 67,309(3) | 0 | 0 | 0 | 0 | 0 | 0 | 67,309 |
** Mr. Schler was appointed Chief Executive Officer on September 19, 2013.
(2) The amounts, if any, in the “Stock Awards” column of the “Summary Compensation” table have been calculated based upon the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 and there are no awards subject to performance conditions.
(3) Consulting fees paid and accrued for the fiscal year ended June 30, 2011.
(4)Salary and/or consulting fees paid and accrued for the fiscal year ended June 30, 2012.
(5) Salary and/or consulting fees paid and accrued for the fiscal year ended June 30, 2013.
Employment Agreements
The Company does not have an employment agreement or consulting agreement with Messrs. Schler, Scherba, Liabotis or Nykoliation. Each receives consulting fees and/or monthly salaries. Messrs. Scherba, Schler, Liabotis and Nykoliation receive approximately CAD$12,000 per month, although the compensation varies from month to month depending on various factors.
Outstanding Stock Options and Stock Appreciation Rights Grants
Outstanding stock options granted to Named Executive Officers (“NEO’s”) and Directors as at June 30, 2013 are as follows:
Option Awards | |||||
Name | No. of Securities Underlying Unexercised Options Exercisable (#) | No. of Securities Underlying Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date |
J.A. Kirk McKinnon, *** Former CEO and Director*** | 225,000 1,150,000 675,000 575,000 650,000 1,420,000 975,000 800,000 | 0 | 0 | 0.352 0.395 0.30 0.20 0.21 0.28 0.29 0.21 | Sept 2, 2013 May 11, 2016 July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 July 13, 2016 February 27, 2018 |
Richard E. Schler CEO and Director
| 200,000 1,100,000 600,000 225,000 200,000 1,340,000 675,000 650,000 | 0 | 0 | 0.352 0.395 0.30 0.20 0.21 0.28 0.29 0.21 | Sept 2, 2013 May 11, 2016 July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 July 13, 2016 February 27, 2018 |
Craig Scherba, President, COO and Director | 250,000 350,000 200,000 200,000 400,000 750,000 | 0 | 0 | 0.395 0.30 0.20 0.21 0.28 0.21 | May 11, 2016 July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 February 27, 2018 |
Brent Nykoliation, Senior Vice President
| 400,000 450,000 200,000 200,000 350,000 700,000 | 0 | 0 | 0.395 0.30 0.20 0.21 0.28 0.21 | May 11, 2016 July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 February 27, 2018 |
Peter D. Liabotis, Chief Financial Officer | 250,000 350,000 200,000 200,000 350,000 550,000 | 0 | 0 | 0.395 0.30 0.20 0.21 0.28 0.21 | May 11, 2016 July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 February 27, 2018 |
***Mr. McKinnon resigned as Chief Executive Officer and Chairman of the Board of Directors on September 12, 2013.
The Company has no stock appreciation rights.
Outstanding Stock Awards at Year End
The outstanding equity awards as at June 30, 2013 are as follows:
Name | Stock awards | |||||
Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested (#) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($) | |||
J.A. Kirk McKinnon, NEO*** | 0 | 0 | 0 | 0 | ||
Richard E. Schler, NEO | 0 | 0 | 0 | 0 | ||
Craig Scherba, NEO | 0 | 0 | 0 | 0 | ||
Brent Nykoliation, NEO | 0 | 0 | 0 | 0 | ||
Peter D. Liabotis, NEO | 0 | 0 | 0 | 0 | ||
***Mr. McKinnon resigned as Chief Executive Officer and Chairman of the Board of Directors on September 12, 2013.
Options Exercises and Stocks Vested
Options exercised and stocks vested as at June 30, 2013 are as follows:
Name | Option awards | Stock awards | ||
Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Investing ($) | |
J.A. Kirk McKinnon, NEO*** | 0 | 0 | 0 | 0 |
Richard E. Schler, NEO | 0 | 0 | 0 | 0 |
Craig Scherba, NEO | 0 | 0 | 0 | 0 |
Brent Nykoliation, NEO | 0 | 0 | 0 | 0 |
Peter D. Liabotis, NEO | 0 | 0 | 0 | 0 |
***Mr. McKinnon resigned as Chief Executive Officer and Chairman of the Board of Directors on September 12, 2013.
Grants of Plan-Based Awards
Grants of plan-based awards are as follows:
Name | Grant date | Estimated future payouts under non-equity incentive plan awards | Estimated future payouts under equity incentive plan awards | All other stock awards: Number of shares of stock or units (#) | All other option awards: Number of securities underlying options (#) | Exercise or base price of option awards ($/Sh) | Grant date fair value of stock and option awards | ||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||
J.A. Kirk McKinnon, NEO*** | n/a | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Richard E. Schler, NEO | n/a | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Craig Scherba, NEO | n/a | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Brent Nykoliation, NEO | n/a | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Peter D. Liabotis, NEO | n/a | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
***Mr. McKinnon resigned as Chief Executive Officer and Chairman of the Board of Directors on September 12, 2013.
Reference – Grant Date - n/a = not applicable.
As at June 30, 2013, the Company had no formalized deferred compensation plan.
Name | Executive contributions in last FY ($) | Registrant contributions in last FY ($) | Aggregate earnings in last FY ($) | Aggregate withdrawals/ distributions ($) | Aggregate balance at last FYE ($) |
J.A. Kirk McKinnon, NEO*** | 0 | 0 | 0 | 0 | 0 |
Richard E. Schler, NEO | 0 | 0 | 0 | 0 | 0 |
Craig Scherba, NEO | 0 | 0 | 0 | 0 | 0 |
Brent Nykoliation, NEO | 0 | 0 | 0 | 0 | 0 |
Peter D. Liabotis, NEO | 0 | 0 | 0 | 0 | 0 |
***Mr. McKinnon resigned as Chief Executive Officer and Chairman of the Board of Directors on September 12, 2013.
Golden Parachute Compensation
As at June 30, 2013, the Company had no arrangements in place relating to the termination of employees.
Name | Cash ($) | Equity ($) | Pension/NQDC ($) | Perquisites/benefits ($) | Tax reimbursement ($) | Other ($) | Total ($) |
J.A. Kirk McKinnon, NEO*** | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Richard E. Schler, NEO | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Craig Scherba, NEO | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Brent Nykoliation, NEO | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Peter D. Liabotis, NEO | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
***Mr. McKinnon resigned as Chief Executive Officer and Chairman of the Board of Directors on September 12, 2013.
Aggregated Option Exercises and Fiscal Year-End Option Values
On March 9, 2006, the Company filed a Form S-8 registration statement in connection with its newly adopted Stock Option Plan (the “Plan”) allowing for the direct award of shares or granting of stock options to acquire up to a total of 2,000,000 Shares. On December 18, 2006, February 16, 2007, July 11, 2007, September 29, 2009, May 3, 2011, March 1, 2012 and February 27, 2013, the Plan was amended to increase the stock option pool by a total of 30,500,000 additional Shares. The following table summarizes the continuity of the Company’s stock options:
Number of Shares | Weighted average exercise price ($) | |
Outstanding June 30, 2011 | 14,130,000 | 0.29 |
Granted | 15,845,000 | 0.27 |
Exercised | (510,000) | 0.15 |
Expired | (2,475,000) | 0.15 |
Cancelled | (3,300,000) | 0.31 |
Outstanding, June 30, 2012 | 23,690,000 | 0.29 |
Granted | 7,595,000 | 0.23 |
Exercised | (700,000) | 0.15 |
Expired | (1,695,000) | 0.15 |
Cancelled | (1,750,000) | 0.32 |
Outstanding, June 30, 2013 | 27,140,000 | 0.28 |
Additional information regarding options outstanding as at June 30, 2013 is as follows:
Outstanding | Exercisable | ||||
Exercise Price |
Number of shares | Weighted average life in years | Weighted average exercise price | Number of shares | Weighted average exercise price |
0.352 | 750,000 | 0.18 | 0.352 | 750,000 | 0.352 |
0.395 | 4,850,000 | 0.86 | 0.395 | 4,850,000 | 0.395 |
0.30 | 3,750,000 | 3.01 | 0.30 | 3,750,000 | 0.30 |
0.29 | 1,695,000 | 3.04 | 0.29 | 1,695,000 | 0.29 |
0.20 | 1,850,000 | 3.32 | 0.20 | 1,850,000 | 0.20 |
0.21 | 2,240,000 | 3.42 | 0.21 | 2,240,000 | 0.21 |
0.28 | 5,925,000 | 3.69 | 0.28 | 5,925,000 | 0.28 |
0.23 | 180,000 | 3.90 | 0.23 | 180,000 | 0.23 |
0.21 | 5,900,000 | 4.67 | 0.21 | 5,900,000 | 0.21 |
The following are changes in the number of stock options outstanding subsequent to the Company’s June 30, 2013 year end, and as of the date of this report:
As a result of these transactions, 28,445,000 stock options were outstanding as of the date of this report.
Long-Term Incentive Plan Awards
There are no Long-Term Incentive Plans in place at this time.
Compensation of Directors
Directors who provide services to the Company in other capacities has been previously reported under “Summary Compensation”. The following table summarizes compensation paid to or earned by our directors who are not Named Executive Officers for their service as directors of our company during the fiscal year ended June 30, 2013.
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards(1) ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All other Comp-ensation ($) | Total(1) ($) |
V. Peter Harder, Director | 0 | 0 | 49,390(1) | 0 | 0 | 0 | 49,390(1) |
John Sanderson, Director | 0 | 0 | 17,960(1) | 0 | 0 | 0 | 17,960(1) |
Quentin Yarie, Director | 39,000 | 0 | 53,880(1) | 0 | 0 | 0 | 92,880(1) |
Johann de Bruin, Director | 0 | 0 | 17,960(1) | 0 | 0 | 0 | 17,960(1) |
Albert A. Thiess, Jr, Director | 0 | 0 | 17,960(1) | 0 | 0 | 0 | 17,960 (1) |
(1) The values in the “Option Awards” and included within the “Total” columns above do not represent a cash payment of any kind. Rather these values represent the calculated Black-Scholes theoretical value of granted options. It is important to note that these granted options may or may not ever be exercised. Whether granted options are exercised or not will be based primarily, but not singularly, on the Company’s future stock price and whether the granted options become “in-the-money”. If these granted options are unexercised or expire, the cash value or benefit to the above directors is $nil.
Pension Benefits
As of June 30, 2013, the Company had no pension or retirement plans.
Name | Plan name | Number of years credited service (#) | Present value of accumulated benefit ($) | Payments during last fiscal year ($) |
J.A. Kirk McKinnon, NEO*** | not applicable | 0 | 0 | 0 |
Richard E. Schler, NEO | not applicable | 0 | 0 | 0 |
Craig Scherba, NEO | not applicable | 0 | 0 | 0 |
Brent Nykoliation, NEO | not applicable | 0 | 0 | 0 |
Peter D. Liabotis, NEO | not applicable | 0 | 0 | 0 |
***Mr. McKinnon resigned as Chief Executive Officer and Chairman of the Board of Directors on September 12, 2013.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth certain information regarding beneficial ownership of our Shares as of October 10, 2013, by: (i) each party known by the Company to own beneficially more than 5% of our Shares; (ii) each director of the Company; (iii) each of the Named Executive Officers; and (iv) all directors and executive officers of the Company as a group.
The number and percentage of shares beneficially owned is determined in accordance with Rule 13d-3 under the Exchange Act, and the information is not necessarily indicative of beneficial ownership for any other purpose. The Company believes that each individual or entity named has sole investment and voting power with respect to the securities indicated as beneficially owned by them, subject to community property laws, where applicable, except where otherwise noted. The “Number of Shares Beneficially Owned” in calculated based on total shares held plus warrants held (plus stock options entitled to exercise). The aggregate of these items, which totals 225,094,920, will be used as the denominator for the percentage calculation below.
Name and Address of Beneficial Owner | Number of Shares Beneficially Owned | Percentage of Outstanding Shares Beneficially Owned(1) |
V. Peter Harder, Chairman of the Board, Director* 5538 Pattapiece Crescent, Manotick, Ontario, Canada(2) (12) (13) | 1,575,000 | 0.70% |
Richard E. Schler, Chief Executive Officer & Director** 80 Greybeaver Trail , Toronto, Ontario, Canada(3) (13)** | 9,220,000 | 4.10% |
Craig Scherba, President, COO & Director 1480 Willowdown Road, Oakville, Ontario, Canada(4) (13) | 2,330,000 | 1.04% |
John Sanderson, Vice-Chairman & Director 1721 – 27th Street, West Vancouver, BC, Canada(5) (12) (13) |
1,000,000 |
0.44% |
Quentin Yarie, Director 196 McAllister Road, North York, Ontario (6) (13) | 1,875,000 | 0.83% |
Johann de Bruin, Director 1283 Dunwoodie Ave, Pretoria, South Africa(7) (13) | 300,000 | 0.13% |
Albert A. Thiess, Jr., Director 8 Lawson’s Pond Court, Bluffton, SC, USA(8) (12) (13) | 405,000 | 0.18% |
J.A. Kirk McKinnon, Former Chairman, CEO & Director*** 46 Ferndale Crescent , Brampton, Ontario, Canada(9) (13)* | 10,933,500 | 4.86% |
Peter D. Liabotis, Chief Financial Officer 2261 Rockingham Drive, Oakville, Ontario, Canada(10) (13) | 2,181,000 | 0.97% |
Brent Nykoliation, Senior Vice President 161 Fallingbrook Road, Toronto, Ontario, Canada(11) (13) | 3,225,000 | 1.43% |
All directors and executive officers as a group (10 persons) (12) | 33,044,500 | 14.68% |
Sources –www.sedi.ca, U.S. regulatory filings, internal schedules and the Company’s registered shareholder list.
* Mr. Harder was appointed Chairman of the Board of Directors on September 19, 2013.
** Mr. Schler was appointed Chief Executive Officer on September 19, 2013.
***Mr. McKinnon resigned as Chief Executive Officer and Chairman of the Board of Directors on September 12, 2013.
(1) Denominator used for calculation is 225,094,920. Based on total issued and outstanding Shares of 192,554,321 plus warrants outstanding of 4,095,599 plus Shares purchase Shares purchase options outstanding of 28,445,000 as of October 10, 2013.
(2) Total includes 350,000 Shares and 1,220,000 Shares purchase options exercisable between $0.11 and $0.395 per share with expiry dates between May 14, 2014 and October 9, 2018.
(3) Total include items held by “Sarmat Resources Inc.”, a related company, plus certain family members. holdings Includes 4,130,000 Shares and 5,160,000 Shares purchase options exercisable between $0.11 and $0.395 per share with expiry dates between May 14, 2014 and September 18, 2018.
(4) Total includes 2,330,000 Share purchase options exercisable between $0.11 and $0.395 per share with expiry dates between May 14, 2014 and July 9, 2018.
(5) Total includes 250,000 Shares and 750,000 Share purchase options exercisable between $0.11 and $0.395 per share with expiry dates between May 14, 2014 and September 18, 2018.
(6) Total includes 325,000 Shares and 1,500,000 Share purchase options exercisable between $0.11 and $0.395 per share with expiry dates between May 14, 2014 and September 18, 2018.
(7) Total includes 300,000 Share purchase options exercisable between $0.21 and $0.28 per share with expiry dates between March 7, 2017 and February 28, 2018.
(8) Total includes 100,000 Shares and 305,000 Share purchase options exercisable between $0.11 and $0.23 per share with expiry dates between May 23, 2017 and July 9, 2018.
(9) Total include items held by “Badger Resources Inc.”, a related company plus certain family members holdings. Includes 4,087,000 Shares and 6,440,000 Share purchase options exercisable between $0.11 and $0.395 per share with expiry dates between May 14, 2014 and September 18, 2018.
(10) Total includes 131,000 Shares and 2,050,000 Share purchase options exercisable between $0.11 and $0.395 per share with expiry dates between May 14, 2014 and July 9, 2018.
(11) Total includes 675,000 Shares and 2,550,000 Share purchase options exercisable between $0.11 and $0.395 per share with expiry dates between May 14, 2014 and September 18, 2018.
(12) Members of the Audit Committee.
(13) Parties whose shareholdings are a part of the total of “All directors and executive officers as a group (10 persons)”.
Changes in Control
We are not aware of any arrangements that may result in a change in control of the Company.
Interest of Informed Persons in Material Transactions
Except as otherwise disclosed herein, no Director or Officer of the Company, no proposed nominee for election to the Board, no person owning or exercising control over more than 10% of the Company’s issued and outstanding Shares, and no associate or affiliate of any such person hashad any material interest, direct or indirect, in any material transaction involving the Company within thefiscal year ended June 30, 2013.
Equity Compensation Plan Information
The following table sets forth information as of June 30, 2013 for all compensation plans not directly approved by the Company's security holders but issued pursuant to the shareholder approved Amended and Restated Stock Option Plan. Options reported below were issued under the Company's Plan.
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*Based on a closing price of US$0.12 on Friday June 28, 2013 and presuming all options are exercised.
***Mr. McKinnon resigned as Chief Executive Officer and Chairman of the Board of Directors on September 12, 2013.
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***Mr. McKinnon resigned as Chief Executive Officer and Chairman of the Board of Directors on September 12, 2013.
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* Mr. Harder was appointed Chairman of the Board of Directors on September 19, 2013.
** Mr. Schler was appointed Chief Executive Officer on September 19, 2013.
***Mr. McKinnon resigned as Chief Executive Officer and Chairman of the Board of Directors on September 12, 2013.
In addition, please note the following:
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s directors and executive officers, and persons who beneficially own more than 10% of a registered class of the Company’s equity securities, to file reports of beneficial ownership and changes in beneficial ownership of the Company’s securities with the SEC on FormPROPOSAL 3 (Initial Statement of Beneficial Ownership), Form 4 (Statement of Changes of Beneficial Ownership of Securities) and Form 5 (Annual Statement of Beneficial Ownership of Securities). Directors, executive officers and beneficial owners of more than 10% of the Company’s Common Stock are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms that they filed. Except as otherwise set forth herein, based solely on review of the copies of such forms furnished to the Company, or written representations that no reports were required, the Company believes that for the fiscal year ended June 30, 2013, beneficial owners and executives complied with Section 16(a) filing requirements applicable to them.
PROPOSAL 2 - RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTING FIRM
On May 13, 2013, the Company received notice that, effective June 1, 2013, MSCM LLP (“MSCM”) the Company’s independent registered public accountants, merged with MNP LLP (“MNP”). Most of the professional staff of MSCM continued with MNP either as employees or partners will continue their practice with MNP.
Recommendation of the Board of Directors
Auditors Fees
Audit Fees(1) | Audit-Related Fees(2) | Tax Fees(3) | All Other Fees(4) | |
Year ended June 30, 2013 | 63,160 | 5,000 | 5,000 | Nil |
Year ended June 30, 2012 | 74,000 | 16,500 | 9,500 | Nil |
1. Audit Fees – Audit fees were paid for professional services rendered by the auditors for the audit of the Company’s annual financial statements as well as services provided in connection with quarterly and statutory and regulatory filings within Form 10-K and Form 10-Q.
2. Audit-Related Fees – The aggregate fees, including expenses, billed by the Company’s principal accountant for services reasonably related to the audit
3. Tax Fees – Tax fees are payable in respect of tax compliance, tax advice and tax planning professional services. These services include reviewing tax returns and assisting in responses to government tax authorities.
4. All Other Fees – All other fees are payable for professional services which included accounting advice. The Company did not incur any such fees during the years ended June 30, 2013 and 2012.
Auditor Independence and Auditor’s Time on Task
Our Board of Directors considers that the work done for us in the year ended June 30, 2013 by our company’s auditors, MNP LLP (the surviving firm of our auditors, formerly MSCM LLP Chartered Accountants) is compatible with maintaining MNP LLP. All of the work expended by MNP LLP on our June 30, 2013 audit was attributed to work performed MNP LLP’s full-time, permanent employees.All of the work expended by MNP LLP, on our June 30, 2013 audit was attributed to work performed by MNP LLP full-time, permanent employees.
PROPOSAL 3 - APPROVAL OF AMENDMENTS TO THE AMENDED AND RESTATED STOCK OPTION PLAN
The following is a brief summary of the Amended and Restated Stock Option Plan (“Plan”). Shareholders are encouraged to review the entire Plan filed on Form 8-K on October 16, 2013 or athttp://www.energizerresources.com/investors/agm-data. The purpose of the Plan is to advance the interests of the Company, by providing an additional incentive to attract, retain and motivate highly qualified and competent persons who are key to the Company and upon whose efforts and judgment the success of the Company and its Subsidiaries is largely dependent.
U.S. Federal Income Tax Consequences (for U.S. citizens granted options under the Plan)
If a holder is granted a nonqualified stock option under the Plan, the holder should not have taxable income on the grant of the option. Generally, the holder should recognize ordinary income at the time of exercise in an amount equal to the fair market value of a share of our Shares at such time, less the exercise price paid. The holder's basis in the Shares for purposes of determining gain or loss on a subsequent sale or disposition of such shares generally will be the fair market value of our Shares on the date the holder exercises such option. Any subsequent gain or loss generally will be taxable as a capital gain or loss. The Company should be entitled to a federal income tax deduction at the time and for the same amount as the holder recognizes ordinary income.
A holder of an incentive stock option will not recognize taxable income upon grant. If the applicable employment-related requirements are met, the holder will not recognize taxable income at the time of exercise. However, the excess of the fair market value of our Shares received over the option price is an item of tax preference income potentially subject to the alternative minimum tax. If any of the requirements for incentive stock options under the Internal Revenue Code are not met, the incentive stock option will be treated as a nonqualified stock option and the tax consequences described above for nonqualified stock options will apply. Once an incentive stock option has been exercised, if the stock acquired upon exercise is held for a minimum of two years from the date of grant and one year from the date of exercise, the gain or loss (in an amount equal to the difference between the fair market value on the date of sale and the exercise price) upon disposition of the stock will be treated as a long-term capital gain or loss, and we will not be entitled to any deduction. If the holding period requirements are not met, the excess of the fair market value on the date of exercise over the exercise price (less any diminution in value of the stock after exercise) will be taxed as ordinary income and the Company is entitled to a deduction to the extent of the amount included in the income of the holder. Appreciation in the stock subsequent to the exercise date will be taxed as long term or short-term capital gain, depending on whether the stock was held for more than one year after the exercise date.
If, on a change of control of the Company, the exercisability of an award is accelerated, any excess on the date of the change of control of the fair market value of the shares or cash issued under accelerated awards over the purchase price of such shares, if any, may be characterized as "parachute payments" (within the meaning of Section 280G) if the sum of such amounts and any other such contingent payments received by the employee exceeds an amount equal to three times the "base amount" for such employee. The base amount generally is the average of the annual compensation of such employee for the five years preceding a change in ownership or control. An "excess parachute payment," with respect to any employee, is the excess of the parachute payments to such person, in the aggregate, over and above such person's base amount. If the amounts received by an employee upon a change-in-control are characterized as parachute payments, such employee will be subject to a 20% excise tax on the excess parachute payment and the Company will be denied any deduction with respect to such excess parachute payment.
Taking all these factors into consideration, however, the Board of Directors believes that these measures should increase the likelihood that all of the Company’s shareholders will be treated equally and fairly when shareholder action is taken, and should enhance the ability of the Company and its shareholders to carefully consider shareholder nominations and proposals.
In order to conform with TSX and US tax regulations, certain sections within the Plan have been modified since the Company’s listing on the TSX during June 2011 and since the last annual general meeting of the Company. The Company is required to, and will continue to follow all policies and procedures of the TSX as they relate to stock option plans.
The following definitions are for purposes of this proposal:
“Disinterested Shareholder Approval” means approval of a majority of the votes cast by all Shareholders in person or by proxy at the Meeting, excluding votes attached to Shares beneficially owned by Insiders to whom options may be granted under the Plan and Associates of such persons;
“Insider” means (a) a director or senior officer of the Company, (b) a director or senior officer of a company that is an Insider or subsidiary of the Company, (c) an individual, corporation, incorporated association or organization, body corporate, partnership, trust, association or other entity that beneficially owns or controls, directly or indirectly, securities that are not debt securities that carry a voting right either under all circumstances or under some circumstances that have occurred and are continuing, or (d) the Company itself if it holds any of its own securities.
Disinterested Shareholders are asked to approve by passing the following ordinary resolution:
“RESOLVED BY ORDINARY RESOLUTION: to approve an amendment to the Company’s Plan to increase the authorized number of options for Shares of the Company authorized to be issued to 37,500,000 from 32,500,000”.
In accordance with the requirement of the TSX to obtain Disinterested Shareholder Approval, proxies representing Shares beneficially owned by Insiders to whom options may be granted under the Plan will be excluded from voting on this resolution. The total number of shares which will be excluded from voting will be 10,591,000 shares which represents 5.50% of the non-diluted, issued and outstanding Shares of the Company. With respect to all other proxies, unless a proxy specifies that the Shares it represents are to be withheld from voting in favour of the resolution proposed above, the proxies named in the accompanying form of proxy intend to vote in favour of this resolution.
Recommendation of the Board of Directors
The Board recommends a vote FOR the approval of the Amended and Restated Stock Option Plan that increases the number of options for Shares eligible for issue to 37,500,000 from 32,500,000.
Background
The Company is proposing to conduct a private placement of securities (the “Private Placement”) in order to raise funds to finance the continued development of its Madagascar graphite mineral property as well as for general and administrative purposes. The securities offered pursuant to the Private Placement will be priced in the context of the market and may, but not necessarily will, be offered at a discount to the “market price” (within the meaning of such term under the rules of the TSX, which market price was, as of October 7, 2013, the date the Company applied for “price protection” under applicable TSX Policies, CAD $0.1334) but within the permitted discount under applicable TSX policies (the maximum permitted discount being 25%), which amount will not be less than CAD $0.10 per Subscription Receipt. However, pursuant to applicable TSX policies the securities will be deemed to be offered at a discount to the market price (even though the actual price may be at or above market at the time the securities are priced) since the Units (as defined below) underlying the Subscription Receipts will include warrants that are exercisable to acquire Shares and, if a sufficient number of Subscription Receipts are sold, may result in the issuance of listed Shares that is greater than 25% of the issued and outstanding Shares of the Company (on a non-diluted basis) prior to the completion of the Private Placement. Consequently, shareholder approval for the Private Placement is required.
The Company anticipates this will be the last Private Placement necessary before mine financing will be required. The funds raised from the Private Placement will be primarily used for the completion of a bankable feasibility study, which is now being expedited in order to meet the due diligence requirements of Caterpillar Mining Financing and other financial institutions whom have expressed interest in providing mine financing. The Bankable Feasibility study will include a comprehensive Environmental and Geo-Technical Study in preparation for finalizing mine design parameters and as a prerequisite for future project financing. Funds will also be used to generate additional quantities of graphite concentrate in larger quantities (40-50 tonnes) to provide potential off-take partners with samples for product end-use evaluation and verification. A portion of the funds raised will be targeted for marketing initiatives, focused on raising the awareness and exposure of the Company to potential strategic off-take partners and retail and institutional investors. Particular focus will be paid to key markets in Asia, the Unites States and Europe.
It is expected that the Private Placement will be completed on or before January 31, 2014 and will consist of the issuance of up to 125,000,000 Subscription Receipts of the Company. Each Subscription Receipt will be automatically exercisable for units (the “Units”) of the Company upon satisfaction of the Escrow Release Conditions (as defined below). Each Unit will be comprised of one Share (a “Purchased Share”) and one-half of one Share purchase warrant (a “Warrant”). Each whole Warrant shall be exercisable to acquire one Common Share at a per share price which will be approximately 50% greater than the subscription price (and will be at a premium to the prevailing market price at the time of pricing of the securities to be sold in the Private Placement, and will not be less than CAD $0.14) until the date that is eighteen (18) months from the date of issuance.
The maximum number of Subscription Receipts to be issued pursuant to the Private Placement will be a total of 125,000,000. In addition, the Company may issue Broker Warrants (as defined below) to an Agent (as defined below) or as partial finder’s fees in an amount to be determined but not to exceed 7,500,000 Broker Warrants. The total number of securities potentially issuable pursuant to the Private Placement, assuming the maximum number of Subscription Receipts are issued, the Subscription Receipts are automatically exercised upon satisfaction of the Escrow Release Conditions (as defined below), all Warrants partially comprising the Units are exercised and the maximum number of Broker Warrants are issued and all such Broker Warrants are exercised, is 195,000,000 Shares, representing 101% of the current issued and outstanding Shares prior to completion of the Private Placement on a non-diluted basis.
The number of Common Shares issuable pursuant to each Subscription Receipt, Warrant and Broker Warrant will be subject to standard adjustment provisions in the event that the Company undertakes a capital or corporate reorganization, share consolidation, stock dividend, or other capital restructuring transaction.
The Company may retain the services of an investment banker (the "Agents") to assist it with the Private Placement, but at this time has not yet done so. In the event an Agent is not retained, the Private Placement will be conducted on a non-brokered basis. The closing of the Private Placement of Subscription Receipts is expected to take place by the end of November , 2013 or such other date or dates as shall be mutually agreed upon by the Company and the Agents (if any), provided, however, that the Private Placement shall not be completed after January 31, 2014. If an Agent is retained, the terms of engagement are expected to be on a commercially reasonable efforts basis and any commissions will be paid only upon and at the time of Escrow Release (as defined below). The Company expects to pay a negotiated commission based on a percentage of the gross proceeds of the issue and sale of the Subscription Receipts and to issue warrants (the “Broker Warrants”) to acquire that number of Shares that is equal to a negotiated percentage of the number of Subscription Receipts sold pursuant to the Private Placement. The Broker Warrants will be exercisable for a period of eighteen (18) months following the issuance thereof at a per warrant exercise price based on the same terms as warrants issued pursuant to the Private Placement. If an Agent is retained, the terms of the Private Placement will be subject to the provisions of a definitive agency agreement (the "Agency Agreement") to be entered into among the Company and the Agent which shall contain standard market out, disaster out, regulatory out and material adverse change out clauses until the date of closing of the Private Placement and other industry standard provisions. The Subscription Receipts will be issued pursuant to a subscription receipt agreement entered into among the Company, the Agent and a licensed Canadian trust company or other escrow agent (the “Escrow Agent”). The gross proceeds of the Offering (the "Escrowed Funds") will be held in escrow and will be released to the Company or as otherwise directed by the Company (the “Escrow Release”), together with any interest thereon, and the Subscription Receipts automatically exercised and the Common Shares and Warrants comprising the Units issued to the purchasers of the Subscription Receipts (the “Purchasers”) if, on or before the date that is 120 days following the closing of the Private Placement (the “Escrow Release Deadline”), the shareholders of the Company have approved the Private Placement Resolution (set out below), and all other escrow release conditions, as may be agreed upon between the Company and the Agents (collectively with the shareholder approval of the Private Placement Resolution, the “Escrow Release Conditions”). In the event the Escrow Release Conditions are not satisfied on or before the Escrow Release Deadline, the Subscription Receipts will be void and of no further force or effect and the Escrowed Funds will be returned to the Purchasers.
The following Insiders of the Company are expected to participate in the Private Placement on the same basis as the arm’s-length Purchasers: Craig Scherba, President, the Chief Operating Officer and a Director of the Company (up to 500,000 Subscription Receipts, the underlying shares of which represent 0.39% of the issued and outstanding Shares of the Company prior to the completion of the Private Placement); Peter Liabotis, the Chief Financial Officer of the Company (up to 500,000 Subscription Receipts, the underlying shares of which represent 0.39% of the issued and outstanding Shares of the Company prior to the completion of the Private Placement); Brent Nykoliation, Senior Vice President of the Corporation (up to 500,000 Subscription Receipts the underlying shares of which represent 0.39% of the issued and outstanding Shares of the Company prior to the completion of the Private Placement); Richard Schler, the Chief Executive Officer and a Director of the Company (up to 500,000 Subscription Receipts, the underlying shares of which represent 0.39% of the issued and outstanding Shares of the Company prior to the completion of the Private Placement), and Quentin Yarie, a Director of the Company (up to 400,000 Subscription Receipts, the underlying shares of which represent 0.31% of the issued and outstanding Shares of the Company prior to the completion of the Private Placement). The maximum number of Shares of the Company issuable to Insiders pursuant to the Private Placement (after exercise of the Subscription Receipts and the Warrants) will be equal to 1.83% of the total number of issued and outstanding Shares of the Company, without taking into consideration Shares issued to any other purchasers under the Private Placement.
The Private Placement will not result in a change of control of the Company, nor will any new insiders be created as a result of the Private Placement.
Requirement for Shareholder Approval
Sections 604(a)(i) and 607(g)(i) of the TSX Company Manual require that shareholder approval be obtained for any private placement conducted at a discount to the market price where the number of shares being issued or issuable exceeds 25% of the non-diluted number of shares outstanding prior to the completion of the private placement. The Private Placement will be deemed to be conducted at a discount to the market price since the Company is proposing to issue Units comprised of Shares and warrants to acquire additional Shares in an amount totalling more than 25% of the non-diluted number of Shares outstanding prior to the Private Placement. Accordingly, the rules of the TSX require that the Private Placement and the issuance of Shares pursuant to the Private Placement (including on exercise of the Warrants) issued to Purchasers pursuant to the Private Placement be approved by an ordinary resolution of the shareholders.
The Private Placement Resolution
At the Meeting, the Shareholders will be asked to consider and vote upon the Private Placement Resolution, which, in accordance with the rules of the TSX, will authorize the Company to complete the Private Placement and in particular, will result in the automatic exercise of the Subscription Receipts upon satisfaction of the Escrow Release Conditions and authorize the issuance of Shares and Warrants comprising the Units pursuant to the Private Placement, as well as the issuance of the Broker Warrants . The full text of the Private Placement Resolution is as follows:
"BE IT RESOLVED, as an ordinary resolution of the shareholders Company, that:
1. the issuance by the Company to the Purchasers, on a private placement basis, of up to 125,000,000 Subscription Receipts on or before January 31, 2014, the issuance of up to 125,000,000 Purchased Shares and up to 62,500,000 Warrants upon exercise of the Subscription Receipts, 62,500,000 Shares issuable upon exercise of the Warrants and up to 7,500,000 Shares on exercise of the Broker Warrants, all of which total in the aggregate more than 25% of the issued and outstanding Shares, on a non-diluted basis, immediately prior to completion of the Private Placement, is hereby ratified, confirmed and approved.
2. any director or officer of the Company be and is hereby authorized to do all things and execute all instruments necessary or desirable to give effect to this ordinary resolution.
3. notwithstanding that this ordinary resolution has been duly passed by the shareholders, the board of directors of the Company may, in its sole discretion, decide not to act on this resolution without further approval of the Shareholders."
The Private Placement Resolution is an ordinary resolution of the shareholders and, to be valid, it must be approved by a majority of the votes cast by the shareholders present in person or by proxy at the Meeting.Unless otherwise directed, the persons named in the enclosed form of proxy, if named as proxy, intend to vote for approval of the foregoing resolution.
Recommendation of the Board of Directors
The Board of Directors recommends that the Shareholders vote in favour of the Private Placement Resolution.
PROPOSAL 5 - ADVISORY VOTE ON EXECUTIVE COMPENSATION
stockholders, stockholders voted in favour of holding an advisory vote in respect of executive compensation on an annual basis. This advisory stockholder vote, gives you as a stockholder the opportunity to approve or not approve the NEO’s compensation of our NEOs that is disclosed in this Proxy Statement by voting for or against the resolution below (or by abstaining with respect to the resolution).
“
Recommendation of the Board
PROPOSAL 6
Name and Address of Beneficial Owner | Number of Common Shares Beneficially Owned | Percentage of Outstanding Common Shares Beneficially Owned(1) |
V. Peter Harder, Chairman of the Board, Director 5538 Pattapiece Crescent, Manotick, Ontario, Canada | 3,650,000 | 0.8% |
John Sanderson, Vice-Chairman of the Board & Director 1721 – 27th Street, West Vancouver, BC, Canada (3) (13) (14) | 1,700,000 | 0.4% |
Craig Scherba, President, Chief Executive Officer & Director (*) 1480 Willowdown Road, Oakville, Ontario, Canada (4) (14) | 3,900,000 | 0.9% |
Robin Borley, SVP Mine Development & Director (**) Waterfall Country Estate, Gauteng, South Africa (5) (14) | 850,000 | 0.2% |
Quentin Yarie, Director 196 McAllister Road, North York, Ontario (7) (14) | 3,100,000 | 0.7% |
Albert A. Thiess, Jr., Director 8 Lawson's Pond Court, Bluffton, SC, USA (8) (13) (14) | 725,000 | 0.2% |
Brent Nykoliation, SVP Corporate Development 161 Fallingbrook Road, Toronto, Ontario, Canada (9) (14) | 4,675,000 | 1.1% |
Dean Comand, Director 131 Garden Avenue, Ancaster, Ontario, Canada (10) (13) (14) | 400,000 | 0.1% |
Dalton Larson, Director 3629 Canterbury Drive, Surrey, BC , Canada (11) (14) | 1,300,000 | 0.3% |
Richard Schler, Former CEO & Director (*) 80 Greybeaver Trail , Toronto, Ontario, Canada (12) | 10,560,000 | 2.4% |
Peter Liabotis, Former Chief Financial Officer & SVP (***) 2261 Rockingham Drive, Oakville, Ontario, Canada (6) | 3,731,000 | 0.9% |
All directors and executive officers as a group (9 persons) | 20,300,000 | 4.7% |
All directors and executive officers including former executive officers as a group (11 persons) | 34,591,000 | 8.0% |
CORPORATE GOVERNANCE PRACTICES
· | Audit Committee: |
· | Disclosure Committee: |
· | Nomination Committee: |
· | Compensation Committee: |
· | Capital Projects Committee: |
Name | Name of Reporting Issuer | Exchange | Position |
V. Peter Harder | Power Financial Corporation IGM Financial Corporation Telesat Canada, Northland Power Inc. Timberwest Forest Company Magna International Inc. | TSX TSX TSX TSX TSX TSX/NYSE | Director Director Director Director Director Director |
Craig Scherba | Honey Badger Exploration Inc. | TSX-V | Director |
John Sanderson | MacDonald Mines Exploration Ltd Honey Badger Exploration Inc. | TSX-V TSX-V | Chairman of the Board Chairman of the Board |
Quentin Yarie | MacDonald Mines Exploration Ltd Red Pine Exploration Inc. | TSX-V TSX-V | Director Director |
June 30, 2004 as filed on May 19, 2004.
After careful consideration, the Board of Directors believes that the executive compensation advisory vote should be held every three years, and therefore our Board of Directors recommends that you vote for a frequency of every three years for future executive compensation advisory votes.
Relationship with Management
The Board of Directors believes that holding the executive compensation advisory vote every three years is in the best interestsPresident & Chief Executive Officer of the Company is a member of the Board, as is usual in a company of this size. The Board feels that this is not an impediment to the proper discharge of its responsibilities. Interaction between members of management and the Board, inside and outside Board meetings, ensures that the Board is informed and the Board members' experience utilized by management. The Board remains cognizant to corporate governance issues and seeks to set up structures to ensure the effective discharge of its stockholdersresponsibilities without creating additional costs. The Board is committed to ensuring the Company's long-term viability, and recommends votingthe well-being of its employees and of the communities in which it operates. The Board has also adopted a policy of permitting individual directors, under appropriate circumstances, to engage legal, financial or other advisors at the Company's expense.
Recommendationaudit for the year ended June 30, 2015 were CAD$10,330 (June 30, 2014: CAD$3,960).
Name and Principal Position | Fiscal Year | Salary ($)(2) | Bonus ($) | Stock Award ($)(3) | Option Award ($) | Non Equity Inventive Plan Compensation ($) | Change in Pension Value & Non Qualified Deferred Compensation Earnings ($) | All Other Compensation ($)(1) | Total ($)(1) |
Craig Scherba CEO, President and Director* | 2015 | 57,300 | 0 | 0 | 0 | 0 | 0 | 45,613 | 102,913 |
2014 | 167,305 | 0 | 0 | 0 | 0 | 0 | 61,566 | 228,871 | |
2013 | 130,000 | 0 | 0 | 0 | 0 | 0 | 134,700 | 264,700 | |
Richard E. Schler, Former CEO and Former Director ** | 2015 | 149,123 | 0 | 0 | 0 | 0 | 0 | 120,866 | 269,989 |
2014 | 218,955 | 0 | 0 | 0 | 0 | 0 | 84,174 | 303,129 | |
2013 | 197,008 | 0 | 0 | 0 | 0 | 0 | 280,428 | 477,438 | |
Robin Borley, SVP and Director*** | 2015 | 187,200 | 0 | 0 | 0 | 0 | 0 | 17,430 | 204,630 |
2014 | 116,900 | 0 | 0 | 0 | 0 | 0 | 26,820 | 143,720 | |
2013 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
Peter Liabotis, Former Chief Financial Officer & SVP**** | 2015 | 103,327 | 0 | 0 | 0 | 0 | 0 | 44,617 | 147,944 |
2014 | 210,055 | 0 | 0 | 0 | 0 | 0 | 58,755 | 268,810 | |
2013 | 171,500 | 0 | 0 | 0 | 0 | 0 | 98,780 | 270,280 | |
Brent Nykoliation, SVP | 2015 | 115,726 | 0 | 0 | 0 | 0 | 0 | 57,941 | 173,667 |
2014 | 210,259 | 0 | 0 | 0 | 0 | 0 | 61,825 | 272,084 | |
2013 | 190,009 | 0 | 0 | 0 | 0 | 0 | 125,720 | 315,729 |
* | On July 30, 2015, Mr. Scherba became the Chief Executive Officer, replacing Mr. Schler who resigned from the Company. |
** | Mr. Schler was appointed Chief Executive Officer on September 19, 2013 and resigned in July 2015. |
*** | Mr. Borley was appointed Senior Vice President of Mine Development and a Director on December 1, 2013. |
**** | Mr. Liabotis was replaced as Chief Financial Officer by Mr. Marc Johnson on October 23, 2015. |
(1) | The values in the "All Other Compensation" above do not represent a cash payment of any kind. Rather these values represent the calculated Black-Scholes theoretical value of granted options. It is important to note that these granted options may or may not ever be exercised. Whether granted options are exercised or not will be based primarily, but not singularly, on the Company's future stock price and whether the granted options become "in-the-money". If these granted options are unexercised and expire, the cash value or benefit to the above noted individuals is $nil. |
"Summary Compensation" table have been calculated based upon the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 and there are no awards subject to performance conditions.
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards (1) ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All other Compensation ($) | Total (1) ($) |
V. Peter Harder, Director | 0 | 0 | 37,147 (1) | 0 | 0 | 0 | 37,147 (1) |
John Sanderson, Director | 0 | 0 | 35,196 (1) | 0 | 0 | 0 | 35,196 (1) |
Quentin Yarie, Director | 16,529 | 0 | 39,637 (1) | 0 | 0 | 0 | 56,166 (1) |
Albert A. Thiess, Jr., Director | 0 | 0 | 9,711 (1) | 0 | 0 | 0 | 9,711 (1) |
Dean Comand, Director | 0 | 0 | 19,920 (1) | 0 | 0 | 0 | 19,920 (1) |
Dalton Larson | 0 | 0 | 9,960 (1) | 0 | 0 | 0 | 9,960 (1) |
(1) | The values in the "Option Awards" and included within the "Total" columns above do not represent a cash payment of any kind. Rather these values represent the calculated Black-Scholes theoretical value of granted options. It is important to note that these granted options may or may not ever be exercised. Whether granted options are exercised or not will be based primarily, but not singularly, on the Company's future stock price and whether the granted options become "in-the-money". If these granted options are unexercised and expire, the cash value or benefit to the above noted individuals is $nil. |
Option Awards | |||||
Name | No. of Securities Underlying Unexercised Options Exercisable (#) | No. of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date |
Richard E. Schler, NEO | 600,000 675,000 225,000 200,000 1,340,000 650,000 170,000 200,000 475,000 1,100,000 465,000 | 0 | 0 | 0.30 0.29 0.20 0.21 0.28 0.21 0.11 0.15 0.18 0.15 0.20 | July 1, 2016 July 13, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 Feb 27, 2018 July 9, 2018 Sept 19, 2018 Jan 10, 2019 July 3, 2019 Feb 26, 2020 |
Craig Scherba, NEO | 350,000 200,000 200,000 400,000 750,000 180,000 500,000 250,000 470,000 | 0 | 0 | 0.30 0.20 0.21 0.28 0.21 0.11 0.18 0.15 0.20 | July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 Feb 27, 2018 July 9, 2018 Jan 10, 2019 July 3, 2019 Feb 26, 2020 |
Peter Liabotis, NEO | 350,000 200,000 200,000 350,000 550,000 150,000 500,000 250,000 450,000 | 0 | 0 | 0.30 0.20 0.21 0.28 0.21 0.11 0.18 0.15 0.20 | July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 Feb 27, 2018 July 9, 2018 Jan 10, 2019 July 3, 2019 Feb 26, 2020 |
Robin Borley, NEO | 125,000 75,000 300,000 350,000 | 0 | 0 | 0.28 0.21 0.18 0.20 | March 7, 2017 Feb 27, 2018 Jan 10, 2019 Feb 26, 2020 |
Brent Nykoliation, NEO | 450,000 200,000 200,000 350,000 700,000 175,000 75,000 400,000 400,000 450,000 | 0 | 0 | 0.30 0.20 0.21 0.28 0.21 0.11 0.15 0.18 0.15 0.20 | July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 Feb 27, 2018 July 9, 2018 Sept 19, 2018 Jan 10, 2019 July 3, 2019 Feb 26, 2020 |
Company had no pension or retirement plans.
Annual Report
All stockholders
a) | The Company incurred a total of $98,595 (June 30, 2014: $112,200) in office administration and rent expense from a public company related by common management, Red Pine Exploration Inc (TSX.V: "RPX"). (Source: www.sedi.ca as ofNovember 2, 2015.). |
Name | Title at Energizer | Title at Red Pine | Shares Held in RPX | % Ownership of RPX |
Richard Schler | Former CEO and Former Director | Former CEO and Former Director | 1,458,200 | 2.1% |
Craig Scherba | Director, CEO & President | SVP - Chief Geologist | 318,000 | 0.7% |
Peter Liabotis | Former CFO | Former CFO | 454,000 | 0.5% |
Brent Nykoliation | Senior VP | Director | 374,190 | 0.7% |
Total | 2,604,390 | 3.8% |
b) | The Company incurred $629,204 (June 30, 2014: $1,190,585) in mineral exploration, administrative, management and consulting fees to directors and officers and paid or accrued directly to directors and officers or companies under their control. |
c) | The Company incurred $1,927,797 (June 30, 2014: $1,533,953) in charges from a mining and engineering firm for which one of the Company's directors serves as a senior officer and a director which was included in mineral exploration expense. |
d) | During the year ended June 30, 2014, and subsequently revised during the year ended June 30, 2015, the Company entered into an agreement to option a 75% interest in the Sagar Property to Honey Badger Exploration Inc. (TSX-V: "TUF"), a public company related by common management. |
a) | Related party balances of $Nil (June 30, 2014: $54,764) were included in amounts receivable and prepaid expenses and $24,048 (June 30, 2014: $33,019) related to rent, was included in accounts payable and accrued liabilities. |
b) | The Company advanced a short-term loan to MacDonald Mines Exploration Ltd. (TSX-V: "BMK"), a company related by way of common management, totaling $120,238 (June 30, 2014: $46,366). This loan is interest bearing at a rate of 5%. No amounts have been paid back up to June 30, 2015. Accrued interest due totaled $3,863 (June 30, 2014: $142) as at June 30, 2015, and is included in the balance. A $53,603 (June 30, 2014: $Nil) impairment charge was recorded against this loan as of June 30, 2015. The Company's short-term loan amounts with RPX of $24,964 and TUF of $23,182 which existed as of June 30, 2014 were repaid during the year. |
c) | Of the $Nil (June 30, 2014: $1,533,007) in charges from a mining and engineering firm for which one of the Company's former directors serves as a senior officer and director. $Nil (June 30, 2014: $633,418) is included in accounts payable and accrued liabilities. |
d) | $46,292 (June 30, 2014: $264,922) was included within accounts payable and accrued liabilities as a committed amount due to the former Chief Executive Officer of the Company. |
Plan Category | Number of securities to be issued upon exercise of outstanding options, and warrants | Weighted-average exercise price of outstanding options and warrants | Number of securities remaining available for future under equity compensation plans (excluding securities reflected in column (a) | ||||||||
Equity compensation plans approved by security holders | 35,365,000 | $ | 0.22 | 7,635,000 | |||||||
Equity compensation plans not approved by security holders | -- | -- | -- |
Option Awards as of June 30, 2015 | ||||||
Name | No. of Shares of Common Stock Underlying Unexercised Common Stock Purchase Options Exercisable (#) | Date of Grant | Additional Consideration to be Received Upon Exercise or Material Conditions required to Exercise | Option Exercise Price ($) | Value Realized if Exercised ($) * | Option Expiration Date |
Craig Scherba, NEO (1) | 350,000 200,000 200,000 400,000 750,000 180,000 500,000 250,000 470,000 | July 1, 2011 Oct 24, 2011 Dec 1, 2011 March 7, 2012 Feb 27, 2013 July 9, 2013 Jan 10, 2014 July 3, 2014 Feb 26, 2015 | None None None None None None None None None | 0.30 0.20 0.21 0.28 0.21 0.11 0.18 0.15 0.20 | 0 0 0 0 0 0 0 0 0 | July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 Feb 27, 2018 July 9, 2018 Jan 10, 2019 July 3, 2019 Feb 26, 2020 |
Robin Borley, NEO | 125,000 75,000 300,000 350,000 | March 7, 2012 Feb 27, 2013 Jan 10, 2014 Feb 26, 2015 | None None None None | 0.28 0.21 0.18 0.20 | 0 0 0 0 | March 7, 2017 Feb 27, 2018 Jan 10, 2019 Feb 26, 2020 |
Brent Nykoliation, NEO | 450,000 200,000 200,000 350,000 700,000 175,000 75,000 400,000 400,000 450,000 | July 1, 2011 Oct 24, 2011 Dec 1, 2011 March 7, 2012 Feb 27, 2013 July 9, 2013 Sept 19, 2013 Jan 10, 2014 July 3, 2014 Feb 26, 2015 | None None None None None None None None None None | 0.30 0.20 0.21 0.28 0.21 0.11 0.15 0.18 0.15 0.20 | 0 0 0 0 0 0 0 0 0 0 | July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 Feb 27, 2018 July 9, 2018 Sept 19, 2018 Jan 10, 2019 July 3, 2019 Feb 26, 2020 |
Quentin Yarie, Director | 300,000 50,000 150,000 300,000 300,000 100,000 50,000 425,000 250,000 350,000 | July 1, 2011 Oct 24, 2011 Dec 1, 2011 March 7, 2012 Feb 27, 2013 July 9, 2013 Sept 19, 2013 Jan 10, 2014 July 3, 2014 Feb 26, 2015 | None None None None None None None None None None | 0.30 0.20 0.21 0.28 0.21 0.11 0.15 0.18 0.15 0.20 | 0 0 0 0 0 0 0 0 0 0 | July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 Feb 27, 2018 July 9, 2018 Sept 19, 2018 Jan 10, 2019 July 3, 2019 Feb 26, 2020 |
V. Peter Harder, Director | 225,000 25,000 75,000 100,000 275,000 25,000 250,000 250,000 250,000 300,000 | July 1, 2011 Oct 24, 2011 Dec 1, 2011 March 7, 2012 Feb 27, 2013 July 9, 2013 Oct 9, 2013 Jan 10, 2014 July 3, 2014 Feb 26, 2015 | None None None None None None None None None None | 0.30 0.20 0.21 0.28 0.21 0.11 0.13 0.18 0.15 0.20 | 0 0 0 0 0 0 0 0 0 0 | July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 Feb 27, 2018 July 9, 2018 Oct 9, 2018 Jan 10, 2019 July 3, 2019 Feb 26, 2020 |
John Sanderson, Director | 125,000 50,000 50,000 100,000 100,000 25,000 50,000 400,000 200,000 350,000 | July 1, 2011 Oct 24, 2011 Dec 1, 2011 March 7, 2012 Feb 27, 2013 July 9, 2013 Sept 19, 2013 Jan 10, 2014 July 3, 2014 Feb 26, 2015 | None None None None None None None None None None | 0.30 0.20 0.21 0.28 0.21 0.11 0.15 0.18 0.15 0.20 | 0 0 0 0 0 0 0 0 0 0 | July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 Feb 27, 2018 July 9, 2018 Sept 19, 2018 Jan 10, 2019 July 3, 2019 Feb 26, 2020 |
Albert A. Thiess, Jr., Director | 180,000 100,000 25,000 125,000 195,000 | May 23, 2012 Feb 27, 2013 July 9, 2013 Jan 10, 2014 Feb 26, 2015 | None None None None None | 0.23 0.21 0.11 0.18 0.20 | 0 0 0 0 0 | May 23, 2017 Feb 27, 2018 July 9, 2018 Jan 10, 2019 Feb 26, 2020 |
Dean Comand, Director | 400,000 | Feb 26, 2015 | None | 0.20 | 0 | Feb 26, 2020 |
Dalton Larson, Director | 200,000 | Feb 26, 2015 | None | 0.20 | 0 | Feb 26, 2020 |
Richard Schler, Former NEO (2) | 600,000 225,000 200,000 1,340,000 675,000 650,000 170,000 200,000 475,000 1,100,000 465,000 | July 1, 2011 Oct 24, 2011 Dec 1, 2011 March 7, 2012 July 13, 2012 Feb 27, 2013 July 9, 2013 Sept 19, 2013 Jan 10, 2014 July 3, 2014 Feb 26, 2015 | None None None None None None None None None None None | 0.30 0.20 0.21 0.28 0.29 0.21 0.11 0.15 0.18 0.15 0.20 | 0 0 0 0 0 0 0 0 0 0 0 | July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 July 13, 2017 Feb 27, 2018 July 9, 2018 Sept 19, 2018 Jan 10, 2019 July 3, 2019 Feb 26, 2020 |
Peter Liabotis, Former NEO (3) | 350,000 200,000 200,000 350,000 550,000 150,000 500,000 250,000 450,000 | July 1, 2011 Oct 24, 2011 Dec 1, 2011 March 7, 2012 Feb 27, 2013 July 9, 2013 Jan 10, 2014 July 3, 2014 Feb 26, 2015 | None None None None None None None None None | 0.30 0.20 0.21 0.28 0.21 0.11 0.18 0.15 0.20 | 0 0 0 0 0 0 0 0 0 | July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 Feb 27, 2018 July 9, 2018 Jan 10, 2019 July 3, 2019 Feb 26, 2020 |
(1) | On July 30, 2015, Mr. Scherba became the Chief Executive Officer, replacing Mr. Schler who has resigned from the Company. |
(2) | Mr. Schler resigned as Chief Executive Officer in July 2015. |
(3) | Mr. Liabotis was replaced as Chief Financial Officer in on October 23, 2015. |
Option Awards as of June 30, 2015 | |||||
Name | No. of Shares of Common Stock Underlying Unexercised Common Stock Purchase Options Exercisable (#) | Date of Grant | Additional Consideration to be Received Upon Exercise or Material Conditions required to Exercise | Option Exercise Price ($) | Option Expiration Date |
Current Named Executive Officers, as a group on June 30, 2015 (5 persons): Craig Scherba(1), Richard Schler(2), Peter Liabotis(3), Robin Borley, Brent Nykoliation. | 1,750,000 675,000 825,000 800,000 2,565,000 2,725,000 675,000 275,000 2,175,000 2,000,000 2,185,000 | July 1, 2011 July 13, 2012 Oct 24, 2011 Dec 1, 2011 March 7, 2012 Feb 27, 2013 July 9, 2013 Sept 19, 2013 Jan 10, 2014 July 3, 2014 Feb 26, 2015 | None None None None None None None None None None None | 0.30 0.29 0.20 0.21 0.28 0.21 0.11 0.15 0.18 0.15 0.20 | July 1, 2016 July 13, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 Feb 27, 2018 July 9, 2018 Sept 19, 2018 Jan 10, 2019 July 3, 2019 Feb 26, 2020 |
Total NEO's as of June 30, 2015, as a group (5 persons): 16,650,000 | |||||
All current Directors who are not NEO's or executive officers as a group on June 30, 2015 (6 persons) - V. Peter Harder, John Sanderson, Quentin Yarie, Albert A. Thiess, Jr., Dean Comand & Dalton Larson. | 650,000 125,000 275,000 500,000 180,000 775,000 175,000 100,000 250,000 1,200,000 700,000 1,795,000 | July 1, 2011 Oct 24, 2011 Dec 1, 2011 March 7, 2012 May 23, 2012 Feb 27, 2013 July 9, 2013 Sept 19, 2013 Oct 9, 2013 Jan 10, 2014 July 3, 2014 Feb 26, 2015 | None None None None None None None None None None None None | 0.30 0.20 0.21 0.28 0.23 0.21 0.11 0.15 0.13 0.18 0.15 0.20 | July 1, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 May 23, 2017 Feb 27, 2018 July 9, 2018 Sept 19, 2018 Oct 9, 2018 Jan 10, 2019 July 3, 2019 Feb 26, 2020 |
Total all current Directors who are not NEO's or executive officers as a group as of June 30, 2015 (6 persons): 6,725,000 | |||||
All Directors (9 persons) - V. Peter Harder, John Sanderson, Richard Schler, Craig Scherba, Robin Borley, Quentin Yarie, Albert A. Thiess, Jr., Dean Comand & Dalton Larson,. | 1,600,000 675,000 550,000 675,000 2,365,000 180,000 2,250,000 525,000 300,000 250,000 2,475,000 2,050,000 3,080,000 | July 1, 2011 July 13, 2012 Oct 24, 2011 Dec 1, 2011 March 7, 2012 May 23, 2012 Feb 27, 2013 July 9, 2013 Sept 19, 2013 Oct 9, 2013 Jan 10, 2014 July 3, 2014 Feb 26, 2015 | None None None None None None None None None None None None None | 0.30 0.29 0.20 0.21 0.28 0.23 0.21 0.11 0.15 0.13 0.18 0.15 0.20 | July 1, 2016 July 13, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 May 23, 2017 Feb 27, 2018 July 9, 2018 Sept 19, 2018 Oct 9, 2018 Jan 10, 2019 July 3, 2019 Feb 26, 2020 |
Total all current Directors as of June 30, 2015 (9 persons): 16,975,000 | |||||
All employees (excluding all Named Executive Officers as they also serve as executive officers and/or directors) as a group. | 900,000 975,000640,000 685,000 1,810,000 1,275,000 230,000 300,000 550,000 1,575,000 250,000 | July 1, 2011 July 13, 2012 Oct 24, 2011 Dec 1, 2011 March 7, 2012 Feb 27, 2013 July 9, 2013 Sept 19, 2013 Jan 10, 2014 July 3, 2014 Feb 26, 2015 | None None None None None None None None None None None | 0.30 0.29 0.20 0.21 0.28 0.21 0.11 0.15 0.18 0.15 0.20 | July 1, 2016 July 13, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 Feb 27, 2018 July 9, 2018 Sept 19, 2018 Jan 10, 2019 July 3, 2019 Feb 26, 2020 |
Total employees (excluding all NEO's as they serve as executive officers) as a group as of June 30, 2015: 9,190,000 | |||||
Outstanding Options - all parties | 3,600,000 1,650,000 1,640,000 1,910,000 5,400,000 180,000 5,250,000 1,080,000 675,000 250,000 4,450,000 250,000 4,550,000 4,480,000 | July 1, 2011 July 13, 2012 Oct 24, 2011 Dec 1, 2011 March 7, 2012 May 23, 2012 Feb 27, 2013 July 9, 2013 Sept 19, 2013 Oct 9, 2013 Jan 10, 2014 Feb 6, 2014 July 3, 2014 Feb 26, 2015 | None None None None None None None None None None None None None None | 0.30 0.29 0.20 0.21 0.28 0.23 0.21 0.11 0.15 0.13 0.18 0.18 0.15 0.20 | July 1, 2016 July 13, 2016 Oct 24, 2016 Dec 1, 2016 March 7, 2017 May 23, 2017 Feb 27, 2018 July 9, 2018 Sept 19, 2018 Oct 9, 2018 Jan 10, 2019 Feb 6, 2019 July 3, 2019 Feb 26, 2020 |
Total Options as of June 30, 2015 (all parties): 35,365,000 |
(2) | Mr. Schler resigned as Chief Executive Officer in July 2015. |
(3) | Mr. Liabotis was replaced as Chief Financial Officer in on October 23, 2015. |
· | There are no associates of any such directors, executive officers, or nominees to that have or are to receive options or any other person who received or is to receive 5 percent of such options, warrants or rights. |
· | All of the stock options in the above noted table are convertible into common stock. |
· | The exercise price of all of the stock options noted above were based on the closing price the date before the granting of the stock option. |
· | There are no cashless or other provisions aside from the right for the holder of the stock option to exercise. |
· | Other than as noted above in respect of Mr. Schler and Mr. Liabotis, all NEO's provide the Company services on an ongoing basis. |
· | Messrs Harder, Sanderson, Thiess, Comand and Larson provide director services on an ongoing basis. |
Stockholder Proposals
UnderNOMINATIONS
· | For director nominations, not less than thirty (30) nor more than sixty-five (65) days prior to the date of the annual and special meeting of stockholders; provided, however, that in the event that the annual and special meeting of stockholders is called for a date that is less than fifty (50) days after the date (the "Notice Date") on which the first public announcement of the date of the annual and special meeting was made, notice by the Nominating Stockholder may be made not later than the close of business on the tenth (10th) day following the Notice Date. |
· | For other business, no later than July 15, 2016. |
Other Matters
As of the date of this proxy statement, we know of no matters other than those set forth herein that will be presented for consideration at the meeting. If any other matter or matters are properly brought before the meeting or any adjournment thereof, the persons named in the accompanying proxyStockholders will have discretionary authority to vote or otherwise act, with respect to such mattersany matter presented at the meeting if the Company has not received notice of the matter by the dates required under the Company's Bylaws, as described above, and in accordance with their judgment.
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Check here if you plan to attendserve a term of one year or until his or her successor is duly elected or appointed. V. Peter Harder John Sanderson Craig Scherba Quentin Yarie Robin Borley Albert A. Thiess, Jr Dean Comand Dalton Larson For AgainstAbstain Proposal 2 - To approve the 2013 AnnualStock Option Plan Resolution Proposal 3 - To ratify the appointment of MNP LLP, Chartered Accountants, as the Company's independent registered public accounting firm for the fiscal year ending June 30, 2016 and Special Meetingallow the directors to fix their remuneration Proposal 4 - To approve by an advisory vote in respect of Stockholders [________]
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Signature of Stockholder Name of Stockholder (print exactly as it appears hereon)
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Certificate Number Number of Shares Held
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Date Address Change
1. THIS PROXY IS SOLICITED BY MANAGEMENT OF THE COMPANY.
2.THIS PROXY SHOULD BE READ IN CONJUNCTION WITH THE MEETING MATERIALS PRIOR TO VOTING.
3.If you appoint Management’sManagement's nominees to vote your securities, they will vote in accordance with your instructions or, if no instructions are given, in accordance with the Management voting recommendations highlighted for each resolution. If you appoint someone else to vote your securities, they will also vote in accordance with your instructions or, if no instructions are given, as they in their discretion choose.
4. This proxy confers discretionary authority on the person named to vote in his or her discretion with respect to amendments or variations to the matters identified in the Notice of the Meeting accompanying the proxy or such other matters which may properly come before the Meeting or any adjournment or postponement thereof.
5. To be valid, this proxy must be signed. Please date the proxy. If the proxy is not dated, it is deemed to bear the date of its being mailed to the shareholders of the Company.
6. To be valid, this proxy must be received byEmpire Stock Transfer Inc. 1859 Whitney Mesa Dr., Henderson, NV, 89014, USAbyFriday December 8, 2013 at 5pm,local time. Late proxies may be accepted or rejected by the Chairman of the Meeting in his discretion, and the Chairman is under no obligation to accept or reject any particular late proxy.
7.discretion. If the shareholder is a corporation, the proxy must be executed by an officer or attorney thereof duly authorized, and the shareholder may be required to provide documentation evidencing the signatory’ssignatory's power to sign the proxy.
The The Committee The Committee shall inquire of management and the external auditor regarding significant risks or exposures to which the Company may be subject, and shall assess the adequacy of the steps management has taken to minimize such risks. - The Committee shall perform any other responsibilities consistent with this Charter and any applicable laws as the Committee or Board deems appropriate. The Committee shall report regularly to the Board on Committee activities, findings and recommendations. The Committee is responsible for ensuring that the Board is aware of any matter that may have a significant impact on the financial condition or affairs of the Company. The Committee shall review and assess the continued adequacy of this Charter annually and submit such proposed amendments as the Committee sees fit to the Board for its consideration.1.GENERAL Audit Committee (the “Committee”) is appointed by the Board of Directors of Energizer Resources Inc. (the “Company”)"Company) appoints the Audit Committee (the "Committee). The Committee is a key component of the Company’sCompany's commitment to maintaining a higher standard of corporate responsibility. The Committee shall review the Company’sCompany's financial reports, internal control systems, the management of financial risks and the external audit process. It has the authority to conduct any investigation appropriate to its responsibilities.2.AUTHORITYshall havehas the authority to:(i)engage independent counsel and other advisors as it determines necessary to carry out its duties;(ii)set and pay the compensation for advisors employed by the Committee; and(iii)communicate directly with the internal and external auditors.3. engage independent counsel and other advisors as it necessary to carry out its duties; set and pay the compensation for advisors employed by the Committee; and communicate directly with the internal and external auditors.3.1.(a)The Committee shall recommend to the Board the external auditor to be nominated, shall set the compensation for the external auditor and shall ensure that the external auditor reports directly to the Committee.(b)The Committee shall be directly responsible for overseeing the work of the external auditor, including the resolution of disagreements between management and the external auditor regarding financial reporting.(c)The Committee shall review the external auditor’s audit plan, including scope, procedures and timing of the audit.(d)The Committee shall pre-approve all non-audit services to be provided by the external auditor.(e)The Committee shall review and approve the Company’s hiring policies regarding partners, employees and former partners and employers of the present and former external auditor.(f)The Committee shall review fees paid by the Company to the external auditor and other professionals in respect of audit and non-audit services on an annual basis.3.2. - The Committee shall recommend to the Board the external auditor to be nominated, shall set the compensation for the external auditor and shall ensure that the external auditor reports directly to the Committee. (b) The Committee shall be directly responsible for overseeing the work of the external auditor, including the resolution of disagreements between management and the external auditor regarding financial reporting. (c) The Committee shall review the external auditor's audit plan, including scope, procedures and timing of the audit. (d) The Committee shall pre-approve all non-audit services to be provided by the external auditor. (e) The Committee shall review and approve the Company's hiring policies regarding partners, employees and former partners and employers of the present and former external auditor. (f) The Committee shall review fees paid by the Company to the external auditor and other professionals in respect of audit and non-audit services on an annual basis.(a)The Committee shall review the annual audited financial statements to satisfy itself that they are presented in accordance with generally accepted accounting principles, that the information contained therein is not erroneous, misleading or incomplete and that the audit function has been effectively carried out.(b)The Committee shall report to the Board with respect to its review of the annual audited financial statements and recommend to the Board whether or not same should be approved prior to their being publicly disclosed.(c)The Committee shall review the Company’s annual and interim financial statements, management’s discussion and analysis relating to annual and interim financial statements, and earnings press releases prior to any of the foregoing being publicly disclosed by the Company.(d)The Committee shall satisfy itself that adequate procedures are in place for the review of the Company’s public disclosure of financial information extracted or derived from the Company’s financial statements other than the disclosure referred to in Section 3.2(c) of this Charter, and periodically assess the adequacy of these procedures.(e)The Committee shall oversee any investigations of alleged fraud and illegality relating to the Company’s finances.(f)The Committee shall establish procedures for:(i)the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters; and(ii)the confidential, anonymous submission by employees of the Company or concerns regarding questionable accounting or auditing matters.(g)The Committee shall meet no less frequently than annually with the external auditor and the Chief Financial Officer or, in the absence of a Chief Financial Officer, with the officer of the Company in charge of financial matters, to review accounting practices, internal controls, auditing matters and such other matters as the Committee deems appropriate.3.3.(a) The Committee shall review the annual audited financial statements to satisfy itself that they are presented in accordance with generally accepted accounting principles, that the information contained therein is not erroneous, misleading or incomplete and that the audit function has been effectively carried out. (b) The Committee shall report to the Board with respect to its review of the annual audited financial statements and recommend to the Board whether or not same should be approved prior to their being publicly disclosed. (c) The Committee shall review the Company's annual and interim financial statements, management's discussion and analysis relating to annual and interim financial statements, and earnings press releases prior to any of the foregoing being publicly disclosed by the Company. (d) The Committee shall satisfy itself that adequate procedures are in place for the review of the Company's public disclosure of financial information extracted or derived from the Company's financial statements other than the disclosure referred to in Section 3.2(c) of this Charter, and periodically assess the adequacy of these procedures. (e) The Committee shall oversee any investigations of alleged fraud and illegality relating to the Company's finances. (f) The Committee shall establish procedures for: (1) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters; and (2) the confidential, anonymous submission by employees of the Company or concerns regarding questionable accounting or auditing matters. (g) The Committee shall meet no less frequently than annually with the external auditor and the Chief Financial Officer or, in the absence of a Chief Financial Officer, with the officer of the Company in charge of financial matters, to review accounting practices, internal controls, auditing matters and such other matters as the Committee deems appropriate.3.4.284.4.1.(a)The Committee shall be composed of three or more directors, the majority of whom are not employees, Control Persons or officers of the Company or any of its Associates or Affiliates, as such capitalized terms are defined by the TSX.(b)If at any time, the Company ceases to be exempt from Part 3 of National Instrument 52-110 - Audit Committees, every audit committee member shall be Independent, as such term is defined in said Instrument.(c)Notwithstanding Sections 4.1(a) and 4.1(b) of this Charter, the Committee and its membership shall at all times be so constituted as to meet all current, applicable legal, regulatory and listing requirements, including, without limitation, securities laws and the requirements of the TSX and of all applicable securities regulatory authorities.(d)Committee members shall be appointed by the Board from time to time. One member shall be designated by the Board to serve as Chair.4.2.(a) The Committee shall be composed of three or more directors, the majority of whom are not employees, Control Persons or officers of the Company or any of its Associates or Affiliates, as such capitalized terms are defined by the TSX. (b) If at any time, the Company ceases to be exempt from Part 3 of National Instrument 52-110 - Audit Committees, every audit committee member shall be Independent, as such term is defined in said Instrument. (c) Notwithstanding Sections 4.1(a) and 4.1(b) of this Charter, the Committee and its membership shall at all times be so constituted as to meet all current, applicable legal, regulatory and listing requirements, including, without limitation, securities laws and the requirements of the TSX and of all applicable securities regulatory authorities. (d) Committee members will be appointed by the Board. One member shall be designated by the Board to serve as Chair.(a)The Committee shall meet at least quarterly, at the discretion of the Chair or a majority of its members, as circumstances dictate or as may be required by applicable laws. A minimum of two and at least 50% of the members present either in person or by telephone shall constitute a quorum. Further, in order for a quorum to be constituted, the majority of members present must not be employees, Control Persons or officers of the Company or any of its Associates or Affiliates, as such capitalized terms are defined by the TSX.(b)If and whenever a vacancy in the Committee shall exist, the remaining members may exercise all of its powers and responsibilities provided that a quorum (as herein defined) remains in office.(c)The time and place at which meetings of the Committee shall be held, and the procedures at such meetings, shall be determined from time to time by the Committee. A meeting of the Committee may be called by letter, telephone, facsimile or electronic means, by giving 48 hours notice, or such greater notice as may be required under the Company’s By-Laws, provided that no notice shall be necessary if all the members are present either in person or by telephone or if those absent have waived notice or otherwise indicated their consent to the holding of such meeting.(d)The Committee shall keep minutes of its meetings which shall be submitted to the Board. The Committee may, from time to time, appoint any person, who need not be a member, to act as a secretary at any meeting.(e)The Committee may invite such officers, directors and employees of the Company as it deems appropriate, from time to time, to attend meetings of the Committee.(f)Any matters to be determined by the Committee shall be decided by a majority of the votes cast at a meeting of the Committee called for such purpose. Actions of the Committee may be taken by an instrument or instruments in writing signed by all members of the Committee, and such actions shall be effective as though they had been decided by a majority of the votes cast at a meeting of the Committee called for such purpose.5.(a) The Committee shall meet at least quarterly, at the discretion of the Chair or a majority of its members, as circumstances dictate or are required. A minimum of two and at least 50% of the members present in person or by telephone shall constitute a quorum. For quorum to exist, the majority of members present must not be Company' employees, Control Persons or officers or any of its Associates or Affiliates, (capitalized terms as defined by the TSX). (b) If a vacancy in the Committee exists, the remaining members may exercise all of its powers and responsibilities provided that a quorum (as herein defined) remains in office. (c) The time and place at which meetings of the Committee shall be held, and the procedures at such meetings, shall be determined by the Committee. A meeting of the Committee may be called by letter, telephone, facsimile or electronic means, by giving 48 hours notice, or such greater notice as may be required under the Company's By-Laws, provided that no notice shall be necessary if all the members are present either in person or by telephone or if those absent have waived notice. (d) The Committee shall keep minutes of its meetings which shall be submitted to the Board. The Committee may, from time to time, appoint any person, who need not be a member, to act as a secretary at any meeting. (e) The Committee may invite such officers, directors and employees of the Company as it deems appropriate, from time to time, to attend meetings of the Committee. Any matters to be determined by the Committee shall be decided by a majority of the votes cast at a meeting of the Committee called for such purpose. Actions of the Committee may be taken by an instrument or instruments in writing signed by all members of the Committee, and such actions shall be effective as though they had been decided by a majority of the votes cast at a meeting of the Committee called for such purpose.6.1. Purpose. a) "Board" shall mean the Board of Directors of the Company. b) "Cause" shall mean any of the following: i. a determination by the Company that there has been a willful, reckless or grossly negligent failure by the Optionee to perform his or her duties as an employee or consultant of the Company; ii. a determination by the Company that there has been a willful breach by the Optionee of any of the material terms or provisions of any employment or consulting agreement between such Optionee and the Company; iii. any conduct by the Optionee that either results in his or her conviction of a felony under the laws of the United States of America or any state thereof, or of an equivalent crime under the laws of any other jurisdiction; iv. a determination by the Company that the Optionee has committed an act or acts involving fraud, embezzlement, misappropriation, theft, breach of fiduciary duty or material dishonesty against the Company, its properties or personnel; v. any act by the Optionee that the Company determines to be in willful or wanton disregard of the Company's best interests, or which results, or is intended to result, directly or indirectly, in improper gain or personal enrichment of the Optionee at the expense of the Company; vi. a determination by the Company that there has been a willful, reckless or grossly negligent failure by the Optionee to comply with any rules, regulations, policies or procedures of the Company, or that the Optionee has engaged in any act, behavior or conduct demonstrating a deliberate and material violation or disregard of standards of behavior that the Company has a right to expect of its employees; or vii. if the Optionee, while employed by the Company and for two years thereafter, violates a confidentiality and/or noncompeting agreement with the Company, or fails to safeguard, divulges, communicates, uses to the detriment of the Company or for the benefit of any person or persons, or misuses in any way, any Confidential Information, provided however, that, if the Optionee has entered into a written employment agreement with the Company which remains effective and which expressly provides for a termination of such Optionee's employment for "cause," the term "Cause" as used herein shall have the meaning as set forth in the Optionee's employment agreement in lieu of the definition of "Cause" set forth in this Section 2(b). c) "Change of Control" shall mean the acquisition by any person or group (as that term is defined in the Exchange Act, and the rules promulgated pursuant to that act) in a single transaction or a series of transactions of thirty percent (30%) or more in voting power of the outstanding stock of the Company and a change of the composition of the Board of Directors so that, within two years after the acquisition took place, a majority of the members of the Board of Directors of the Company, or of any corporation with which the Company may be consolidated or merged, are persons who were not Directors or Officers of the Company or one of its Subsidiaries immediately prior to the acquisition, or to the first of a series of transactions which resulted in the acquisition of thirty percent (30%) or more in voting power of the outstanding stock of the Company. d) "Code" shall mean the Internal Revenue Code of 1986, as amended. e) "Committee" shall mean the stock option committee appointed by the Board or, if not appointed, the Board. f) "Common Stock" shall mean the Company's Common Stock, par value $0.001 per share. g) "Consultant" means any person or corporation engaged to provide ongoing management or consulting services for the Company or any employee of such person or corporation, other than a Director, Officer or an Employee. h) "Director" shall mean a member of the Board of Directors of the Company. i) "Eligible Participants" shall mean any Officers, Directors, Consultants, Employees, Management Company Employees and independent contractors providing services to the Company. Any person who files with the Committee, in a form satisfactory to the Committee, a written waiver of eligibility to receive any Option under this Plan shall not be eligible to receive any Option under this Plan for the duration of such waiver. j) "Employee" shall mean any person regularly employed by the Company or any parent or Subsidiary of the Company within the meaning of Section 3401(c) of the regulations promulgated thereunder k) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. l) "Fair Market Value" of a Share on any date of reference shall be the Closing Price of a share of Common Stock on the business day immediately preceding such date, unless the Committee in its sole discretion shall determine otherwise in a fair and uniform manner. For this purpose, the "Closing Price" of the Common Stock on any business day shall be (i) if the Common Stock is listed or admitted for trading on any United States national securities exchange, or if actual transactions are otherwise reported on a consolidated transaction reporting system, the last reported sale price of the Common Stock on such exchange or reporting system, as reported in any newspaper of general circulation, (ii) if the common stock is listed for trading on the TSX, the "market price" of the common stock on such exchange, (iii) if the Common Stock is quoted on The Nasdaq Stock Market ("Nasdaq"), or any similar system of automated dissemination of quotations of securities prices in common use, the mean between the closing high bid and low asked quotations for such day of the Common Stock on such system, or (iv) if neither clause (i), (ii) nor (iii) is applicable, the mean between the high bid and low asked quotations for the Common Stock as reported by the National Quotation Bureau Incorporated if at least two securities dealers have inserted both bid and asked quotations for the Common Stock on at least five of the 10 preceding days. If the information set forth in clauses (i) through (iii) above is unavailable or inapplicable to the Company (e.g., if the Company's Common Stock is not then publicly traded or quoted), then the "Fair Market Value" of a Share shall be the fair market value (i.e., the price at which a willing seller would sell a Share to a willing buyer when neither is acting under compulsion and when both have reasonable knowledge of all relevant facts) of a share of the Common Stock on the business day immediately preceding such date as the Committee in its sole and absolute discretion shall determine in a fair and uniform manner. m) "Incentive Stock Option" shall mean an incentive stock option as defined in Section 422 of the Code. n) "Insider" means (i) a director or senior officer of the Company, (ii) a director or senior officer of a company that is an Insider or subsidiary of the Company, (iii) a person that beneficially owns or controls, directly, or indirectly, voting shares carrying more than 10% of the voting rights attached to all outstanding voting shares of the Company, or the Company itself if it holds any of its own securities. o) "Management Company" shall mean the management company owned by a Director or Officer that is contracted to provide management services to the Company, which services are required for the ongoing successful operations of the business enterprise of the Company. p) "Management Company Employee" means an individual employed by a management company. q) "Non-Statutory Stock Option" or "Non-qualified Stock Option" shall mean an Option, which is not an Incentive Stock Option. r) "Officer" shall mean the Company's chairman, president (or the Chief Executive Officer), principal financial officer (or the Chief Financial Officer), principal accounting officer (or the controller), any vice-president of the Company in charge of a principal business unit, division or function (such as sales, administration or finance), any other officer who performs a policy-making function, or any other person who performs similar policy-making functions for the Company. Officers of Subsidiaries shall be deemed Officers of the Company if they perform such policy-making functions for the Company. As used in this paragraph, the phrase "policy-making function" does not include policy-making functions that are not significant. Unless specified otherwise in a resolution by the Board, an "executive officer" pursuant to Item 401(b) of Regulation S-K (17 C.F.R. § 229.401(b)) shall be only such person designated as an "Officer" pursuant to the foregoing provisions of this paragraph. s) "Option" (when capitalized) shall mean any stock option granted under this Plan. t) "Optioned Shares" mean the Shares, which may be acquired on exercise of an Option. u) "Optionee" shall mean a person to whom an Option is granted under this Plan or any person who succeeds to the rights of such person under this Plan by reason of the death of such person. v) "Plan" shall mean this Stock Option Plan of Energizer Resources Inc., as of November 2, 2015, which may be further amended or restated from time to time. w) "Share" or "Shares" shall mean a share or shares, as the case may be, of the Common Stock, as adjusted in accordance with Section 10 of this Plan. x) "Subsidiary" shall mean any corporation (other than the Company) in any unbroken chain of corporations beginning with the Company if, at the time of the granting of the Option, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50 percent or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. y) "TSX" means the Toronto Stock Exchange or any successor thereto. z) "TSX Manual" means the Toronto Stock Exchange Company Manual. aa) "U.S. Optionee" means an Optionee who is a citizen of the United States or a resident of the United States, in each case as defined in section 7701(a)(30) and section 7701(b)(1) of the Code. 3. Shares and Options. a) If any Option granted under this Plan shall terminate, expire, or be canceled, forfeited or surrendered as to any Shares, the Shares relating to such lapsed Option shall be available for issuance pursuant to new Options subsequently granted under this Plan. Upon the grant of any Option hereunder, the authorized and unissued Shares to which such Option relates shall be reserved for issuance to permit exercise under this Plan. b) Subject to the provisions of Section 15 hereof, an Option granted hereunder shall be either an Incentive Stock Option or a Non-Statutory Stock Option as determined by the Committee at the time of grant of such Option and shall clearly state whether it is an Incentive Stock Option or Non-Statutory Stock Option. c) No Incentive Stock Option shall be granted more than 10 years after the earlier of (i) the date on which this Plan is adopted by the Board or (ii) the date on which this Plan is approved by shareholders of the Company. d) Options otherwise qualifying as Incentive Stock Options hereunder will not be treated as Incentive Stock Options to the extent that the aggregate Fair Market Value (determined at the time the Option is granted) of the Shares, with respect to which Options meeting the requirements of Code Section 422(b) are exercisable for the first time by any individual during any calendar year (under all stock option or similar plans of the Company and any Subsidiary), exceeds U.S. $100,000. 4. TSX Limitations. a) the aggregate number of Shares issued to insiders of the Company within any 12-month period, or issuable to insiders of the Company at any time, under the Plan and any other security-based compensation arrangement of the Company, may not exceed 10% of the total number of issued and outstanding Common Shares of the Company at such time; b) the maximum aggregate number of Shares that may be reserved under the Plan for issuance to any one individual in any 12 month period shall not exceed 5% of the issued and outstanding Shares at the time of grant; unless the Company has obtained Disinterested Shareholder Approval (as such term is defined in the TSX Manual) for such an issuance; c) the maximum aggregate number of Shares that may be reserved under the Plan or other share compensation arrangements of the Company for issuance to any one Consultant during any 12 month period shall not exceed 2% of the issued and outstanding Shares at the time of grant; d) the maximum aggregate number of Shares that may be reserved under the Plan or other share compensation arrangement of the Company for issuance to persons who are employed in investor relations activities (as defined in the TSX Manual) during any 12 month period shall not exceed 2% of the issued and outstanding Shares at the time of grant; and e) the Board shall, through the establishment of the appropriate procedures, monitor the trading in the securities of the Company by all Optionees performing Investor Relations Activities, and a) Options under the Plan may only be granted to Eligible Participants. b) Each Option shall be evidenced by an option agreement that may contain any term deemed necessary or desirable by the Committee, provided such terms are not inconsistent with this Plan or any applicable law. c) In granting Options, the Committee shall take into consideration the contribution of the prospective Optionee has made, or is expected to make, to the success of the Company or its Subsidiaries and such other factors as the Committee shall determine. The Committee shall also have the authority to consult with and receive recommendations from Officers and other personnel of the Company and its Subsidiaries with regard to these matters. The Committee may from time to time in granting Options under this Plan prescribe such terms and conditions concerning such Options as it deems appropriate, provided that such terms and conditions are not more favorable to an Optionee than those expressly permitted herein; provided further, however, that to the extent not cancelled pursuant to Section 9(b) hereof, upon a Change in Control, any Options that have not yet vested, may, in the sole discretion of the Committee, vest upon such Change in Control. d) The Company covenants that all Employees, Consultants or Management Company Employees shall be bona fide Employees, Consultants or Management Company Employees as the case may be, of the Company or its Subsidiaries. e) The Options granted to Employees under this Plan shall be in addition to regular salaries, consulting fees, pension, life insurance or other benefits related to their employment with the Company or its Subsidiaries. Neither this Plan nor any Option granted under this Plan shall confer upon any person any right to employment or continuance of employment (or related salary and benefits) by the Company or its Subsidiaries. f) Subject to the policies of the TSX, an Option shall vest and may be exercised (in each case to the nearest full Share) during the period for which the option is granted in accordance with a vesting schedule as the Board may determine in its discretion. (a) An Option shall be deemed exercised when (i) the Company has received written notice of such exercise in accordance with the terms of the Option, (ii) full payment of the aggregate option price of the Shares as to which the Option is exercised has been made, (iii) the Optionee has agreed to be bound by the terms, provisions and conditions of any applicable stockholders' agreement, and (iv) arrangements that are satisfactory to the Committee in its sole discretion have been made for the Optionee's payment to the Company of the amount that is necessary for the Company or the Subsidiary employing the Optionee to withhold in accordance with applicable Federal, Provincial or state tax withholding requirements. Unless further limited by the Committee in any Option, the exercise price of any Shares purchased pursuant to the exercise of such Option shall be paid in cash, by certified or official bank check or by money order. (b) No Optionee shall be deemed to be a holder of any Shares subject to an Option unless and until a stock certificate or certificates for such Shares are issued to such person(s) under the terms of this Plan. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions or other rights for which the record date is prior to the date such stock certificate is issued, except as expressly provided in Section 10 hereof. 8. Exercise of Options. (a) The expiration date(s) of an Option shall be determined by the Committee at the time of grant, but in no event shall an Option be exercisable greater than 10 years from the date of grant of the Option. (b) Unless otherwise expressly provided in any Option as approved by the Committee, notwithstanding the exercise schedule set forth in any Option, each outstanding Option, may, in the sole discretion of the Committee, become fully exercisable upon the date of the occurrence of any Change of Control, but, unless otherwise expressly provided in any Option, no earlier than six months after the date of grant, and if and only if Optionee is in the employ of the Company on such date. (c) The Committee may in its sole discretion accelerate the date on which any Option may be exercised and may accelerate the vesting of any Shares subject to any Option or previously acquired by the exercise of any Option. (a) Unless otherwise expressly provided in any Option Agreement, and subject to any applicable limitations contained in Section 15(c) of this Plan, the unexercised portion of any Option shall automatically and without notice immediately terminate and become forfeited, null and void at the time of the earliest to occur of the following: (i) the expiration of a period not to exceed one year (such period to be determined by the Board in its sole discretion) after the date on which the Optionee's employment is terminated for any reason other than by reason of (a) Cause, (b) the termination of the Optionee's employment with the Company by such Optionee following less than 60 days' prior written notice to the Company of such termination (an "Improper Termination"), (c) a mental or physical disability (within the meaning of Section 22(e) of the Code) as determined by a medical doctor satisfactory to the Committee, or (d) death; (ii) immediately upon (a) the termination by the Company of the Optionee's employment for Cause, or (b) an Improper Termination; (iii) the later of (a) the expiration of a period not to exceed one year (such period to be determined by the Board in its sole discretion) after the date on which the Optionee's employment is terminated by reason of a mental or physical disability (within the meaning of Code Section 22(e)) as determined by a medical doctor satisfactory to the Committee, or (b) one year after the date on which the Optionee shall die if such death shall occur during such period; (iv) one year after the date of termination of the Optionee's employment by reason of death of the employee; or (v) the expiration date of the Option established on the date of grant and set forth in the Option Agreement. (b) The Committee in its sole discretion may, by giving written notice ("cancellation notice"), cancel effective upon the date of the consummation of any corporate transaction described in Subsection 10(d) hereof, any Option that remains unexercised on such date. Such cancellation notice shall be given a reasonable period of time prior to the proposed date of such cancellation and may be given either before or after approval of such corporate transaction. (c) Upon termination of Optionee's employment as described in this Section 9, or otherwise, any Option (or portion thereof) not previously vested or not yet exercisable pursuant to Section 8 of this Plan shall be immediately canceled. (a) If at any time while this Plan is in effect or unexercised Options are outstanding, there shall be any increase or decrease in the number of issued and outstanding Shares through the declaration of a stock dividend or through any recapitalization resulting in a stock split, combination or exchange of Shares (other than any such exchange or issuance of Shares through which Shares are issued to effect an acquisition of another business or entity or the Company's purchase of Shares to exercise a "call" purchase option), then and in such event: (i) appropriate adjustment shall be made in the maximum number of Shares available for grant under this Plan, so that the same percentage of the Company's issued and outstanding Shares shall continue to be subject to being so optioned; (ii) appropriate adjustment shall be made in the number of Shares and the exercise price per Share thereof then subject to any outstanding Option, so that the same percentage of the Company's issued and outstanding Shares shall remain subject to purchase at the same aggregate exercise price; and (iii) such adjustments shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive. (b) Subject to the prior consent of the TSX and the specific terms of any Option, the Committee may change the terms of Options outstanding under this Plan, with respect to the option price or the number of Shares subject to the Options, or both, when, in the Committee's sole discretion, such adjustments become appropriate by reason of a corporate transaction described in Subsection 10(d) hereof, or otherwise, provided that any adjustment to an outstanding Option held by a U.S. Optionee will be made in a manner that complies with, and does not create adverse tax consequences under, section 409A of the Code. (c) Except as otherwise expressly provided herein, the issuance by the Company of shares of its capital stock of any class, or securities convertible into or exchangeable for shares of its capital stock of any class, either in connection with a direct or underwritten sale, or upon the exercise of rights or warrants to subscribe therefor or purchase such Shares, or upon conversion of obligations of the Company into such Shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of or exercise price of Shares then subject to outstanding Options granted under this Plan. (d) Without limiting the generality of the foregoing, the existence of outstanding Options granted under this Plan shall not affect in any manner the right or power of the Company to make, authorize or consummate: (i) any or all adjustments, reclassifications, recapitalizations, reorganizations or other changes in the Company's capital structure or its business; (ii) any merger or consolidation of the Company or to which the Company is a party; (iii) any issuance by the Company of debt securities, or preferred or preference stock that would rank senior to or above the Shares subject to outstanding Options; (iv) any purchase or issuance by the Company of Shares or other classes of common stock or common equity securities; (v) the dissolution or liquidation of the Company; (vi) any sale, transfer, encumbrance, pledge or assignment of all or any part of the assets or business of the Company; or (vii) any other corporate act or proceeding, whether of a similar character or otherwise. (e) The Optionee shall receive written notice within a reasonable time prior to the consummation of such action advising the Optionee of any of the foregoing. The Committee may, in the exercise of its sole discretion, in such instances declare that any Option shall terminate as of a date fixed by the Board and give each Optionee the right to exercise his or her Option. 12. Issuance of Shares. (i) a representation and warranty by the Optionee to the Company, at the time any Option is exercised, that he or she is acquiring the Shares to be issued to him for investment and not with a view to, or for sale in connection with, the distribution of any such Shares; and (ii) an agreement and undertaking to comply with all of the terms, restrictions and provisions set forth in any then applicable stockholders' agreement relating to the Shares, including, without limitation, any restrictions on transferability, any rights of first refusal and any option of the Company to "call" or purchase such Shares under then applicable agreements, and (iii) any restrictive legend or legends, to be embossed or imprinted on Share certificates, that are, in the discretion of the Committee, necessary or appropriate to comply with the provisions of any securities law or other restriction applicable to the issuance of the Shares. (iv) if and for so long as the Shares are listed on the TSX, the exercise price is reduced to Discounted Market Price, Options will be subject to a four month hold period commencing from the date of grant and any Shares issued pursuant to the exercise of an Option prior to the expiry of the hold period will bear the following TSX legend (or similar wording, with the same effect): 13. Stock Appreciation Rights. a) This Plan shall be administered by the Committee, which shall consist of not less than two Directors. The Committee shall have all of the powers of the Board with respect to this Plan. Any member of the Committee may be removed at any time, with or without cause, by resolution of the Board and any vacancy occurring in the membership of the Committee may be filled by appointment by the Board. b) Subject to the provisions of this Plan and the policies of the TSX, the Committee shall have the authority, in its sole discretion, to: a. grant Options; b. determine the exercise price per Share at which Options may be exercised; c. determine the Optionees to whom, and time or times at which, Options shall be granted; d. determine the number of Shares to be represented by each Option; e. determine the terms, conditions and provisions of each Option granted (which need not be identical) and, with the consent of the holder thereof, modify or amend each Option, provided that no modification of an outstanding Option held by a U.S. Optionee will be made if it would result in adverse tax consequences under Section 409A of the Code; f. accelerate the exercise date of any Option; and g. make all other determinations deemed necessary or advisable for the administration of this Plan, including granting, pricing and cancelling Options. c) The Committee, from time to time, may adopt rules and regulations for carrying out the purposes of this Plan. The Committee's determinations and its interpretation and construction of any provision of this Plan shall be final, conclusive and binding upon all Optionees and any holders of any Options granted under this Plan. d) Any and all decisions or determinations of the Committee shall be made either: a. by a majority vote of the members of the Committee at a meeting of the Committee; or b. without a meeting by the unanimous written approval of the members of the Committee. e) No member of the Committee, or any Officer or Director of the Company or its Subsidiaries, shall be personally liable for any act or omission made in good faith in connection with this Plan. a) Notwithstanding any other provisions of this Plan to the contrary, an Incentive Stock Option shall not be granted to any person owning directly or indirectly (through attribution under Section 424(d) of the Code) at the date of grant, stock possessing more than 10% of the total combined voting power of all classes of stock of the Company (or of its Subsidiary) at the date of grant unless the exercise price of such Option is at least 110% of the Fair Market Value of the Shares subject to such Option on the date the Option is granted, and such Option by its terms is not exercisable after the expiration of 5 years from the date such Option is granted. b) An Incentive Stock Option may be granted only to a person who is an employee of the Company or of any parent or subsidiary of the Company (within the meaning of section 424 of the Code). c) Incentive Stock Options are subject to the limitations contained in Section 9(a) of this Plan and the applicable Option Agreement. In addition, in order to retain its status as an Incentive Stock Option, the following rules related to timing of exercise of the Incentive Stock Option following termination of employment apply, and failure to exercise within the applicable time period will result in loss of status as an Incentive Stock Option. i. If a U.S. Optionee who has been granted an Incentive Stock Option ceases to be an employee of the Company (or by a subsidiary of the Company within the meaning of Section 424 of the Code) for any reason, whether voluntary or involuntary, other than death, permanent disability or just cause, then in order for the Option to retain Incentive Stock Option status, the Incentive Stock Option must be exercised by the earlier of (a) the date that is three months after the date of cessation of employment or (b) the expiration of the term of such Incentive Stock Option. For the purposes of this Section, the employment of a U.S. Optionee who has been granted an Incentive Stock Option will not be considered interrupted or terminated upon (a) sick leave, military leave or any other leave of absence approved by the Committee that does not exceed ninety (90) days in the aggregate; provided, however, that if reemployment upon the expiration of any such leave is guaranteed by contract or applicable law, such ninety (90) day limitation will not apply, or (b) a transfer from one office of the Company (or of any subsidiary) to another office of the Company (or of any parent or subsidiary) or a transfer between the Company and any parent or subsidiary. ii. If a U.S. Optionee who has been granted Incentive Stock Options ceases to be employed by the Company (or by any parent or subsidiary of the Company within the meaning of Section 424 of the Code) because of a permanent disability, such U.S. Optionee may exercise such Incentive Stock Option (to the extent such Incentive Stock Option was exercisable on the date of permanent disability at any time prior to the earlier of (a) the expiration date of the Option established on the date of grant and set forth in the Option Agreement; or (b) the date that is later of (i) the expiration of a period not to exceed one year (such period to be determined by the Board in its sole discretion) after the date on which the U.S. Optionee's employment is terminated by reason of a mental or physical disability (within the meaning of Code Section 22(e)) as determined by a medical doctor satisfactory to the Committee, or (ii) one year after the date on which the U.S. Optionee shall die if such death shall occur during such period. d) In the event that this Plan is not approved by the shareholders of the Company within twelve (12) months before or after the date on which this Plan is adopted by the Board, any Incentive Stock Option granted under this Plan will automatically be deemed to be a Non-Statutory Stock Option. (a) This Plan shall be administered and interpreted so that all Incentive Stock Options granted under this Plan will qualify as Incentive Stock Options under Section 422 of the Code. If any provision of this Plan should be held invalid for the granting of Incentive Stock Options or illegal for any reason, such determination shall not affect the remaining provisions hereof, and this Plan shall be construed and enforced as if such provision had never been included in this Plan. (b) This Plan shall be governed by the laws of the Province of Ontario, Canada. (c) Headings contained in this Plan are for convenience only and shall in no manner be construed as part of this Plan or affect the meaning or interpretation of any part of this Plan. (d) Any reference to the masculine, feminine, or neuter gender shall be a reference to such other gender as is appropriate. (e) Time shall be of the essence with respect to all time periods specified for the giving of notices to the company hereunder, as well as all time periods for the expiration and termination of Options in accordance with Section 9 hereof (or as otherwise set forth in an option agreement). a) Notwithstanding any provision in the Plan allowing amendments without security holder approval, specific security holder approval is required for the following amendments: a. a reduction in the exercise price or purchase price benefiting an insider of the issuer; b. any amendment to remove or to exceed the insider participation limit; c. an increase to the maximum number of securities issuable, either as a fixed number or a fixed percentage of the listed issuer's outstanding capital represented by such securities; and d. amendments to an amending provision within a security based compensation arrangement. b) Subject to the limitations in Section 17(a) and TSX approval, the exercise price per Optioned Share under an Option may be reduced at the discretion of the Board or Committee only if: a. disinterested shareholder approval of the shareholders of the Company is obtained for any reduction in the exercise price under an Option held by an Insider of the Company; and b. at least six months has elapsed since the later of the date such Option was granted and the date the exercise price for such Option was last amended; and c. provided that if the exercise price is reduced to the then Discounted Market Price (as such term is defined in the TSX Manual), the TSX four month hold period will apply from the date of the amendment and further provided that no such conditions will apply in the case of an adjustment made under Section 10(a) hereof. Notwithstanding anything to the contrary herein, the exercise price of an outstanding Option held by a U.S. Optionee will not be reduced below the Fair Market Value of a Share on the date of such modification of the Option. c) Subject to the limitations in Section 17(a) and 17(b) and the policies of the TSX, the Board or the Committee may from time to time amend this Plan or any Option without the consent or approval of the stockholders of the Company; d) Except to the extent provided in Section 9, no amendment or suspension of this Plan or any Option issued hereunder shall substantially impair any Option previously granted to any Optionee without the consent of such Optionee. a) This Plan shall terminate on November 2, 2025, being ten years after the date of adoption by the Board of Directors. b) Notwithstanding the termination of this Plan, all options issued under this Plan shall remain outstanding and continue to be governed by the terms and conditions of this Plan.