UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-PX
ANNUAL REPORT OF PROXY VOTING OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
INVESTMENT COMPANY ACT FILE NUMBER 811-1800
U.S. GLOBAL INVESTORS FUNDS
7900 CALLAGHAN ROAD
SAN ANTONIO, TX 78229
(Address of principal executive offices) (Zip code)
SUSAN B. MCGEE, ESQ.
7900 CALLAGHAN ROAD
SAN ANTONIO, TX 78229
(Name and address of agent for service)
Registrant's telephone number, including area
code: 210-308-1234
Date of fiscal year end: JUNE 30
Date of reporting period: JUNE 30, 2004
ITEM 1. PROXY VOTING RECORD.
Vote Summary Report
Apr 01, 2004 - Jun 30, 2004
All American Fund
Mtg Company/ Mgmt Vote Record Shares
Date/Type Ballot Issues Security Rec Cast Date Prpnent Voted
- ----------------- -------------------------------------- ------------ ----------- ------------- ------------- ----------- ----------
- ------------------------------------------------------------------------------------------------------------------------------------
05/11/04 - A 3M CO *MMM* 88579Y101 03/12/04 1,400
1 Elect Directors For Split Mgmt
1.1 Elect Director Edward A. Brennan ---
Withhold
We recommend a vote FOR the directors with the
exceptions of insider W. James McNerney, Jr. and
independent outsiders Kevin W. Sharer and Edward A.
Brennan. We recommend that shareholders WITHHOLD votes
from W. James McNerney, Jr., Kevin W. Sharer, and
Edward A. Brennan for failure to implement the proposal
to submit the company's poison pill to a shareholder
vote.
1.2 Elect Director Michael L. Eskew --- For
1.3 Elect Director W. James McNerney, Jr. ---
Withhold
1.4 Elect Director Kevin W. Sharer ---
Withhold
2 Ratify Auditors For For Mgmt
3 Increase Authorized Common Stock For For Mgmt
The requested increase of 1,500,000,000 shares, is
below the allowable threshold of 2,025,000,000
shares. We recommend a vote FOR Item 3.
4 Separate Chairman and CEO Positions Against For ShrHoldr
Absent an established lead director with substantial
duties as outlined in (1) to (7), we believe that a
company of this size should be able to find an
independent qualified director willing to serve as
chairman. We recommend FOR the proposal.
04/21/04 - A 7-Eleven, Inc. *SE* 817826209 02/27/04 6,400
1 Elect Directors For Split Mgmt
1.1 Elect Director Toshifumi Suzuki ---
Withhold
We recommend a vote FOR the directors with the
exception of insiders Toshifumi Suzuki, Masaaki
Asakura, Masaaki Kamata, James W. Keyes and Kazuo
Otsuka. We recommend that shareholders WITHHOLD
votes from Toshifumi Suzuki, Masaaki Asakura,
Masaaki Kamata, James W. Keyes and Kazuo Otsuka for
failure to establish a majority independent board.
1.2 Elect Director Yoshitami Arai --- For
1.3 Elect Director Masaaki Asakura ---
Withhold
1.4 Elect Director Jay W. Chai --- For
1.5 Elect Director R. Randolph Devening ---
For
1.6 Elect Director Gary J. Fernandes --- For
1.7 Elect Director Masaaki Kamata --- Withhold
1.8 Elect Director James W. Keyes --- Withhold
1.9 Elect Director Kazuo Otsuka --- Withhold
1.10 Elect Director Lewis E. Platt --- For
2 Ratify Auditors For For Mgmt
3 Approve Executive Incentive Bonus Plan For For Mgmt
The performance measures included under the plan
are appropriate for the company given its line of
business, long-term strategic objectives, and
industry-specific measures for assessing market
competitiveness. Additionally, the plan is
administered by a committee of independent
outsiders who must certify attainment of these
objective, measurable performance goals before cash
awards are paid to participants. Moreover,
preservation of the full deductibility of all
compensation paid reduces the company's corporate
tax obligation.
4 Other Business For Against Mgmt
As we cannot know the content of these issues, we
do not recommend that shareholders approve this
request.
05/27/04 - A Ace Ltd. *ACE* G0070K103 04/08/04 4,000
Meeting for Holders of ADRs
1 Elect Directors For For Mgmt
1.1 Elect Director Brian Duperreault --- For
These are routine board elections.
1.2 Elect Director Robert M. Hernandez --- For
1.3 Elect Director Peter Menikoff --- For
1.4 Elect Director Robert Ripp --- For
1.5 Elect Director Dermot F. Smurfit --- For
2 PROPOSAL TO APPROVE THE ACE LIMITED 2004 For For Mgmt
LONG-TERM INCENTIVE PLAN.
V. Vote Recommendation The total cost of the
company's plans of 6.25 percent is within the
allowable cap for this company of 10.65 percent.
Additionally, this plan expressly forbids
repricing.
3 PROPOSAL TO RATIFY THE APPOINTMENT OF For For Mgmt
PRICEWATERHOUSECOOPERS LLP AS THE
INDEPENDENT ACCOUNTANTS OF ACE LIMITED
FOR THE FISCAL YEAR ENDING DECEMBER 31,
2004.
05/20/04 - A Advanced Fibre Communications, Inc. 00754A105 03/23/04 4,000
*AFCI*
1 Elect Directors For For Mgmt
2 Ratify Auditors For For Mgmt
04/30/04 - A Alcoa Inc. *AA* 013817101 02/02/04 3,000
1 Elect Directors For For Mgmt
1.1 Elect Director Alain J.P. Belda --- For
1.2 Elect Director Carlos Ghosn --- For
1.3 Elect Director Henry B. Schacht --- For
1.4 Elect Director Franklin A. Thomas --- For
2 Approve Omnibus Stock Plan For For Mgmt
V.
Vote Recommendation The total cost of the company's
plans of 4.27 percent is within the allowable cap
for this company of 6.52 percent. Additionally,
this plan expressly forbids repricing.
3 Report on Pay Disparity Against Against ShrHoldr
Based on our concerns regarding the utility of the
proposed report, and the independence of the company's
compensation committee, we do not believe that
preparation of the requested report would yield
meaningful information to shareholders regarding the
efficacy of the company's executive compensation
policies and practices.
4 Submit Severance Agreement Against Against ShrHoldr
(Change-in-Control) to Shareholder Vote
In this case, we believe that the ceiling set by
the proponent of 2.00 times the sum of an
executive's base salary and bonus is lower than the
standard threshold level of 2.99 times of base
salary and bonus of severance remuneration for
corporate executives that should be subject to a
shareholder vote. Additionally, Alcoa's board of
directors has adopted a policy to require
shareholder approval of future severance agreements
if such agreements would result in a payment excess
of 2.99 times the salary and bonus of the executive
based on the 2003 annual shareholder meeting.
Therefore, ISS finds the proposal in this case
overly restrictive and recommends voting AGAINST
it.
04/26/04 - A American Express Co. *AXP* 025816109 02/27/04 4,600
1 Elect Directors For For Mgmt
1.1 Elect Director Daniel F. Akerson --- For
We recommend a vote FOR the directors with the
exception of affiliated outsider Vernon E. Jordan, Jr.
We recommend that shareholders WITHHOLD votes from
Vernon E. Jordan, Jr. for sitting on more than six
boards.
1.2 Elect Director Charlene Barshefsky --- For
1.3 Elect Director William G. Bowen --- For
1.4 Elect Director Ursula M. Burns --- For
1.5 Elect Director Kenneth I. Chenault --- For
1.6 Elect Director Peter R. Dolan --- For
1.7 Elect Director Vernon E. Jordan, Jr. ---
For
1.8 Elect Director Jan Leschly --- For
1.9 Elect Director Richard A. McGinn --- For
1.10 Elect Director Edward D. Miller --- For
1.11 Elect Director Frank P. Popoff --- For
1.12 Elect Director Robert D. Walter --- For
2 Ratify Auditors For For Mgmt
3 Establish Term Limits for Directors Against Against ShrHoldr
Under an effective corporate governance system,
shareholders have the right to express their
preferences each year by voting on directors at the
annual meeting. Thus, shareholders can remove or
reelect directors as they see fit.
4 Report on Political Against Against ShrHoldr
Contributions/Activities
When reviewing requests for proposals on political
contributions, ISS takes into account the scope and
nature of the request, the company's adherence to
laws and regulations governing political
contributions, and company policies and additional
disclosure on such contributions. In the case of
American Express, we note that the company complies
with federal, state, and local laws regarding
contributions to political candidates or
organizations. Further, the company offers to
provide information on political contributions to
shareholders upon request. Therefore, the scope of
the disclosure requested in this proposal may not
be substantially different from information
currently available, and may not provide any
significant benefit to shareholders. As such, it
does not appear that preparing and publicizing such
reports in the manner requested by the proponent
would be the most effective use of company assets.
05/19/04 - A American International Group, Inc. 026874107 03/26/04 2,200
*AIG*
1 Elect Directors For For Mgmt
1.1 Elect Director M. Bernard Aidinoff --- For
1.2 Elect Director Pei-Yuan Chia --- For
1.3 Elect Director Marshall A. Cohen --- For
1.4 Elect Director Willaim S. Cohen --- For
1.5 Elect Director Martin S. Feldstein --- For
1.6 Elect Director Ellen V. Futter --- For
1.7 Elect Director Maurice R. Greenberg ---
For
1.8 Elect Director Carla A. Hills --- For
1.9 Elect Director Frank J. Hoenemeyer --- For
1.10 Elect Director Richard C. Holbrooke ---
For
1.11 Elect Director Donald P. Kanak --- For
1.12 Elect Director Howard I. Smith --- For
1.13 Elect Director Martin J. Sullivan --- For
1.14 Elect Director Edmund S.W. Tse --- For
1.15 Elect Director Frank G. Zarb --- For
2 Approve Executive Incentive Bonus Plan For For Mgmt
The performance measures included under the plan are
appropriate for the company given its line of business,
long-term strategic objectives, and industry-specific
measures for assessing market competitiveness.
Additionally, the plan is administered by a committee
of independent outsiders who must certify attainment of
these objective, measurable performance goals before
cash awards are paid to participants. Moreover,
preservation of the full deductibility of all
compensation paid reduces the company's corporate tax
obligation.
3 Approve Non-Employee Director Stock For For Mgmt
Option Plan
V.
Vote Recommendation The total cost of the company's
plans of 2.17 percent is within the allowable cap
for this company of 8.00 percent.
4 Ratify Auditors For For Mgmt
5 Report on Political Against Against ShrHoldr
Contributions/Activities
When reviewing requests for proposals on political
contributions, ISS takes into account the scope and
nature of the request, the company's adherence to
laws and regulations governing political
contributions, and company policies and additional
disclosure on such contributions. In the case of
AIG, we note that the company complies with state
and local laws regarding contributions to political
candidates or organizations. Further, the extensive
scope of the reports requested in this proposal may
not be substantially different from information
currently available and could prove costly and
difficult for the company to publish in a formal
report. As such, it does not appear that preparing
and publicizing such reports in the manner
requested by the proponent would be the most
effective use of shareholder funds.
6 Divest from Tobacco Equities Against Against ShrHoldr
Therefore, because of the restrictive format and
potential financial impact of this proposal, we do
not recommend shareholder support for this
resolution.
7 Link Executive Compensation to Predatory Against Against ShrHoldr
Lending
While AIG does not explicitly address the issue of
predatory lending as a function of executive
compensation, ISS notes that the company has an
independent compensation committee and a charter
that discusses the factors used in determining
executive compensation. Additionally, although some
lending institutions may have adopted policies that
generally link executive compensation to
responsible business practices, it does not appear
that the company's main competitors specifically
tie any portion of executive compensation to
predatory lending. Moreover, the company's current
compensation levels have not been the subject of
recent, significant controversy. ISS also notes
that the company has policies and processes aimed
at eliminating instances of predatory lending
within the company's operations, including
compliance review by the legal and compliance
departments. Based on these policies to ensure
compliance with laws aimed at preventing predatory
lending, the independence of the compensation
committee, and the absence of controversy
surrounding current executive compensation we do
not believe that this review and a subsequent
report are necessary at this time.
05/13/04 - A Amgen, Inc. *AMGN* 031162100 03/19/04 4,400
1 Elect Directors For Split Mgmt
1.1 Elect Director Frank J. Biondi, Jr. ---
For
We recommend a vote FOR the directors with the
exception of affiliated outsider Jerry D. Choate.
We recommend that shareholders WITHHOLD votes from
Jerry D. Choate for standing as an affiliated
outsider on the Audit and Compensation committees.
1.2 Elect Director Jerry D. Choate ---
Withhold
1.3 Elect Director Frank C. Herringer --- For
1.4 Elect Director Gilbert S. Omenn --- For
2 Ratify Auditors For For Mgmt
3 Prepare Glass Ceiling Report Against Against ShrHoldr
4 Expense Stock Options Against For ShrHoldr
04/28/04 - A Anheuser-Busch Companies, Inc. *BUD* 035229103 03/01/04 2,000
1 Elect Directors For For Mgmt
2 Ratify Auditors For For Mgmt
05/13/04 - A Applebee's International, Inc. 037899101 03/15/04 4,000
*APPB*
1 Elect Directors For For Mgmt
1.1 Elect Director Jack P. Helms --- For
1.2 Elect Director Lloyd L. Hill --- For
1.3 Elect Director Burton M. Sack --- For
1.4 Elect Director Michael A. Volkema --- For
1.5 Elect Director Steven K. Lumpkin --- For
2 Amend Omnibus Stock Plan For For Mgmt
V.
Vote Recommendation The total cost of the company's
plans of 8.35 percent is within the allowable cap
for this company of 19.93 percent. Additionally,
this plan expressly forbids repricing.
3 Approve Employee Stock Purchase Plan For For Mgmt
ISS approves of this plan because it complies with
Section 423 of the Internal Revenue Code, the number of
shares being reserved is relatively conservative, the
offering period is reasonable, and there are limits on
participation.
4 Ratify Auditors For For Mgmt
5 Report on Genetically Modified Organisms Against Against ShrHoldr
In this case, the proponent is asking for a report
on the company's policies regarding GE ingredients
as well as any contingency plan for sourcing non-GE
ingredients should the need arise. While we
generally support proposals that seek to provide
shareholders with greater disclosure regarding the
risks associated with their investment, we believe
that generating such a report could be time
consuming and costly to the company without
providing significant value to shareholders. Since
the government bodies tasked with determining the
health and safety have determined that GE
ingredients are not significantly different from
conventional products, certain raw materials have
seen a tremendous growth in the use of the GE
products. This type of market saturation, combined
with potential difficulties in determining a
difference between engineered and conventional
products with current testing procedures may result
in inaccurate results. We further note that the
company currently meets government standards with
regards to food safety issues. Finally, we believe
that planning alternatives for sourcing non-GE
ingredients, should the situation require, would be
based largely on speculation about future
restrictions and legislation and may not be
ultimately beneficial to the company or its
shareholders. Based on the potential expenses and
difficulty acquiring reliable results in testing GE
ingredients, we do not feel this report would be a
beneficial use of shareholder assets.
05/06/04 - A Avon Products, Inc. *AVP* 054303102 03/15/04 2,000
1 Elect Directors For Split Mgmt
1.1 Elect Director Edward T. Fogarty --- For
We recommend a vote FOR the directors with the
exception of Maria Elena Lagomasino. We recommend
that shareholders WITHHOLD votes from Maria Elena
Lagomasino for standing as an affiliated outsider
on the Compensation and Nominating committees.
1.2 Elect Director Susan J. Kropf --- For
1.3 Elect Director Maria Elena Lagomasino ---
Withhold
2 Ratify Auditors For For Mgmt
3 Increase Authorized Common Stock For For Mgmt
The requested increase of 700,000,000 shares is
below the allowable threshold of 880,000,000
shares.
4 Declassify the Board of Directors Against For ShrHoldr
The ability to elect directors is the single most
important use of the shareholder franchise, and all
directors should be accountable on an annual basis. A
classified board can entrench management and
effectively preclude most takeover bids or proxy
contests. Board classification forces dissidents and
would-be acquirers to negotiate with the incumbent
board, which has the authority to decide on offers
without a shareholder vote.
5 Report on Feasibility of Removing Against Against ShrHoldr
Parabens from Company Products
As regulatory authorities approve of paraben use
and replacing them with other preservatives could
present potential health risks, we recommend
shareholders do not approve this proposal at this
time.
6 Report on Feasibility of Removing Dibutyl Against Against ShrHoldr
Phthalate from Company Products
While ISS notes that the proponent has raised some
issues of concern, we believe that the company has
taken appropriate steps to ensure that its products
comply with laws and regulations related to
consumer safety. Moreover, since the product is
approved for cosmetic applications by the
government organizations tasked with evaluating
consumer product safety, and science on this issue
remains inconclusive, ISS believes that undertaking
the expense preparing a report to evaluate the
feasibility of removing this chemical from its
products based on speculation is unnecessary. As
such, we do not recommend shareholder support for
this resolution.
05/11/04 - A Benchmark Electronics, Inc. *BHE* 08160H101 03/31/04 3,000
1 Elect Directors For For Mgmt
2 Amend Omnibus Stock Plan For For Mgmt
V.
Vote Recommendation The total cost of the company's
plans of 18.40 percent is within the allowable cap
for this company of 19.79 percent.
3 Ratify Auditors For For Mgmt
04/29/04 - A Broadcom Corp. *BRCM* 111320107 03/05/04 3,000
1 Elect Directors For For Mgmt
1.1 Elect Director George L. Farinsky --- For
We recommend a vote FOR the directors.
1.2 Elect Director John Major --- For
1.3 Elect Director Alan E. Ross --- For
1.4 Elect Director Henry Samueli, Ph.D. ---
For
1.5 Elect Director Robert E. Switz --- For
1.6 Elect Director Werner F. Wolfen --- For
2 Amend Omnibus Stock Plan For Against Mgmt
V.
Vote Recommendation The total cost of the company's
plans of 63.26 percent is above the allowable cap
for this company of 12.40 percent. Additionally,
this company has repriced stock options without
shareholder approval in the past. The plan allows
repricing of underwater stock options without
shareholder approval, which we believe reduces the
incentive value of the plan.
3 Ratify Auditors For For Mgmt
04/21/04 - A Burlington Resources Inc. *BR* 122014103 02/23/04 1,000
1 Elect Directors For Split Mgmt
1.1 Elect Director Barbara T. Alexander ---
For
We recommend a vote FOR the directors with the
exceptions of affiliated outsiders Walter Scott, Jr.
and Kenneth W. Orce. We recommend that shareholders
WITHHOLD votes from Walter Scott, Jr. for standing as
an affiliated outsider on the Compensation and
Nominating committees, and Kenneth W. Orce for standing
as an affiliated outsider on the Nominating Committee.
1.2 Elect Director Reuben V. Anderson --- For
1.3 Elect Director Laird I. Grant --- For
1.4 Elect Director Robert J. Harding --- For
1.5 Elect Director John T. LaMacchia --- For
1.6 Elect Director Randy L. Limbacher --- For
1.7 Elect Director James F. McDonald --- For
1.8 Elect Director Kenneth W. Orce ---
Withhold
1.9 Elect Director Donald M. Roberts --- For
1.10 Elect Director James A. Runde --- For
1.11 Elect Director John F. Schwarz --- For
1.12 Elect Director Walter Scott, Jr. ---
Withhold
1.13 Elect Director Bobby S. Shackouls --- For
1.14 Elect Director Steven J. Shapiro --- For
1.15 Elect Director William E. Wade, Jr. ---
For
2 Approve Increase in Common Stock and a For For Mgmt
Stock Split
3 Ratify Auditors For For Mgmt
05/26/04 - A Calpine Corp. *CPN* 131347106 03/29/04 20,000
1 Elect Directors For Withhold Mgmt
1.1 Elect Director Ann B. Curtis --- Withhold
We recommend withholding votes from all of the
nominees. We recommend that shareholders WITHHOLD
votes from independent outsiders Gerald Greenwald,
Kenneth T. Derr, and insider Ann B. Curtis for
failure to implement the proposal to submit the
company's poison pill to a shareholder vote.
1.2 Elect Director Kenneth T. Derr ---
Withhold
1.3 Elect Director Gerald Greenwald ---
Withhold
2 Increase Authorized Common Stock For For Mgmt
The requested increase of 1,000,000,000 shares is
below the allowable threshold of 1,100,000,000
shares. We recommend a vote FOR the proposal.
3 Amend Omnibus Stock Plan For For Mgmt
V. Vote Recommendation The total cost of the company's
plans of 5.91 percent is within the allowable cap for
this company of 10.89 percent. Additionally, this plan
expressly forbids repricing. Note that 35.64 percent of
the grants last year were made to the top five
executive officers.
4 Amend Employee Stock Purchase Plan For For Mgmt
ISS approves of this item because the plan complies
with Section 423 of the Internal Revenue Code, the
number of shares being added is relatively
conservative, the offering period is reasonable, and
there are limitations on participation.
5 Implement Indigenous Peoples Right Against Against ShrHoldr
Policy/ Cease Medicine Lake Development
ISS generally supports proposals that call for
increased disclosure on matters of importance to
shareholders. Such transparency can assist
shareholders in better evaluating the business
risks associated with their investment. However,
the benefits derived from this disclosure must be
weighed against the cost and burden of preparing
the information and the potential impacts that the
disclosure may have on company strategy or
operations. In this case, ISS notes that the
proponents go beyond a request for increased
transparency or the creation of a formal policy to
request that the company cease its operations in a
particular region. While we believe that the intent
of this proposal raises certain valid concerns
regarding the company's position on indigenous
peoples rights, we also note that Calpine has other
operations in indigenous land that have
demonstrated a degree of successful interaction
with Native American groups. Further, the company
has received authorization from the appropriate
organizations to pursue development in the Medicine
Lake Highland region and the company believes that
the opportunities presented in this region could
prove to be valuable assets for the company.
Moreover, federal courts summarily dismissed the
litigation referenced by the proponent. Therefore,
we agree with the proponents that Calpine could
benefit from the formation of a policy on
indigenous peoples' rights and increased disclosure
on its operations in Native American territories;
however, ISS believes that requesting complete
cessation of operations or consideration of further
development in a region that may provide valuable
resources to the company is unduly restrictive, and
better left to a decision by Calpine's management
after careful review. As such, we do not recommend
support for the proposal at this time.
6 Limit Awards to Executives Against Against ShrHoldr
In this case, the company awards long-term,
equity-based incentive awards in the form of options
with an exercise price equal to the market price of the
stock on the day of the grant and with a four-year
vesting schedule. The company does not issue
performance-based restricted shares. Also, the company
does not have a holding period or executive ownership
requirement. While we do like some of the elements of
the restricted stock proposal, including granting of
restricted stock based on achievement of justifiable
operational performance criteria and disclosure of
actual hurdle rates for the performance criteria, given
the fact that the proponent asks for a complete
substitution of options with restricted stock, we
believe the proposal is unduly restrictive.
7 Include Voting Recommendations of Against Against ShrHoldr
Institutional Holders in Proxy Statement
ISS concurs with the company's argument that the
resolution could be expensive and unfeasible to
administer. Such additional corporate expenditures
would be hard to justify considering that proxy
analyses are already available to the public from a
variety of vendors and on the web from certain
institutional investors. The decision to follow
another institutional investor's recommendation is
best left with the individual shareholder.
8 Ratify Auditors For For Mgmt
04/29/04 - A Capital One Financial Corp. *COF* 14040H105 02/29/04 1,900
1 Elect Directors For For Mgmt
2 Ratify Auditors For For Mgmt
3 Approve Omnibus Stock Plan For For Mgmt
V. Vote Recommendation The total cost of the
company's plans of 10.31 percent is within the
allowable cap for this company of 10.59 percent.
Additionally, this plan expressly forbids
repricing.
04/14/04 - A Caterpillar Inc. *CAT* 149123101 02/17/04 1,200
1 Elect Directors For For Mgmt
1.1 Elect Director John T. Dillon --- For
We recommend a vote FOR the directors.
1.2 Elect Director Juan Gallardo --- For
1.3 Elect Director William A. Osborn --- For
1.4 Elect Director Gordon R. Parker --- For
1.5 Elect Director Edward B. Rust, Jr. --- For
2 Amend Omnibus Stock Plan For For Mgmt
V. Vote Recommendation The total cost of the
company's plans of 7.76 percent is within the
allowable cap for this company of 8.55 percent.
3 Ratify Auditors For For Mgmt
4 Submit Shareholder Rights Plan (Poison Against For ShrHoldr
Pill) to Shareholder Vote
Although we commend the company for approving the
TIDE provision to the company's rights plan,
because poison pills greatly alter the balance of
power between shareholders and management,
shareholders should be allowed to make their own
evaluation of such plans.
5 Report on Equipment Sales to Israel Against Against ShrHoldr
In this case, ISS agrees with the company's statement
on the issue. While we recommend that Caterpillar
continuously review the risks and opportunities
associated with each market that the company operates
in, it would be overly burdensome and potentially
costly to monitor and respond to issues resulting from
the end use of the company's products. Further, we note
that Caterpillar complies with current laws and
regulations regarding international operations.
Additionally, we agree that government officials and
organizations can better address the political aspects
of this proposal, and may represent a more appropriate
forum for these concerns. As such, we do not recommend
shareholder support for this proposal at this time.
6 Report on Operational Imact of HIV/AIDS, Against Against ShrHoldr
TB, and Malaria Pandemic
ISS generally supports proposals for increased
disclosure that promote good corporate citizenship
while enhancing long-term shareholder value. For
proposals related to HIV/AIDS reporting, we
evaluate the scope of the company's operations in
these markets, the company's current initiatives in
developing countries to help address this
healthcare crisis, and the nature of the company's
existing healthcare policies including healthcare
access and benefits to local workers. In this case,
we note that Caterpillar does not appear to provide
information related to the HIV/AIDS, TB, and
Malaria pandemic on its website; however, the
company does acknowledge the seriousness of the
health crisis in its statement on the issue in the
company's proxy statement. Additionally, the
company currently has a subsidized healthcare plan
that includes programs to improve accessibility to
treatment for employees in Africa. We further note
that the relative percentages of Caterpillar's net
earnings and total assets in the region comprise a
relatively small segment of the company's business.
While we acknowledge that Caterpillar's programs
and related disclosures do not appear to be as
extensive as some other companies operating in the
areas most affected by the HIV/AIDS, TB, and
Malaria pandemic, we believe that company has taken
certain actions to help address the affects of this
healthcare crisis on its employees in this region.
Additionally, when considering the limited scope of
Caterpillar's operations in these markets, we do
not believe that the report requested in this
proposal will provide enough substantial
information to shareholders to justify the
potential difficulties and expenses of preparing
the report. Therefore, we do not recommend
shareholder support for the resolution at this
time.
06/04/04 - A Chesapeake Energy Corp. *CHK* 165167107 04/08/04 8,000
1 Elect Directors For For Mgmt
1.1 Elect Director Frank A. Keating --- For
1.2 Elect Director Tom L. Ward --- For
1.3 Elect Director Frederick B. Whittemore
--- For
2 Increase Authorized Common Stock For For Mgmt
The requested increase of 150,000,000 shares is
below the allowable threshold of 350,000,000
shares.
3 Increase Authorized Preferred Stock For For Mgmt
The requested increase of 10,000,000 shares is
below the allowable threshold of 17,500,000 shares.
05/13/04 - A Chicago Bridge & Iron Co. *CBI* 167250109 04/01/04 7,000
Meeting for Holders of ADRs
1 FIRST POSITION: BALLENGEE For For Mgmt
2 FIRST POSITION: BORDAGES Against Abstain Mgmt
In ISS's opinion, the candidate presented under
Item 1 possesses better qualifications for board
membership. In contrast to Bordages, the candidate
presented under the previous item can be classified
as an independent. On this basis, we recommend a
vote against Item 2.
3 SECOND POSITION: SIMPSON For For Mgmt
4 SECOND POSITION: LEVENTRY Against Abstain Mgmt
In ISS's opinion, the candidate presented under
Item 3 possesses better qualifications for board
membership. In contrast to Leventry, the candidate
presented under the previous item can be classified
as an independent. On this basis, we recommend a
vote against Item 4.
5 TO AUTHORIZE THE PREPARATION OF THE For For Mgmt
ANNUAL ACCOUNTS AND ANNUAL REPORT IN THE
ENGLISH LANGUAGE AND ADOPT DUTCH
STATUTORY ANNUAL ACCOUNTS
6 TO DISCHARGE MANAGEMENT BOARD AND For For Mgmt
SUPERVISORY BOARD FROM LIABILITY IN
EXERCISE OF THEIR DUTIES
7 TO RESOLVE THE FINAL DIVIDEND For For Mgmt
8 TO REPURCHASE UP TO 30% OF THE ISSUED For Against Mgmt
SHARE CAPITAL
Since the proposal would allow the company to
repurchase shares at a price up to 150 percent of
the market value, and the plan does not contain any
safeguards against selective buybacks, we advise a
vote against.
9 TO CANCEL SHARES TO BE ACQUIRED BY THE For For Mgmt
COMPANY IN ITS OWN SHARE CAPITAL
ISS opposes the share repurchase request under Item
8. Even if this proposal is defeated, however, the
current authorization will be valid for another six
months after this AGM. Cancellation of the shares
held in treasury would allow the company to
repurchase more shares at a premium up to 50
percent. On the other hand, if the shareholders did
not approve the request to cancel shares, Chicago
Bridge & Iron could decide to reissue the shares
held in treasury and thereby enable further share
repurchases. ISS prefers that the shares be
cancelled rather than issued for some undisclosed
purpose. We therefore recommend a vote in favor of
the proposal.
10 TO APPROVE THE EXTENSION OF THE AUTHORITY For For Mgmt
TO ISSUE AND/OR GRANT RIGHTS ON SHARES
AND TO LIMIT OR EXCLUDE PREEMPTIVE RIGHTS
11 TO INCREASE THE AMOUNT OF THE AUTHORIZED For For Mgmt
SHARE CAPITAL
12 TO APPOINT DELOITTE & TOUCHE AS THE For For Mgmt
COMPANY S INDEPENDENT PUBLIC ACCOUNTANTS
05/03/04 - A CHINA TELECOM CORP LTD 169426103 03/24/04 1,200
Meeting for Holders of ADRs
1 TO CONSIDER AND APPROVE THE CONSOLIDATED For For Mgmt
FINANCIAL STATEMENTS OF THE COMPANY, THE REPORT OF THE
BOARD OF DIRECTORS, THE REPORT OF THE SUPERVISORY
COMMITTEE AND THE REPORT OF THE INTERNATIONAL AUDITORS
FOR THE YEAR ENDED 31 DECEMBER 2003.
2 TO CONSIDER AND APPROVE THE PROFIT For For Mgmt
DISTRIBUTION PROPOSAL AND DECLARATION OF
A FINAL DIVIDEND FOR YEAR ENDED 31
DECEMBER 2003.
3 TO CONSIDER AND APPROVE THE ANNUAL For For Mgmt
REMUNERATION PROPOSAL FOR THE COMPANY S DIRECTORS FOR
THE YEAR ENDING 31 DECEMBER 2004.
4 Ratify Auditors For For Mgmt
5 TO GRANT A GENERAL MANDATE TO THE BOARD For Against Mgmt
OF DIRECTORS TO ISSUE, ALLOT AND DEAL
WITH ADDITIONAL SHARES IN THE COMPANY.
This request is being made to renew the authority
because the authority to issue shares effectively
expired with the convening of this shareholder
meeting. This authority complies with strict SEHK
regulations governing such plans; however, ISS
recommends voting against the issuance of shares
without preemptive rights unless the company
provides specific language and terms that there
will be (1) adequate restrictions on discounts and
(2) no authority to refresh the share issuance
amounts without prior shareholder approval. This is
in light of abuses made by a number of Hong Kong
companies that have issued shares at steep
discounts to related parties and renewed the share
issuance amount under this authority without
shareholder approval, both of which are permissible
under current law.
6 TO AUTHORISE THE BOARD OF DIRECTORS TO For Against Mgmt
INCREASE THE REGISTERED CAPITAL AND AMEND
THE ARTICLES OF ASSOCIATION.
Given that ISS does not support the issuance of
shares without preemptive rights in light of abuses
made by a number of Hong Kong companies that have
issued shares at steep discounts to related parties
and renewed the authority without shareholder
approval, we recommend shareholders to vote against
the proposed increase in registered capital.
7 THE DIRECTORS OF THE COMPANY BE For For Mgmt
AUTHORISED TO ISSUE AND ALLOT UP TO
8,317,560,515 NEW H SHARES (THE NEW H
SHARES ).
8 THE DIRECTORS OF THE COMPANY BE For For Mgmt
AUTHORISED TO INCREASE THE REGISTERED
CAPITAL OF THE COMPANY.
9 SUBJECT TO THE PASSING OF SPECIAL For For Mgmt
RESOLUTION (E1) SHAREHOLDERS HEREBY,
WAIVE PRE-EMPTIVE RIGHTS (IF ANY) OVER
THE NEW H SHARES.
04/20/04 - A Citigroup Inc. *C* 172967101 02/27/04 8,500
1 Elect Directors For For Mgmt
1.1 Elect Director C. Michael Armstrong ---
For
We recommend a vote FOR the directors.
1.2 Elect Director Alain J.P. Belda --- For
1.3 Elect Director George David --- For
1.4 Elect Director Kenneth T. Derr --- For
1.5 Elect Director John M. Deutch --- For
1.6 Elect Director Roberto Hernandez Ramirez
--- For
1.7 Elect Director Ann Dibble Jordan --- For
1.8 Elect Director Dudley C. Mecum --- For
1.9 Elect Director Richard D. Parsons --- For
1.10 Elect Director Andrall E. Pearson --- For
1.11 Elect Director Charles Prince --- For
1.12 Elect Director Robert E. Rubin --- For
1.13 Elect Director Franklin A. Thomas --- For
1.14 Elect Director Sanford I. Weill --- For
1.15 Elect Director Robert B. Willumstad ---
For
2 Ratify Auditors For For Mgmt
3 Limit Executive Compensation Against Against ShrHoldr
ISS feels that taking away the company's ability to
grant stock options is an arbitrary and excessively
restrictive proposal that could potentially
prohibit the company from compensating employees
based upon their individual and company-wide
performance. Being unable to issue stock options
could hinder the company's ability to attract and
retain competent executive officers. As such, this
item does not warrant shareholder approval.
4 Report on Political Against Against ShrHoldr
Contributions/Activities
When reviewing requests for proposals on political
contributions, ISS takes into account the scope and
nature of the request, the company's adherence to
laws and regulations governing political
contributions, and company policies and additional
disclosure on such contributions. In the case of
Citigroup, we note that the company follows all
state and local laws regarding contributions to
political candidates or organizations.
Additionally, the scope of the disclosure requested
in this proposal may not be substantially different
from information currently available, and could
prove costly and difficult for the company to
publish in a formal report. As such, it does not
appear that preparing and publicizing such reports
in the manner requested by the proponent would be
the most effective use of shareholder funds.
5 Prohibit Awards to Executives Against Against ShrHoldr
We believe this proposal is too restrictive, as it
would prohibit the executives from being remunerated
with stock options and severance payments regardless of
the company's performance. As such, this item does not
warrant shareholder approval.
6 Separate Chairman and CEO Positions Against Against ShrHoldr
ISS supports the concept of separating the positions of
chairman and CEO when a company does not have the
countervailing governance structure as described above.
In the case of Citigroup, the company has independent
key committees, established governance guidelines, and
a lead director with clearly defined duties.
Additionally, the company has committed to creating and
maintaining a 2/3 independent board by its next annual
election. As such, ISS does not believe that this
proposal warrants shareholder support.
06/11/04 - A Commerce Bancorp, Inc. *CBH* 200519106 04/23/04 3,600
1 Elect Directors For For Mgmt
2 Approve Stock Option Plan For Against Mgmt
V.
Vote Recommendation The total cost of the company's
plans of 13.98 percent is above the allowable cap
for this company of 10.27 percent.
3 Increase Authorized Common Stock For Against Mgmt
The requested increase of 350,000,000 shares is
above the allowable threshold of 240,000,000
shares.
4 Ratify Auditors For For Mgmt
06/08/04 - A Devon Energy Corp. *DVN* 25179M103 04/09/04 1,000
1 Elect Directors For For Mgmt
2 Ratify Auditors For For Mgmt
3 Require a Majority Vote for the Election Against Against ShrHoldr
of Directors
In the view of many shareholders, the current
director election system simply creates
self-perpetuating boards. Incumbent members select
nominees to fill vacancies and decide whether to
renominate themselves. Thus, shareholders
effectively have no meaningful choice among
candidates, and the election process becomes a mere
ratification of the company's slate of nominees.
Withholding votes from a board member can serve as
a shareholder communication tool to express
displeasure with a given director. But because
directors are typically elected by a plurality
(those nominees receiving the most votes win board
seats), company nominees running unopposed are
reelected. Under current proxy rules, only
candidates nominated by the board can appear in the
company's proxy statement. A shareholder could
technically nominate a candidate from the floor of
the annual meeting, but, since most investors vote
by mail, floor nominations are unlikely to succeed.
Although some companies' bylaws outline procedures
for shareholders to suggest possible candidates to
board nominating panels, few of these individuals
actually make it to the ballots as nominees.
Instead, shareholders wishing to nominate an
alternative slate of candidates to run against
management's must go through an expensive and
time-consuming proxy solicitation process of their
own (i.e., a proxy contest). In October 2003, the
SEC proposed new proxy rules to give significant,
long-term shareholders greater ability to include
director nominees in management's proxy statement.
A final rule is expected in 2004. The proposal
entails a two-step, two-year process. In the first
year, one of two triggering events must occur, each
of which demonstrates shareholder dissatisfaction
with a company's proxy process: (i) one or more
directors at a company must receive withhold votes
totaling 35 percent or more of the votes cast, or
(ii) a shareholder proposal asking for open access,
which is submitted by the holders of at least one
percent of the shares (and owned for at least one
year), must be approved by a majority of the votes
cast. If one of these two conditions is met, then
for the following two years, the company would be
required to include in its proxy materials one or
more board nominees proposed by holders of at least
five percent of the company's shares (and owned for
at least two years). In addition, the number of
shareholder nominees permitted would be dictated by
the size of the board as follows: one nominee for
boards of eight or fewer directors, two nominees
for boards of nine to 19 directors, and three
nominees for boards having 20 or more directors.
ISS supports the general principle that
shareholders should have choice in director
elections and input in the nomination process
greater than they currently have under the
plurality system. We believe that requiring
directors to receive a majority of votes cast in an
uncontested election has some merit as it promotes
the accountability of directors and makes a
shareholder vote on director elections a more
powerful signal. However, this proposal lacks
clarity on the threshold requirement -- the
resolution refers to majority of shares "entitled
to vote" while the supporting statement refers both
to "shares entitled to be voted" and "majority of
votes cast." Requiring nominees to obtain the
majority of outstanding votes is a much more
difficult hurdle, one which we are not at this time
ready to endorse. The main concern in implementing
a majority threshold requirement is that an annual
board could be in effect be "decapitated" by a
failure to obtain majority shareholder support. In
the case of companies which have classified boards,
the concerns regarding a "decapitated" board is
mitigated. With staggered boards, only a minority
portion of the board is up for election each year,
and therefore only such minority portion may be
adversely affected by the failure of that year's
nominees to obtain majority shareholder support.
Irrespective of the structure of the company's
board, this proposal fails to address the
implementation mechanism in the event that
directors fail to garner the required majority
vote. In such a case, actual removal of affected
directors may not be feasible or desirable, and
alternative measures may be available to indicate
displeasure with the board (e.g., increased
disclosure requirements for "unratified" board
members). Given that: (i) the plurality voting
threshold is the currently accepted standard for
the election of directors of publicly-traded
companies, (ii) approval of this item could disrupt
board operations and the company's financial
performance in the event some or all of the
director nominees do not receive majority support
and do not get elected, (iii) requiring a majority
vote of the outstanding shares in effect provides
for a supermajority of votes cast, which would
adversely affect shareholders' ability to elect
directors in a contested election, and (iv) the
proposed provision may diminish the likelihood of a
successful open access campaign by providing for an
increased vote requirement in the election of
directors, we do not at this point in time believe
the proposed amendment warrants shareholder
support.
05/24/04 - A Digital Insight Corp. *DGIN* 25385P106 03/31/04 5,500
1 Elect Directors For For Mgmt
2 Ratify Auditors For For Mgmt
04/28/04 - A E.I. Du Pont De Nemours & Co. *DD* 263534109 03/09/04 1,800
1 Elect Directors For For Mgmt
1.1 Elect Director Alain J. P. Belda --- For
1.2 Elect Director Richard H. Brown --- For
1.3 Elect Director Curtis J. Crawford --- For
1.4 Elect Director John T. Dillon --- For
1.5 Elect Director Louisa C. Duemling --- For
1.6 Elect Director Charles O. Holliday, Jr.
--- For
1.7 Elect Director Deborah C. Hopkins --- For
1.8 Elect Director Lois D. Juliber --- For
1.9 Elect Director Masahisa Naitoh --- For
1.10 Elect Director William K. Reilly --- For
1.11 Elect Director H. Rodney Sharp, III ---
For
1.12 Elect Director Charles M. Vest --- For
2 Ratify Auditors For For Mgmt
3 Report on Executive Ties to Government Against Against ShrHoldr
ISS recognizes that companies can benefit from the
knowledge and expertise of former government
workers. These employees may be intimately familiar
with the internal processes of government
procurement and decision-making. The knowledge of
such employees can add real value to a company's
operations. ISS shares in the proponent's concern
for potential conflicts of interest at such
companies, but in this case, the company states
that it has specific policies in place to avoid
such conflicts of interest. Moreover, the
production of such a report annually could be
costly without providing substantial benefit to
shareholders. Given these factors, we see no reason
to support this request.
4 Adopt and Report on a Code of Corporate Against Against ShrHoldr
Conduct
In the case of Dupont, the company has already
committed itself to a code of conduct that upholds
a number of the core ILO standards, including
prohibitions on child labor, involuntary
servitude/forced labor, nondiscrimination, and
freedom of association ' although we acknowledge
that the company's existing code does not
specifically reference the right to collective
bargaining. However, it appears that the company's
code is in line with the codes of similar
companies. Dupont has endorsed the Global Compact
and supports the GRI, representing active
consideration of human and labor rights issues as
well as sustainable development in the communities
where the company operates. Also, while the
proponent has cited certain labor disputes in
Dupont's operations in the United States, ISS does
not believe that these incidents show the type of
systematic disregard to workplace human rights that
would merit a substantial amendment to the
company's current policies. Therefore, the fact
that the company already has policies in place that
substantially address many of the principles
outlined in the ILO conventions, and lacking
evidence to suggest systematic failure to comply
with these policies, we do not believe that support
of this proposal is warranted at this time.
5 Limit Executive Compensation Against Against ShrHoldr
The Compensation Committee is composed entirely of
independent directors and currently sets and reviews
the company's executive compensation program. Taking
into account the activities of the Compensation
Committee regarding the setting and monitoring of the
executive compensation, we agree with the company that
the proposed report would duplicate the Compensation
Committee's ongoing work to review, evaluate, and
modify the company's executive compensation policy and
programs. As such, we see no reason to support this
proposal.
05/25/04 - A EarthLink, Inc. *ELNK* 270321102 03/31/04 5,000
1 Elect Directors For For Mgmt
2 Ratify Auditors For For Mgmt
05/12/04 - A Eastman Kodak Co. *EK* 277461109 03/15/04 3,600
1 Elect Directors For For Mgmt
1.1 Elect Director William H. Hernandez ---
For
1.2 Elect Director Hector de J. Ruiz --- For
1.3 Elect Director Laura D'Andrea Tyson ---
For
2 Ratify Auditors For For Mgmt
3 Approve Omnibus Stock Plan For For Mgmt
This proposal does not seek to authorize an
increase in the number of shares available for
issuance under the plan. It aims to re-approve the
performance goals under the 2000 Omnibus Long-Term
Compensation Plan so that the compensation paid to
the company's highest paid executives is linked to
these performance goals, thereby, providing tax
deductibility to the company. ISS recommends a vote
FOR this proposal.
4 Adopt Chemical Policy Against Against ShrHoldr
In the case of Eastman Kodak, we note that the company
has a comprehensive environmental, health and safety
program and regularly reports on its environmental
programs, policies and initiatives to reduce emissions
of toxic chemicals through its EHS report. The company
has reduced emissions in recent years and has policies
to reduce the release and health impacts of toxic
chemicals. While we understand the proponent's concerns
with PBTs, it is unclear whether a complete phase-out
of PBTs would be feasible at this time. However, it
appears that the company is taking steps to reduce
toxic emissions from its operations and is committed to
continuing to make reductions and to reporting on its
environmental initiatives to its shareholders and the
public going forward. Based on the company's
initiatives to reduce toxic emissions in recent years
and the level of its current environmental reporting,
we recommend that shareholders oppose this request.
5 Prohibit Awards to Executives Against Against ShrHoldr
ISS believes that an independent compensation committee
needs to have flexibility in constructing compensation
packages for its top managers in order to remain
competitive in the marketplace. The prohibition of all
future stock options, SARs and severance packages would
effectively limit the company's ability to retain and
attract qualified management. This proposal is too
restrictive, and does not warrant shareholder approval.
05/20/04 - A Efunds Corporation *EFD* 28224R101 03/31/04 6,000
1 Elect Directors For For Mgmt
2 Ratify Auditors For For Mgmt
04/19/04 - A Eli Lilly and Co. *LLY* 532457108 02/13/04 4,500
1 Elect Directors For For Mgmt
1.1 Elect Director Steven C. Beering --- For
We recommend a vote FOR the directors.
1.2 Elect Director Winfried Bischoff --- For
1.3 Elect Director Franklyn G. Prendergast
--- For
1.4 Elect Director Kathi P. Seifert --- For
2 Ratify Auditors For For Mgmt
3 Approve Executive Incentive Bonus Plan For For Mgmt
The performance measures included under the plan
are appropriate for the company given its line of
business, long-term strategic objectives, and
industry-specific measures for assessing market
competitiveness. Additionally, the plan is
administered by a committee of independent
outsiders who must certify attainment of these
objective, measurable performance goals before cash
awards are paid to participants. Moreover,
preservation of the full deductibility of all
compensation paid reduces the company's corporate
tax obligation.
4 Limit Executive Compensation Against Against ShrHoldr
The Compensation Committee is composed entirely of
independent directors and currently sets and reviews
the company's executive compensation program. We
believe that the Compensation Committee should have the
flexibility to determine an executive's pay based on a
number of factors, rather then have an arbitrary cap to
determine executive compensation. Although we agree
with the proponent that the restricted share program
should utilize justifiable performance criteria and
challenging performance benchmarks, the proposed caps
on restricted stock grants, severance payments, salary
and bonus, would be unduly restrictive. Thus, we do not
support this proposal.
5 Report on Drug Pricing Against Against ShrHoldr
05/07/04 - A ENERPLUS RESOURCES FD 29274D604 03/10/04 13,000
1 Elect Derek Fortune, Gordon Kerr, Douglas For For Mgmt
Martin, Robert Normand, Eric Tremblay,
Donald West, Harry Wheeler, Robert Zorich
as Directors of EnerMark Inc
2 Approve Auditors and Authorize Board to For For Mgmt
Fix Remuneration of Auditors
05/04/04 - A EOG Resources, Inc. *EOG* 26875P101 03/08/04 2,300
1 Elect Directors For For Mgmt
1.1 Elect Director George A. Alcorn --- For
1.2 Elect Director Charles R. Crisp --- For
1.3 Elect Director Mark G. Papa --- For
1.4 Elect Director Edmund P. Segner, III ---
For
1.5 Elect Director Donald F. Textor --- For
1.6 Elect Director Frank G. Wisner --- For
2 Ratify Auditors For For Mgmt
3 Amend Omnibus Stock Plan For For Mgmt
V.
Vote Recommendation The total cost of the company's
plans of 6.10 percent is within the allowable cap
for this company of 7.14 percent. Equity grants
including stock options, and restricted stock
awards to top five named executive officers were
25.60 percent of the total shares awarded in the
current year.
4 Other Business For Against Mgmt
As we cannot know the content of these issues, we
do not recommend that shareholders approve this
request.
05/26/04 - A Express Scripts, Inc. *ESRX* 302182100 03/31/04 1,700
1 Elect Directors For Split Mgmt
1.1 Elect Director Gary G. Benanav --- For
We recommend a vote FOR the directors with the
exception of Thomas P. Mac Mahon. We recommend that
shareholders WITHHOLD votes from Thomas P. Mac Mahon
for poor attendance.
1.2 Elect Director Frank J. Borelli --- For
1.3 Elect Director Nicholas J. LaHowchic ---
For
1.4 Elect Director Thomas P. Mac Mahon ---
Withhold
1.5 Elect Director John O. Parker, Jr. --- For
1.6 Elect Director George Paz --- For
1.7 Elect Director Samuel K. Skinner --- For
1.8 Elect Director Seymour Sternberg --- For
1.9 Elect Director Barrett A. Toan --- For
1.10 Elect Director Howard L. Waltman --- For
2 Increase Authorized Common Stock For For Mgmt
The requested increase of 94,000,000 shares is
below the allowable threshold of 217,200,000
shares. We recommend a vote FOR Item 2.
3 Ratify Auditors For For Mgmt
05/07/04 - A FileNet Corp. *FILE* 316869106 03/16/04 3,800
1 Elect Directors For Split Mgmt
1.1 Elect Director L. George Klaus --- For
We recommend a vote FOR the directors with the
exception of affiliated outsider Theodore J. Smith.
We recommend that shareholders WITHHOLD votes from
Theodore J. Smith for standing as an affiliated
outsider on the nominating committee.
1.2 Elect Director William P. Lyons --- For
1.3 Elect Director Lee D. Roberts --- For
1.4 Elect Director John C. Savage --- For
1.5 Elect Director Roger S. Siboni --- For
1.6 Elect Director Theodore J. Smith ---
Withhold
2 Amend Omnibus Stock Plan For For Mgmt
V. Vote Recommendation The total cost of the company's
plans of 17.35 percent is within the allowable cap for
this company of 19.85 percent. In 2003, the company
granted over 25 percent of its total grants to its top
five named executive officers.
3 Ratify Auditors For For Mgmt
05/19/04 - A First Data Corp. *FDC* 319963104 03/22/04 3,000
1 Elect Directors For For Mgmt
2 Ratify Auditors For For Mgmt
04/28/04 - A General Electric Co. *GE* 369604103 03/01/04 13,000
1 Elect Directors For Split Mgmt
1.1 Elect Director James I. Cash, Jr. --- For
We recommend a vote FOR the directors with the
exception of Claudio X. Gonzalez. We recommend that
shareholders WITHHOLD votes from Claudio X. Gonzalez
for sitting on more than six boards.
1.2 Elect Director Dennis D. Dammerman --- For
1.3 Elect Director Ann M. Fudge --- For
1.4 Elect Director Claudio X. Gonzalez ---
Withhold
1.5 Elect Director Jeffrey R. Immelt --- For
1.6 Elect Director Andrea Jung --- For
1.7 Elect Director Alan G. Lafley --- For
1.8 Elect Director Kenneth G. Langone --- For
1.9 Elect Director Ralph S. Larsen --- For
1.10 Elect Director Rochelle B. Lazarus --- For
1.11 Elect Director Sam Nunn --- For
1.12 Elect Director Roger S. Penske --- For
1.13 Elect Director Robert J. Swieringa --- For
1.14 Elect Director Douglas A. Warner III ---
For
1.15 Elect Director Robert C. Wright --- For
2 Ratify Auditors For For Mgmt
3 Amend Omnibus Stock Plan For For Mgmt
We support the addition of revenue growth rate to
the pool of performance measures applicable to
long-term performance awards. We also applaud the
company's decision to shift a substantial portion
of its executive grants to restricted stock units
and performance based awards. Such practice should
reduce dilution and provide effective incentives
for superior performers who remain with the company
during periods of stock market fluctuations in
which stock options may have no realizable value.
In addition, restricted stock units and long-term
performance awards more closely align executives'
interests with investors' long term interests as
these awards are paid out only to executives who
remain with the company for extended periods.
4 Provide for Cumulative Voting Against Against ShrHoldr
In the case of General Electric, the company has an
annually-elected board comprising a majority of
independent directors; its Nominating and Corporate
Governance Committee consists of only independent
directors; the company grants shareholders confidential
voting and the right to call a special meeting; the
board does not have the sole right to change the size
of the board beyond a stated range that has been
approved by shareholders; the company has a published
statement of corporate governance guidelines, including
a description of the process by which a shareholder may
submit a director nominee; and the company does not
have either a dual-class structure or dead-hand poison
pill. GE outperformed the S&P 500 Index but
underperformed the S&P 500 Industrials Index for
one-year shareholder returns. However, GE
underperformed these indexes for three-year shareholder
returns. For five-year shareholder returns, GE
outperformed the S&P 500 Index but underperformed the
S&P 500 Industrials Index. In this case, the company
meets our corporate governance criteria. Although the
company does not fully meet the performance criteria,
the company has taken significant steps to improve its
corporate governance provisions, especially relating to
board reforms and shareholder friendly compensation
strategies for officers and directors (see Items 3 and
16). Given that the company: (1) meets our corporate
governance criteria and (2) has voluntarily taken steps
to improve its corporate governance through policy
changes regarding board structure, composition, and
responsibilities and executive and director
compensation, the proposal does not warrant shareholder
support.
5 Eliminate Animal Testing Against Against ShrHoldr
When evaluating proposals on animal testing policies,
ISS considers the nature of the product and the degree
to which live animal testing is necessary or federally
mandated. Additionally, we look at the feasibility and
availability of alternative methods. Finally, ISS will
evaluate industry practices to determine if animal
testing is common at competitors and peer companies in
similar circumstances. In this case, GE has developed a
policy that calls for utilizing live animal testing to
the least extent possible, provided it complies with
regulation and does not effect the analysis of
treatment effectiveness or employee and consumer
safety. Additionally, in some cases alternative methods
of testing may be not feasible or fail to meet criteria
established by the government. As such, ISS does not
recommend shareholder support for the resolution at
this time.
6 Report on Nuclear Fuel Storage Risks Against Against ShrHoldr
When considering proposals that request a risk
assessment and adoption of new policies regarding the
company's nuclear operations, ISS takes into account
several factors, including the regulatory framework
that the company's operations are subject to and the
company's existing disclosure on security and waste
management policies and procedures. While the
proponents' concerns with the company's on-site storage
of nuclear waste is understandable given the state of
current events, we note that the nuclear power industry
is heavily regulated by the NRC and subject to
restrictions and policies introduced by the Office of
Homeland Security. In 2002, the NRC completed a
comprehensive review of its requirements for nuclear
power plants, including the storage of nuclear waste
and materials and, as a result, issued new required
security measures. In this case, GE operates a spent
fuel storage depository; however, the main focus of
this resolution is directed at the company's design,
manufacturing, and sales of reactors. Based on the
tight regulation of the nuclear power industry by the
NRC and the fact that GE's operations in the nuclear
power industry are primarily in equipment design,
sales, and service; not facility operations, we do not
believe that this report would provide enough
meaningful information to shareholders to justify the
time and assets necessary to prepare this report.
7 Report on PCB Clean-up Against Against ShrHoldr
8 Report on Foreign Outsourcing Against Against ShrHoldr
ISS generally supports proposals that call for
increased disclosure on matters of importance to
shareholders. Such transparency can assist
shareholders in better evaluating the business
risks associated with their investment. However,
the benefits derived from this disclosure must be
weighed against the cost and burden of preparing
the information and the potential impacts that the
disclosure may have on company strategy or
operations. When evaluating proposals to review and
report on outsourcing or off-shoring, ISS looks at
the nature and scope of operations that a company
is opting to outsource as well as potential risks
and benefits associated with such a policy.
Additionally, we consider industry norms with
regards to the type and number of positions that
are outsourced. Finally, we consider the degree to
which publishing a detailed report on company
outsourcing policies may provide strategic insight
to competitors while not disclosing substantial,
useful information to shareholders. In this case we
note that GE does outsource some service and
technical positions to foreign markets where the
company has determined that cost savings would
ultimately benefit the company and increase
shareholder value. Further we note that several of
the company's peers and competitors have outsourced
similar jobs. Additionally, detailed disclosure on
the company's policies regarding job outsourcing
may not provide benefits to shareholders
commensurate with the cost of preparing this
report. As such, we do not recommend support for
the proposal at this time.
9 Prepare Sustainability Report Against Against ShrHoldr
ISS generally supports proposals that seek additional
disclosure, as shareholders should be provided with
sufficient information in key business areas to fully
assess the risks associated with their investment. When
evaluating resolutions calling for a sustainability
report, ISS reviews the current reporting policies of
the company as they relate to sustainability issues.
Specifically, we examine the existence and substance of
an EHS or similar report, code of corporate conduct,
and diversity or equal opportunity data, or a
consolidated sustainability report based on a widely
accepted standard such as the GRI. In this case, ISS
notes that GE currently has significant discussion of
many sustainability issues on the company website. This
disclosure includes an EHS report, diversity
information, the GE Integrity Policy, and information
on community involvement and philanthropic initiatives.
Moreover, the company has committed to publishing a
consolidated report on issues regarding environmental
performance, social initiatives, economic achievement,
and corporate citizenship in 2004. Therefore, while we
will continue to monitor the scope and level of
disclosure at GE, we believe that the company has
substantially addressed many of the issues noted by the
proponent. As such, we do not recommend support for the
proposal at this time.
10 Limit Composition of Management Against Against ShrHoldr
Development and Compensation Committee to
Independent Directors
Given that: (1) the company already has a policy in
place requiring that all key board committee
members be independent and (2) the company's
Management Development and Compensation Committee
is currently fully independent by NYSE, Council of
Institutional Investors, and ISS definitions, we do
not believe this item warrants shareholder support.
11 Report on Pay Disparity Against Against ShrHoldr
In the case of this proposal, we note that the
proponent is specifically asking for a comparison of
the compensation of the company's top executives with
that of its lowest compensated workers on a nationwide
basis and a report on any recommendations regarding
changing the current level of executive pay. Though the
disparity between the pay levels of entry-level and
executive employees has undoubtedly grown at many U.S.
companies over the past few decades, we note that it is
unlikely that the requested report would produce a
meaningful gauge for shareholders of whether GE's
compensation policies and pay levels are appropriate
and effective for employees at the senior executive
level. While we understand the proponent's concerns
with escalating CEO pay, we note that GE's compensation
committee is composed entirely of independent
directors. Based on our concerns regarding the utility
of the proposed report and the independence of the
company's compensation committee, we do not believe
that preparation of the requested report would yield
meaningful information to shareholders regarding the
efficacy of the company's executive compensation
policies and practices.
12 Limit Awards to Executives Against Against ShrHoldr
In light of the recent measures taken by the company to
make its executive and director equity compensation
practices more shareholder friendly (see Items 3 and
16), we believe that the proponent's request of a
cessation of all executive stock option programs and
bonus programs is unreasonable.
13 Limit Board Service for Other Companies Against For ShrHoldr
In view of the increased demands placed on board
members, directors who are overextended may be
jeopardizing their ability to serve as effective
representatives of shareholders. Even if a person were
retired and devoted himself full time to directorships,
based on a full-time work schedule (1,920 hours per
year) and the estimated hours of board service (300 per
year), an individual could not reasonably be expected
to serve on more than six boards. In view of this, ISS
recommends that shareholders withhold votes from
directors who sit on more than six public company
boards. Service on boards of subsidiary companies,
private companies, or non-profit organizations will be
excluded. If a director sits on several mutual fund
boards within the same fund family, it will count as
one board. We note that the company's policy is
substantially similar to the proponent's request. With
regard to fully retired directors, the proponent is
requesting that board service be limited to a total of
five directorships. Although the company's policy does
not address whether a director is retired or not, it
also allows for a total of five directorships as long
as the director in question does not serve as a CEO or
in an equivalent position. The proponent is also
requesting that board service for the company's
non-retired directors be limited to a total of three
directorships while the company places a three board
limit on directors who serve as CEOs or in equivalent
positions. Thus, one of the differences between the
proponent's request and the company's policy lies in
the treatment of non-retired directors. In the case of
non-retired directors, the proponent advocates a total
of three directorships while the company currently
provides for a limit of five directorships, making the
proponent's request slightly more stringent than the
company's current policy. Another significant
difference between the proponent's request and the
company's policy lies in the enforcement mechanisms.
While the company may bypass the aforementioned limits
with respect to current directors, the proponent's
request would not give the company such leeway. In
fact, it would require an advisory shareholder vote in
the event the proposed policy is discontinued or
materially changed. Although the company maintains a
policy regarding overboarded directors, the policy
permits the maintenance of current directors who exceed
these limits if the board determines that such
director's service on the board would not be impaired.
In fact, the company has already made an exception with
regard to director Claudio Gonzalez, who sits on over
six other public company boards. The proponent's
request would not allow the company to bypass or alter
these limits without shareholder approval. Therefore,
we believe that the proponent's request represents a
preferable policy framework from a shareholder's
perspective. As such, we believe this item warrants
shareholder support.
14 Separate Chairman and CEO Positions Against Against ShrHoldr
We believe that the company's governance structure
provides a satisfactory balance to a unified
chairman and CEO / president position.
15 Hire Advisor/Maximize Shareholder Value Against Against ShrHoldr
GE outperformed the S&P 500 Index but underperformed
the S&P 500 Industrials Index for one-year shareholder
returns. However, GE underperformed these indexes for
three-year shareholder returns. For five-year
shareholder returns, GE outperformed the S&P 500 Index
but underperformed the S&P 500 Industrials Index. In
the absence of other indicators that would suggest: (1)
the company is in a period of poor or sluggish
performance with no turnaround in sight and (2) the
board is entrenched, we believe that many of the
company's long-term shareholders would suffer if the
company was put into play and sold out at a relatively
depressed price. Given that the company regularly
reviews its businesses in terms of their global
competitiveness, and makes adjustments when warranted
in order to maximize long-term value for shareholders,
we do not believe it should be required to engage the
services of an investment bank to explore the sale of
the company at this time. As such, this item does not
warrant shareholder support.
16 Adopt a Retention Ratio for Executives Against Against ShrHoldr
and Directors
ISS has long advocated director and executive stock
ownership as a mechanism of aligning executive and
shareholder interests. An alternative approach is
the use of a retention ratio or holding period.
Such guidelines require executives to hold a
percentage of the shares they receive from stock
option exercise or other equity awards (net of
income taxes owed) either for a specified period of
time (a holding period) or for their full term of
employment with the company (a retention ratio).
Unlike traditional stock ownership requirements,
holding periods and retention ratios provide for
continuous stock accumulation by executives,
irrespective of the value of their share holdings,
while minimizing the possibility of abusive
short-term profiteering through inside information.
A disadvantage, however, is that stock retention
policies--particularly if applied for full
tenure--could lead to higher executive turnover if
executives can only take their wealth out of the
firm by leaving. While it is important to encourage
executive stock ownership, shareholders must be
mindful that it can be accomplished in a number of
ways. Therefore, shareholder proposals asking
companies to adopt retention ratios for their
executives should be evaluated on a case-by-case
basis. Targeted companies may already have some
type of stock ownership requirement, holding
period, retention ratio, or combination, which
should be reviewed for stringency. A rigorous stock
ownership guideline, for example, should go beyond
the standard 5x salary for CEOs, with the multiple
declining for other executives. It is also
important to consider how easily the stock
ownership threshold can be met. Equity awards
should not be included in the stock ownership
calculation for this purpose. A meaningful
retention ratio may also be an effective substitute
to traditional stock ownership guidelines-- i.e.,
at least 50 percent of stock received from equity
awards (on a net proceeds basis) must be held for
the executive's tenure with the company. In
addition to any guidelines currently in place,
shareholders should take into account actual
officer stock ownership at the company and the
degree to which it meets or exceeds the proponent's
suggested holding period/retention ratio or the
company's own stock ownership policies or retention
requirements. Although the company does not require
a retention ratio, as currently requested, for
directors and officers, it has other mechanisms in
place that align director and officer interests
with shareholders' interests. These include the
aforementioned stock ownership requirements and the
one-year holding period for executives. We also
note the company's shift to a long-term
performance-based equity compensation structure for
its executives (40 percent) and deferred stock
units for its directors (60 percent). Given that
the company already has sufficient mechanisms and
policies in place to ensure the alignment of
director and officer interests - i.e. (1) stock
ownership guidelines, (2) holding period for
executives, and (3) a shift to a long-term
performance-based equity compensation structure, we
do not believe this item warrants shareholder
support.
17 Require 70% to 80% Independent Board Against Against ShrHoldr
Given that: (1) the board is 73.3 percent independent
according to ISS definitions, (2) the company already
has a policy in place providing for a two-thirds
independent board, with a minimum of ten independent
directors at all times, and (3) the company has
voluntarily adopted additional, stricter independence
tests with respect to a director's affiliation with
non-profit organizations funded by the GE and companies
receiving loans from GE, we believe that the company
has taken sufficient steps to ensure the maintenance of
a supermajority independent board. As such, this item
does not warrant shareholder support.
18 Report on Political Against Against ShrHoldr
Contributions/Activities
When reviewing requests for proposals on political
contributions, ISS takes into account the scope and
nature of the request, the company's adherence to
laws and regulations governing political
contributions, and company policies and additional
disclosure on such contributions. In the case of
GE, we note that the company complies with federal,
state, and local laws regarding contributions to
political candidates or organizations.
Additionally, much of the information requested by
the proponent is available on both government and
privately managed websites. Therefore, the scope of
the disclosure requested in this proposal may not
be substantially different from information
currently available, and may not provide any
significant benefit to shareholders. As such, it
does not appear that preparing and publicizing such
reports in the manner requested by the proponent
would be the most effective use of company assets.
05/18/04 - A Georgia Gulf Corp. *GGC* 373200203 03/29/04 4,000
1 Elect Directors For Split Mgmt
1.1 Elect Director Jerry R. Satrum ---
Withhold
We recommend a vote FOR the directors with the
exception of affiliated outsider Jerry R. Satrum.
We recommend that shareholders WITHHOLD votes from
Jerry R. Satrum for standing as an affiliated
outsider on the Audit Committee.
1.2 Elect Director Edward A. Schmitt --- For
1.3 Elect Director Yoshi Kawashima --- For
2 Ratify Auditors For For Mgmt
3 Amend Omnibus Stock Plan For For Mgmt
V.
Vote Recommendation The total cost of the company's
plans of 8.27 percent is within the allowable cap
for this company of 19.60 percent. Additionally,
this plan expressly forbids repricing.
4 Approve Executive Incentive Bonus Plan For For Mgmt
The performance measures included under the plan are
appropriate for the company given its line of business,
long-term strategic objectives, and industry-specific
measures for assessing market competitiveness.
Additionally, the plan is administered by a committee
of independent outsiders who must certify attainment of
these objective, measurable performance goals before
cash awards are paid to participants. Moreover,
preservation of the full deductibility of all
compensation paid reduces the company's corporate tax
obligation.
05/20/04 - A Hasbro, Inc. *HAS* 418056107 03/31/04 3,800
1 Elect Directors For For Mgmt
1.1 Elect Director Alan R. Batkin --- For
1.2 Elect Director Frank J. Biondi, Jr. ---
For
1.3 Elect Director John M. Connors, Jr. ---
For
1.4 Elect Director Jack M. Greenberg --- For
1.5 Elect Director Alan G. Hassenfeld --- For
1.6 Elect Director Claudine B. Malone --- For
1.7 Elect Director Edward M. Philip --- For
1.8 Elect Director Paula Stern --- For
1.9 Elect Director Alfred J. Verrecchia ---
For
2 Approve Executive Incentive Bonus Plan For For Mgmt
The performance measures included under the plan are
appropriate for the company given its line of business,
long-term strategic objectives, and industry-specific
measures for assessing market competitiveness.
Additionally, the plan is administered by a committee
of independent outsiders who must certify attainment of
these objective, measurable performance goals before
cash awards are paid to participants. Moreover,
preservation of the full deductibility of all
compensation paid reduces the company's corporate tax
obligation.
3 Ratify Auditors For For Mgmt
4 Implement and Monitor Code of Corporate Against Against ShrHoldr
Conduct - ILO Standards
Based on the fact that the company already has a
publicly available code of conduct that
substantively addresses the core ILO standards and
the company engages in internal monitoring in
conjunction with audit firms, we do not believe
that support is warranted for this shareholder
resolution at this time.
05/12/04 - A Hercules Inc. *HPC* 427056106 03/22/04 10,000
1 Elect Directors For For Mgmt
1.1 Elect Director Craig A. Rogerson --- For
1.2 Elect Director John C. Hunter, III --- For
1.3 Elect Director Robert D. Kennedy --- For
2 Amend Articles to Elect Directors by For For Mgmt
Plurality Vote
Conclusion ISS supports the general notion that
shareholders should have greater choice in director
elections and greater input in the nomination
process. Given that: (i) plurality voting is the
currently accepted standard for the election of
directors of publicly traded companies, (ii)
requiring a majority vote of the outstanding shares
could disrupt board operations and the company's
financial performance in the event some or all of
the director nominees do not receive majority
support and do not get elected, (iii) requiring a
majority vote of the outstanding shares can in
effect provide for a supermajority of votes cast,
which would adversely affect shareholders' ability
to elect directors in a contested election, and
(iv) a majority voting threshold may diminish the
likelihood of a successful open access campaign by
providing for an increased vote requirement in the
election of directors, ISS believes that
management's proposal towards a plurality voting
system warrants shareholder support.
3 Ratify Auditors For For Mgmt
4 Amend Articles to Provide Shareholders For For Mgmt
with Right to Act by Written Consent and
Call Special Meetings
Conclusion If this proposal is implemented,
shareholders would have greater ability to remove
directors or initiate shareholder resolutions
without waiting for the next scheduled meeting.
Shareholders could also find it easier to respond
to a beneficial offer as a bidder who already owns
shares would have the option to call a special
meeting. ISS commends management for submitting
this proposal, which demonstrates a commitment to
shareholders' interests.
06/02/04 - A Hibbett Sporting Goods, Inc. *HIBB* 428565105 04/05/04 3,800
1 Elect Directors For For Mgmt
2 Amend Non-Employee Director Stock Option For For Mgmt
Plan
V. Vote Recommendation The total cost of the
company's plans of 8.53 percent is within the
allowable cap for this company of 15.96 percent.
Additionally, this plan expressly forbids
repricing.
05/07/04 - A Illinois Tool Works Inc. *ITW* 452308109 03/09/04 1,400
1 Elect Directors For For Mgmt
1.1 Elect Director William F. Aldinger --- For
At this time, ISS recommends a vote FOR all
director nominees, but advocates for a more
transparent disclosure on executive compensation.
1.2 Elect Director Michael J. Birck --- For
1.3 Elect Director Marvin D. Brailsford ---
For
1.4 Elect Director James R. Cantalupo --- For
1.5 Elect Director Susan Crown --- For
1.6 Elect Director Don H. Davis, Jr. --- For
1.7 Elect Director W. James Farrell --- For
1.8 Elect Director Robert C. McCormack --- For
1.9 Elect Director Robert S. Morrison --- For
1.10 Elect Director Harold B. Smith --- For
2 Ratify Auditors For For Mgmt
04/21/04 - A/S Inco Ltd. *N.* 453258402 03/16/04 5,000
1 Amend Bylaws Re:Declassify the Board For For Mgmt
2 Elect Directors For For Mgmt
3 Approve Auditors and Authorize Board to For For Mgmt
Fix Remuneration of Auditors
4 Other Business (Voting) For Against Mgmt
As we cannot know the content of the issues to be
raised under this item we do not recommend
shareholders approve this resolution.
06/02/04 - A Ingersoll-Rand Company Limited *IR* G4776G101 04/02/04 2,200
Meeting for Holders of ADRs
1 Elect Directors For For Mgmt
2 ADOPTION OF AMENDED AND RESTATED For For Mgmt
INCENTIVE STOCK PLAN OF 1998.
V. Vote Recommendation The total cost of the
company's plans of 7 percent is within the
allowable cap for this company of 9.45 percent.
3 APPROVAL OF AMENDED AND RESTATED BYE-LAWS. For For Mgmt
We believe the proposed article amendments will
have a positive effect on the company's corporate
governance, and we recommend that shareholders
support this item.
4 Ratify Auditors For For Mgmt
5 SHAREHOLDER PROPOSAL TO DECLASSIFY THE Against For ShrHoldr
BOARD OF DIRECTORS.
The ability to elect directors is the single most
important use of the shareholder franchise, and all
directors should be accountable on an annual basis.
A classified board can entrench management and
effectively preclude most takeover bids or proxy
contests. Board classification forces dissidents
and would-be acquirers to negotiate with the
incumbent board, which has the authority to decide
on offers without a shareholder vote.
6 SHAREHOLDER PROPOSAL TO CHANGE THE Against Against ShrHoldr
COMPANY S JURISDICTION OF INCORPORATION.
ISS believes that support of this shareholder
resolution is not warranted at this time as the
board has adequately addressed many of the concerns
raised by the proponent. Based on our assessment of
the significant economic benefits to shareholders
and the company's recent progress toward positive
corporate governance and improved disclosure, ISS
recommends that shareholders oppose this
shareholder-requisitioned proposal.
7 SHAREHOLDER PROPOSAL TO REQUIRE THE Against Against ShrHoldr
SEPARATION OF THE CHIEF EXECUTIVE OFFICER
AND THE CHAIR OF THE BOARD.
We believe that the company's governance structure
provides a satisfactory balance to a unified
chairman and CEO position.
05/19/04 - A Intel Corp. *INTC* 458140100 03/22/04 4,860
1 Elect Directors For Split Mgmt
1.1 Elect Director Craig R. Barrett --- For
We recommend a vote FOR the directors with the
exception of independent outsider D. James Guzy. We
recommend that shareholders WITHHOLD votes from D.
James Guzy for sitting on more than six boards.
1.2 Elect Director Charlene Barshefsky --- For
1.3 Elect Director E. John P. Browne --- For
1.4 Elect Director Andrew S. Grove --- For
1.5 Elect Director D. James Guzy --- Withhold
1.6 Elect Director Reed E. Hundt --- For
1.7 Elect Director Paul S. Otellini --- For
1.8 Elect Director David S. Pottruck --- For
1.9 Elect Director Jane E. Shaw --- For
1.10 Elect Director John L. Thornton --- For
1.11 Elect Director David B. Yoffie --- For
2 Ratify Auditors For For Mgmt
3 Approve Omnibus Stock Plan For For Mgmt
V. Vote Recommendation The total cost of the
company's plans of 7.39 percent is within the
allowable cap for this company of 12.68 percent.
Additionally, this plan expressly forbids
repricing.
4 Expense Stock Options Against For ShrHoldr
In the absence of an accepted methodology with which to
value the contingent cost of stock options, companies
that have voluntarily expensed stock options have had
flexibility in their selection of a specific valuation
methodology. Opponents of option expensing argue that
options are difficult to value and expensing options
could add complexity and decrease transparency in
financial reporting. However, given the fact that stock
options have become an integral component of
compensation, their value cannot be ignored and treated
as "no-cost" compensation. We believe that stock
options should be expensed along with other forms of
compensation. Given that (1) many companies use stock
options as a significant component of overall
compensation, (2) the exercise of options result in a
transfer of shareholder value, and (3) the contingent
cost of options reduces earnings, we believe that
options should be expensed along with all other forms
of compensation to better reflect the company's true
earnings and provide additional discipline against
overuse.
5 Limit/Prohibit Awards to Executives Against For ShrHoldr
The company currently does not use performance-vesting
awards in its compensation plans for senior executives.
Although the proponent in its supporting statement is
critical of fixed-price options, it does not appear
that the proposal advocates replacement of options with
performance-based restricted stock. The proposal
requests the the company use performance-vesting stock
in development of future equity awards for senior
executives. Although the company has recently adopted
officer stockholding guidelines, a more rigorous
requirement would be 7x to 10x for the CEO and scaled
down for other executives. Therefore, ISS believes that
this proposal warrants shareholder support.
6 Performance- Based/Indexed Options Against For ShrHoldr
06/23/04 - A InteractiveCorp *IACI* 45840Q101 04/29/04 3,600
1 Elect Directors For Split Mgmt
1.1 Elect Director Richard N. Barton --- For
We recommend a vote FOR the directors with the
exception of independent outsider Edgar Bronfman,
Jr., affiliated outsider Diane Von Furstenberg, and
insiders Victor A. Kaufman, Barry Diller, and
Robert R. Bennett. We recommend that shareholders
WITHHOLD votes from Edgar Bronfman, Jr. for poor
attendance, from Robert R. Bennett for standing as
an insider on the Compensation Committee and for
failure to establish an independent nominating
committee, and from Diane Von Furstenberg, Victor
A. Kaufman, and Barry Diller for failure to
establish an independent nominating committee.
1.2 Elect Director Robert R. Bennett ---
Withhold
1.3 Elect Director Edgar Bronfman, Jr. ---
Withhold
1.4 Elect Director Barry Diller --- Withhold
1.5 Elect Director Victor A. Kaufman ---
Withhold
1.6 Elect Director Donald R. Keough --- For
1.7 Elect Director Marie-Josee Kravis --- For
1.8 Elect Director John C. Malone --- For
1.9 Elect Director Steven Rattner --- For
1.10 Elect Director Gen. H.N. Schwarzkopf ---
For
1.11 Elect Director Alan G. Spoon --- For
1.12 Elect Director Diane Von Furstenberg ---
Withhold
2 Ratify Auditors For For Mgmt
04/22/04 - A Johnson & Johnson *JNJ* 478160104 02/24/04 3,700
1 Elect Directors For For Mgmt
1.1 Elect Director Gerard N. Burrow --- For
We recommend a vote FOR the directors.
1.2 Elect Director Mary S. Coleman --- For
1.3 Elect Director James G. Cullen --- For
1.4 Elect Director Robert J. Darretta --- For
1.5 Elect Director M. Judah Folkman --- For
1.6 Elect Director Ann D. Jordan --- For
1.7 Elect Director Arnold G. Langbo --- For
1.8 Elect Director Susan L. Lindquist --- For
1.9 Elect Director Leo F. Mullin --- For
1.10 Elect Director Steven S Reinemund --- For
1.11 Elect Director David Satcher --- For
1.12 Elect Director Henry B. Schacht --- For
1.13 Elect Director William C. Weldon --- For
2 Ratify Auditors For For Mgmt
3 Cease Charitable Contributions Against Against ShrHoldr
05/25/04 - A JP Morgan Chase & Co. *JPM* 46625H100 04/02/04 4,700
1 Approve Merger Agreement For For Mgmt
Conclusion: JPM shareholders will own approximately
58 percent of the company and maintain management
control with Mr. Harrison serving as the CEO for
two years until Mr. Dimon takes over that role. The
board composition will be split equally. J.P.
Morgan determined that board participation at this
level for Bank One was a condition to the deal.
Considering the relatively low premium to
comparable transactions, strategic importance of
the deal to both firms, and the potential cost
savings, the board and management tradeoffs appear
balanced. In aggregate, the deal presents a
compelling case for both J.P. Morgan and Bank One
shareholders due to the strategic benefits of the
transactions, improved competitive position, cost
synergies and the possibility of additional revenue
opportunities. We recommend a vote in favor of the
transaction.
2 Elect Directors For For Mgmt
3 Ratify Auditors For For Mgmt
4 Amend Executive Incentive Bonus Plan For For Mgmt
The performance measures included under the plan
are appropriate for the company given its line of
business, long-term strategic objectives, and
industry-specific measures for assessing market
competitiveness. Additionally, the plan is
administered by a committee of independent
outsiders who must certify attainment of these
objective, measurable performance goals before cash
awards are paid to participants. Moreover,
preservation of the full deductibility of all
compensation paid reduces the company's corporate
tax obligation.
5 Adjourn Meeting For Against Mgmt
Once their votes have been cast, there is no
justification for spending more money to continue
pressing shareholders for more votes.
6 Establish Term Limits for Directors Against Against ShrHoldr
Because a six-year term limit is arbitrary, and because
the company's shareholders can express their
dissatisfaction with directors on an annual basis, we
believe that the proposal does not warrant shareholder
support.
7 Charitable Contributions Against Against ShrHoldr
ISS generally believes that charitable contributions
are beneficial to the company when they are donated in
good faith and in the absence of gross negligence or
self-dealing of management. These contributions assist
in worthwhile causes and can help generate goodwill
within the community. The JP Morgan Chase Foundation
engages and donates to causes that management believes
are beneficial to the communities in which the company
operates and in the best interests of the company.
Further, the company provides comprehensive information
regarding its corporate giving grants in its Corporate
Responsibility Annual Reports available on the
company's website. Therefore, lacking evidence to the
contrary, we believe that continuing these charitable
contributions is in the best interests of the
shareholders.
8 Political Contributions Against Against ShrHoldr
When reviewing requests for proposals on political
contributions, ISS takes into account the scope and
nature of the request, the company's adherence to laws
and regulations governing political contributions, and
company policies and additional disclosure on such
contributions. In the case of JP Morgan Chase, we note
that the company appears to comply with state and local
laws regarding contributions to political candidates or
organizations. Furthermore, federal contributions are
made with donations through a PAC and not directly from
the company, and information on these PAC contributions
is available through certain public sources. Therefore,
the scope of the disclosure requested in this proposal
may not be substantially different from information
currently available, and could prove costly and
difficult for the company to publish in a formal
report. As such, it does not appear that preparing and
publicizing such reports in the manner requested by the
proponent would be the most effective use of
shareholder funds.
9 Separate Chairman and CEO Positions Against For ShrHoldr
In this case, J.P. Morgan does not have an independent
lead director. Absent an offsetting governance
structure, we believe that a company of this size
should be able to find two qualified people willing to
serve in the separate positions of chairman and CEO /
president.
10 Provide Adequate Disclosure for over the Against Against ShrHoldr
counter Derivatives
Because the company complies with regulatory and
FASB requirements for derivative disclosure, the
company's existing disclosure provides an adequate
basis to evaluate the company's collateral on
derivatives. At this time, we recommend against the
proposal.
11 Auditor Independence Against Against ShrHoldr
In the specific case of J.P. Morgan Chase, the company
paid $25.1 million for audit fees, $17.3 million for
audit-related fees and $11 million for other non-audit
related fees. The non-audit services are not excessive.
Therefore, we believe this proposal does not warrant
shareholder support.
12 Submit Non-Employee Director Compensation Against Against ShrHoldr
to Vote
JP Morgan's director compensation is in line with
the compensation practices of its peers. We agree
with the company's view that a significant portion
of the overall director compensation be linked to
the company's stock. At this time, in the absence
of compelling evidence of abusive director
compensation practices, we recommend against the
proposal.
13 Report on Pay Disparity Against Against ShrHoldr
When reviewing requests for reports on executive
compensation, ISS takes into consideration the scope of
the requested report, the company's internal procedures
for determining compensation, and the company's
historical compensation practices. As with all report
requests, ISS carefully weighs the potential usefulness
of the requested report against the costs of
preparation and whether the report would be duplicative
of existing disclosure. In the case of this proposal,
we note that the proponent is specifically asking for a
comparison of the compensation of the company's top
executives with that of its lowest compensated workers
on a worldwide basis and a report on any
recommendations regarding changing the current level of
executive pay. Though the disparity between the pay
levels of entry-level and executive employees has
undoubtedly grown at many U.S. companies over the past
few decades, we note that it is unlikely that the
requested report would produce a meaningful gauge for
shareholders of whether the company's compensation
policies and pay levels are appropriate and effective
for employees at the senior executive level. While we
understand the proponent's concerns with escalating CEO
pay, we note that the board's Compensation & Management
Development Committee is composed entirely of
independent directors. Based on our concerns regarding
the scope of the proposal and the independence of the
company's compensation committee, we do not believe
that preparation of the requested report would yield
meaningful information to shareholders regarding the
efficacy of the company's executive compensation
policies and practices.
04/16/04 - S Juniper Networks, Inc. *JNPR* 48203R104 03/10/04 2,000
1 Issue Shares in Connection with an For For Mgmt
Acquisition
05/06/04 - A K-Swiss, Inc. *KSWS* 482686102 03/22/04 3,200
1 Elect Directors For For Mgmt
2 Ratify Auditors For For Mgmt
06/02/04 - A Labor Ready, Inc. *LRW* 505401208 04/08/04 8,400
1 Elect Directors For For Mgmt
2 Ratify Auditors For For Mgmt
04/02/04 - A Lehman Brothers Holdings Inc. *LEH* 524908100 02/13/04 2,000
1 Elect Directors For For Mgmt
2 Ratify Auditors For For Mgmt
05/03/04 - A Louisiana-Pacific Corp *LPX* 546347105 03/05/04 5,000
1 Elect Directors For Split Mgmt
1.1 Elect Director Dustan E. McCoy --- For
We recommend a vote FOR the directors with the
exception of affiliated outsider Lee C. Simpson. We
recommend that shareholders WITHHOLD votes from Lee
C. Simpson for standing as an affiliated outsider
on the Nominating Committee.
1.2 Elect Director Lee C. Simpson --- Withhold
1.3 Elect Director Colin D. Watson --- For
2 Amend Omnibus Stock Plan For For Mgmt
V.
Vote Recommendation The total cost of the company's
plans of 7.31 percent is within the allowable cap
for this company of 8.34 percent. Additionally,
this plan expressly forbids repricing. ISS noted
that the top five named officers received
approximately 49 percent of the total 2003 equity
grants.
3 Amend Non-Employee Director Restricted For For Mgmt
Stock Plan
V.
Vote Recommendation The total cost of the company's
plans of 4.11 percent is within the allowable cap
for this company of 8.34 percent. Additionally,
this plan expressly forbids repricing.
4 Amend Non-Employee Director Stock Option For For Mgmt
Plan
VI.
Vote Recommendation The total cost of the company's
plans of 4.11 percent is within the allowable cap
for this company of 8.34 percent. Additionally,
this plan expressly forbids repricing.
5 Amend Executive Incentive Bonus Plan For For Mgmt
The performance measures included under the plan are
appropriate for the company given its line of business,
long-term strategic objectives, and industry-specific
measures for assessing market competitiveness.
Additionally, the plan is administered by a committee
of independent outsiders who must certify attainment of
these objective, measurable performance goals before
cash awards are paid to participants. Moreover,
preservation of the full deductibility of all
compensation paid reduces the company's corporate tax
obligation.
6 Ratify Auditors For For Mgmt
7 Separate Chairman and CEO Positions Against For ShrHoldr
Based on the above structure, LP did not meet most
of the criteria and therefore ISS recommends voting
FOR this proposal.
8 Report on Greenhouse Gas Emissions Against Against ShrHoldr
In this case, Louisiana Pacific provides some
disclosure on the topics brought forth by the
proponents in its Environmental, Forestry and Safety
Report and other environmental sections of the
company's web site. Moreover, the request to study the
feasibility of obtaining Forest Stewardship Council
(FSC) certification by January 2005 may not be feasible
and may not serve to enrich shareholder value. It
appears from existing disclosure that the company is
committed to improved environmental performance and the
reduction of greenhouse gas emissions and has engaged
other organizations in addressing and monitoring its
performance these issues. While the company could
continue to expand its disclosure in these areas, we
agree with management that it has substantially
addressed the intent of this proposal. As such, we
believe that preparation of a new and separate report
may not provide enough additional useful information to
justify the time and expense of creating such a
document.
05/20/04 - A Marsh & McLennan Companies, Inc. 571748102 03/22/04 3,000
*MMC*
1 Elect Directors For For Mgmt
1.1 Elect Director Lewis W. Bernard --- For
We recommend a vote FOR the directors.
1.2 Elect Director Mathis Cabiallavetta ---
For
1.3 Elect Director Zachary W. Carter --- For
1.4 Elect Director Robert F. Erburu --- For
1.5 Elect Director Oscar Fanjul --- For
1.6 Elect Director Ray J. Groves --- For
2 Ratify Auditors For For Mgmt
04/20/04 - A Mellon Financial Corp. *MEL* 58551A108 02/06/04 4,900
1 Elect Directors For For Mgmt
1.1 Elect Director Jared L. Cohon --- For
We recommend a vote FOR the directors.
1.2 Elect Director Ira J. Gumberg --- For
1.3 Elect Director Martin G. Mcguinn --- For
1.4 Elect Director David S. Shapira --- For
1.5 Elect Director John P. Surma --- For
1.6 Elect Director Edward J. Mcaniff --- For
2 Amend Omnibus Stock Plan For For Mgmt
V.
Vote RecommendationThe total cost of the company's
plan is 5.30 percent, which is within the allowable
cap for this company of 6.80 percent. Additionally,
the company prohibits repricing.
3 Ratify Auditors For For Mgmt
04/20/04 - A Morgan Stanley *MWD* 617446448 02/20/04 3,200
1 Elect Directors For Split Mgmt
1.1 Elect Director John W. Madigan ---
Withhold
We recommend a vote FOR the directors with the
exception of John W. Madigan. We recommend that
shareholders WITHHOLD votes from John W. Madigan
because the company failed to implement a majority
supported shareholder proposal to declassify the
board.
1.2 Elect Director Dr. Klaus Zumwinkel --- For
1.3 Elect Director Sir Howard Davies --- For
2 Ratify Auditors For For Mgmt
3 Declassify the Board of Directors Against For ShrHoldr
4 Submit Severance Agreement Against For ShrHoldr
(Change-in-Control) to Shareholder Vote
5 Report on Political Against Against ShrHoldr
Contributions/Activities
In light of the potential costs and resources
associated with the requested report, we recommend
that shareholders oppose this request. Vote
AGAINST.
06/01/04 - A Nabors Industries, Ltd. *NBR* G6359F103 04/08/04 4,000
Meeting for Holders of ADRs
1 Elect Directors For For Mgmt
1.1 Elect Director James L. Payne --- For
These are routine board elections.
1.2 Elect Director Hans W. Schmidt --- For
2 Ratify Auditors For For Mgmt
3 SHAREHOLDER PROPOSAL TO CHANGE NABORS Against Against Mgmt
JURISDICTION OF INCORPORATION FROM
BERMUDA TO DELAWARE.
ISS believes that support of this shareholder
resolution is not warranted at this time as the
board has adequately addressed many of the concerns
associated with this proposal. Based on our
assessment of the significant economic benefits to
shareholders and the company's good disclosure,
transparency, and the commitments made to reduce
shareholders' jurisdictional concerns, ISS
recommends that shareholders oppose this
shareholder-requisitioned proposal.
04/28/04 - A National Commerce Financial 63545P104 03/01/04 3,600
Corporation *NCF*
1 Elect Directors For For Mgmt
2 Ratify Auditors For For Mgmt
04/16/04 - S NetScreen Technologies, Inc. 64117V107 03/10/04 10,100
1 Approve Merger Agreement For For Mgmt
2 Adjourn Meeting For Against Mgmt
Once their votes have been cast, there is no
justification for spending more money to continue
pressing shareholders for more votes.
05/19/04 - A New York Community Bancorp, Inc. 649445103 03/29/04 8,177
*NYB*
1 Elect Directors For For Mgmt
2 Ratify Auditors For For Mgmt
04/16/04 - A Novellus Systems, Inc. *NVLS* 670008101 02/17/04 2,000
1 Elect Directors For For Mgmt
2 Ratify Auditors For For Mgmt
3 Provision of Non-Audit Services by Against Against ShrHoldr
Independent Auditors
4 Limit Executive Compensation Against Against ShrHoldr
04/30/04 - A Orbital Sciences Corp. *ORB* 685564106 03/08/04 8,000
1 Elect Directors For For Mgmt
06/29/04 - A PATTERSON-UTI ENERGY INC. *PTEN* 703481101 05/28/04 3,000
1 Elect Directors For For Mgmt
2 Increase Authorized Common Stock For For Mgmt
The requested increase of 100,000,000 shares is
below the allowable threshold of 160,000,000
shares.
3 Amend Omnibus Stock Plan For For Mgmt
Given that the company will be entitled to a business
expense deduction due to the favorable tax treatment
attributable to Section 162(m), we believe the proposed
amendment warrants shareholder approval.
4 Amend Omnibus Stock Plan For For Mgmt
Given that the company will be entitled to a business
expense deduction due to the favorable tax treatment
attributable to Section 162(m), we believe the proposed
amendment warrants shareholder approval.
5 Ratify Auditors For For Mgmt
05/05/04 - A PepsiCo, Inc. *PEP* 713448108 03/12/04 3,000
1 Elect Directors For For Mgmt
2 Ratify Auditors For For Mgmt
3 Approve Executive Incentive Bonus Plan For For Mgmt
The performance measures included under the plan
are appropriate for the company given its line of
business, long-term strategic objectives, and
industry-specific measures for assessing market
competitiveness. Additionally, the plan is
administered by a committee of independent
outsiders who must certify attainment of these
objective, measurable performance goals before cash
awards are paid to participants. Moreover,
preservation of the full deductibility of all
compensation paid reduces the company's corporate
tax obligation.
4 Report on Political Against Against ShrHoldr
Contributions/Activities
When reviewing requests for proposals on political
contributions, ISS takes into account the scope and
nature of the request, the company's adherence to
laws and regulations governing political
contributions, and company policies and additional
disclosure on such contributions. In this case, the
company notes that its contributions to political
entities and the related disclosure comply with all
applicable laws on this topic. The proposal asks
that this report should be published within five
business days of the annual meeting, and that
reports disclosing the recipient and amount of each
political contribution be made in a series of local
and national newspapers. While ISS believes that
increased disclosure is generally beneficial, it
does not appear that the cost of preparing and
publicizing such reports in the manner requested by
the proponent would be the most effective use of
shareholder funds. In light of the potential costs
associated with the requested report, we recommend
that shareholders oppose this request
5 Report on Operational Impact of HIV/AIDS, Against Against ShrHoldr
TB, and Malaria Pandemic
ISS generally supports proposals for increased
disclosure that promote good corporate citizenship
while enhancing long-term shareholder value. For
proposals related to HIV/AIDS reporting, we
evaluate the scope of the company's operations in
these markets, the company's current initiatives in
developing countries to help address this
healthcare crisis, and the nature of the company's
existing healthcare policies including healthcare
access and benefits to local workers. In this case,
we note that PepsiCo does appear to provide some
information related to the HIV/AIDS, TB, and
Malaria pandemic on its website. Further ISS notes
that, despite its relatively small investments in
Sub Saharan Africa, the company has taken several
steps to address concerns related to the HIV/AIDS
pandemic, including membership in the GBC, health
care coverage, and continued evaluation and
communication on this topic through a specially
formed internal task force and reporting utilizing
GRI guidelines. In this case, we believe that the
company has taken certain actions to help address
the affects of this healthcare crisis in emerging
markets. These actions represent an acknowledgement
of the effect that the HIV/AIDS, TB, and malaria
pandemic could have on company strategy and
operations. As such, when considering the scope of
PepsiCo's initiatives to address this crisis and
current level of disclosure, we do not believe that
the report requested in this proposal will provide
information to shareholders commensurate with the
potential difficulties and expense of preparing the
report. Therefore, we do not recommend shareholder
support for the resolution at this time.
04/22/04 - A Pfizer Inc. *PFE* 717081103 02/27/04 8,675
1 Elect Directors For For Mgmt
1.1 Elect Director Michael S. Brown --- For
We recommend a vote FOR the directors.
1.2 Elect Director M. Anthony Burns --- For
1.3 Elect Director Robert N. Burt --- For
1.4 Elect Director W. Don Cornwell --- For
1.5 Elect Director William H. Gray III --- For
1.6 Elect Director Constance J. Horner --- For
1.7 Elect Director William R. Howell --- For
1.8 Elect Director Stanley O. Ikenberry ---
For
1.9 Elect Director George A. Lorch --- For
1.10 Elect Director Henry A. Mckinnell --- For
1.11 Elect Director Dana G. Mead --- For
1.12 Elect Director Franklin D. Raines --- For
1.13 Elect Director Ruth J. Simmons --- For
1.14 Elect Director William C. Steere, Jr. ---
For
1.15 Elect Director Jean-Paul Valles --- For
2 Ratify Auditors For For Mgmt
3 Approve Omnibus Stock Plan For For Mgmt
V. Vote Recommendation The total cost of the
company's plans of 4.88 percent is within the
allowable cap for this company of 6.79 percent.
Additionally, this plan expressly forbids
repricing.
4 Report on Operational Impact of HIV/AIDS, Against Against ShrHoldr
TB, and Malaria Pandemic
In this case, we believe that the company has taken
certain actions to help address the affects of this
healthcare crisis in emerging markets. These
actions are similar in nature and scope to those
taken by industry peers and competitors, and
represent an acknowledgement of the effect that the
HIV/AIDS, TB, and malaria pandemic could have on
company strategy and operations. As such, when
considering the scope of Pfizer's initiatives to
address this crisis and current level of
disclosure, we do not believe that the report
requested in this proposal will provide information
to shareholders commensurate with the potential
difficulties and expenses of preparing the report.
Therefore, we do not recommend shareholder support
for the resolution at this time.
5 Cease Political Contributions/Activities Against Against ShrHoldr
Interaction between corporate America and the political
process has been a topic of debate for several years.
Increasing scrutiny during and election year and in the
wake of corporate scandals has led to a surge in
shareholder activism on issues of political
contributions. Opponents of corporate political
contributions argue that companies spending scarce
resources on expensive lobbying efforts and donating to
PACs would be better off investing that money on new
procedures that will better position the company to
deal with the coming regulations or improve its
operations. Conversely, corporate responses tend to
suggest that company involvement in the political
process can be beneficial to the business interests of
the company and, ultimately, shareholder value. When
reviewing requests for proposals on political
contributions, ISS takes into account the scope and
nature of the request, the company's adherence to laws
and regulations governing political contributions, and
company policies and additional disclosure on such
contributions. In this case, the proponent has
requested that the company completely refrain from
political contributions without providing a business
case for the resolution. Moreover, we note that the
company complies with all appropriate state and federal
laws regarding campaign contributions. Therefore, based
on the level of government oversight on political
contributions and lack of supporting information for
this proposal, ISS recommends that shareholders vote
against this item.
6 Report on Political Against Against ShrHoldr
Contributions/Activities
When reviewing requests for proposals on political
contributions, ISS takes into account the scope and
nature of the request, the company's adherence to
laws and regulations governing political
contributions, and company policies and additional
disclosure on such contributions. In the case of
Pfizer, we note that the company follows all state
and local laws regarding contributions to political
candidates or organizations. Additionally,
interested parties can view information on the
company's political contributions and donations on
a report published at the end of each election
cycle. Finally, the scope and nature of the
information requested in this proposal may not be
substantially different from data currently
available and could prove costly and difficult for
the company to publish in a formal report. As such,
it does not appear that preparing and publicizing
such reports in the manner requested by the
proponent would be the most effective use of
shareholder funds.
7 Establish Term Limits for Directors Against Against ShrHoldr
Under an effective corporate governance system,
shareholders have the right to express their
preferences each year by voting on directors at the
annual meeting. Thus, shareholders can remove or
reelect directors as they see fit.
8 Report on Drug Pricing Against Against ShrHoldr
When evaluating drug-pricing proposals, ISS considers
the economic benefits of providing subsidized drugs
(e.g., public goodwill) against the potential costs in
terms of reduced profits, lower R&D spending, and harm
to competitiveness. Additionally, the company's current
policies are taken into account, including any existing
subsidy or donor programs that make life-saving
pharmaceuticals more accessible to financially needy
patients. Finally, we consider the degree to which peer
companies have implemented price restraints.
Specifically, this proposal calls for the company to
limit price increases to a level below that of the
annual inflation rate, and report to shareholders on
these initiatives. While ISS generally supports
increased disclosure that may help shareholders better
evaluate their investment, the cost and difficulty in
generating this information should be offset by
benefits gained from the report. In this case, we also
note that the structure of the proposal includes
commitment to a pricing policy along with the report.
Pfizer has implemented several programs to assist in
increasing accessibility to their products for the
financially needy. Additionally, the company provides
information on these discount, subsidy, and assistance
programs in its public filings and on the company
website. Finally, ISS agrees with the company that
linking drug pricing to the inflation rate may place
the company at a competitive disadvantage by
artificially discounting prices below those of
competitors' products and limiting resources to invest
in research and development. Therefore, ISS recommends
that shareholders vote against this proposal.
9 Limit Awards to Executives Against Against ShrHoldr
10 Amend Animal Testing Policy Against Against ShrHoldr
In this case, Pfizer has developed a policy that
calls for utilizing in vitro testing wherever
possible provided it complies with regulations and
does not effect the analysis of treatment
effectiveness or patient safety. Additionally, in
some cases alternative methods of testing may be
not feasible or meet criteria established by the
government. Moreover, the level of live animal
testing at Pfizer appears to be consistent with
industry standards on the topic. As such, ISS does
not recommend shareholder support for the
resolution at this time.
05/28/04 - A Phelps Dodge Corp. *PD* 717265102 04/08/04 1,000
1 Elect Directors For For Mgmt
1.1 Elect Director Marie L. Knowles --- For
1.2 Elect Director Jon C. Madonna --- For
1.3 Elect Director Gordon R. Parker --- For
1.4 Elect Director Robert D. Johnson --- For
2 Cease Charitable Contributions Against Against ShrHoldr
ISS generally believes that charitable
contributions are beneficial to the company when
they are donated in good faith and in the absence
of gross negligence or self-dealing of management.
These contributions assist in worthwhile causes and
can help generate goodwill within the community.
Phelps Dodge's charitable programs support causes
that management believes are beneficial to the
communities in which the company operates and in
the best interests of the company. Therefore,
lacking evidence to the contrary, we believe that
continuing these charitable contributions is in the
best interests of the shareholders.
05/13/04 - A Pioneer Natural Resources Co. *PXD* 723787107 03/17/04 3,000
1 Elect Directors For For Mgmt
2 Ratify Auditors For For Mgmt
05/11/04 - A/S Precision Drilling Corporation *PD.* 74022D100 03/22/04 2,000
1 Elect W.C. Dunn, Robert J.S. Gibson, For For Mgmt
Murray K. Mullen, Patrick M. Murray, Fred
W. Pheasey, Robert L. Phillips, Hank B. Swartout,
H.Garth Wiggins as Directors
2 Ratify Auditors For For Mgmt
3 Approve 2004 Stock Option Plan For Against Mgmt
Vote Recommendation We commend the company for
expressly forbidding the repricing of stock options
under the plan and limiting director participation
in the plan. However, the total cost of the
company's plans of 3.54 percent is above the
allowable cap for this company of 3.51 percent.
05/19/04 - A Proassurance Corp *PRA* 74267C106 03/31/04 3,000
1 Elect Directors For For Mgmt
1.1 Elect Director Victor T. Adamo --- For
1.2 Elect Director Paul R. Butrus --- For
2 Approve Omnibus Stock Plan For For Mgmt
V.
Vote Recommendation The total cost of the company's
plans of 9.32 percent is within the allowable cap
for this company of 15.17 percent. Additionally,
this plan expressly forbids repricing.
05/05/04 - A Secure Computing Corp. *SCUR* 813705100 03/15/04 3,000
1 Elect Directors For For Mgmt
2 Increase Authorized Common Stock For For Mgmt
The requested increase of 50,000,000 shares is
below the allowable threshold of 77,500,000 shares.
3 Amend Stock Option Plan For For Mgmt
V.
Vote Recommendation The total cost of the company's
plans of 16.17 percent is within the allowable cap
for this company of 19.82 percent.
4 Amend Employee Stock Purchase Plan For For Mgmt
ISS approves of this item because the plan complies
with Section 423 of the Internal Revenue Code, the
number of shares being added is relatively
conservative, the offering period is reasonable, and
there are limitations on participation.
5 Ratify Auditors For For Mgmt
05/04/04 - A Sempra Energy *SRE* 816851109 03/09/04 3,500
1 Elect Directors For For Mgmt
1.1 Elect Director Stephen L. Baum --- For
1.2 Elect Director Wilford D. Godbold, Jr.
--- For
1.3 Elect Director Richard G. Newman --- For
2 Approve Omnibus Stock Plan For For Mgmt
V.
Vote Recommendation We commend the company for
expressly forbidding the repricing of stock options
under the plan. Although, the total cost of the
company's plans of 11.15 percent is above the
allowable cap for this company of 6.76 percent, the
proposal is designed to bring the plan into
compliance with Section 162 (m) of the Internal
Revenue in order to preserve the tax deductibility
and provides for the issuance of awards with
performance-based criteria. Additionally, the plan
forbids repricing. We believe these are positive
amendments, therefore, we believe that this
proposal warrants shareholder support.
3 Ratify Auditors For For Mgmt
4 Declassify the Board of Directors Against For ShrHoldr
5 Submit Shareholder Rights Plan (Poison Against For ShrHoldr
Pill) to Shareholder Vote
In this case, the company's rights plan was not
approved by shareholders nor does it embody the
above features that ISS recommends. We therefore
agree with the proponent that the current pill
should be redeemed and any new pill be put to a
shareholder vote.
6 Prohibit Auditor from Providing Non-Audit Against Against ShrHoldr
Services
In the case of Sempra Energy, the tax and other
fees is represents only 17.62 percent of the total
fees paid to the auditor for 2003. In view of the
reasonable level of non-audit fees for 2003 and the
Audit Committee procedures for mitigating potential
conflicts of interest, we do not believe support of
this proposal is warranted at this time.
7 Separate Chairman and CEO Positions Against For ShrHoldr
Although Sempra Energy has a greater than 2/3
independent outsiders on its board, all-independent key
committees, and established governance guidelines, the
company has not designated a lead/presiding director
with duties that meet all of our minimum requirements.
The independent directors meet in executive session at
the conclusion of each regularly scheduled board
meeting and the chair of Compensation Committee
presides over these sessions. However, it is not
clearly stated, in the company's proxy statement nor
its website, that such presiding director presides at
all meetings of the board at which the chairman is not
present; serves as liaison between the chairman and the
independent directors; approves information sent to the
board; approves meetings schedules to assure that there
is sufficient time for discussion of all agenda items;
or has the authority to call meetings of the
independent directors. Absent an offsetting governance
structure, we believe that a company of this size
should be able to find two qualified people willing to
serve in the separate positions of chairman and CEO.
04/29/04 - A Silicon Laboratories, Inc. *SLAB* 826919102 03/01/04 1,000
1 Elect Directors For For Mgmt
2 Ratify Auditors For For Mgmt
04/21/04 - A SouthTrust Corp. *SOTR* 844730101 02/20/04 3,000
1 Elect Directors For For Mgmt
1.1 Elect Director Carl F. Bailey --- For
We recommend a vote FOR the directors.
1.2 Elect Director John M. Bradford --- For
1.3 Elect Director William C. Hulsey --- For
1.4 Elect Director Wallace D. Malone, Jr. ---
For
2 Ratify Auditors For For Mgmt
3 Approve Executive Incentive Bonus Plan For For Mgmt
The performance measures included under the plan
are appropriate for the company given its line of
business, long-term strategic objectives, and
industry-specific measures for assessing market
competitiveness. Additionally, the plan is
administered by a committee of independent
outsiders who must certify attainment of these
objective, measurable performance goals before cash
awards are paid to participants. Moreover,
preservation of the full deductibility of all
compensation paid reduces the company's corporate
tax obligation.
4 Approve Omnibus Stock Plan For For Mgmt
V.
Vote Recommendation The total cost of the company's
plans of 7.78 percent is within the allowable cap
for this company of 9.12 percent. In 2003, the
company granted 31.10 percent of its total shares
to the company's top 5 executives.
04/23/04 - A STMicroelectronics N.V. *STM* 861012102 03/11/04 4,000
Meeting for Holders of ADRs
1 ADOPTION OF THE ANNUAL ACCOUNTS FOR THE For For Mgmt
2003 FINANCIAL YEAR
2 DISCHARGE OF THE SOLE MEMBER OF THE For For Mgmt
MANAGING BOARD
3 DISCHARGE OF THE MEMBERS OF THE For For Mgmt
SUPERVISORY BOARD
4 ADOPTION OF A DIVIDEND OF $0.12 PER For For Mgmt
COMMON SHARE
5 PROPOSAL OF APPOINTMENT OF GERALD ARBOLA For For Mgmt
AS A NEW MEMBER OF THE SUPERVISORY BOARD
AND TO COMPLETE THE THREE-YEAR TERM
6 PROPOSAL OF APPOINTMENT OF DIDIER LOMBARD For For Mgmt
AS A NEW MEMBER OF THE SUPERVISORY BOARD
AND TO COMPLETE THE THREE-YEAR TERM
7 APPROVAL OF THE COMPENSATION OF THE For For Mgmt
MEMBERS OF THE SUPERVISORY BOARD
8 APPROVAL OF THE NEW EMPLOYEE STOCK For For Mgmt
PURCHASE PLAN
9 DELEGATION TO THE SUPERVISORY BOARD FOR For Against Mgmt
FIVE YEARS OF THE AUTHORITY TO ISSUE NEW
SHARES
Due to the excessive time framework, antitakeover
potential, and dilutive potential, we recommend a
vote against the proposal.
10 APPROVAL OF THE CHANGE IN THE QUORUM FOR For Against Mgmt
THE GENERAL MEETING OF SHAREHOLDERS FROM
ONE-THIRD OF THE ISSUED SHARE CAPITAL TO
15% OF THE ISSUED SHARE CAPITAL
In the case of STMicroelectronics, two shareholders
indirectly control 17.25 percent each of the
capital. Because the quorum would be lowered to
only 15 percent, we recommend a vote against the
proposal.
11 AUTHORIZATION OF THE AMENDMENT OF THE For Against Mgmt
ARTICLES OF ASSOCIATION RELATING TO THE
ITEMS MENTIONED UNDER RESOLUTION 10
In keeping with our opposition against Item 10, we
recommend a vote against this item as well.
12 APPROVAL OF OUR CORPORATE GOVERNANCE For For Mgmt
POLICY
06/24/04 - A/S StockGroup Information Systems, Inc. 861273100 05/14/04 150,000
*SWEB*
1 Elect Directors For For Mgmt
2 Other Business For Against Mgmt
3 Approve Reverse Stock Split For For Mgmt
04/15/04 - A Texas Instruments Inc. *TXN* 882508104 02/17/04 9,000
1 Elect Directors For For Mgmt
1.1 Elect Director James R. Adams --- For
1.2 Elect Director David L. Boren --- For
1.3 Elect Director Daniel A. Carp --- For
1.4 Elect Director Thomas J. Engibous --- For
1.5 Elect Director Gerald W. Fronterhouse ---
For
1.6 Elect Director David R. Goode --- For
1.7 Elect Director Wayne R. Sanders --- For
1.8 Elect Director Ruth J. Simmons --- For
1.9 Elect Director Richard K. Templeton ---
For
1.10 Elect Director Christine Todd Whitman ---
For
2 Ratify Auditors For For Mgmt
3 Expense Stock Options Against For ShrHoldr
In the absence of an accepted methodology with
which to value the contingent cost of stock
options, companies that have voluntarily expensed
stock options have had flexibility in their
selection of a specific valuation methodology.
Opponents of option expensing argue that options
are difficult to value and expensing options could
add complexity and decrease transparency in
financial reporting. However, given the fact that
stock options have become an integral component of
compensation, their value cannot be ignored and
treated as "no-cost" compensation. We believe that
stock options should be expensed along with other
forms of compensation. Given that (1) many
companies use stock options as a significant
component of overall compensation, (2) the exercise
of options result in a transfer of shareholder
value, and (3) the contingent cost of options
reduces earnings, we believe that options should be
expensed along with all other forms of compensation
to better reflect the company's true earnings and
provide additional discipline against overuse.
05/17/04 - A The Charles Schwab Corp. *SCH* 808513105 03/18/04 7,600
1 Elect Directors For For Mgmt
1.1 Elect Director Donald G. Fisher --- For
We recommend a vote FOR the directors.
1.2 Elect Director Paula A. Sneed --- For
1.3 Elect Director David B. Yoffie --- For
2 Approve Omnibus Stock Plan For For Mgmt
V.
Vote Recommendation The total cost of the company's
plans of 7.05 percent is within the allowable cap
for this company of 8.65 percent. Additionally,
this plan expressly forbids repricing.
06/15/04 - A The Children's Place Retail Stores, 168905107 04/30/04 6,600
Inc. *PLCE*
1 Elect Directors For Withhold Mgmt
1.1 Elect Director Stanley Silverstein ---
Withhold
We recommend that shareholders WITHHOLD votes from
affiliated outsider Stanley Silverstein for failure
to establish a majority independent board.
2 Ratify Auditors For For Mgmt
3 Amend Stock Option Plan For For Mgmt
V.
Vote Recommendation The total cost of the company's
plans of 12.82 percent is within the allowable cap
for this company of 13.96 percent.
04/27/04 - A The Chubb Corp. *CB* 171232101 03/08/04 3,000
1 Elect Directors For For Mgmt
1.1 Elect Director Zoe Baird --- For
We recommend a vote FOR the directors.
1.2 Elect Director Sheila P. Burke --- For
1.3 Elect Director James I. Cash, Jr. --- For
1.4 Elect Director Joel J. Cohen --- For
1.5 Elect Director James M. Cornelius --- For
1.6 Elect Director John D. Finnegan --- For
1.7 Elect Director David H. Hoag --- For
1.8 Elect Director Klaus J. Mangold --- For
1.9 Elect Director Sir David G. Scholey, CBE
--- For
1.10 Elect Director Raymond G. H. Seitz --- For
1.11 Elect Director Lawrence M. Small --- For
1.12 Elect Director Daniel E. Somers --- For
1.13 Elect Director Karen Hastie Williams ---
For
1.14 Elect Director James M. Zimmerman --- For
1.15 Elect Director Alfred W. Zollar --- For
2 Approve Omnibus Stock Plan For For Mgmt
V.
Vote RecommendationThe total cost of this plan is
7.61 percent, which is within the allowable cap for
this company of 9.78 percent. Additionally, this
plan expressly forbids repricing.
3 Approve Non-Employee Director Omnibus For For Mgmt
Stock Plan
VI.
Vote Recommendation The total cost of the company's
plans of 4.36 percent is within the allowable cap
for this company of 9.78 percent. Additionally,
this plan expressly forbids repricing.
4 Ratify Auditors For For Mgmt
5 Report on Political Against Against ShrHoldr
Contributions/Activities
When reviewing requests for proposals on political
contributions, ISS takes into account the scope and
nature of the request, the company's adherence to
laws and regulations governing political
contributions, and company policies and additional
disclosure on such contributions. In the case of
Chubb, we note that the company follows all state
and local laws regarding contributions to political
candidates or organizations. Furthermore, the
extensive scope of the reports requested in this
proposal may not be substantially different from
information currently available and could prove
costly or difficult to gather and publish in a
formal report. As such, it does not appear that
preparing and publicizing such reports in the
manner requested by the proponent would be the most
effective use of shareholder funds.
05/13/04 - A The Dow Chemical Company *DOW* 260543103 03/15/04 2,300
1 Elect Directors For For Mgmt
2 Ratify Auditors For For Mgmt
3 Declassify the Board of Directors For For Mgmt
ISS commends management for submitting this
proposal, which demonstrates a commitment to
shareholders' interests.
4 Report on Social Initiatives in Bhopal Against Against ShrHoldr
ISS generally supports proposals for increased
disclosure that promote good corporate citizenship
while enhancing long-term shareholder value. Increased
transparency can better inform shareholders on the
potential risks and opportunities associated with their
investment. In this case ISS notes that the proposal
also calls for certain actions to be taken as a
function of the reporting initiative. Amplifying
statements to the Securities and Exchange Commission
from the proponent have recommended that these actions
include Dow's dispatch of staff and equipment to Bhopal
to supervise remediation; Disclosure of all information
held by Union Carbide related to the health impacts of
methyl isocyanate; Conducting and disclosing further
health studies on methyl isocyanate to assist in
meeting continuing medical needs of the Bhopal victims;
and Conduct meetings with survivors of the Bhopal
tragedy and report on the results. Further the
proponent has noted that the company should disclose
further information on legal risks associated with
Bhopal and potential opportunity costs, including
impact on the company's operations in Asia, associated
with Dow Chemicals stance on the Bhopal tragedy. ISS
believes that this resolution merits serious
consideration based on the impact of the tragic
accident in Bhopal on the company and on thousands of
people. That said, while we agree with the proponents
that Dow Chemical should undertake efforts to increase
its disclosure on this topic, we are concerned with the
structure of this resolution, specifically the actions
that the proponents are linking to the report. ISS
notes that the company has disclosed certain
information on Bhopal both on the Dow Chemicals website
and on www.bhopal.com, a website sponsored by Union
Carbide specifically discussing information on the
tragedy. Further, while we have noted that the company
could improve its transparency on certain issues, it
may not be appropriate to disclose certain legal risks
or potential opportunity costs that may be speculative
in nature and potentially misunderstood or
mischaracterized. Moreover, while ISS believes that the
company could benefit from increased disclosure, we do
not believe that the actions requested by the
proponents to accompany this report are necessary per
se, or an appropriate expenditure of shareholder
assets. Therefore, ISS urges Dow Chemical to increase
the scope and detail of discussion on the Bhopal
tragedy; however, based on the structure and potential
expenses associated with the actions requested by this
proposal we are not compelled to recommend shareholder
support for the resolution.
05/21/04 - A Time Warner Inc *TWX* 887317105 03/23/04 8,100
1 Elect Directors For For Mgmt
1.1 Elect Director James L. Barksdale --- For
1.2 Elect Director Stephen F. Bollenbach ---
For
1.3 Elect Director Stephen M. Case --- For
1.4 Elect Director Frank J. Caufield --- For
1.5 Elect Director Robert C. Clark --- For
1.6 Elect Director Miles R. Gilburne --- For
1.7 Elect Director Carla A. Hills --- For
1.8 Elect Director Reuben Mark --- For
1.9 Elect Director Michael A. Miles --- For
1.10 Elect Director Kenneth J. Novack --- For
1.11 Elect Director Richard D. Parsons --- For
1.12 Elect Director R. E. Turner --- For
1.13 Elect Director Francis T. Vincent, Jr.
--- For
2 Ratify Auditors For For Mgmt
3 Adopt China Principles Against Against ShrHoldr
In the case of Time Warner, we note that the
company is not involved in labor controversies with
its workers in China, but the Internet industry in
general has faced criticism from opponents over the
issue of promoting freedom of expression while
operating under restrictive Chinese laws. While it
appears the company does not have a publicly
available code of conduct referencing certain human
and labor rights issues, we are concerned that some
of the aspects of the China Principles may be
beyond the company's control, such as prohibiting
police or military presence at the company's
operations, or preventing the government from using
company technology to commit human rights
violations. Thus, adopting and fully implementing
the China Principles could prove both costly and
difficult. As such, while ISS strongly encourages
Timer Warner to evaluate its policies and
compliance standards for labor and human rights in
China and around the world, we do not believe that
the implementation of the China Principles would be
in the best interests of the company.
4 Report on Pay Disparity Against Against ShrHoldr
Based on our concerns regarding the scope of the
proposal and the independence of the company's
compensation committee, we do not believe that
preparation of the requested report would yield
meaningful information to shareholders regarding the
efficacy of the company's executive compensation
policies and practices.
06/03/04 - A Time Warner Telecom, Inc. *TWTC* 887319101 04/07/04 6,300
1 Elect Directors For Split Mgmt
1.1 Elect Director Larissa L. Herda ---
Withhold
We recommend a vote FOR the directors with the
exceptions of insiders Glenn A. Britt, Larissa L.
Herda, Richard J. Davies, Spencer B. Hays and
Robert D. Marcus, and affiliated outsider Robert J.
Miron. We recommend that shareholders WITHHOLD
votes from Glenn A. Britt for standing as an
insider on the Compensation and Nominating
committees and for failure to establish a majority
independent board. We also recommend that
shareholders WITHHOLD votes from Richard J. Davies,
Spencer B. Hays and Robert D. Marcus for failure to
establish a majority independent board. Lastly, we
recommend that shareholders WITHHOLD votes from
Larissa L. Herda for standing as insider on the
Nominating Committee and for failure to establish a
majority independent board, and Robert J. Miron for
standing as an affiliated outsider on the
Compensation and Nominating committees and for
failure to establish a majority independent board.
1.2 Elect Director Glenn A. Britt --- Withhold
1.3 Elect Director Richard J. Davies ---
Withhold
1.4 Elect Director Spencer B. Hays ---
Withhold
1.5 Elect Director Robert D. Marcus ---
Withhold
1.6 Elect Director Robert J. Miron ---
Withhold
1.7 Elect Director Anthony R. Muller --- For
1.8 Elect Director Theodore H. Schell --- For
1.9 Elect Director Mary Agnes Wilderotter ---
For
2 Approve Employee Stock Purchase Plan For For Mgmt
ISS approves of this plan because it complies with
Section 423 of the Internal Revenue Code, the number of
shares being reserved is relatively conservative, the
offering period is reasonable, and there are limits on
participation.
3 Ratify Auditors For For Mgmt
04/15/04 - A Tractor Supply Co. *TSCO* 892356106 03/02/04 3,100
1 Elect Directors For Split Mgmt
1.1 Elect Director James F. Wright --- For
We recommend a vote FOR the directors with the
exception of Gerard E. Jones. We recommend that
shareholders WITHHOLD votes from Gerard E. Jones for
standing as an affiliated outsider on the Nominating
Committee.
1.2 Elect Director Gerard E. Jones ---
Withhold
1.3 Elect Director Edna K. Morris --- For
2 Ratify Auditors For Against Mgmt
3 Approve Executive Incentive Bonus Plan For For Mgmt
The performance measures included under the plan
are appropriate for the company given its line of
business, long-term strategic objectives, and
industry-specific measures for assessing market
competitiveness. Additionally, the plan is
administered by a committee of independent
outsiders who must certify attainment of these
objective, measurable performance goals before cash
awards are paid to participants. Moreover,
preservation of the full deductibility of all
compensation paid reduces the company's corporate
tax obligation.
04/29/04 - A UCBH Holdings, Inc. *UCBH* 90262T308 02/29/04 8,000
1 Elect Directors For For Mgmt
2 Amend Certificate to Remove Anti-Takeover For For Mgmt
Provision
The provision is similar to control share
acquisition statutes that are a prevalent form of
state-sponsored antitakeover legislation. Such
statutes function by denying shares their voting
rights when they contribute to ownership in excess
of certain thresholds. Voting rights for those
shares exceeding ownership limits may only be
restored by approval of either a majority or
supermajority of disinterested shares. The
provision in the company's certificate does not
provide shareholders with the ability to restore
the voting rights for those shares exceeding
ownership limits. Control share acquisition
statutes and provisions similar to the one in the
company's certificate may harm long-term share
value by effectively entrenching management. The
ability to buy shares should not be constrained by
a limitation of voting rights in excess of a
specified threshold. Moreover, denying certain
shares their voting rights violates the "one share,
one vote" principle of stock ownership. While it
would be unusual for shareholders to vote against a
proposal to opt out such provisions, there may be
cases in which discouraging a particularly harmful
takeover does prove beneficial to shareholders. In
this case, the company has opted to substitute one
anti-takeover device for another. Although we
applaud the company's decision to remove the voting
restriction from the certificate, we do not believe
that the adoption of the poison pill without
shareholder approval is in shareholders' best
interests. Substitution aside, ISS supports the
elimination of the voting restriction in excess of
ten percent ownership as it would provide all
shareholders, regardless of their level of
ownership, with one vote per share.
3 Ratify Auditors For For Mgmt
04/27/04 - A United States Steel Corp. *X* 912909108 02/27/04 3,500
1 Elect Directors For For Mgmt
2 Ratify Auditors For For Mgmt
05/12/04 - A UnitedHealth Group Incorporated 91324P102 03/15/04 1,400
*UNH*
1 Elect Directors For For Mgmt
2 Ratify Auditors For For Mgmt
3 Expense Stock Options Against For ShrHoldr
ISS supports the general principle motivating this
non-binding proposal. In the wake of financial
reporting problems and excessive executive
compensation at companies like Enron Corp.,
Worldcom Inc., and Tyco International Ltd., we
agree with the growing investor consensus that
companies should expense the costs associated with
stock options in order to increase the accuracy of
their financial statements. Although companies can
choose to expense options, the Financial Accounting
Standards Board (FASB) does not require it. Since
the expensing of options lowers earnings, most
companies have elected not to do so. Instead, most
companies have opted to disclose option values only
in the footnotes to their annual reports. In the
absence of an accepted methodology with which to
value the contingent cost of stock options,
companies that have voluntarily expensed stock
options (some 350) have had flexibility in their
selection of a specific valuation methodology.
Opponents of option expensing argue that options
are difficult to value and expensing options could
add complexity and decrease transparency in
financial reporting. However, given the fact that
stock options have become an integral component of
compensation, their value cannot be ignored and
treated as "no-cost" compensation. Given that (1)
many companies use stock options as a significant
component of overall compensation, (2) the exercise
of options result in a transfer of shareholder
value, and (3) the contingent cost of options
reduces earnings, we believe that options should be
expensed along with all other forms of compensation
to better reflect the company's true earnings and
provide additional discipline against overuse.
4 Limit Awards to Executives Against Against ShrHoldr
ISS believes that an independent compensation committee
needs to have flexibility in constructing compensation
packages for its top managers in order to remain
competitive in the marketplace. This proposal is too
restrictive, and does not warrant shareholder approval.
06/01/04 - A Urban Outfitters, Inc. *URBN* 917047102 04/19/04 2,800
1 Elect Directors For Split Mgmt
1.1 Elect Director Richard A. Hayne ---
Withhold
We recommend a vote FOR the directors with the
exception of insiders Glen T. Senk and Richard A. Hayne
and affiliated outsiders Harry S. Cherken, Jr. and
Scott A. Belair. We recommend that shareholders
WITHHOLD votes from Scott A. Belair for standing as an
affiliated outsider on the Audit, Compensation and
Nominating committees and failure to establish a
majority independent board. We also recommend that
shareholders WITHHOLD votes from Glen T. Senk, Richard
A. Hayne and Harry S. Cherken, Jr. for failure to
establish a majority independent board.
1.2 Elect Director Scott A. Belair ---
Withhold
1.3 Elect Director Harry S. Cherken, Jr. ---
Withhold
1.4 Elect Director Joel S. Lawson III --- For
1.5 Elect Director Glen T. Senk --- Withhold
1.6 Elect Director Robert H. Strouse --- For
2 Increase Authorized Common Stock For Against Mgmt
3 Approve Omnibus Stock Plan For Against Mgmt
V.
Vote Recommendation Although the total cost of the
company's plans of 9.38 percent is within the
allowable cap for this company of 18.60 percent,
the plan allows repricing of underwater stock
options without shareholder approval, which we
believe reduces the incentive value of the plan.
06/04/04 - A Wal-Mart Stores, Inc. *WMT* 931142103 04/05/04 4,780
1 Elect Directors For For Mgmt
1.1 Elect Director James W. Breyer --- For
We recommend a vote FOR the directors.
1.2 Elect Director M. Michele Burns --- For
1.3 Elect Director Thomas M. Coughlin --- For
1.4 Elect Director David D. Glass --- For
1.5 Elect Director Roland A. Hernandez --- For
1.6 Elect Director Dawn G. Lepore --- For
1.7 Elect Director John D. Opie --- For
1.8 Elect Director J. Paul Reason --- For
1.9 Elect Director H. Lee Scott, Jr. --- For
1.10 Elect Director Jack C. Shewmaker --- For
1.11 Elect Director Jose H. Villarreal --- For
1.12 Elect Director John T. Walton --- For
1.13 Elect Director S. Robson Walton --- For
1.14 Elect Director Christopher J. Williams
--- For
2 Approve Stock Option Plan For For Mgmt
V. Vote Recommendation The total cost of the
company's plans of 2.98 percent is within the
allowable cap for this company of 5.69 percent.
3 Approve Stock Option Plan For For Mgmt
Sharesave plans enable employees to become
shareholders, which gives them a stake in the company's
growth. However, such plans are beneficial only when
they are well balanced and in the best interests of all
shareholders. ISS approves of this plan because the
number of shares being allowed under the plan is
reasonable and the plan is broad based.
4 Amend Employee Stock Purchase Plan For For Mgmt
ISS approves of this item because: (1) the number of
shares being added is relatively conservative, (2) the
company's matching contribution is reasonable, and (3)
there is no voting power dilution associated with the
plan.
5 Ratify Auditors For For Mgmt
6 Separate Chairman and CEO Positions Against For ShrHoldr
Absent an offsetting governance structure, we
believe that a company of this size should be able
to find a qualified independent director willing to
serve as chairman.
7 Prepare Sustainability Report Against For ShrHoldr
8 Report on Stock Option Distribution by Against For ShrHoldr
Race and Gender
9 Report on Genetically Modified Organisms Against Against ShrHoldr
(GMO)
10 Prepare Diversity Report Against For ShrHoldr
As employment diversity issues can impact corporate
reputation, we believe that such information should be
made available to shareholders of the company.
11 Submit Executive Compensation to Vote Against For ShrHoldr
We acknowledge the tax benefits arising from deferring
executive compensation. However, paying above-market
interest rates on deferred compensation is not "best
practice" and results in an additional expense to
shareholders. According to an Executive Benefits Survey
(2003 Results) published by Clark Consulting, only
seven percent of the 227 participating companies
provided a bonus rate above their base earnings rate.
In addition, the increment formula for long term
participating in the plan is unique and quite generous.
We believe shareholders may benefit from having the
opportunity to make their own evaluation of the
deferred compensation packages, especially when such
plans contain unique features beyond best practice.
06/28/04 - S WellPoint Health Networks Inc. *WLP* 94973H108 05/10/04 750
1 Approve Merger Agreement For For Mgmt
ISS Conclusion: Based on the sensible strategic
rationale, the significant market premium, the
potential cost and revenue synergies to be derived
from the proposed combination, the accretive nature
of the deal, and the valuation work and marketing
process of company's financial advisor, we believe
the merger agreement warrants shareholder support.
04/27/04 - A Wells Fargo & Company *WFC* 949746101 03/09/04 3,000
1 Elect Directors For Split Mgmt
1.1 Elect Director J.A. Blanchard III --- For
We recommend a vote FOR the directors with the
exceptions of affiliated outsiders Michael W. Wright,
Judith M. Runstad, and Donald B. Rice. We recommend
that shareholders WITHHOLD votes from Judith M. Runstad
for standing as an affiliated outsider on the Audit
Committee, Michael W. Wright and Donald B. Rice for
standing as affiliated outsiders on the Human Resources
and Governance & Nominating committees.
1.2 Elect Director Susan E. Engel --- For
1.3 Elect Director Enrique Hernandez, Jr. ---
For
1.4 Elect Director Robert L. Joss --- For
1.5 Elect Director Reatha Clark King --- For
1.6 Elect Director Richard M. Kovacevich ---
For
1.7 Elect Director Richard D. McCormick ---
For
1.8 Elect Director Cynthia H. Milligan --- For
1.9 Elect Director Philip J. Quigley --- For
1.10 Elect Director Donald B. Rice --- Withhold
1.11 Elect Director Judith M. Runstad ---
Withhold
1.12 Elect Director Stephen W. Sanger --- For
1.13 Elect Director Susan G. Swenson --- For
1.14 Elect Director Michael W. Wright ---
Withhold
2 Approve Retirement Plan For For Mgmt
This proposal would allow employees receive a
reasonable matching contribution in stock on
compensation that would have not been eligible for a
match under the regular 401(k) because of Code
limitations or deferrals. Furthermore, the dilution
arising from stock issuance under this plan is minimal.
As such, we recommend a vote for this benefit plan.
3 Ratify Auditors For For Mgmt
4 Expense Stock Options Against For ShrHoldr
However, given the fact that stock options have
become an integral component of compensation, their
value cannot be ignored and treated as "no-cost"
compensation. We believe that stock options should
be expensed along with other forms of compensation.
Given that (1) many companies use stock options as
a significant component of overall compensation,
(2) the exercise of options result in a transfer of
shareholder value, and (3) the contingent cost of
options reduces earnings, we believe that options
should be expensed along with other forms of
compensation to better reflect the company's true
earnings and provide additional discipline against
overuse. Moreover, this proposal received majority
support at last year's meeting.
5 Limit Executive Compensation Against Against ShrHoldr
While we do like some of the elements of the restricted
stock proposal, such as granting restricted stock based
on achievement of performance criteria and disclosure
of actual hurdle rates for the performance criteria, we
believe the proposal is restrictive given the fact that
the proponent asks for a complete substitution of
options with restricted stock.
6 Link Executive Compensation to Social Against Against ShrHoldr
Issues
In view of the company's controversies regarding
predatory lending practices, we believe that this
shareholder proposal warrants careful
consideration, but should be considered alongside
the company's current policies regarding the issue.
Based on the company's disclosure of policies to
address concerns of predatory lending, the
independence of the compensation committee, and the
absence of controversy surrounding current
executive compensation we do not believe that this
review and a subsequent report are necessary at
this time.
7 Report on Political Against Against ShrHoldr
Contributions/Activities
When reviewing requests for proposals on political
contributions, ISS takes into account the scope and
nature of the request, the company's adherence to
laws and regulations governing political
contributions, and company policies and additional
disclosure on such contributions. In the case of
Wells Fargo, we note that the company complies with
federal, state, and local laws regarding
contributions to political candidates or
organizations. Additionally, the company has
instituted and published a policy that does not
authorize corporate contributions to political
candidates or related entities. While ISS notes
that the company amended its reply to this proposal
based on information received after the
distribution of the proxy statement showing
corporate campaign contributions from a subsidiary
of the company, we believe that the updated policy
for 2004 as stated on the company website clearly
and publicly addresses the issue. Finally, the
extensive scope of the reports requested in this
proposal may not be substantially different from
information currently available and could prove
costly and difficult for the company to publish in
a formal report. As such, it does not appear that
preparing and publicizing such reports in the
manner requested by the proponent would be the most
effective use of shareholder funds.
04/22/04 - A Wyeth *WYE* 983024100 03/12/04 3,400
1 Elect Directors For For Mgmt
1.1 Elect Director Clifford L. Alexander, Jr.
--- For
1.2 Elect Director Frank A. Bennack, Jr. ---
For
1.3 Elect Director Richard L. Carrion --- For
1.4 Elect Director Robert Essner --- For
1.5 Elect Director John D. Feerick --- For
1.6 Elect Director Robert Langer --- For
1.7 Elect Director John P. Mascotte --- For
1.8 Elect Director Mary Lake Polan --- For
1.9 Elect Director Ivan G. Seidenberg --- For
1.10 Elect Director Walter V. Shipley --- For
1.11 Elect Director John R. Torell III --- For
2 Ratify Auditors For For Mgmt
3 Report on Drug Pricing Against Against ShrHoldr
When evaluating drug-pricing proposals, ISS
considers the economic benefits of providing
subsidized drugs (e.g., public goodwill) against
the potential costs in terms of reduced profits,
lower R&D spending, and harm to competitiveness.
Additionally, the company's current policies are
taken into account, including any existing subsidy
or donor programs that make life-saving
pharmaceuticals more accessible to financially
needy patients. Finally, we consider the degree to
which peer companies have implemented price
restraints. Specifically, this proposal calls for a
report on the company's marketing and pricing
policies. While ISS generally supports increased
disclosure that may help shareholders better
evaluate their investment, the cost and difficulty
in generating this information should be offset by
benefits gained from increased disclosure. In the
case of Wyeth, we note that the company has
initiated programs aimed at increasing the
accessibility and decreasing the cost of its
products through subsidies, discounts, and
donations for qualifying individuals. Moreover, the
company supports several international
organizations in the effort to distribute its
products to people who could not otherwise afford
these medications. Finally, the company has
disclosure available on its website, comparable to
that of industry peers, that discusses Wyeth's
stance on drug accessibility and pricing, and
initiatives that the company has taken both
domestically and internationally to address this
issue. As such, ISS does not believe the report
requested by this proposal will provide additional
significant benefits to shareholders.
4 Amend Animal Testing Policy Against Against ShrHoldr
When evaluating proposals on animal testing policies,
ISS considers the nature of the product and the degree
to which live animal testing is necessary or federally
mandated. Additionally, we look at the feasibility and
availability of alternative methods. Finally, ISS will
evaluate industry practices to determine if animal
testing is common at competitors and peer companies in
similar circumstances. In this case, Wyeth has
developed a policy that calls for minimizing live
animal testing wherever possible. However, certain
types of research may benefit from these tests when
alternative methods may not be available or practical
in light of the complexity of the subject research.
Additionally, in some cases alternative methods of
testing may be not feasible or meet criteria
established by the government. Moreover, the level of
live animal testing at Wyeth appears to be consistent
with industry standards on the topic. As such, ISS does
not recommend shareholder support for the resolution at
this time.
Vote Summary Report
Apr 01, 2004 - Jun 30, 2004
China Region Opportunity Fund
Mtg Company/ Mgmt Vote Record Shares
Date/Type Ballot Issues Security Rec Cast Date Prpnent Voted
- ----------------- ---------------------------- ----------- --------- ------------- ------------- ----------- ----------
- -----------------------------------------------------------------------------------------------------------------------
06/07/04 - A ALUMINUM CORPORATION OF Y0094N109 05/04/04 400,000
CHINA LTD
1 Approve Report of Directors For For Mgmt
2 Approve Report of Supervisory For For Mgmt
Committee
3 Approve Financial Statements For For Mgmt
4 Approve Profit Distribution For For Mgmt
Plan and Approve Final
Dividend of RMB0.096 Per Share
5 Approve Remuneration of For For Mgmt
Directors and Supervisors
6 Approve Payment of Housing For Against Mgmt
Subsidy to Certain Directors
and Payment of Performance
Bonus to Certain Directors and
Supervisors
ISS notes that the company did not identify
individual director recipients of the proposed
housing subsidy and performance bonus. While these
payments may be a part of the company's
compensation package and performance bonuses are
generally used to reward individuals for their
contributions to the growth of a company's
business, the company did not provide information
on the criteria used to determine individuals
worthy to receive such subsidy or bonus. Given
this, we are unable to ascertain whether the grant
of housing subsidies and performance bonuses are
fair and reasonable and that non-executive
directors are not included among those receiving
such payments.
We therefore recommend a vote
against this resolution.
7 Approve For For Mgmt
PricewaterhouseCoopers, Hong
Kong, CPAs and
PricewaterhouseCoopers Zhong
Tian CPAs Ltd. Co. as
International and Domestic
Auditors, Respectively, and
Authorize Audit Committee to
Fix Their Remuneration
8 Reelect Xiong Weiping, Joseph For For Mgmt
C. Muscari, Chen Xiaozhou,
Chiu Chi Cheong Clifton and
Wang Dianzuo as Directors and
Elect Luo Jianchuan, Xiao
Yaqing, Chen Jihua and Jiang
Qiangui as New Directors to
the Second Board of Directors
9 Reelect Luo Tao, Yuan Li and For For Mgmt
Ou Xiaowu as Supervisors to
the Second Supervisory
Committee
10 Amend Articles Re: Change in For For Mgmt
Total Share Capital and
Shareholding Structure, Number
of Independent Directors,
Election of Directors, Voting
at General Meetings and
Material Interest of Directors
in Contracts Entered into by
the Company
11 Approve Issuance of Equity or For Against Mgmt
Equity-Linked Securities
without Preemptive Rights
This authority complies with strict SEHK
regulations governing such plans, however, ISS
recommends voting against the issuance of shares
without preemptive rights unless the company
provides specific language and terms that there
will be (1) adequate restrictions on discounts and
(2) no authority to refresh the share issuance
amounts without prior shareholder approval. This
is in light of abuses made by a number of Hong
Kong companies that have issued shares at steep
discounts to related parties and renewed the share
issuance amount under this authority without
shareholder approval, which are permissible under
current law.
06/15/04 - A Angang New Steel Company Y0132D105 05/15/04 800,000
1 Accept Report of the Directors For For Mgmt
2 Accept Report of the For For Mgmt
Supervisory Committee
3 Accept Financial Statements For For Mgmt
4 Approve Proposed Profit For For Mgmt
Distribution Plan
5 Approve Remuneration of For For Mgmt
Directors and Supervisors
6 Approve Auditors and Authorize For For Mgmt
Board to Fix Their Remuneration
7 Approve Asset Purchase For For Mgmt
Agreement Between Angang New
Steel Co. and Anshan Iron &
Steel Group Complex
8a Amend Articles Re: Voting at For For Mgmt
General Meetings
8b Amend Articles Re: Nomination For For Mgmt
of Directors
8c Amend Articles Re: Special For For Mgmt
Resolutions
8d Amend Articles Re: Associates For For Mgmt
to Directors, Supervisors,
Managers or Other Senior
Management Officers
8e Amend Articles Re: Material For For Mgmt
Interest of Directors in
Contracts Entered into by the
Company
8f Amend Articles Re: Adoption of For For Mgmt
Articles of Association
9 Authorize Board to Effect For For Mgmt
Proposed Changes to the
Articles of Association
10 Other Business (Voting) For Against Mgmt
Although this item is routine and only
those issues that could legally be
discussed could be presented for
consideration, its approval would create
an opportunity for those who attend the
meeting to approve changes that are not
in the best interests of all
shareholders. We recommend that
shareholders oppose this item unless the
company has provided detailed information
about the issues that will be discussed.
05/12/04 - A Anhui Conch Cement Co Y01373102 04/13/04 700,000
1 Accept Directors' Report For For Mgmt
2 Accept Supervisors' Report For For Mgmt
3 Accept Financial Statements For For Mgmt
4 Approve Allocation of Income For Against Mgmt
and Dividends
A total of RMB 0.10 ($0.012) per share has been
proposed as annual cash dividend, this represents
a payout ratio of 16 percent. Whenever the payout
ratio falls below our minimum recommended
30-percent level we take a closer look at the
company's allocation of income history. During the
fiscal years of 1999 - 2003, the company recorded
Earnings Per Share (EPS) of RMB 0.06 ($0.007), RMB
0.12 ($0.014), RMB 0.21($0.025), RMB 0.23
($0.028), and RMB 0.62 ($0.075), respectively.
However, the company's average payout ratio for
the last five years is only 12 percent. This is
far below the ISS minimum limit of 30 percent. The
company has not provided a strong rationale for
such a high retention of capital which generally
must be disclosed for us to support a prolonged
low payout ratio. Due to this longstanding
shareholder-unfriendly practice, ISS therefore
recommends that shareholders vote against the
proposal. ISS also calls on the company to
disclose the reason for their low payout ratios in
the last couple of years and recommends that Anhui
Conch alter its dividend policy if there is no
pressing reason for it to retain capital.
5 Approve Auditors and Authorize For For Mgmt
Board to Fix Their Remuneration The proposal seeks the
re-appointment of PricewaterhouseCoopers Zhong
Tian CPAs and PricewaterhouseCoopers CPAs as the
PRC and the international auditors of the company
respectively .
6 Elect Directors and For For Mgmt
Supervisors and Fix Their
Remuneration
06/29/04 - S Anhui Conch Cement Co Y01373102 05/28/04 200,000
1a Approve Ongoing Connected For For Mgmt
Transactions with Shanghai
Conch Construction Material
Intl. Trading Co. Ltd.
This item concerns connected transactions between
the company and its subsidiaries (the Group) with
Shanghai Conch Construction Material Intl. Trading
Co. Ltd. (Shanghai Conch Trading) for the latter's
export of cement and clinker products produced by
subsidiaries of the company to overseas customers
as a non-exclusive agent; the import of clinker
and cement production equipment, including spare
parts and accessories for production, from
overseas suppliers as agent of the company; and
purchase of cement and clinker products from the
Group and sale of such products to third parties
in mainland China as principal. The arrangement
between the company and Shanghai Conch Trading
will be for a term of three years ending Dec. 31,
2006. As agent of the Group, Shanghai Conch
Trading will be paid a commission fee equal to 1.5
percent on the amount of overseas sales and the
amount of cement production equipment imported on
behalf of the Group, respectively; and the
purchase of cement and clinker products from the
Group would be made at price no more favorable
than those offered by the Group to independent
customers. The company estimates that the amount
of commission payable to Shanghai Conch Trading as
export agent will be approximately HK$3.8 million
($489,375), HK$6.2 million ($798,454) and HK$9.4
million ($1.2 million) for each of the three years
ending Dec. 31, 2006. As import agent, the caps
for Shanghai Conch Trading's commission for each
of the three years ending Dec. 31, 2006, amount to
approximately HK$3.6 million ($463,619), HK$3.8
million ($489,375) and HK$4.0 million ($515,132).
Lastly, the company has set the following caps for
sale transactions with Shanghai Conch Trading at
HK$297 million ($38.2 million), HK$425 million
($54.7 million) and HK$566 million ($72.9
million), respectively, for each of the three
years ending Dec. 31, 2006. Watterson Asia Ltd.,
an independent financial evaluator, reviewed the
terms of the proposal and declared them as fair
and reasonable to shareholders. These connected
transactions appear to be reasonable in that the
commission fee to be paid by the Group to Shanghai
Conch Trading is based on the market rate for the
industry and sales of products by the Group to
Shanghai Conch Trading will be based on prices no
more favorable than those offered to independent
customers. As the company does not hold the
necessary export and import license to sell
products produced by its subsidiaries and source
production equipment overseas, such services have
been provided by third parties. By procuring the
services of Shanghai Conch Trading, the company is
confident that the Group will be able to gain
access to Shanghai Conch Trading's customer base
and expand sales to untapped overseas and domestic
customers.
1b Approve Ongoing Connected For For Mgmt
Transactions with Shanghai
Conch Logistics Co. Ltd.
This item proposes to engage the services of
Shanghai Conch Logistics Co. Ltd. (Shanghai Conch
Logistics) as one of the Group's non-exclusive
shipping transport service provider, delivering
cement and clinker between subsidiaries of the
company and coal ash and accessory materials for
production from suppliers to members of the Group.
Shipping fees payable to Shanghai Conch Logistics
will be determined based on the shipping tariff
schedule published by the Ministry of
Transportation of the People's Republic of China
(PRC) and market rates in the shipping industry.
Shanghai Conch Logistics would propose reasonable
shipping fees but may extend discounts of 10 to 20
percent. In the event that all vessels owned by
Shanghai Conch Logistics are unavailable, Shanghai
Conch Logistics may, as an agent of the Group,
hire other independent shipping providers to
address the shipping requirements of the Group.
Shipping delivery fees payable to the independent
shipping providers will be paid directly by the
company to the respective independent shipping
provider, however, Shanghai Conch Logistics will
be paid an agency fee representing administrative
and insurance costs charged on an as-incurred
basis. This item is proposed given that the
Ministry of Transportation in the PRC now requires
shipping transport services providers to own
vessels used in the provision of their transport
services. As a result, shipping transport services
previously provided by a subsidiary of the company
using hired ships may no longer be used as the
shipping transport license may no longer be
renewed. This being the case, shipping transport
services must now be sourced by the Group from
logistics companies, including Shanghai Conch
Logistics. The company has set HK$401 million
($51.6 million), HK$613 million ($78.9 million),
HK$755 million ($97.2 million) as annual caps for
the cargo shipping transportation services to be
provided by Shanghai Conch Logistics for each of
the three years ending Dec. 31, 2006. Watterson
Asia Ltd., an independent financial evaluator
reviewed the terms of this proposal and declared
them as fair and reasonable to shareholders. This
appears to be a reasonable request in that the
Group's clinker and cement production plants are
located along the banks of the Yangtze River, as
such, river transport was noted to be an important
means of transport from the manufacturing bases to
the sales points. Procuring the services of
Shanghai Conch Logistics, with its fleet of
approximately 1,000 ships and barges primarily
used to serve enterprises along the Yangtze River,
is expected to benefit the company through
bulk-delivery discounts offered by Shanghai Conch
Logistics and higher sales along the Yangtze
River.
2 Amend Articles Re: Guarantee For For Mgmt
to Controlling Shareholder and
Related Parties, Voting at
General Meetings, Nomination
of Directors, Material
Interest of Any Director,
Supervisor, General Manager or
Senior Management in Contracts
Entered into by the Company
The amended articles seek to clarify conditions
for the company's provision of guarantees by
disallowing guarantees to shareholders or other
connected parties with less than 50 percent
shareholding and parties, other than subsidiaries,
with a gearing ratio above 70 percent; and setting
a limit of 50 percent of the net asset value for
the aggregate amount of guarantees provided by the
company to external parties. The new articles
likewise reflect the voting restriction for
shareholders required to abstain from voting on
particular resolutions at general meetings and the
prohibition on directors, at board meetings, to
vote on proposals in which they are deemed to be
materially interested. Also included is a minimum
seven-day lodgment period for the nomination of
directors by shareholders. The period shall
commence no earlier than the day after the release
of the meeting notice and end no later than seven
days before the meeting date. These changes have
been a routine request on most meeting notices of
Hong Kong listed companies as a result of
amendments made to applicable rules. A vote in
favor of this resolution is recommended.
04/23/04 - A ASM Pacific Technology G0535Q117 None 221,000
Ltd.
1 Accept Financial Statements For For Mgmt
and Statutory Reports
2 Approve Final Dividend of For For Mgmt
HK$0.84 Per Share
3 Elect Director and Authorize For For Mgmt
Board to Fix Their Remuneration
4 Reappoint Auditors and For For Mgmt
Authorize Board to Fix Their
Remuneration
04/23/04 - S ASM Pacific Technology G0535Q117 None 221,000
Ltd.
1 Amend Articles Re: Voting at For For Mgmt
General Meetings, Nomination
of Directors, Appointment of
Multiple Corporate
Representatives by a Clearing
House
2 Approve Issuance of Equity or For Against Mgmt
Equity-Linked Securities
without Preemptive Rights
This authority complies with strict SEHK
regulations governing such plans, however, ISS
recommends voting against the issuance of shares
without preemptive rights unless the company
provides specific language and terms that there
will be (1) adequate restrictions on discounts and
(2) no authority to refresh the share issuance
amounts without prior shareholder approval. This
is in light of abuses made by a number of Hong
Kong companies that have issued shares at steep
discounts to related parties and renewed the share
issuance amount under this authority without
shareholder approval, both of which are
permissible under current law.
3 Approve Repurchase of Up to 10 For For Mgmt
Percent of Issued Capital
4 Authorize Reissuance of For For Mgmt
Repurchased Shares
04/29/04 - A AU OPTRONICS CORP 002255107 03/01/04 15,000
Meeting for Holders of ADRs
1 ACCEPTANCE OF THE 2003 For For Mgmt
BUSINESS REPORT AND FINANCIAL
STATEMENTS, AS SET FORTH IN
THE COMPANY S NOTICE OF
MEETING.
2 APPROVAL OF THE REVISIONS TO For For Mgmt
THE ARTICLES OF INCORPORATION,
AS SET FORTH IN THE COMPANY S
NOTICE OF MEETING.
3 Elect Directors For For Mgmt
4 APPROVAL OF THE PROPOSAL FOR For For Mgmt
DISTRIBUTION OF 2003 PROFITS,
AS SET FORTH IN THE COMPANY S
NOTICE OF MEETING.
5 APPROVAL OF THE CAPITALIZATION For For Mgmt
OF 2003 DIVIDENDS AND EMPLOYEE
STOCK BONUS, AS SET FORTH IN
THE COMPANY S NOTICE OF
MEETING.
6 APPROVAL TO HAVE A NEW RIGHTS For For Mgmt
ISSUE TO SPONSOR DR OFFERING,
AS SET FORTH IN THE COMPANY S
NOTICE OF MEETING.
7 APPROVAL TO RELEASE THE For For Mgmt
DIRECTORS FROM NON-COMPETITION
RESTRICTIONS, AS SET FORTH IN
THE COMPANY S NOTICE OF
MEETING.
06/23/04 - A/S Bema Gold Corp. *BGO.* 08135F107 05/10/04 100,000
1 Elect Directors For For Mgmt
2 Ratify PricewaterhouseCoopers For For Mgmt
LLP as Auditors
3 Amend Stock Option Plan to For For Mgmt
Increase Shares Resreved
Thereunder
4 Amend Stock Option Plan Re: For For Mgmt
Expiry Date of Options
06/30/04 - A CAPITAL ALLIANCE GROUP INC 13971N107 05/12/04 536,666
1 Appoint Auditors For For Mgmt
Dale Matheson Carr-Hilton LaBonte are the
company's current auditors. The company's
auditor since 1996, LaBonte & Co. merged
with Dale Matheson Carr-Hilton effective
January 1, 2004.
2 Authorize Board to Fix For For Mgmt
Remuneration of the Auditors
The circular does not provide the audit
or non-audit fees paid to the auditor
over the most recent fiscal year.
3 Fix Number of Directors at six For For Mgmt
This is a routine item.
4 Elect Directors For Split Mgmt
4.1 Elect Allen Chu as Director
--- For
The board is majority independent.
4.2 Elect Toby Chu as Director ---
Withhold
We recommend withholding votes from Toby
Chu because he is an insider on the Audit
Committee.
4.3 Elect Tony David as Director
--- For
4.4 Elect G. David Richardson as
Director --- For
4.5 Elect Prithep Sosothikul as
Director --- For
4.6 Elect Alfred Ng as Director
--- For
5 Remove pre-existing company For For Mgmt
provisions
The company was incorporated under the Company Act
(British Columbia). B.C. has adopted new
legislation, the Business Corporations Act
(British Columbia) (BCBCA) which provides
corporations with more flexibility and aligns with
legislation in other jurisdictions in Canada. As a
result, the company is requesting shareholder
approval for some resolutions proposed in
conjunction with this change. This resolution asks
shareholders to delete the Pre-existing Company
Provisions from the Notice of Articles that has
been proposed. Under the Pre-existing Company
Provisions , three-quarters of the votes cast by
shareholders were required in order to pass a
special resolution. Under the BCBCA, two-thirds of
the votes cast are required. Essentially, if this
resolution passes, in the future special
resolutions will require two-thirds of votes cast
to pass. As this is in line with several other
Canadian jurisdictions, Fairvest does not oppose
this resolution.
6 Approve replacement of For Against Mgmt
company's Articles
In conjunction with the establishment of the BCBCA
as mentioned above, the company is asking
shareholders to adopt new Articles. The circular
does not attach the proposed new articles, but
states that with the new Articles, the company
will have more flexibility, including: directors
will have increased authority to amend the
company's Articles; the name of the company can be
changed by the directors without the need for
shareholder approval; there are no residency
requirements for directors; and, no specific
officer requirements. Shareholders should note
that one of the amendments to the articles may
enable the directors to create blank cheque
preferred shares with unspecified rights. Blank
cheque preferred stock can also be used as an
entrenchment device in the event of a corporate
takeover and, as given that this may be possible
under the new Articles, we do not recommend a vote
in favour of this resolution.
7 Increase Authorized Share For For Mgmt
Capital
The Company Act required that companies have a set
authorized capital, unlike most other Canadian
jurisdictions, which permit unlimited authorized
capital. As a result of the change in legislation
in B.C., the company is asking shareholders to
approve an amendment to the articles of the
corporation in order to change the authorized
capital from 50,000,000 shares to an 100,000,000
shares. We do not oppose this resolution.
8 Amend Stock Option Plan For Against Mgmt
This item will create a twenty percent
rolling stock option plan. The total cost
of the company's plan is compared to an
allowable cap using a compensation model.
The allowable caps are industry-specific,
market cap-based, and pegged to the
average amount paid by companies
performing in the top quartile of their
peer groupings. Industry classifications
are established using standard industry
code (SIC) groups. Using historic data
tracked by Fairvest of the value of
authorized shares for issue at each
company ranked in the top quartile of its
industry, a benchmark pay level is
established for each industry. The total
cost of the company's plan of 11.60
percent is above the allowable cap for
this company of 10.15 percent. Fairvest
prefers companies to adopt a fixed
maximum number of shares to be reserved
pursuant to options plans, rather than
'rolling' stock option plans. We also
oppose the resolution, however, because
it would appear that non-employee
directors participate in options on a
discretionary basis. This is a practice
which gives rise to the possibility of
self-dealing by directors in options.
Directors who are able to grant
themselves options without limit could
find their independence compromised.
Shareholders should note that this plan
could allow options to be granted with a
discounted exercise price if permitted
for by the TSX Venture Exchange. The
amended plan could represent dilution of
up to 16.66 percent on a fully-diluted
basis at any point in time.
9.1 Authorize the number of shares For Against Mgmt
reserved for issuance under
stock options granted to
insiders exceeding 10% of the
issued shares
This proposal seeks advance shareholder approval
to allow the board to grant options to insiders in
excess of 10% of the issued shares. Fairvest
opposes this resolution as it may lead to
excessive grants. As such, we recommend a vote
against this resolution and the next 2 items on
the agenda.
9.2 Authorize the grant to For Against Mgmt
insiders, within a 12 month
period, of stock options
exceeding 10% of the issued
shares
Please see the above item.
9.3 Authorize, if the Company For Against Mgmt
becomes a Tier 1 issuer, the
issuance to any optionee,
within a 12 month period, of a
number of options exceeding 5%
of the issued shares
Please see the above item.
9.4 Approve Repricing of Options For Against Mgmt
Shareholders are being asked to provide
prior blanket approval for the potential
repricing of options previously granted
to insiders. Fairvest does not approve of
the repricing of options. If insiders are
able to have exercise prices reset
following a fall in share price, the
incentive purpose of the plan is
undermined. We believe that the use of
options as incentive means that insiders
must bear the same risks as shareholders
in holding these options. By making them
an almost risk-free proposition, the
incentive purpose of the plan is diluted
and shareholders pay the price.
06/28/04 - A China First Pencil Co Ltd Y1424Z119 06/04/04 1
1 Accept 2003 Annual Report For For Mgmt
2 Accept Directors' Report For For Mgmt
3 Accept Financial Statements For For Mgmt
4 Approve Allocation of Income For For Mgmt
and Dividends
The company proposes not to distribute
any dividend for the year 2003.
5 Approve Auditors and Authorize For For Mgmt
Board to Fix Their Remuneration
6 Approve Sales Agreement For Against Mgmt
At the time of the delivery of this
analysis the company had not disclosed
adequate information therefore we must
advise against the resolution due to poor
disclosure.
7 Approve Resignation of Wu Guo For For Mgmt
Min as Director
8 Elect Directors For For Mgmt
9 Elect Supervisors For For Mgmt
10 Accept Supervisors' Report For For Mgmt
11 Amend Articles of Association For For Mgmt
The proposal seeks to insert an article regarding
external guarantees provided by the company.
Details are as follows: 1. China First Pencil Co
Ltd will only issue guarantees to a subsidiary
that is at least 50 percent-owned; 2. The total
amount of guarantee should not exceed 50 percent
of the net assets of the company; 3. China First
Pencil Co Ltd should not make guarantees to any
party with a debt-to-asset ratio of more than 70
percent; 4. Any guarantee should be made with a
counter-guarantee; and other rules and procedures
of such guarantee. Also included is a proposal to
decrease the current number of board members from
10 to eight and other procedural amendments
regarding board meetings. The company already has
existing guidelines with regard to the provision
of external guarantees. This amendment only seeks
to reinforce those guidelines. Meanwhile,
decreasing the number of board members is meant to
reflect the current size and scope of the
company's operations. ISS recommends that
shareholders approve this request.
04/21/04 - A China International Marine Y1457J107 04/09/04 365,088
Containers Group
1 Accept Directors' Report For For Mgmt
2 Accept Annual Report For For Mgmt
3 Accept Report of Supervisory For For Mgmt
Committee
4 Provide Credit Guarantee for For Against Mgmt
the Short-term Loan of the
Company's Subsidiary
At the time of the delivery of this analysis the
company had not disclosed adequate information
therefore we must advise against the resolution
due to poor disclosure.
5 Approve Allocation of Income For For Mgmt
and Cash Dividend of RMB 3.80
per 10 Shares and Bonus Issue
of Six per 10 Shares
Cash dividend of RMB 3.80 ($0.46) per 10 shares
and bonus issue of six per 10 shares has been
proposed.
6 Elect Directors For For Mgmt
7 Approve Directors' Remuneration For For Mgmt
8 Elect Supervisors For For Mgmt
9 Amend Articles of Association For Against Mgmt
At the time of the delivery of this analysis the
company had not disclosed adequate information
therefore we must advise against the resolution
due to poor disclosure.
10 Amend Rules and Procedures of For For Mgmt
Shareholders Meeting
The company failed to provide any details
regarding the matter. However, based on the
previous disclosures of Chinese companies, the
item is considered purely technical with neutral
effect to shareholder value.
11 Approve Auditors For For Mgmt
06/08/04 - A China Merchants Holdings Y1489Q103 06/01/04 579,000
(International) Ltd.
1 Accept Financial Statements For For Mgmt
and Statutory Reports
2 Approve Final Dividend of For For Mgmt
HK$0.29 Per Share
3a Reelect Zhao Huxiang as For For Mgmt
Director
3b Reelect Li Yinquan as Director For For Mgmt
3c Reelect Meng Xi as Director For For Mgmt
3d Reelect Zhou Qifang as Director For For Mgmt
3e Authorize Board to Fix Their For For Mgmt
Remuneration
4 Reappoint Auditors and For For Mgmt
Authorize Board to Fix Their
Remuneration
5a Approve Issuance of Equity or For Against Mgmt
Equity-Linked Securities
without Preemptive Rights
This authority complies with strict SEHK
regulations governing such plans. However, ISS
recommends voting against the issuance of shares
without preemptive rights unless the company
provides specific language and terms that there
will be (1) adequate restrictions on discounts and
(2) no authority to refresh the share issuance
amounts without prior shareholder approval. This
is in light of abuses made by a number of Hong
Kong companies that have issued shares at steep
discounts to related parties and renewed the share
issuance amount under this authority without
shareholder approval, which are permissible under
current law.
5b Approve Repurchase of Up to For For Mgmt
Ten Percent of Issued Capital
5c Authorize Reissuance of For For Mgmt
Repurchased Shares
6 Amend Articles Re: Voting at For For Mgmt
General Meetings, Material
Interest of Directors in
Contracts Entered into by the
Company and Technical
Definitions
06/16/04 - A China Mobile (Hong Kong) Y14965100 None 200,000
Limited
1 Accept Financial Statements For For Mgmt
and Statutory Reports
2 Approve Final Dividend of For For Mgmt
HK$0.20 Per Share
3 Elect Directors For For Mgmt
4 Reappoint Auditors and For For Mgmt
Authorize Board to Fix Their
Remuneration
5 Approve Remuneration of For For Mgmt
HK$180,000 for Each Director
6 Approve Repurchase of Up to 10 For For Mgmt
Percent of Issued Capital
7 Approve Issuance of Equity or For Against Mgmt
Equity-Linked Securities
without Preemptive Rights
However, ISS recommends voting against the
issuance of shares without preemptive rights
unless the company provides specific language and
terms that there will be (1) adequate restrictions
on discounts and (2) no authority to refresh the
share issuance amounts without prior shareholder
approval. This is in light of abuses made by a
number of Hong Kong companies that have issued
shares at steep discounts to related parties and
renewed the share issuance amount under this
authority without shareholder approval, both of
which are permissible under current law.
8 Authorize Reissuance of For For Mgmt
Repurchased Shares
9 Amend Articles Re: Voting at For For Mgmt
General Meetings, Retirement
of Directors, Nomination of
Directors, Material Interest
of Directors in Contracts
Entered into by the Company
06/16/04 - A China Mobile (Hong Kong) 16941M109 04/23/04 20,000
Limited
Meeting for Holders of ADRs
1 TO RECEIVE AND CONSIDER THE For For Mgmt
FINANCIAL STATEMENTS AND THE
REPORTS OF THE DIRECTORS AND
AUDITORS FOR YEAR ENDED 31
DECEMBER 2003.
2 TO DECLARE A FINAL DIVIDEND For For Mgmt
FOR THE YEAR ENDED 31 DECEMBER
2003.
3 TO RE-ELECT MR. XUE TAOHAI AS For For Mgmt
A DIRECTOR.
4 TO RE-ELECT MR. LI GANG AS A For For Mgmt
DIRECTOR.
5 TO RE-ELECT MR. XU LONG AS A For For Mgmt
DIRECTOR.
6 TO RE-ELECT MR. MOSES CHENG MO For For Mgmt
CHI AS A DIRECTOR.
7 TO RE-ELECT DR. J. BRIAN CLARK For For Mgmt
AS A DIRECTOR.
8 Ratify Auditors For For Mgmt
9 TO FIX THE DIRECTORS FEES. For For Mgmt
10 TO REPURCHASE SHARES IN THE For For Mgmt
COMPANY NOT EXCEEDING 10% OF
THE AGGREGATE NOMINAL AMOUNT
OF THE EXISTING ISSUED SHARE
CAPITAL.
11 TO ISSUE, ALLOT AND DEAL WITH For Against Mgmt
ADDITIONAL SHARES IN THE
COMPANY NOT EXCEEDING 20% OF
THE EXISTING ISSUED SHARE
CAPITAL.
However, ISS recommends voting against the
issuance of shares without preemptive rights
unless the company provides specific language and
terms that there will be (1) adequate restrictions
on discounts and (2) no authority to refresh the
share issuance amounts without prior shareholder
approval. This is in light of abuses made by a
number of Hong Kong companies that have issued
shares at steep discounts to related parties and
renewed the share issuance amount under this
authority without shareholder approval, both of
which are permissible under current law.
12 TO EXTEND THE GENERAL MANDATE For For Mgmt
GRANTED TO THE DIRECTORS TO ISSUE, ALLOT AND DEAL WITH
SHARES BY THE NUMBER OF SHARES REPURCHASED.
13 TO AMEND THE ARTICLES OF For For Mgmt
ASSOCIATION OF THE COMPANY.
06/16/04 - S China Mobile (Hong Kong) Y14965100 None 60,000
Limited
1 Approve Sale and Purchase For For Mgmt
Agreement Between China Mobile
(Hong Kong) Ltd., China Mobile
Hong Kong (BVI) Ltd. and China
Mobile Communications Corp.
06/28/04 - A China Overseas Land & Y15004107 06/18/04 2,400,000
Investment Ltd.
1 Accept Financial Statements For For Mgmt
and Statutory Reports
2 Reelect Directors For For Mgmt
3 Approve Final Dividend of For For Mgmt
HK$0.03 Per Share
4 Reappoint Auditors and For For Mgmt
Authorize Board to Fix Their
Remuneration
5 Approve Repurchase of Up to 10 For For Mgmt
Percent of Issued Capital
6 Approve Issuance of Equity or For Against Mgmt
Equity-Linked Securities
without Preemptive Rights
This authority complies with strict SEHK
regulations governing such plans, however, ISS
recommends voting against the issuance of shares
without preemptive rights unless the company
provides specific language and terms that there
will be (1) adequate restrictions on discounts and
(2) no authority to refresh the share issuance
amounts without prior shareholder approval. This
is in light of abuses made by a number of Hong
Kong companies that have issued shares at steep
discounts to related parties and renewed the share
issuance amount under this authority without
shareholder approval, which are permissible under
current law.
7 Authorize Reissuance of For For Mgmt
Repurchased Shares
8 Amend Articles Re: Issuance of For For Mgmt
Share Certificates, Voting at
General Meetings, Material
Interest of Directors in
Contracts Entered into by the
Company, Nomination of
Directors, Electronic
Communication
05/18/04 - A China Petroleum & Chemical Y15010104 04/19/04 2,700,000
Corp.
Ordinary Business
1 Accept Report of the Directors For For Mgmt
2 Accept Report of the For For Mgmt
Supervisory Committee
3 Accept Financial Statements For For Mgmt
4 Approve 2003 Profit For For Mgmt
Appropriation Plan and Final
Dividend
5 Reappoint KPMG Huazhen and For For Mgmt
KPMG as the PRC and
International Auditors
Respectively and Authorize
Board to Fix Their Remuneration
Special Business
1 Approve Issuance of Equity or For Against Mgmt
Equity-Linked Securities
without Preemptive Rights
This request is being made to renew the authority
because the authority to issue shares effectively
expired with the convening of this shareholder
meeting. This authority complies with strict SEHK
regulations governing such plans, however, ISS
recommends voting against the issuance of shares
without preemptive rights unless the company
provides specific language and terms that there
will be (1) adequate restrictions on discounts and
(2) no authority to refresh the share issuance
amounts without prior shareholder approval. This
is in light of abuses made by a number of Hong
Kong companies that have issued shares at steep
discounts to related parties and renewed the share
issuance amount under this authority without
shareholder approval, both of which are
permissible under current law.
2 Amend Articles Re: External For For Mgmt
Guarantees, Voting at General
Meetings, Nomination of
Directors, Material Interest
of Directors in Contracts
Entered into by the Company
05/14/04 - S China Pharmaceutical Group Y15018131 None 1,200,000
Ltd (frmly China Pharm.
Ent. & In
1 Approve Repurchase of Up to 10 For For Mgmt
Percent of Issued Capital
2 Approve Issuance of Equity or For Against Mgmt
Equity-Linked Securities
without Preemptive Rights
This request is being made to renew the authority
because the authority to issue shares effectively
expired with the convening of this shareholder
meeting. However, ISS recommends voting against
the issuance of shares without preemptive rights
unless the company provides specific language and
terms that there will be (1) adequate restrictions
on discounts and (2) no authority to refresh the
share issuance amounts without prior shareholder
approval. This is in light of abuses made by a
number of Hong Kong companies that have issued
shares at steep discounts to related parties and
renewed the share issuance amount under this
authority without shareholder approval, both of
which are permissible under current law.
3 Authorize Reissuance of For For Mgmt
Repurchased Shares
06/10/04 - A China Shipping Development Y1503Y108 05/10/04 800,000
Co.(Formerly Shanghai Hai
Xing)
1 Accept Report of the Directors For For Mgmt
2 Accept Report of the For For Mgmt
Supervisory Committee
3 Accept Financial Statements For For Mgmt
and Statutory Reports
4 Approve Profit Distribution For For Mgmt
Plan
The board recommends the payment of a
final dividend of RMB0.15 ($0.02) per
share.
5 Approve Remuneration of For For Mgmt
Directors and Supervisors
6 Reappoint Shanghai Zhonghua For For Mgmt
Huying CPA and Ernst & Young
as Domestic and International
Auditors Respectively and
Authorize Board to Fix Their
Remuneration
7 Elect Sun Zhitang as Director For For Mgmt
8 Approve Establishment of Audit For For Mgmt
Committee
9 Approve Establishment of For For Mgmt
Strategy Committee
10 Amend Articles Re: Voting at For For Mgmt
General Meetings, Nomination
of Directors, Material
Interest of Directors in
Contracts Entered into by the
Company, Provision of
Guarantee to Outside Parties
This item seeks to amend certain provisions in the
company's articles of association in light of
recent changes to the Listing Rules. The changes
pertain to voting restrictions for parties,
including directors, deemed to have material
interests in contracts, arrangements or proposals
entered into by the company. At the same time,
this item includes a provision specifying a
minimum seven-day period for the submission of
director nominees by shareholders and the
nominees' notice of acceptance. This nomination
period will commence the day after the release of
the meeting notice up to seven days prior to the
meeting date. In addition, the company will be
allowed to offer guarantees to any outside party
provided that it complies with the principles set
out in the amended articles.
05/03/04 - A CHINA TELECOM CORP LTD Y1505D102 04/02/04 4,500,000
1 Accept Financial Statements For For Mgmt
and Statutory Reports
2 Approve Final Dividend of For For Mgmt
HK$0.065 Per Share
3 Approve Remuneration of For For Mgmt
Directors for the Year Ending
Dec. 31, 2004
4 Reappoint KPMG as For For Mgmt
International Auditors and
KPMG Huazhen as Domestic
Auditors and Authorize Board
to Fix Their Remuneration
5 Approve Issuance of Equity or For Against Mgmt
Equity-Linked Securities
without Preemptive Rights
This request is being made to renew the authority
because the authority to issue shares effectively
expired with the convening of this shareholder
meeting. This authority complies with strict SEHK
regulations governing such plans; however, ISS
recommends voting against the issuance of shares
without preemptive rights unless the company
provides specific language and terms that there
will be (1) adequate restrictions on discounts and
(2) no authority to refresh the share issuance
amounts without prior shareholder approval. This
is in light of abuses made by a number of Hong
Kong companies that have issued shares at steep
discounts to related parties and renewed the share
issuance amount under this authority without
shareholder approval, both of which are
permissible under current law.
6 Approve Increase in Registered For Against Mgmt
Capital
06/09/04 - S CHINA TELECOM CORP LTD Y1505D102 05/07/04 500,000
1 Approve Acquisition Agreement For For Mgmt
Between China Telecom Corp.
Ltd. and China
Telecommunications Corp.
2 Approve Prospective Connected For For Mgmt
Transaction with a Related
Party
3 Amend Articles Re: Service For For Mgmt
Areas of the Company
4 Amend Articles Re: Voting at For For Mgmt
General Meetings, Nomination
of Directors
04/28/04 - S Citic Int'l Financial Y1636Y108 None 1,500,000
Hldgs (formerly CITIC Ka
Wah)
1 Approve Acquisition Agreement For For Mgmt
05/20/04 - A Citic Int'l Financial Y1636Y108 None 2,400,000
Hldgs (formerly CITIC Ka
Wah)
1 Accept Financial Statements For For Mgmt
and Statutory Reports
2 Approve Final Dividend For For Mgmt
3 Reelect Directors and For For Mgmt
Authorize Board to Fix Their
Remuneration
4 Approve Auditors and Authorize For For Mgmt
Board to Fix Their Remuneration
5 Approve Issuance of Equity or For Against Mgmt
Equity-Linked Securities
without Preemptive Rights
6 Approve Repurchase of Up to 10 For For Mgmt
Percent of Issued Capital
7 Authorize Reissuance of For For Mgmt
Repurchased Shares
05/20/04 - A Citic Int'l Financial Y1636Y108 05/14/04 1,000,000
Hldgs (formerly CITIC Ka
Wah)
1 Accept Financial Statements For For Mgmt
and Statutory Reports
2 Approve Final Dividend of For For Mgmt
HK$0.063 Per Share
3a1 Reelect Kong Dan as Director For For Mgmt
3a2 Reelect Chang Zhenming as For For Mgmt
Director
3a3 Reelect Chan Hui Dor Lam For For Mgmt
Doreen as Director
3a4 Reelect Dou Jianzhong as For For Mgmt
Director
3a5 Reelect Fan Sheung Tak Stephen For For Mgmt
as Director
3a6 Reelect Ju Weimin as Director For For Mgmt
3a7 Reelect Kong Siu Chee Kenneth For For Mgmt
as Director
3a8 Reelect Lam Kwong Siu as For For Mgmt
Director
3a9 Reelect Liu Jifu as Director For For Mgmt
3a10 Reelect Lo Wing Yat Kelvin as For For Mgmt
Director
3a11 Reelect Wang Dongming as For For Mgmt
Director
3a12 Reelect Yang Chao as Director For For Mgmt
3a13 Reelect Zhang Enzhao as For For Mgmt
Director
3a14 Reelect Zhao Shengbiao as For For Mgmt
Director
3b Authorize Board to Fix For For Mgmt
Directors' Remuneration
4 Reappoint KPMG as Auditors and For For Mgmt
Authorize Board to Fix Their
Remuneration
5 Approve Issuance of Equity or For Against Mgmt
Equity-Linked Securities
without Preemptive Rights
This authority complies with strict SEHK
regulations governing such plans; however, ISS
recommends voting against the issuance of shares
without preemptive rights unless the company
provides specific language and terms that there
will be (1) adequate restrictions on discounts and
(2) no authority to refresh the share issuance
amounts without prior shareholder approval. This
is in light of abuses made by a number of Hong
Kong companies that have issued shares at steep
discounts to related parties and renewed the share
issuance amount under this authority without
shareholder approval, both of which are
permissible under current law.
6 Approve Repurchase of Up to 10 For For Mgmt
Percent of Issued Capital
7 Authorize Reissuance of For For Mgmt
Repurchased Shares
05/20/04 - S Citic Int'l Financial Y1636Y108 None 1,000,000
Hldgs (formerly CITIC Ka
Wah)
Special Business
1 Amend Articles Re: Voting at For For Mgmt
General Meetings, Nomination
of Directors, Material
Interest of Directors in
Contracts Entered into by the
Company
05/10/04 - A CITIC Pacific Ltd Y1639J116 None 80,000
1 Accept Financial Statements For For Mgmt
and Statutory Reports
2 Approve Final Dividend For For Mgmt
3 Reelect Larry Yung Chi Kin, For For Mgmt
Peter Lee Chung Hing, Norman
Yuen Kee Tong, Liu Jifu and
Willie Chang as Directors
4 Reappoint Auditors and For For Mgmt
Authorize Board to Fix Their
Remuneration
5 Approve Fees of HK$150,000 per For For Mgmt
Annum for Each Director and
Additional Remuneration of
HK$100,000 and HK$50,000 to
Each of the Nonexecutive
Directors Who Serve in the
Audit and Remuneration
Committees Respectively
6 Amend Articles Re: Issuance of For For Mgmt
Share Certificates, Voting at
General Meetings, Material
Interest of Directors in
Contracts Entered into by the
Company, Nomination of
Directors, Indemnification of
Directors and Other Officers
of the Company
7 Approve Issuance of Equity or For Against Mgmt
Equity-Linked Securities
without Preemptive Rights
This request is being made to renew the authority
because the authority to issue shares effectively
expired with the convening of this shareholder
meeting. This authority complies with strict SEHK
regulations governing such plans, however, ISS
recommends voting against the issuance of shares
without preemptive rights unless the company
provides specific language and terms that there
will be (1) adequate restrictions on discounts and
(2) no authority to refresh the share issuance
amounts without prior shareholder approval. This
is in light of abuses made by a number of Hong
Kong companies that have issued shares at steep
discounts to related parties and renewed the share
issuance amount under this authority without
shareholder approval, both of which are
permissible under current law.
8 Approve Repurchase of Up to 10 For For Mgmt
Percent of Issued Capital
9 Authorize Reissuance of For For Mgmt
Repurchased Shares
04/28/04 - A CNOOC LTD 126132109 04/06/04 12,000
Meeting for Holders of ADRs
1 TO RECEIVE AND CONSIDER THE For For Mgmt
AUDITED ACCOUNTS FOR THE YEAR ENDED DECEMBER 31, 2003
TOGETHER WITH THE REPORTS OF THE DIRECTORS AND THE
AUDITORS THEREON.
2 TO DECLARE THE FINAL DIVIDEND For For Mgmt
FOR THE YEAR ENDED DECEMBER
31, 2003 AND SPECIAL CASH
DIVIDEND.
3 TO RE-ELECT MR. SHOUWEI ZHOU For For Mgmt
AS EXECUTIVE DIRECTOR.
4 TO RE-ELECT PROFESSOR KENNETH For For Mgmt
S. COURTIS AS INDEPENDENT
NON-EXECUTIVE DIRECTOR.
5 TO RE-ELECT DR. ERWIN For For Mgmt
SCHURTENBERGER AS INDEPENDENT
NON-EXECUTIVE DIRECTOR.
6 TO ELECT MR. EVERT HENKES AS For For Mgmt
INDEPENDENT NON-EXECUTIVE
DIRECTOR.
7 Ratify Auditors For For Mgmt
8 TO GRANT A GENERAL MANDATE TO For For Mgmt
THE DIRECTORS TO REPURCHASE
SHARES IN THE COMPANY.
9 TO GRANT A GENERAL MANDATE TO For Against Mgmt
THE DIRECTORS TO ISSUE, ALLOT
AND DEAL WITH ADDITIONAL
SHARES IN THE COMPANY.
This authority complies with strict SEHK
regulations governing such plans, however, ISS
recommends voting against the issuance of shares
without preemptive rights unless the company
provides specific language and terms that there
will be (1) adequate restrictions on discounts and
(2) no authority to refresh the share issuance
amounts without prior shareholder approval. This
is in light of abuses made by a number of Hong
Kong companies that have issued shares at steep
discounts to related parties and renewed the share
issuance amount under this authority without
shareholder approval, both of which are
permissible under current law.
10 TO EXTEND THE GENERAL MANDATE For For Mgmt
GRANTED TO THE DIRECTORS TO ISSUE, ALLOT AND DEAL WITH
SHARES BY THE NUMBER OF SHARES REPURCHASED.
11 TO AMEND THE ARTICLES OF For For Mgmt
ASSOCIATION OF THE COMPANY.
05/10/04 - A COFCO International Ltd. G2251V106 None 600,000
(China Foods Hold. Ltd. )
1 Accept Financial Statements For For Mgmt
and Statutory Reports
2 Approve Final Dividend For For Mgmt
3a1 Reelect Yu Guangquan as For For Mgmt
Director
3a2 Reelect Qu Zhe as Director For For Mgmt
3b Authorize Board to Fix Their For For Mgmt
Remuneration
4 Reappoint Ernst & Young as For For Mgmt
Auditors and Authorize Board
to Fix Their Remuneration
5 Approve Issuance of Equity or For Against Mgmt
Equity-Linked Securities
without Preemptive Rights
This request is being made to renew the authority
because the authority to issue shares effectively
expired with the convening of this shareholder
meeting. This authority complies with strict SEHK
regulations governing such plans, however, ISS
recommends voting against the issuance of shares
without preemptive rights unless the company
provides specific language and terms that there
will be (1) adequate restrictions on discounts and
(2) no authority to refresh the share issuance
amounts without prior shareholder approval. This
is in light of abuses made by a number of Hong
Kong companies that have issued shares at steep
discounts to related parties and renewed the share
issuance amount under this authority without
shareholder approval, both of which are
permissible under current law.
6 Approve Repurchase of Up to 10 For For Mgmt
Percent of Issued Capital
7 Authorize Reissuance of For For Mgmt
Repurchased Shares
8 Amend Bylaws Re: Voting at For For Mgmt
General Meetings, Material
Interest of Directors in
Contracts Entered into by the
Company, Nomination of
Directors
05/21/04 - A Cosco Pacific Limited G2442N104 05/17/04 285,000
1 Accept Financial Statements For For Mgmt
and Statutory Reports
2 Approve Final Dividend of For For Mgmt
HK$0.18 Per Share
3a1 Reelect Zhang Fusheng as For For Mgmt
Director
3a2 Reelect Wang Futian as Director For For Mgmt
3a3 Reelect Gao Weijie as Director For For Mgmt
3a4 Reelect Chen Hongsheng as For For Mgmt
Director
3a5 Reelect Ma Zehua as Director For For Mgmt
3a6 Reelect Ma Guichuan as Director For For Mgmt
3a7 Reelect Li Yunpeng as Director For For Mgmt
3a8 Reelect He Jiale as Director For For Mgmt
3a9 Reelect Liu Guoyuan as Director For For Mgmt
3a10 Reelect Li Jianhong as Director For For Mgmt
3a11 Reelect Sun Yueying as Director For For Mgmt
3a12 Reelect Qin Fuyan as Director For For Mgmt
3a13 Reelect Li Kwok Po, David as For For Mgmt
Director
3b Approve Remuneration of For For Mgmt
Directors
4 Reappoint For For Mgmt
PricewaterhouseCoopers as
Auditors and Authorize Board
to Fix Their Remuneration
05/21/04 - S Cosco Pacific Limited G2442N104 05/17/04 285,000
1 Approve Issuance of Equity or For Against Mgmt
Equity-Linked Securities
without Preemptive Rights
This request is being made to renew the authority
because the authority to issue shares effectively
expired with the convening of this shareholder
meeting. However, ISS recommends voting against
the issuance of shares without preemptive rights
unless the company provides specific language and
terms that there will be (1) adequate restrictions
on discounts and (2) no authority to refresh the
share issuance amounts without prior shareholder
approval. This is in light of abuses made by a
number of Hong Kong companies that have issued
shares at steep discounts to related parties and
renewed the share issuance amount under this
authority without shareholder approval, both of
which are permissible under current law.
2 Approve Repurchase of Up to 10 For For Mgmt
Percent of Issued Capital
3 Authorize Reissuance of For For Mgmt
Repurchased Shares
Special Business
1 Amend Bylaws Re: Voting at For For Mgmt
Meetings, Nomination of
Directors, Material Interest
of Directors in Contracts
Entered into by the Company
06/11/04 - A Daying Modern Y3179Y107 05/28/04 1
Agricultural(frmly
Shanghai Hero Co Ltd)
1 Accept 2003 Annual Report For For Mgmt
2 Accept Director's Report For For Mgmt
3 Accept Supervisors' Report For For Mgmt
4 Accept Financial Statements For For Mgmt
and Statutory Reports
5 Approve Allocation of Income For For Mgmt
and Dividends
The company proposes not to distribute
any dividend as it incurred a net loss
for the fiscal year 2003.
6 Approve Auditors and Authorize For For Mgmt
Board to Fix Their Remuneration
7 Approve Cancellation of the For For Mgmt
Proposed Change of Company Name
8 Amend Articles of Association For For Mgmt
The proposal seeks to increase the number
of supervisors in the supervisory
committee from three persons to a range
of 3-5 persons. By providing for a range
rather than a fixed number of
supervisors, this proposal will give
Daying Modern Agricultural more
flexibility in hiring additional
supervisors in proportion to the size and
complexity of the company's operations.
ISS recommends that shareholders approve
this request.
05/10/04 - A Denway Motors Ltd. Y2032Y106 04/30/04 1,100,000
(formerly Denway
Investment)
1 Accept Financial Statements For For Mgmt
and Statutory Reports
2 Approve Final Dividend of For For Mgmt
HK$0.06 Per Share and Special
Dividend of HK$0.08 Per Share
3 Reelect Zhang Fangyou, Chen For For Mgmt
Xuejun and Zeng Qinghong as
Directors and Authorize Board
to Fix Their Remuneration
4 Reappoint For For Mgmt
PricewaterhouseCoopers as
Auditors and Authorize Board
to Fix Their Remuneration
5 Approve Increase in Authorized For For Mgmt
Capital from HK$400 Million to
HK$1 Billion by the Creation
of 6 Billion Shares of HK$0.10
Each
6 Authorize Capitalization of For For Mgmt
Reserves for Bonus Issue
7 Approve Repurchase of Up to 10 For For Mgmt
Percent of Issued Capital
8 Approve Issuance of Equity or For Against Mgmt
Equity-Linked Securities
without Preemptive Rights
This request is being made to renew the authority
because the authority to issue shares effectively
expired with the convening of this shareholder
meeting. This authority complies with strict SEHK
regulations governing such plans, however, ISS
recommends voting against the issuance of shares
without preemptive rights unless the company
provides specific language and terms that there
will be (1) adequate restrictions on discounts and
(2) no authority to refresh the share issuance
amounts without prior shareholder approval. This
is in light of abuses made by a number of Hong
Kong companies that have issued shares at steep
discounts to related parties and renewed the share
issuance amount under this authority without
shareholder approval, both of which are
permissible under current law.
9 Authorize Reissuance of For For Mgmt
Repurchased Shares
10 Amend Articles Re: Voting at For For Mgmt
General Meetings, Material
Interest of Directors in
Contracts Entered into by the
Company, Nomination and
Removal of Directors
06/28/04 - A/S European Minerals 29879A104 05/29/04 50,000
Corp(formerly Kazakhstan
Minerals Corporat *EPM.U*
1 Appoint Auditors and Authorize For For Mgmt
Board to Fix Remuneration of
Auditors
PricewaterhouseCoopers LLP are the company's
current auditors. The circular does not provide
the audit or non-audit fees paid to the auditor
over the most recent fiscal year.
2 Elect William G. Kennedy, For Withhold Mgmt
Anthony J. Williams, Dr. Barry
D. Rayment, and Marvin J.
Singer as Directors
Given that shareholders may wish to express
differing views as to the suitability of the
director nominees, Fairvest takes the view that
shareholders should have the ability to cast
ballots with respect to individuals rather than
the entire slate. If this is possible, they will
not be forced to withhold votes for the board as a
whole as their only method of registering a
negative view of an individual or individuals. We
recommend withholding votes from the entire slate
because William G. Kennedy is an insider on the
Audit Committee. The board is majority
independent.
3 Approve Issuance of Shares in For Against Mgmt
One or More Private Placements
Shareholders are being asked to provide
blanket approval for the potential issuance of up
to 57,902,122 shares, representing potential
dilution of 100 percent of the outstanding shares.
The shares have a 52-week high and low of $1.12
and $0.32, respectively, and are currently trading
at $0.58 per share; as such any share issuances
could be issued at a 25 percent discount to the
fair market value as per Exchange regulations.
Fairvest prefers to see blanket approval for
future private placements to be capped at no more
than 30 percent of the outstanding shares. Given
the potential for excessive dilution, we do not
recommend shareholders approve this resolution.
06/15/04 - A/S High River Gold Mines Ltd. 42979J107 05/05/04 100,000
*HRG*
1 Elect Alexandr Balabanov, W. For For Mgmt
Derek Bullock, Michael Chieng,
Laurence Curtis, Valery
Dmitriev, David Mosher,
Vladimir Polevanov, Mark
Rachovides and Donald Whalen
as Directors
2 Approve Issuance of Shares in For Against Mgmt
One or More Private Placements Given the potential for
excessive dilution, we do not recommend
shareholders approve this resolution.
3 Extend the Time of Expiry of For For Mgmt
Certain Warrants
4 Amend Stock Option Plan For Against Mgmt
Vote Recommendation The total cost
of the company's plans of 4.35 percent is
within the allowable cap for this company
of 4.97 percent. We oppose the amendment
to increase shares reserved for options,
however, because it would appear that
non-employee directors have the ability
to participate in options on a
discretionary basis. Directors who are
able to grant themselves options without
limit could find their independence
compromised.
5 Approve Acquisition of Shares For For Mgmt
in OJSC Buryatzoloto
6 Appoint PricewaterhouseCoopers For For Mgmt
LLP as Auditors and Authorize
Board to Fix Remuneration of
Auditors
05/05/04 - A Hong Kong And China Gas Y33370100 None 321,693
Co. Ltd.
1 Accept Financial Statements For For Mgmt
and Statutory Reports
2 Approve Final Dividend For For Mgmt
3 Reelect Directors For For Mgmt
4 Reappoint For For Mgmt
PricewaterhouseCoopers as
Auditors and Authorize Board
to Fix Their Remuneration
5 Approve Remuneration of Each For For Mgmt
Director at HK$130,000 Per
Annum and Approve an
Additional HK$130,000 Per
Annum for the Chairman
6a Approve Repurchase of Up to 10 For For Mgmt
Percent of Issued Capital
6b Approve Issuance of Equity or For Against Mgmt
Equity-Linked Securities
without Preemptive Rights
This request is being made to renew the authority
because the authority to issue shares effectively
expired with the convening of this shareholder
meeting. This authority complies with strict SEHK
regulations governing such plans, however, ISS
recommends voting against the issuance of shares
without preemptive rights unless the company
provides specific language and terms that there
will be (1) adequate restrictions on discounts and
(2) no authority to refresh the share issuance
amounts without prior shareholder approval. This
is in light of abuses made by a number of Hong
Kong companies that have issued shares at steep
discounts to related parties and renewed the share
issuance amount under this authority without
shareholder approval, both of which are
permissible under current law.
6c Authorize Reissuance of For For Mgmt
Repurchased Shares
6d Amend Articles Re: Voting at For For Mgmt
General Meetings, Nomination
of Directors
05/06/04 - A Hongkong and Shanghai Y35518110 None 440,000
Hotels Ltd.
1 Accept Financial Statements For For Mgmt
and Statutory Reports
2 Approve Final Dividend For For Mgmt
3 Reelect Directors For For Mgmt
4 Reappoint Auditors and For For Mgmt
Authorize Board to Fix Their
Remuneration
5 Approve Issuance of Equity or For Against Mgmt
Equity-Linked Securities
without Preemptive Rights
This request is being made to renew the authority
because the authority to issue shares effectively
expired with the convening of this shareholder
meeting. This authority complies with strict SEHK
regulations governing such plans, however, ISS
recommends voting against the issuance of shares
without preemptive rights unless the company
provides specific language and terms that there
will be (1) adequate restrictions on discounts and
(2) no authority to refresh the share issuance
amounts without prior shareholder approval. This
is in light of abuses made by a number of Hong
Kong companies that have issued shares at steep
discounts to related parties and renewed the share
issuance amount under this authority without
shareholder approval, both of which are
permissible under current law.
6 Approve Repurchase of Up to 10 For For Mgmt
Percent of Issued Capital
7 Authorize Reissuance of For For Mgmt
Repurchased Shares
8 Approve Remuneration of For For Mgmt
Directors at HK$100,000 for
Each
9 Amend Articles Re: Addition of For For Mgmt
Technical Definitions and
Minor Alterations, Reelection
of Directors, Inclusion of
Electronic Communications to
Facilitate Meetings, as Well
as to Disclose Corporate
Information
05/28/04 - A HSBC Holdings Plc G4634U169 None 65,000
1 Accept Financial Statements For For Mgmt
and Statutory Reports
2a Re-elect Lord Butler as For For Mgmt
Director
2b Re-elect Baroness Lydia Dunn For For Mgmt
as Director
2c Elect Rona Fairhead as Director For For Mgmt
2d Re-elect William Fung as For For Mgmt
Director
2e Elect Michael Geoghegan as For For Mgmt
Director
2f Re-elect Sharon Hintze as For For Mgmt
Director
2g Re-elect John Kemp-Welch as For For Mgmt
Director
2h Re-elect Sir Mark Moody-Stuart For For Mgmt
as Director
2i Re-elect Helmut Sohmen as For For Mgmt
Director
3 Re-appoint KPMG Audit Plc as For For Mgmt
Auditors and Authorise Board
to Fix Remuneration of Auditors
4 Approve Remuneration Report For For Mgmt
5 Authorise 1,099,900,000 For For Mgmt
Ordinary Shares for Market
Purchase
6 Auth. Issuance of For For Mgmt
Non-Cumulative Pref. Shares
with Pre-emptive Rights up to
Aggregate Nominal Amount of
GBP 100,000, USD 100,000 and
EUR 100,000; and Auth.
Issuance of Ord. Shares with
Pre-emptive Rights up to
Aggregate Nominal Amount of
USD 1,099,900,000
7 Authorise Issuance of Equity For For Mgmt
or Equity-Linked Securities
without Pre-emptive Rights up
to Aggregate Nominal Amount of
USD 274,975,000
8 Approve Increase in For For Mgmt
Remuneration of Non-Executive
Directors from GBP 35,000 to
GBP 55,000 Per Annum
05/11/04 - A Huaneng Power 443304100 03/29/04 8,000
International Inc.
Meeting for Holders of ADRs
1 TO CONSIDER AND APPROVE THE For For Mgmt
WORKING REPORT FROM THE BOARD
OF DIRECTORS OF THE COMPANY
FOR YEAR 2003.
2 TO CONSIDER AND APPROVE THE For For Mgmt
WORKING REPORT FROM THE
SUPERVISORY COMMITTEE OF THE
COMPANY FOR YEAR 2003.
3 TO CONSIDER AND APPROVE THE For For Mgmt
AUDITED FINANCIAL STATEMENTS
OF THE COMPANY FOR YEAR 2003.
4 Ratify Auditors For For Mgmt
5 TO CONSIDER AND APPROVE THE For For Mgmt
PROPOSAL REGARDING THE
ADJUSTMENT OF THE REMUNERATION
OF INDEPENDENT DIRECTORS.
6 TO CONSIDER AND APPROVE THE For For Mgmt
PROFIT DISTRIBUTION PLAN OF
THE COMPANY FOR YEAR 2003.
The
company proposed to distribute RMB 5
($0.60) and bonus issue of five shares per 10
shares held.
7 TO CONSIDER AND APPROVE THE For For Mgmt
PROPOSAL REGARDING ISSUE OF NEW SHARES BY CONVERSION
OF THE ADDITIONAL PAID-IN CAPITAL AND THE SURPLUS
RESERVE FUND.
The proposal seeks to capitalize a portion of the
company's capital reserve and retained earning and
distribute new fully paid shares to shareholders
free of charge; there is no cost to shareholders
to maintain their stakes and no risk of dilution.
This procedure transfers wealth to shareholders
and does not significantly impact share value. The
only impact on shareholders is that by increasing
the number of shares on issue, the company could
increase liquidity, enhance marketability, and
ultimately expand its shareholder base. This item
is pursuant to the bonus issue of item 6.
8 TO CONSIDER AND APPROVE THE For For Mgmt
PROPOSED AMENDMENTS TO THE
ARTICLES OF ASSOCIATION.
The proposal seeks to amend artilcles of
association to reflect registered capital and its
capital structure due to 2003 bonus issue; to
insert a pragraph that requires shareholders'
approval for guarantee provided by the company
that has amount greater than 20 percent of the
company's net assets, board of directors' consent
for amount range between five to 20 percent of the
company's net assets, and chairman and vice
chairman of the board to decide on guarantee less
than five percent; and other technical amendments
that will have neutral effect to shareholders'
value.
06/15/04 - S Huaneng Power 443304100 05/04/04 5,000
International Inc.
Meeting for Holders of ADRs
1 TO APPROVE THE ACQUISITION OF For For Mgmt
40% INTEREST IN HEBEI HANFENG POWER GENERATION LIMITED
LIABILITY COMPANY AND 90% INTEREST IN JINGGANGSHAN
HUANENG POWER GENERATION LIMITED LIABILITY COMPANY.
Items 1 and 2 concern proposed acquisitions by the
company of five power plants in the People's
Republic of China (the PRC). Item 1seeks
shareholder approval for the company's purchase of
a 40 percent interest in Hebei Hanfeng Power
Generation Ltd. Liability Co. (Hanfeng Power
Plant) and a 90 percent interest in Jinggangshan
Huaneng Power Generation Ltd. Liability Co.
(Jinggangshan Power Plant) from China Huaneng
Group (Huaneng Group) for an aggregate
consideration of RMB1.9 billion ($235.2 million).
On the other hand, Item 2 seeks shareholder
approval for the company to acquire a 55 percent
interest in Huaneng Hunan Yueyang Power Generation
Ltd. Liability Co. (Yueyang Power Plant) and a 60
percent interest in Huaneng Chongqing Luohuang
Power Generation Ltd. Liability Co. (Luohuang
Power Plant) and the entire assets and liabilities
of Huaneng Intl. Power Devt. Corp. Yingkou Branch
Co. (Yingkou Power Plant) from Huaneng Intl. Power
Devt. Corp. (HIPDC) for an aggregate consideration
of RMB2.6 billion ($309.4 million). The aggregate
consideration payable by the company under the two
acquisition proposals amounts to approximately
RMB4.5 billion ($544.6 million). Half of the total
consideration will be financed by cash resources
of the company and its subsidiaries (the Group)
while the remaining half will be funded by bank
loans. Huaneng Power Plant operates in the Hebei
Province, adjacent to the capital Beijing and
Tianjin which is an important commercial port in
the northern region of the PRC. Jinggangshan Power
Plant is situated in Jiangxi Province, in the
souteast part of the PRC. Yueyang Power Plant
operates in Hunan Province, a province noted for
its relatively high coal output in the southern
part of the PRC. Luohuang Power Plant is situated
in the Chonqing Muncipality, considered to be the
largest multi-functional modern industrial and
commercial city in the western part of the PRC.
Lastly, Yingkou Powerplant is located in Liaoning
Province, a coastal region considered to be an
essential passageway for foreign trade and
international communication in northeast China.
The acquisitions were deemed as fair as they were
examined by N M Rothschild & Sons (Hong Kong) Ltd.
(Rothschild), an independent financial evaluator.
The deals appear to be fair to shareholders in
that the consideration payable by the company for
the acquisition of the five power plants discussed
above falls within the range of comparable
transactions as found by Rothschild. The
enterprise value/earnings before interest, tax,
depreciation and amortization (EV/EBITDA) of 5.7
times and earnings multiple of 8.7 times are lower
than 1) the average EV/EBITDA and earnings
multiple of comparable Hong Kong-listed companies
of 8.9 times and 17.5 times respectively and 2)
the average EV/EBITDA of 6.1 times and earnings
multiple of 10.9 times for comparable acquisition
transactions in the Chinese electric power
generation sector. In addition, these proposals
are in line with the company's objective of
acquiring existing and developing new power
plants. The acquisitions are seen to increase the
company's market share and allow the company to
maintain its competitive position in a period when
reforms in the PRC's power generation sector are
being undertaken and competition is being
introduced. In view of these, we recommend
shareholders to vote in favor of the proposed
acquisitions in Item 1 and Item 2.
2 TO APPROVE THE ACQUISITION OF For For Mgmt
55% INTEREST IN HUANENG HUNAN YUEYANG POWER GENERATION
LIMITED LIABILITY COMPANY, 60% INTEREST IN HUANENG
CHONGNING LUOBUANG POWER GENERATION LIMITED LIABILITY
COMPANY, ALL AS MORE FULLY DESCRIBED IN THE CIRCULAR.
Refer to the discussion in Item 1.
3 TO APPROVE THE GUARANTEE For Against Mgmt
ARRANGEMENTS AND AGREEMENTS,
ALL AS MORE FULLY DESCRIBED IN
THE CIRCULAR.
This item seeks approval for guarantee
arrangements and agreements between Hanfeng Power
Plant, Jinggangshan Power Plant and Huaneng Group
together with the company's assumption of the
existing guarantee of Jinggangshan Power Plant
originally provided by Huaneng Group. However, the
company did not provide sufficient information on
the terms of the agreements. As such, we are
unable to ascertain whether the terms of the
agreements are fair and reasonable to the company
and its shareholders. Given that this proposal may
potentially increase the company's liabilities, we
recommend shareholders to vote against this
resolution.
4 TO APPROVE THE ENTRUSTED LOAN For Against Mgmt
ARRANGEMENT, ALL AS MORE FULLY
DESCRIBED IN THE CIRCULAR. Item 4 concerns the
entrusted loan arrangement between Yueyang Power
Plant, HIPDC and China Huaneng Finance Co., the
entrusted loan arrangement in respect of Yingkou
Power Plant and other loan arrangements and
agreements with respect to other power plants
proposed to be acquired by the company in Items 1
and 2. Given that this proposal may potentially
increase the company's liabilities and
insufficient information was provided, we are
unable to ascertain whether the terms of the
agreements are fair and reasonable to the company
and its shareholders. As such, we recommend
shareholders to vote against this resolution.
5 TO APPROVE THE LOAN AND For Against Mgmt
DEPOSIT ARRANGEMENT, ALL AS
MORE FULLY DESCRIBED IN THE
CIRCULAR.
This item seeks to approve loan and deposit
arrangements concerning several power plants
proposed to be acquired by the company in Items 1
and 2. In view of the insufficient data available,
we are unable to ascertain whether the terms of
the agreements are fair and reasonable to the
company and its shareholders. As this proposal may
potentially increase the company's liabilities, a
vote against this resolution is recommended.
05/20/04 - A Hutchison Whampoa Y38024108 05/12/04 28,000
1 Accept Financial Statements For For Mgmt
and Statutory Reports
2 Approve Final Dividend of For For Mgmt
HK$1.22 Per Share
3a Elect Li Ka-shing as Director For For Mgmt
3b Elect Frank John Sixt as For For Mgmt
Director
3c Elect George Colin Magnus as For For Mgmt
Director
3d Elect Michael David Kadoorie For For Mgmt
as Director
4 Approve Auditors and Authorize For For Mgmt
Board to Fix Their Remuneration
5a Approve Issuance of Equity or For Against Mgmt
Equity-Linked Securities
without Preemptive Rights
This authority complies with strict SEHK
regulations governing such plans; however, ISS
recommends voting against the issuance of shares
without preemptive rights unless the company
provides specific language and terms that there
will be (1) adequate restrictions on discounts and
(2) no authority to refresh the share issuance
amounts without prior shareholder approval. This
is in light of abuses made by a number of Hong
Kong companies that have issued shares at steep
discounts to related parties and renewed the share
issuance amount under this authority without
shareholder approval, both of which are
permissible under current law.
5b Approve Repurchase of Up to 10 For For Mgmt
Percent of Issued Capital
5c Authorize Reissuance of For For Mgmt
Repurchased Shares
05/20/04 - S Hutchison Whampoa Y38024108 05/12/04 28,000
Special Business
1 Amend Articles Re: Voting at For For Mgmt
Meetings, Nomination of
Directors, Material Interest
of Directors in Contracts
Entered into by the Company
Ordinary Business
1 Approve Share Option Scheme of For Against Mgmt
Hutchison Harbour Ring Ltd.
Given the unfavorable terms of most Hong
Kong options plans, this plan included,
we recommend that shareholders vote
against this proposal.
2 Approve Share Option Scheme of For Against Mgmt
Hutchison 3G UK Hldgs. Ltd.
Given the potential dilution to existing
shareholders under the proposed share option
scheme, we recommend that shareholders vote
against this proposal.
3 Approve Share Option Scheme of For Against Mgmt
Hutchison 3G Italia S.p.A.
See Item 2.
05/20/04 - A Jiangxi Copper Y4446C100 04/20/04 1,600,000
1 Accept Report of Directors For For Mgmt
2 Accept Report of the For For Mgmt
Supervisory Committee
3 Accept Financial Statements For For Mgmt
and Auditors' Reports
4 Approve Proposal for Profit For For Mgmt
Distribution
The board is proposing a final dividend
of RMB0.012 ($0.001) per 10 shares.
5 Reappoint Deloitte Touche For For Mgmt
Tohmatsu Shanghai CPA Ltd. and
Deloitte Touche Tohmatsu as
the Company's PRC and
International Auditors and
Authorize Any Two Executive
Directors to Fix Their
Remuneration and to Enter into
the Service Agreement with the
Auditors
6 Approve Issuance of Equity or For Against Mgmt
Equity-Linked Securities
without Preemptive Rights
ISS recommends voting against the issuance of
shares without preemptive rights unless the
company provides specific language and terms that
there will be (1) adequate restrictions on
discounts and (2) no authority to refresh the
share issuance amounts without prior shareholder
approval. This is in light of abuses made by a
number of Hong Kong companies that have issued
shares at steep discounts to related parties and
renewed the share issuance amount under this
authority without shareholder approval, which are
permissible under current law.
04/22/04 - A Kingboard Chemical G52562108 None 270,000
Holdings Ltd
1 Accept Financial Statements For For Mgmt
and Statutory Reports
2 Approve Final Dividend of For For Mgmt
HK$0.10 Per Share
3 Reelect Directors and For For Mgmt
Authorize Board to Fix Their
Remuneration
4 Reappoint Auditors and For For Mgmt
Authorize Board to Fix Their
Remuneration
5a Approve Issuance of Equity or For Against Mgmt
Equity-Linked Securities
without Preemptive Rights
This authority complies with strict SEHK
regulations governing such plans. However, ISS
recommends voting against the issuance of shares
without preemptive rights unless the company
provides specific language and terms that there
will be (1) adequate restrictions on discounts and
(2) no authority to refresh the share issuance
amounts without prior shareholder approval. This
is in light of abuses made by a number of Hong
Kong companies that have issued shares at steep
discounts to related parties and renewed the share
issuance amount under this authority without
shareholder approval, both of which are
permissible under current law.
5b Approve Repurchase of Up to 10 For For Mgmt
Percent of Issued Capital
5c Authorize Reissuance of For For Mgmt
Repurchased Shares
6 Approve Increase in Authorized For For Mgmt
Capital from HK$80 Million
Divided into 800 Million
Shares of HK$0.10 Each to
HK$120 Million Divided into
1.2 Billion Shares of HK$0.10
Each
7 Amend Articles Re: Voting at For For Mgmt
General Meetings, Nomination
of Directors, Material
Interest of Directors in
Contracts Entered into by the
Company
06/30/04 - S Kingboard Chemical G52562108 None 300,000
Holdings Ltd
1 Approve Shirai Supply For For Mgmt
Agreement and Annual Caps
05/11/04 - A Li & Fung G5485F144 None 630,000
1 Accept Financial Statements For For Mgmt
and Statutory Reports
2 Approve Final Dividend of For For Mgmt
HK$0.25 Per Share
3a Reelect Danny Lau Sai Wing as For For Mgmt
Executive Director
3b Reelect Annabella Leung Wai For For Mgmt
Ping as Executive Director
3c Reelect Paul Edward For For Mgmt
Selway-Swift as Independent
Non-Executive Director
4 Approve Remuneration of All For For Mgmt
Directors at HK$80,000 and
Additional Remuneration of
HK$50,000 for Non-Executive
Directors Serving on the Audit
Committee
5 Reappoint For For Mgmt
PricewaterhouseCoopers as
Auditors and Authorize Board
to Fix Their Remuneration
6 Approve Repurchase of Up to 10 For For Mgmt
Percent of Issued Capital
7 Approve Issuance of Equity or For Against Mgmt
Equity-Linked Securities
without Preemptive Rights
This request is being made to renew the authority
because the authority to issue shares effectively
expired with the convening of this shareholder
meeting. This authority complies with strict SEHK
regulations governing such plans, however, ISS
recommends voting against the issuance of shares
without preemptive rights unless the company
provides specific language and terms that there
will be (1) adequate restrictions on discounts and
(2) no authority to refresh the share issuance
amounts without prior shareholder approval. This
is in light of abuses made by a number of Hong
Kong companies that have issued shares at steep
discounts to related parties and renewed the share
issuance amount under this authority without
shareholder approval, both of which are
permissible under current law.
8 Authorize Reissuance of For For Mgmt
Repurchased Shares
9 Amend Bylaws Re: Voting at For For Mgmt
General Meetings, Material
Interest of Directors in
Contracts Entered into by the
Company, Nomination of
Directors
06/30/04 - A/S LINGO MEDIA INC 535745103 05/14/04 900,000
1 Elect Michael P. Kraft, For Withhold Mgmt
Richard J.G. Boxer, Scott
Remborg, Geng Chen, Khurram R.
Qureshi, John P. Schram, and
Bailing Xia as Directors
Given that shareholders may wish to express
differing views as to the suitability of the
director nominees, Fairvest takes the view that
shareholders should have the ability to cast
ballots with respect to individuals rather than
the entire slate. If this is possible, they will
not be forced to withhold votes for the board as a
whole as their only method of registering a
negative view of an individual or individuals. We
recommend withholding votes from the entire slate
because Michael P. Kraft is an insider on the
Audit Committee and Khurram R. Qureshi is an
insider on the Compensation Committee.
2 Appoint Auditors and Authorize For For Mgmt
Board to Fix Remuneration of
Auditors
Mintz & Partners LLP have been the company's
auditors since 2003. The circular does not provide
the audit or non-audit fees paid to the auditor
over the most recent fiscal year.
3 Amend Stock Option Plan For Against Mgmt
This item will reaffirm the company's
twenty percent rolling stock option plan.
The total cost of the company's plan is
compared to an allowable cap using a
compensation model. The allowable caps
are industry-specific, market cap-based,
and pegged to the average amount paid by
companies performing in the top quartile
of their peer groupings. Industry
classifications are established using
standard industry code (SIC) groups.
Using historic data tracked by Fairvest
of the value of authorized shares for
issue at each company ranked in the top
quartile of its industry, a benchmark pay
level is established for each industry.
The total cost of the company's plan of
5.53 percent is within the allowable cap
for this company of 19.22 percent.
Fairvest prefers companies to adopt a
fixed maximum number of shares to be
reserved pursuant to options plans,
rather than 'rolling' stock option plans.
We oppose the resolution, however,
because it would appear that non-employee
directors participate in options on a
discretionary basis. This is a practice
which gives rise to the possibility of
self-dealing by directors in options.
Directors who are able to grant
themselves options without limit could
find their independence compromised.
Shareholders should note that this plan
could allow options to be granted with a
discounted exercise price if permitted
for by the TSX Venture Exchange. The
amended plan could represent dilution of
up to 14.74 percent on a fully-diluted
basis at any point in time.
4 Approve Issuance of Shares in For Against Mgmt
One or More Private Placements Shareholders are being
asked to provide blanket approval for the
potential issuance of up to 11,956,485 shares,
representing potential dilution of 50 percent of
the outstanding shares. The shares have a 52-week
high and low of $0.66 and $0.10, respectively, and
are currently trading at $0.255 per share; as such
any share issuances could be issued at a 25
percent discount to the fair market value as per
Exchange regulations. Fairvest prefers to see
blanket approval for future private placements to
be capped at no more than 30 percent of the
outstanding shares. Given the potential for
excessive dilution, we do not recommend
shareholders approve this resolution.
06/01/04 - A Maanshan Iron & Steel Y5361G109 04/30/04 1,500,000
Company Ltd.
1 Accept Report of the Directors For For Mgmt
2 Accept Report of the For For Mgmt
Supervisory Committee
3 Accept Financial Statements For For Mgmt
and Statutory Reports
4 Approve Proposed Profit For For Mgmt
Appropriation
5 Approve Ernst & Young Hua Ming For For Mgmt
and Ernst & Young as Auditors
and Authorize Board to Fix
Their Remuneration
6 Approve Remuneration of the For For Mgmt
Fourth Session of the Board of
Directors, Independent
Directors, Fourth Session of
Supervisory Committee,
Independent Supervisors Not
Exceeding RMB4.3 Million,
RMB30,000, RMB1.7 Million and
RMB20,000 Respectively
Special Business
1 Amend Articles of Association For For Mgmt
2 Authorize Board to Effect For For Mgmt
Proposed Amendments to the
Articles of Association
3 Approve Issuance of Equity or For Against Mgmt
Equity-Linked Securities
without Preemptive Rights
This authority complies with strict SEHK
regulations governing such plans; however, ISS
recommends voting against the issuance of shares
without preemptive rights unless the company
provides specific language and terms that there
will be (1) adequate restrictions on discounts and
(2) no authority to refresh the share issuance
amounts without prior shareholder approval. This
is in light of abuses made by a number of Hong
Kong companies that have issued shares at steep
discounts to related parties and renewed the share
issuance amount under this authority without
shareholder approval, both of which are
permissible under current law.
05/18/04 - A Petrochina Co. Ltd. 71646E100 04/05/04 21,500
Meeting for Holders of ADRs
1 TO APPROVE THE REPORT OF THE For For Mgmt
BOARD OF DIRECTORS OF THE
COMPANY FOR THE YEAR 2003.
2 TO APPROVE THE REPORT OF THE For For Mgmt
SUPERVISORY COMMITTEE OF THE
COMPANY FOR THE YEAR 2003.
3 TO APPROVE THE AUDITED For For Mgmt
FINANCIAL STATEMENTS OF THE
COMPANY FOR THE YEAR 2003.
4 TO APPROVE THE DECLARATION AND For For Mgmt
PAYMENT OF A FINAL DIVIDEND FOR THE YEAR ENDED
DECEMBER 31, 2003 IN THE AMOUNT AND IN THE MANNER
RECOMMENDED BY THE BOARD OF DIRECTORS.
5 TO APPROVE THE AUTHORISATION For For Mgmt
OF THE BOARD OF DIRECTORS TO
DETERMINE THE DISTRIBUTION OF
INTERIM DIVIDEND FOR 2004.
6 RATIFY AUDITORS For For Mgmt
7 TO APPROVE THE PROPOSAL IN For For Mgmt
RELATION TO THE RE-ELECTION OF
MR. CHEN GENG AS A DIRECTOR OF THE COMPANY.
8 TO APPROVE THE PROPOSAL IN For For Mgmt
RELATION TO THE ELECTION OF
MR. ZHOU JIPING AS A DIRECTOR OF THE COMPANY.
9 TO APPROVE THE PROPOSAL IN For For Mgmt
RELATION TO THE ELECTION OF
MR. DUAN WENDE AS A DIRECTOR OF THE COMPANY.
10 TO APPROVE THE PROPOSAL IN For For Mgmt
RELATION TO THE ELECTION OF
MR. SUN XIANFENG AS A
SUPERVISOR OF THE COMPANY.
11 TO APPROVE THE PROPOSAL IN For For Mgmt
RELATION TO THE ELECTION OF
MR. XU FENGLI AS A SUPERVISOR OF THE COMPANY.
12 TO ALLOT AND DEAL WITH For Against Mgmt
ADDITIONAL DOMESTIC SHARES.
ISS recommends voting against the issuance of
shares without preemptive rights unless the
company provides specific language and terms that
there will be (1) adequate restrictions on
discounts and (2) no authority to refresh the
share issuance amounts without prior shareholder
approval. This is in light of abuses made by a
number of Hong Kong companies that have issued
shares at steep discounts to related parties and
renewed the share issuance amount under this
authority without shareholder approval, which are
permissible under current law.
06/08/04 - A Philippine Long Distance 718252604 04/08/04 40,000
Telephone Co.
Meeting for Holders of ADRs
1 APPROVAL OF THE AUDITED For For Mgmt
FINANCIAL STATEMENTS FOR THE
PERIOD ENDING DECEMBER 31,
2003 CONTAINED IN THE COMPANY
S 2003 ANNUAL REPORT
2 Elect Directors For For Mgmt
05/18/04 - A Shanghai Friendship & Y7682E102 04/30/04 1
Overseas
1 Accept Directors' Report For For Mgmt
2 Accept Supervisors' Report For For Mgmt
3 Accept Financial Statements For For Mgmt
4 Approve Allocation of Income For For Mgmt
and Dividends and
Capitalization of Capital
Reserve
Cash dividend of RMB 1.00 ($00.13) per 10 shares
and stock dividend of three shares per 10 shares
has been proposed. Stock dividend will be
capitalized from capital reserves.
5 Amend Articles of Association For For Mgmt
The proposal seeks to amend the company's
Articles of Association to update the
changes in capital structure of the
company.
6 Approve Remuneration of For For Mgmt
Independent Directors
7 Approve Auditors and Authorize For For Mgmt
Board to Fix Their Remuneration
PricewaterhouseCoopers Zhong Tian CPAs
will be re-appointed as international
auditors of the company.
8 Approve Compensation for the For For Mgmt
Relocation of a Store
The proposal seeks to accept the compensation of
RMB 260 million ($31.4 million) for the relocation
of a 90 percent owned department store of the
company. The department store has a book value of
RMB 149 million ($18 million), and market value of
RMB 230 million ($27.8 million). The relocation
will have result in a projected 40 percent
decrease to the net profit of the department store
from the current RMB 9.85 million ($1.2 million)
since the new location area is smaller than the
original location. Nevertheless, the relocation is
part of the Shanghai city government's city
development centennial master plan. ISS recommends
voting in favor of the resolution as the offer
terms are fair as far as the company and its
shareholders are concerned.
06/17/04 - A/S SPUR VENTURES INC 85216L104 05/03/04 537,950
1 Ratify PricewaterhouseCoopers For For Mgmt
LLP as Auditors
PricewaterhouseCoopers LLP have been the
company's auditors since 1993.
2 Authorize Board to Fix For For Mgmt
Remuneration of the Auditors
The circular does not provide the audit
or non-audit fees paid to the auditor
over the most recent fiscal year.
3 Fix Number of Directors For For Mgmt
4 Elect Directors For Split Mgmt
4.1 Elect Director Steven G. Dean
--- For
The board is a majority independent.
4.2 Elect Director Robert G.
Atkinson --- Withhold
We recommend withholding votes from
Robert Atkinson because he is an insider
on the Audit Committee.
4.3 Elect Director Yingbin Ian He
--- For
4.4 Elect Director W. David Black
--- For
4.5 Elect Director David Cohen ---
For
4.6 Elect Director Gordon D. Ewart
--- For
4.7 Elect Director Ruston Goepel
--- For
4.8 Elect Director Dongdong Huang
--- For
5 Approve Stock Option Plan For Against Mgmt
Grants
This resolution would allow the board to grant
options, outside of a formal option plan, which
may represent more than ten percent of outstanding
shares to insiders of the company and to reprice
existing options without further shareholder
approval. Given the lack of set terms on such
options, we are unable to assess any objective
cost to this proposal. As shareholders are being
given no information relating to the potential
effects of options to be granted and or repriced,
we do not recommend shareholders approve this
resolution.
6 Amend Stock Option Plan For Against Mgmt
This proposal seeks shareholder approval
to amend the Stock Option Plan to reserve
1,110,035 additional shares. The total
cost of the company's plan is compared to
an allowable cap using a compensation
model. The allowable caps are
industry-specific, market cap-based, and
pegged to the average amount paid by
companies performing in the top quartile
of their peer groupings. Industry
classifications are established using
standard industry code (SIC) groups.
Using historic data tracked by Fairvest
of the value of authorized shares for
issue at each company ranked in the top
quartile of its industry, a benchmark pay
level is established for each industry.
The total cost of the company's plans of
12.10 percent is above the allowable cap
for this company of 7.39 percent. We
oppose the amendment to increase shares
reserved for options, however, because it
would appear that non-employee directors
participate in options on a discretionary
basis. This is a practice which gives
rise to the possibility of self-dealing
by directors in options. Directors who
are able to grant themselves options
without limit could find their
independence compromised. Shareholders
should note that this plan could allow
options to be granted with a discounted
exercise price if permitted for by the
TSX Venture Exchange. The amended plan
represents dilution of 14.75 percent on a
fully-diluted basis.
7 Amend Notice of Articles Re: For For Mgmt
Pre-Existing Company Provisions The new British
Columbia Business Corporations Act effectively
adds certain provisions, called 'pre-existing
company provisions' to every company's Notice of
Articles until such time as the shareholders of
the company remove them by way of a special
resolution. For the most part, the Corporation is
exempt from the Provisions due to either: a)
having articles which, prior to the enactment of
the new Act, exempt the Corporation from such
requirements; or b) being a public company.
Deleting the Provisions will permit a 66.67%
majority rather than a 75% majority be required to
effect certain corporate changes, including
certain amalgamations or the continuance of the
Corporation out of British Columbia. Management
believes that this resolution will provide the
Corporation with greater flexibility for future
corporate activities.
8 Approve Unlimited Capital For Against Mgmt
Authorization
The updated British Columbia Business Corporations
Act now allows companies to have an unlimited
authorized capital, similar to other Canadian
jurisdictions. The company currently has 100
million common and preferred shares authorized and
just over 28 million common shares outstanding.
Given the Fairvest prefers to see companies with a
fixed maximum limit on authorized capital, with at
least 30 percent of the authorized stock be issued
and outstanding. Limited capital structures
protect against excessive dilution and can be
increased when needed. As such we do not recommend
shareholders approve this resolution.
9 Adopt New Articles For For Mgmt
In conjunction with the new British
Columbia Business Corporations Act the
company is proposing to adopt a new set
of Articles to to provide the company
with greater flexibility for future
corporate activities. The New Articles
are intended to bring the company's
governing rules into alignment with the
new Business Corporations Act and provide
the company with a more effective
governance structure. We do not oppose
this resolution at this time given the
mandatory transition rollover required
under the new Business Corporations Act.
10 Other Business For Against Mgmt
As we cannot know the content of the issues to be
raised under this item we do not recommend
shareholders approve this resolution.
05/11/04 - A Standard Chartered PLC G84228157 None 14,000
1 Accept Financial Statements For For Mgmt
and Statutory Reports
2 Approve Final Dividend of For For Mgmt
36.49 US Cents Per Ordinary
Share
3 Approve Remuneration Report For For Mgmt
4 Elect Jamie Dundas as Director For For Mgmt
5 Elect Ruth Markland as Director For For Mgmt
6 Elect Paul Skinner as Director For For Mgmt
7 Re-elect Mervyn Davies as For For Mgmt
Director
8 Re-elect Michael DeNoma as For For Mgmt
Director
9 Re-elect Rudolph Markham as For For Mgmt
Director
10 Re-elect Hugh Norton as For For Mgmt
Director
11 Re-appoint KPMG Audit Plc as For For Mgmt
Auditors of the Company
12 Authorise Board to Fix For For Mgmt
Remuneration of the Auditors
13 Authorise Issuance of Equity For For Mgmt
or Equity-Linked Securities with Pre-emptive Rights up
to Aggregate Nominal Amount of USD 117,487,333 and up
to USD 213,708,480 Pursuant to Rights Issues, Scrip
Dividends, Share Schemes and Exchangeable Securities
14 Authorise Issuance of Equity For For Mgmt
or Equity-Linked Securities
with Pre-emptive Rights up to
Aggregate Nominal Amount Equal
to the Company's Share Capital
Repurchased Under Item 16
15 Authorise Issuance of Equity For For Mgmt
or Equity-Linked Securities
without Pre-emptive Rights up
to Aggregate Nominal Amount of
USD 29,370,451
16 Authorise 117,487,333 Ordinary For For Mgmt
Shares for Market Purchase
17 Authorise 331,388 For For Mgmt
Non-Cumulative Preference
Shares of USD 5 Each and
195,285,000 Non-Cumulative
Preference Shares of GBP 1
Each for Market Purchase
18 Amend Standard Chartered 2001 For For Mgmt
Performance Share Plan
19 Adopt Standard Chartered 2004 For For Mgmt
UK Sharesave Scheme and the
Standard Chartered 2004
International Sharesave Scheme
05/11/04 - A Taiwan Semiconductor 874039100 03/15/04 73,380
Manufacturing Co.
Meeting for Holders of ADRs
1 TO ACCEPT 2003 BUSINESS REPORT For For Mgmt
AND FINANCIAL STATEMENTS.
2 TO APPROVE THE PROPOSAL FOR For For Mgmt
DISTRIBUTION OF 2003 PROFITS.
3 TO APPROVE THE CAPITALIZATION For For Mgmt
OF 2003 DIVIDENDS AND EMPLOYEE
PROFIT SHARING.
05/28/04 - A Techtronic Industries Y8563B100 05/21/04 275,000
1 Accept Financial Statements For For Mgmt
and Statutory Reports
2 Approve Final Dividend of For Against Mgmt
HK$0.1775 Per Share
In this case, the company was found to have
reserves of approximately HK$2.1 billion ($271.3
million) for the latest financial year end, yet
has failed to comply with the minimum standard of
30 percent for the past four years. Given that no
adequate justification was provided for the
retention of capital, we recommend shareholders to
oppose this dividend request.
3a Reelect Roy Chi Ping Chung as For For Mgmt
Group Executive Director
3b Reelect Kin Wah Chan as Group For For Mgmt
Executive Director
3c Reelect Joel Arthur Schleicher For For Mgmt
as Independent Non-Executive
Director
3d Authorize Board to Fix Their For For Mgmt
Remuneration
4 Reappoint Deloitte Touche For For Mgmt
Tohmatsu as Auditors and Fix
Their Remuneration
5 Approve Increase in Authorized For Against Mgmt
Capital from HK$160 Million to
HK$240 Million by the Creation
of 400 Million Shares of
HK$0.2 Each
In the absence of a specific purpose for the
proposed increase in the company's authorized
capital, we believe that this resolution may
facilitate the use of authority sought in Item 6.
Given that ISS does not support the issuance of
shares without preemptive rights in light of
abuses made by a number of Hong Kong companies
that have issued shares at steep discounts to
related parties and renewed the authority without
shareholder approval, we recommend shareholders to
vote against the proposed increase in authorized
capital.
6 Approve Issuance of Equity or For Against Mgmt
Equity-Linked Securities
without Preemptive Rights
This authority complies with strict SEHK
regulations governing such plans. However, ISS
recommends voting against the issuance of shares
without preemptive rights unless the company
provides specific language and terms that there
will be (1) adequate restrictions on discounts and
(2) no authority to refresh the share issuance
amounts without prior shareholder approval. This
is in light of abuses made by a number of Hong
Kong companies that have issued shares at steep
discounts to related parties and renewed the share
issuance amount under this authority without
shareholder approval, both of which are
permissible under current law. While the company
has limited the amount of discount to 5 percent of
the higher of (1) the closing price of shares on
the SEHK when the agreement was signed and (2) the
average closing price for five trading days
immediately preceding the earliest of (a) the date
of signing of the agreement, (b) the announcement
date, or (c) the date on which the price of shares
to be issued pursuant to the transaction is fixed,
shareholder approval to refresh the share issuance
amounts is not expressly required. Given this, ISS
recommends shareholders to oppose this resolution.
7 Approve Repurchase of Up to 10 For For Mgmt
Percent of Issued Capital
8 Authorize Reissuance of For For Mgmt
Repurchased Shares
9 Amend Articles Re: For For Mgmt
Postponement and Voting at
General Meetings, Appointment
of Alternate Director,
Material Interest of Directors
in Contracts Entered into by
the Company, Electronic
Communication, Indemnification
of Directors and Officers of
the Company
05/28/04 - S Techtronic Industries Y8563B100 05/21/04 275,000
1 Approve Grant of Options to For Against Mgmt
Horst Julius Pudwill and Roy
Chi Ping Chung to Subscribe
for Ordinary Shares in the
Capital of the Company
Pursuant to the Share Option
Scheme
Given these concerns, the proposed grants of
options under unfavorable terms of the share
option scheme are not supported by ISS. A vote
against this resolution is recommended.
2 Approve Stock Split of Every For For Mgmt
Share of HK$0.2 in the Capital
of the Company into Two Shares
of HK$0.1 Each
3 Amend Articles to Reflect For Against Mgmt
Changes in Capital
This request bundles two different changes in the
capital structure of the company. First, the
change would involve the increase in capital
sought at the AGM. The proposed increase in
authorized capital is not supported by ISS given
the lack of specific purpose for the increase and
the possibility that the increase would facilitate
the issuance of shares without preemptive rights
under a general mandate that we do not support.
Our opposition to the general mandate to issue
shares stems from the fact that the company may
refresh the mandate limit without shareholder
approval. Second, the change would reflect the
stock split proposed above, which we consider to
be a legitimate proposal. When reviewing the
merits of bundled amendments to articles such as
this, ISS reviews each change and then weighs them
as a whole. The presence of one strongly negative
amendment merits a vote against the resolution. As
this request is subject to the passing of a
resolution that ISS does not support given its
unfavorable terms, we recommend a vote opposing
this entire resolution.
04/22/04 - A Wing Hang Bank Ltd Y9588K109 None 140,000
1 Accept Financial Statements For For Mgmt
and Statutory Reports
2 Approve Final Dividend For For Mgmt
3 Elect Directors and Authorize For For Mgmt
Board to Fix Their Remuneration
4 Reappoint Auditors and For For Mgmt
Authorize Board to Fix Their
Remuneration
5 Approve New Employee Incentive For Against Mgmt
Plan
Given that the issuance of shares under the
proposed new employee incentive plan, taken
together with shares made available for the
exercise of options under the existing share
option scheme of the company, exceeds our
threshold for stock-based compensation schemes and
in the absence of performance hurdles in the
determination of eligible participants, we
recommend shareholders to oppose this resolution
as it poses a significant level of dilution to
existing shareholders. Moreover, this incentive
plan will be administered by the board, including
executive directors who are eligible to receive
awards. This scenario opens the Plan up to
potential back-scratching abuses.
6 Approve Issuance of Equity or For Against Mgmt
Equity-Linked Securities
without Preemptive Rights
This authority complies with strict SEHK
regulations governing such plans. However, ISS
recommends voting against the issuance of shares
without preemptive rights unless the company
provides specific language and terms that there
will be (1) adequate restrictions on discounts and
(2) no authority to refresh the share issuance
amounts without prior shareholder approval. This
is in light of abuses made by a number of Hong
Kong companies that have issued shares at steep
discounts to related parties and renewed the share
issuance amount under this authority without
shareholder approval, both of which are
permissible under current law.
7 Approve Repurchase of Up to For For Mgmt
Ten Percent of Issued Capital
8 Authorize Reissuance of For For Mgmt
Repurchased Shares
9 Amend Articles of Association For For Mgmt
06/25/04 - A Yanzhou Coal Mining Y97417102 05/25/04 400,000
Company Limited
1 Accept Directors' Report For For Mgmt
2 Accept Supervisors' Report For For Mgmt
3 Accept Financial Statements For For Mgmt
and Statutory Reports
4 Approve Allocation of Income For For Mgmt
and Dividends
A cash dividend of RMB0.164 ($0.02) per
share has been proposed.
5 Approve Remuneration of For For Mgmt
Directors and Supervisors
6 Elect Wang Xin, Wang XinKun, For For Mgmt
and Wang Quanxi as Directors
7 Approve Deloitte Touche For For Mgmt
Tohmatsu in Hong Kong and
Deloitte Touche Tohmatsu CPAs
in PRC as International and
Domestic Auditors Respectively
and Authorize Board to Fix
Their Remuneration
Special Business
8 Amend Articles of Association For For Mgmt
Summaries of the amendments are as
follows: to include the following in the
company's scope of business: the storage,
loading and discharge of coal in ports;
inland water transports; commodity
logistics service; repair of ships; to
increase the number of independent
directors from three to four members; to
increase the number of directors from 11
to 13 members; to insert an article
external guarantees provided by the
company. Such that the company will only
issue guarantees to a subsidiary that is
at least 50 percent-owned; The total
amount of guarantee should not exceed 50
percent of the net assets of the company;
the company should not make guarantees to
any party with a debt-to-asset ratio of
more than 70 percent; Any guarantee
should be made with a counter-guarantee;
and other rules and procedures of such
guarantee. Moreover, the proposal also
mandates independent directors of the
company to issue independent reports
regarding external guarantees and other
procedural guidelines on the matter; to
increase the number of deputy general
managers from four to six members; and
other procedural amendments regarding
shareholder and board meetings and
dividend policy. The proposed amendments
are either neutral or would have positive
effects to shareholder value and
shareholder rights. ISS has no objections
regarding the amendments proposed.
9 Approve Issuance of New Shares For Against Mgmt
This resolution is a request for board
authority to issue new Domestic Shares or
H Shares representing up to 20 percent of
current outstanding Domestic Shares or H
Shares on issue, other than as a rights
issue. The directors would have total
discretion on the issuance of these
shares. The authority would lapse after
one year, or at the next meeting of
shareholders. This request is being made
to renew the authority because the
authority to issue shares effectively
expired with the convening of this
shareholder meeting. However, ISS
recommends voting against the issuance of
shares without preemptive rights unless
the company provides specific language
and terms that there will be (1) adequate
restrictions on discounts and (2) no
authority to refresh the share issuance
amounts without prior shareholder
approval. This is in light of abuses made
by a number of Hong Kong companies that
have issued shares at steep discounts to
related parties and renewed the share
issuance amount under this authority
without shareholder approval, which are
permissible under current law.
Ordinary Business
10 Other Business For Against Mgmt
This routine item would allow other
issues of concern, not contained in the
company's official agenda, to be raised
at the annual general meeting without
giving shareholders ample time to review
their details. Consequently, this would
create an opportunity to pass resolutions
not in the best interest of the
shareholders. In view of this, ISS
recommends a vote against this item until
details on the issues have been provided.
05/21/04 - A Zhejiang Expressway Co Y9891F102 04/26/04 1,400,000
Ordinary Business
1 Approve Report of the Directors For For Mgmt
2 Approve Report of the For For Mgmt
Supervisory Committee
3 Approve Financial Statements For For Mgmt
4 Approve Final Dividend of For For Mgmt
RMB0.11 Per Share
5 Approve Financial Budget for For For Mgmt
2004
6 Reappoint Ernst & Young (Hong For For Mgmt
Kong CPA) and Zhejiang
Pan-China CPA as International
and PRC Auditors Respectively
and Authorize Board to Fix
Their Remuneration
Special Business
1 Approve Issuance of Equity or For Against Mgmt
Equity-Linked Securities
without Preemptive Rights
This authority complies with strict SEHK
regulations governing such plans, however, ISS
recommends voting against the issuance of shares
without preemptive rights unless the company
provides specific language and terms that there
will be (1) adequate restrictions on discounts and
(2) no authority to refresh the share issuance
amounts without prior shareholder approval. This
is in light of abuses made by a number of Hong
Kong companies that have issued shares at steep
discounts to related parties and renewed the share
issuance amount under this authority without
shareholder approval, both of which are
permissible under current law.
2 Amend Articles Re: Voting at For For Mgmt
General Meetings, Nomination
of Directors, Material
Interest of Directors and
Other Officers in Contracts
Entered into by the Company
Vote Summary Report
Apr 01, 2004 - Jun 30, 2004
Global Resources Fund
Mtg Company/ Mgmt Vote Record Shares
Date/Type Ballot Issues Security Rec Cast Date Prpnent Voted
- ----------------- -------------------------------------- ------------ ----------- ------------- ------------- ----------- ----------
- ------------------------------------------------------------------------------------------------------------------------------------
05/19/04 - A/S ACCLAIM ENERGY TR *AE.U* 00433B201 04/08/04 315,000
1 Appoint Computershare Trust Company of For For Mgmt
Canada as trustee of the Trust
This is a routine item.
2 Elect Robert G. Brawn, J. Paul Charron, For For Mgmt
W. Peter Comber, Grant B. Fagerheim,
Frank W. King, Jack C. Lee, R. Gregory
Rich, and R. Carl Smith as Directors of
Acclaim Energy Inc.
Given that unitholders may wish to express
differing views as to the suitability of the
director nominees, Fairvest takes the view that
unitholders should have the ability to cast ballots
with respect to individuals rather than the entire
slate. If this is possible, they will not be forced
to withhold votes for the board as a whole as their
only method of registering a negative view of an
individual or individuals. The board is majority
independent. There are no insiders on either the
Audit or Human Resources and Compensation
Committees.
3 Appoint Auditors For For Mgmt
Deloitte & Touche LLP have been the Trust's
auditors since 2001.
4 Approve Unit Award Incentive Plan For For Mgmt
Unitholders are being asked to approve a unit award
incentive plan which, if passed, would issue up to
2,500,000 units comprised of restricted units and
performance units to directors, officers, employees,
and consultants of the Trust and its affiliates. If
this resolution passes, this plan will replace the
Trust's current Option Plan and Unit Distribution
Incentive Bonus Plan. As at April 8, 2004, 773,360
restricted units and 237,650 performance units had been
conditionally granted pursuant to this proposed plan.
Unitholders should note that there is still an employee
unit savings plan. Finally, non-management directors'
participation in the proposed plan is limited to an
aggregate of 100,000 units, which represents dilution
of approximately 0.1 percent. The total cost of the
trust's plan is compared to an allowable cap using a
compensation model. The allowable caps are
industry-specific, market cap-based, and pegged to the
average amount paid by companies and trusts performing
in the top quartile of their peer groupings. Industry
classifications are established using standard industry
code (SIC) groups. Using historic data tracked by
Fairvest of the value of authorized shares or units for
issue at each company or trust ranked in the top
quartile of its industry, a benchmark pay level is
established for each industry. The total cost of the
company's plans of 1.21 percent is within the allowable
cap for this company of 5.04 percent. The amended plan
represents dilution of 6.45 percent on a fully-diluted
basis.
05/26/04 - A Acetex Corp. *ATX.* 003910106 04/16/04 220,000
1 Elect Brooke Wade, Kenneth Vidalin, John For For Mgmt
Zaozirny, John Garcia, Pierre Dutheil,
Arnold Cader as Directors
2 Approve Auditors and Authorize Board to For For Mgmt
Fix Remuneration of Auditors
04/22/04 - A Alcan Inc. *AL.* 013716105 03/03/04 50,000
1 Elect Directors For Split Mgmt
1.1 Elect Director R. Berger --- Withhold
1.2 Elect Director L.D. Desautels --- For
1.3 Elect Director T. Engen --- For
1.4 Elect Director L.Y. Fortier --- For
1.5 Elect Director J.P. Jacamon --- For
1.6 Elect Director W.R. Loomis --- For
1.7 Elect Director Y. Mansion --- For
1.8 Elect Director C. Morin-Postel --- For
1.9 Elect Director J.E. Newall --- For
1.10 Elect Director G. Saint-Pierre --- For
1.11 Elect Director G. Schulmeyer --- For
1.12 Elect Director P.M. Tellier --- For
1.13 Elect Director M.K. Wong --- For
2 Approve Auditors and Authorize Board to For For Mgmt
Fix Remuneration of Auditors
04/30/04 - A Alcoa Inc. *AA* 013817101 02/02/04 90,000
1 Elect Directors For For Mgmt
1.1 Elect Director Alain J.P. Belda --- For
1.2 Elect Director Carlos Ghosn --- For
1.3 Elect Director Henry B. Schacht --- For
1.4 Elect Director Franklin A. Thomas --- For
2 Approve Omnibus Stock Plan For For Mgmt
V.
Vote Recommendation The total cost of the company's
plans of 4.27 percent is within the allowable cap
for this company of 6.52 percent. Additionally,
this plan expressly forbids repricing.
3 Report on Pay Disparity Against Against ShrHoldr
Based on our concerns regarding the utility of the
proposed report, and the independence of the company's
compensation committee, we do not believe that
preparation of the requested report would yield
meaningful information to shareholders regarding the
efficacy of the company's executive compensation
policies and practices.
4 Submit Severance Agreement Against Against ShrHoldr
(Change-in-Control) to Shareholder Vote
In this case, we believe that the ceiling set by
the proponent of 2.00 times the sum of an
executive's base salary and bonus is lower than the
standard threshold level of 2.99 times of base
salary and bonus of severance remuneration for
corporate executives that should be subject to a
shareholder vote. Additionally, Alcoa's board of
directors has adopted a policy to require
shareholder approval of future severance agreements
if such agreements would result in a payment excess
of 2.99 times the salary and bonus of the executive
based on the 2003 annual shareholder meeting.
Therefore, ISS finds the proposal in this case
overly restrictive and recommends voting AGAINST
it.
05/20/04 - A Algoma Steel Inc. *AGA* 01566M204 04/08/04 300,000
1 Elect Steven Bowsher, Benjamin Duster, For Withhold Mgmt
Brad James, John Kallio, Patrick Lavelle,
James Lawson, Charles Masson, Murray
Nott, Francis Petro and Denis Turcotte as
Directors
Although these are routine appointments given that
shareholders may wish to express differing views as
to the suitability of the director nominees,
Fairvest takes the view that shareholders should
have the ability to cast ballots with respect to
individuals rather than the entire slate. If this
is possible, they will not be forced to withhold
votes for the board as a whole as their only method
of registering a negative view of an individual or
individuals. We recommend withholding votes from
the entire slate because Murray Nott is an insider
on the Audit Committee.
2 Ratify Ernst & Young LLP, Chartered For For Mgmt
Accountants as Auditors and Authorise the
Board the Fix Remuneration of Auditors.
06/07/04 - A ALUMINUM CORPORATION OF CHINA LTD 022276109 04/23/04 7,000
Meeting for Holders of ADRs
1 TO APPROVE THE REPORT OF THE DIRECTORS OF For For Mgmt
THE COMPANY FOR THE YEAR ENDED DECEMBER
31, 2003
2 TO APPROVE THE REPORT OF THE SUPERVISORY For For Mgmt
COMMITTEE OF THE COMPANY FOR THE YEAR
ENDED DECEMBER 31, 2003
3 TO APPROVE THE AUDITED FINANCIAL For For Mgmt
STATEMENTS OF THE COMPANY AND OF THE
GROUP FOR THE YEAR ENDED DECEMBER 31, 2003
4 TO APPROVE THE PROPOSED PROFIT For For Mgmt
DISTRIBUTION PLAN AND THE FINAL DIVIDEND
DISTRIBUTION PLAN OF THE COMPANY
5 TO DETERMINE THE REMUNERATIONS OF THE For For Mgmt
DIRECTORS AND SUPERVISORS OF THE COMPANY
FOR THE YEAR ENDING DECEMBER 31, 2004
6 TO DETERMINE THE PAYMENT OF HOUSING For Against Mgmt
SUBSIDY TO DIRECTORS AND THE PAYMENT OF
PERFORMANCE BONUS FOR DIRECTORS AND
SUPERVISORS
ISS notes that the company did not identify
individual director recipients of the proposed
housing subsidy and performance bonus. While these
payments may be a part of the company's
compensation package and performance bonuses are
generally used to reward individuals for their
contributions to the growth of a company's
business, the company did not provide information
on the criteria used to determine individuals
worthy to receive such subsidy or bonus. Given
this, we are unable to ascertain whether the grant
of housing subsidies and performance bonuses are
fair and reasonable and that non-executive
directors are not included among those receiving
such payments. We therefore recommend a vote
against this resolution.
7 Ratify Auditors For For Mgmt
8 TO APPROVE THE TERMINATION OF OFFICE AS A For For Mgmt
WHOLE OF THE FIRST BOARD OF DIRECTORS IN
ADVANCE UPON THE CONCLUSION OF THE MEETING
9 TO APPROVE THE TERMINATION OF OFFICE AS A For For Mgmt
WHOLE OF THE FIRST SUPERVISORY COMMITTEE
IN ADVANCE UPON THE CONCLUSION OF THE
ANNUAL MEETING
10 TO APPROVE THE FOLLOWING PROPOSAL FOR For For Mgmt
AMENDMENT TO THE BYLAWS OF THE ARTICLES
OF ASSOCIATION OF THE COMPANY
11 TO APPROVE THE PROPOSED SPECIAL RESOLUTION For Against Mgmt
This authority complies with strict SEHK regulations
governing such plans, however, ISS recommends voting
against the issuance of shares without preemptive
rights unless the company provides specific language
and terms that there will be (1) adequate restrictions
on discounts and (2) no authority to refresh the share
issuance amounts without prior shareholder approval.
This is in light of abuses made by a number of Hong
Kong companies that have issued shares at steep
discounts to related parties and renewed the share
issuance amount under this authority without
shareholder approval, which are permissible under
current law.
04/28/04 - A America Mineral Fields, Inc. 023925100 03/24/04 100,000
1 Fix Number of Directors at seven For For Mgmt
This is a routine item.
2 Elect Directors For Split Mgmt
2.1 Elect Etienne Denis as Director --- For
2.2 Elect Paul C. MacNeill as Director ---
Withhold
We recommend withholding votes from Paul C.
MacNeill because he is an insider on both the Audit
and Remuneration Committees.
2.3 Elect Timothy Read as Director --- For
2.4 Elect Bernard Vavala as Director --- For
2.5 Elect Patrick J. Walsh as Director --- For
2.6 Elect John Bentley as Director --- For
2.7 Elect Bernard Pryor as Director --- For
3 Appoint Auditors For For Mgmt
KPMG LLP have been the company's auditors since
1995.
4 Authorize Board to Fix Remuneration of For For Mgmt
the Auditors
The circular does not provide the audit or
non-audit fees paid to the auditor over the most
recent fiscal year.
5 Change Company Name to Adastra Minerals For For Mgmt
Inc.
The company is asking shareholders to approve a
change in the company's name to Adastra Minerals
Inc. in order to better reflect the nature of the
company's business, which is no longer mineral
interests in South America, but in Africa. Fairvest
does not oppose this resolution.
6 Amend Stock Option Plan For For Mgmt
The company is asking shareholders to approve an
amendment to the company's stock option plan which
would permit the cashless exercise of stock options.
Pursuant to this, when an individual would exercise an
option, the company would issue to the individual
common shares having a market value equal to the
aggregate difference between the exercise price of the
options and the current market price of the company's
common shares. Fairvest does not oppose this resolution.
7 Amend Stock Option Plan by increasing For Against Mgmt
numbers of shares available
The company is asking shareholders to approve an
increase in the number of common shares reserved
for issuance pursuant to its stock option plan.
Currently, there are 5,600,000 shares reserved and
the company is asking shareholders to increase this
by 7,500,000 shares, bringing the total number of
shares reserved to 13,100,000 shares. The total
cost of the company's plan is compared to an
allowable cap using a compensation model. The
allowable caps are industry-specific, market
cap-based, and pegged to the average amount paid by
companies performing in the top quartile of their
peer groupings. Industry classifications are
established using standard industry code (SIC)
groups. Using historic data tracked by Fairvest of
the value of authorized shares for issue at each
company ranked in the top quartile of its industry,
a benchmark pay level is established for each
industry. The total cost of the company's plans of
14.46 percent is above the allowable cap for this
company of 9.32 percent. We also oppose the
amendment to increase shares reserved for options
because it would appear that non-employee directors
participate in options on a discretionary basis.
This is a practice which gives rise to the
possibility of self-dealing by directors in
options. Directors who are able to grant themselves
options without limit could find their independence
compromised. The amended plan represents dilution
of 15.72 percent on a fully-diluted basis.
8 Other Business (Voting) For Against Mgmt
As we cannot know the content of the issues to be
raised under this item we do not recommend
shareholders approve this resolution.
06/17/04 - A/S AMERIGO RESOURCES LTD(formerly 03074G109 05/07/04 700,100
GOLDEN TEMPLE MNG CORP)
1 Ratify PricewaterhouseCoopers LLP as For For Mgmt
Auditors
2 Authorize Board to Fix Remuneration of For For Mgmt
the Auditors
3 Elect Director Ian E. Gallie For Withhold Mgmt
Given the classified board structure, the presence of
an insider on the Audit Committee and the lack of an
independent Compensation Committee, we recommend
shareholders voice their discontent with the current
board situation by withholding votes from Ian Gallie,
the only director being nominated this year.
4 Adopt New Articles For Against Mgmt
Fairvest prefers to see companies with a fixed maximum
limit on authorized capital, with at least 30 percent
of the authorized stock issued and outstanding. Limited
capital structures protect against excessive dilution
and can be increased when needed. As such we do not
recommend shareholders approve this resolution.
5 Approve Issuance of Shares in One or More For Against Mgmt
Private Placements
Given the potential for excessive dilution, we do
not recommend shareholders approve this resolution.
6 Other Business For Against Mgmt
As we can not know the content of these issues, we
cannot recommend that shareholders approve this
request.
04/22/04 - A Arch Coal, Inc. *ACI* 039380100 03/01/04 40,000
1 Elect Directors For For Mgmt
05/05/04 - A/S Aur Resources Inc. *AUR.* 051524106 03/31/04 180,000
1 Elect Jorge Carey, James Gill, Norman For For Mgmt
Keevil, William Kennedy, Martin Lepage,
Peter McCarter, William Robertson and
Howard Stockford as Directors
2 Appoint PricewaterhouseCoopers LLP as For For Mgmt
Auditors
3 Confirmation of By-Law No.1 For For Mgmt
06/23/04 - A/S Bema Gold Corp. *BGO.* 08135F107 05/10/04 60,000
1 Elect Directors For For Mgmt
2 Ratify PricewaterhouseCoopers LLP as For For Mgmt
Auditors
3 Amend Stock Option Plan to Increase For For Mgmt
Shares Resreved Thereunder
4 Amend Stock Option Plan Re: Expiry Date For For Mgmt
of Options
06/23/04 - A/S Bema Gold Corp. *BGO.* 08135F107 05/10/04 340,000
1 Elect Directors For For Mgmt
2 Ratify PricewaterhouseCoopers LLP as For For Mgmt
Auditors
3 Amend Stock Option Plan to Increase For For Mgmt
Shares Resreved Thereunder
4 Amend Stock Option Plan Re: Expiry Date For For Mgmt
of Options
06/22/04 - A Bolivar Gold Corp. (formerly 097614101 05/10/04 750,000
TECNOPETROL INC)
1 Elect Jose Francisco Arata, Miguel de la For For Mgmt
Campa, Serafino Iacono, Andres Carrera,
Stephen Wilkinson, and Robert Hines as
Directors
2 Appoint Auditors and Authorize Board to For For Mgmt
Fix Remuneration of Auditors
3 Approve Stock Option Plan For Against Mgmt
The total cost of the company's plans of 8.67 percent
is above the allowable cap for this company of 6.33
percent. We oppose the amendment to increase shares
reserved for options, as well, because it would appear
that non-employee directors participate in options on a
discretionary basis. This is a practice which gives
rise to the possibility of self-dealing by directors in
options. Directors who are able to grant themselves
options without limit could find their independence
compromised.
4 Approve Issuance of Shares in One or More For Against Mgmt
Private Placements
Given the potential for excessive dilution, we do
not recommend shareholders approve this resolution.
5 Amend Articles to eliminate non-board lot For For Mgmt
holdings
06/01/04 - A/S Breakwater Resources Ltd. *BWR* 106902307 04/13/04 300,000
1 Elect C. K. Benner, G. F. Bub, D. K. For For Mgmt
Charter, J. C. Goodman, G. A. C. MacRae,
A. J. Palmiere and A. M. Sinclair, Jr. as Directors
Although these are routine appointments,
shareholders may wish to express differing views as
to the suitability of the director nominees. For
this reason, Fairvest takes the position that
shareholders should have the ability to cast
ballots with respect to individuals rather than the
entire slate. If this is possible, they will not be
forced to withhold votes for the board as a whole
as their only method of registering a negative view
of an individual or individuals. We recommend a
vote FOR the entire slate. There are no insiders on
the Audit or Compensation Committees. The board is
majority independent, with two insiders, one
affiliated outsider and four independent directors.
2 Ratify Deloitte & Touche LLP as Auditors For For Mgmt
Deloitte & Touche LLP are currently the company's
auditors. The company's materials indicate that
according to the auditor, the financial statements
present fairly, in all material respects, the financial
position of the company as at December 31, 2003 and
2002.
3 Amend Stock Option and Share Purchase For Against Mgmt
Components of the Share Incentive Plan
Please see the section below entitled 'Multiple
Plan Notes' for a further discussion of this and
other plans. Vote Recommendation The total cost of
this amendment to the stock option component of the
company's plan is compared to an allowable cap
using a compensation model. The allowable caps are
industry-specific, market cap-based, and pegged to
the average amount paid by companies performing in
the top quartile of their peer groupings. Industry
classifications are established using standard
industry code (SIC) groups. Using historic data
tracked by Fairvest of the value of authorized
shares for issue at each company ranked in the top
quartile of its industry, a benchmark pay level is
established for each industry. The total cost of
this amendment to the company's plan of 4.14
percent is within the allowable cap for this
company of 15.05 percent. We oppose the amendment
to increase shares reserved for options, however,
because it would appear that non-employee directors
participate in options on a discretionary basis.
This is a practice which gives rise to the
possibility of self-dealing by directors in
options. Directors who are able to grant themselves
options without limit could find their independence
compromised. Note that potential dilution is 5.13
percent of fully diluted shares. We note that the
amendment to increase shares reserved to the share
purchase component of the company's share incentive
plan has not been costed under the compensation
model. There are currently 2,156,796 shares
reserved for future purchase. The amendment would
increase the shares reserved for purchase by 1
million shares. As this increase has been bundled
with an increase to the share option component, we
are not at liberty to recommend that shareholders
approve the increase to the shares reserved for
share purchase under the Share Incentive Plan.
4 Amend Share Bonus Component of the Share For Against Mgmt
Incentive Plan
Multiple Plan Notes: The combined shareholder value
transfer for all amendments to this plan is 4.35
percent. The aggregate value of all the proposals
does not exceed the company's allowable shareholder
value transfer cap of 15.05 percent. Vote
Recommendation The total cost of the share bonus
component of company's plan is compared to an
allowable cap using a compensation model. The
allowable caps are industry-specific, market
cap-based, and pegged to the average amount paid by
companies performing in the top quartile of their
peer groupings. Industry classifications are
established using standard industry code (SIC)
groups. Using historic data tracked by Fairvest of
the value of authorized shares for issue at each
company ranked in the top quartile of its industry,
a benchmark pay level is established for each
industry. The total cost of this amendment to the
company's plan of 0.21 percent is within the
allowable cap for this company of 15.05 percent. We
oppose the amendment to increase shares reserved
for options, however, because it would appear that
non-employee directors participate in options on a
discretionary basis. This is a practice which gives
rise to the possibility of self-dealing by
directors in options. Directors who are able to
grant themselves options without limit could find
their independence compromised. Note that potential
dilution is 0.25 percent of fully diluted shares.
5 Approve Grant of Four Million Stock For Against Mgmt
Options
This proposal relates to Item 3, the proposed
amendment to the Stock Option and Share Purchase
components of the Share Incentive Plan. The company
has granted options in excess of the number of
shares reserved under the Share Incentive Plan.
Specifically, 700,000 options to purchase common
shares were granted to five senior officers and one
senior employee on February 19, 2004, at an
exercise price of $0.75, expiring February 18,
2009, 2,250,000 options to purchase common shares
were granted to two executive officers on March 9,
2004, at an exercise price of $0.67, expiring March
8, 2009, 1,000,000 options to purchase common
shares were granted to five outside directors on
March 9, 2004, at an exercise price of $0.67,
expiring March 8, 2009 and 50,000 options to
purchase common shares were granted to a senior
employee on April 29, 2004, at an exercise price
equal to the price of the common shares on the TSX
at the close of trading on May 3, 2004, expiring
April 28, 2009. These grants are subject to
regulatory and shareholder approval. In accordance
with our recommendation against the resolution to
increase the shares reserved for stock option
grants (Item 3) we oppose this proposal to confirm
option grants in excess of those previously
approved by shareholders.
04/21/04 - A Burlington Resources Inc. *BR* 122014103 02/23/04 30,000
1 Elect Directors For Split Mgmt
1.1 Elect Director Barbara T. Alexander ---
For
We recommend a vote FOR the directors with the
exceptions of affiliated outsiders Walter Scott, Jr.
and Kenneth W. Orce. We recommend that shareholders
WITHHOLD votes from Walter Scott, Jr. for standing as
an affiliated outsider on the Compensation and
Nominating committees, and Kenneth W. Orce for standing
as an affiliated outsider on the Nominating Committee.
1.2 Elect Director Reuben V. Anderson --- For
1.3 Elect Director Laird I. Grant --- For
1.4 Elect Director Robert J. Harding --- For
1.5 Elect Director John T. LaMacchia --- For
1.6 Elect Director Randy L. Limbacher --- For
1.7 Elect Director James F. McDonald --- For
1.8 Elect Director Kenneth W. Orce ---
Withhold
1.9 Elect Director Donald M. Roberts --- For
1.10 Elect Director James A. Runde --- For
1.11 Elect Director John F. Schwarz --- For
1.12 Elect Director Walter Scott, Jr. ---
Withhold
1.13 Elect Director Bobby S. Shackouls --- For
1.14 Elect Director Steven J. Shapiro --- For
1.15 Elect Director William E. Wade, Jr. ---
For
2 Approve Increase in Common Stock and a For For Mgmt
Stock Split
3 Ratify Auditors For For Mgmt
05/26/04 - A Calpine Corp. *CPN* 131347106 03/29/04 300,000
1 Elect Directors For Withhold Mgmt
1.1 Elect Director Ann B. Curtis --- Withhold
We recommend withholding votes from all of the
nominees. We recommend that shareholders WITHHOLD
votes from independent outsiders Gerald Greenwald,
Kenneth T. Derr, and insider Ann B. Curtis for
failure to implement the proposal to submit the
company's poison pill to a shareholder vote.
1.2 Elect Director Kenneth T. Derr ---
Withhold
1.3 Elect Director Gerald Greenwald ---
Withhold
2 Increase Authorized Common Stock For For Mgmt
The requested increase of 1,000,000,000 shares is
below the allowable threshold of 1,100,000,000
shares. We recommend a vote FOR the proposal.
3 Amend Omnibus Stock Plan For For Mgmt
V. Vote Recommendation The total cost of the company's
plans of 5.91 percent is within the allowable cap for
this company of 10.89 percent. Additionally, this plan
expressly forbids repricing. Note that 35.64 percent of
the grants last year were made to the top five
executive officers.
4 Amend Employee Stock Purchase Plan For For Mgmt
ISS approves of this item because the plan complies
with Section 423 of the Internal Revenue Code, the
number of shares being added is relatively
conservative, the offering period is reasonable, and
there are limitations on participation.
5 Implement Indigenous Peoples Right Against Against ShrHoldr
Policy/ Cease Medicine Lake Development
ISS generally supports proposals that call for
increased disclosure on matters of importance to
shareholders. Such transparency can assist
shareholders in better evaluating the business
risks associated with their investment. However,
the benefits derived from this disclosure must be
weighed against the cost and burden of preparing
the information and the potential impacts that the
disclosure may have on company strategy or
operations. In this case, ISS notes that the
proponents go beyond a request for increased
transparency or the creation of a formal policy to
request that the company cease its operations in a
particular region. While we believe that the intent
of this proposal raises certain valid concerns
regarding the company's position on indigenous
peoples rights, we also note that Calpine has other
operations in indigenous land that have
demonstrated a degree of successful interaction
with Native American groups. Further, the company
has received authorization from the appropriate
organizations to pursue development in the Medicine
Lake Highland region and the company believes that
the opportunities presented in this region could
prove to be valuable assets for the company.
Moreover, federal courts summarily dismissed the
litigation referenced by the proponent. Therefore,
we agree with the proponents that Calpine could
benefit from the formation of a policy on
indigenous peoples' rights and increased disclosure
on its operations in Native American territories;
however, ISS believes that requesting complete
cessation of operations or consideration of further
development in a region that may provide valuable
resources to the company is unduly restrictive, and
better left to a decision by Calpine's management
after careful review. As such, we do not recommend
support for the proposal at this time.
6 Limit Awards to Executives Against Against ShrHoldr
In this case, the company awards long-term,
equity-based incentive awards in the form of options
with an exercise price equal to the market price of the
stock on the day of the grant and with a four-year
vesting schedule. The company does not issue
performance-based restricted shares. Also, the company
does not have a holding period or executive ownership
requirement. While we do like some of the elements of
the restricted stock proposal, including granting of
restricted stock based on achievement of justifiable
operational performance criteria and disclosure of
actual hurdle rates for the performance criteria, given
the fact that the proponent asks for a complete
substitution of options with restricted stock, we
believe the proposal is unduly restrictive.
7 Include Voting Recommendations of Against Against ShrHoldr
Institutional Holders in Proxy Statement
ISS concurs with the company's argument that the
resolution could be expensive and unfeasible to
administer. Such additional corporate expenditures
would be hard to justify considering that proxy
analyses are already available to the public from a
variety of vendors and on the web from certain
institutional investors. The decision to follow
another institutional investor's recommendation is
best left with the individual shareholder.
8 Ratify Auditors For For Mgmt
05/05/04 - A Cameco Corp. *CCO.* 13321L108 04/01/04 10,000
1 Elect Directors For For Mgmt
2 Appoint KPMG LLP as Auditors For For Mgmt
3 The Undersigned Holder of Record of None None Mgmt
Shares Declares that all Shares are Held,
Beneficially owned or Controlled by One
or More Canadian Residents
4 The Undersigned Holder of Shares Declares None None Mgmt
that the Undersigned is a Canadian
Resident
04/26/04 - A/S Canadian Oil Sands Trust *COS.U* 13642L100 03/12/04 45,000
1 Approve Auditors of Canadian Oil Sands For For Mgmt
Limited and Authorize Board to Fix
Remuneration of Auditors
2 Approve Auditors of Canadian Oil Sands For For Mgmt
Trust and Authorize Board to Fix
Remuneration of Auditors
3 Elect Marcel Coutu, E. Susan Evans, For For Mgmt
Donald Mazankowski, Wayne Newhouse,
Walter O'Donoghue, C.E. Shultz as
Directors of Canadian Oil Sands Limited
4 Amend Unitholder Rights Plan (Poison Pill) For For Mgmt
05/04/04 - A/S CASE RES INC *CAZ* 14745A108 03/26/04 925,000
1 Elect Gordon W. Cameron, Larry A. Shaw, For For Mgmt
Werner A. Siemens, and A. Jeffery Tonken
as Directors
Given that shareholders may wish to express
differing views as to the suitability of the
director nominees, Fairvest takes the view that
shareholders should have the ability to cast
ballots with respect to individuals rather than the
entire slate. If this is possible, they will not be
forced to withhold votes for the board as a whole
as their only method of registering a negative view
of an individual or individuals. Shareholders
should note that the board is majority independent.
2 Appoint Auditors For For Mgmt
Deloitte & Touche LLP have been the company's auditors
since 1999. The circular does not provide the audit or
non-audit fees paid to the auditor over the most recent
fiscal year.
3 Amend Stock Option Plan For Against Mgmt
Shareholders are being asked to approve an increase the
number of common shares reserved for issuance pursuant
to the company's stock option plan. Currently, the
number of shares reserved is 5,719,821, and
shareholders are being asked to approve an increase to
a total of 6,000,000 shares reserved. The total cost of
the company's plan is compared to an allowable cap
using a compensation model. The allowable caps are
industry-specific, market cap-based, and pegged to the
average amount paid by companies performing in the top
quartile of their peer groupings. Industry
classifications are established using standard industry
code (SIC) groups. Using historic data tracked by
Fairvest of the value of authorized shares for issue at
each company ranked in the top quartile of its
industry, a benchmark pay level is established for each
industry. The total cost of the company's plans of 5.27
percent is within the allowable cap for this company of
7.68 percent. We oppose the amendment to increase
shares reserved for options, however, because it would
appear that non-employee directors participate in
options on a discretionary basis. This is a practice
which gives rise to the possibility of self-dealing by
directors in options. Directors who are able to grant
themselves options without limit could find their
independence compromised. The amended plan represents
dilution of 9.07 percent on a fully-diluted basis.
05/14/04 - A/S CCS INCOME TRUST *CCR.U* 12501U102 04/07/04 125,000
1 Elect David Werklund, Brad Munro, J. For Withhold Mgmt
Sherrold Moore, Brian Evans, Bradley
Thomson and Naveen Dargan as Directors of
CCSI
Given that unitholders may wish to express
differing views as to the suitability of the
director nominees, Fairvest takes the view that
unitholders should have the ability to cast ballots
with respect to individuals rather than the entire
slate. If this is possible, they will not be forced
to withhold votes for the board as a whole as their
only method of registering a negative view of an
individual or individuals. We recommend withholding
votes from the entire slate because Mr. David
Werklund is an insider on the Human Resources and
Environmental Health and Safety Committee, which
functions as the Compensation Committee.
2 Appoint Ernst & Young LLP as Auditors and For For Mgmt
Authorize Board to Fix Remuneration of
Auditors
3 Amend Trust Indenture For For Mgmt
06/04/04 - A Chesapeake Energy Corp. *CHK* 165167107 04/08/04 180,000
1 Elect Directors For For Mgmt
1.1 Elect Director Frank A. Keating --- For
1.2 Elect Director Tom L. Ward --- For
1.3 Elect Director Frederick B. Whittemore
--- For
2 Increase Authorized Common Stock For For Mgmt
The requested increase of 150,000,000 shares is
below the allowable threshold of 350,000,000
shares.
3 Increase Authorized Preferred Stock For For Mgmt
The requested increase of 10,000,000 shares is
below the allowable threshold of 17,500,000 shares.
05/13/04 - A Chicago Bridge & Iron Co. *CBI* 167250109 04/01/04 30,000
Meeting for Holders of ADRs
1 FIRST POSITION: BALLENGEE For For Mgmt
2 FIRST POSITION: BORDAGES Against Abstain Mgmt
In ISS's opinion, the candidate presented under
Item 1 possesses better qualifications for board
membership. In contrast to Bordages, the candidate
presented under the previous item can be classified
as an independent. On this basis, we recommend a
vote against Item 2.
3 SECOND POSITION: SIMPSON For For Mgmt
4 SECOND POSITION: LEVENTRY Against Abstain Mgmt
In ISS's opinion, the candidate presented under
Item 3 possesses better qualifications for board
membership. In contrast to Leventry, the candidate
presented under the previous item can be classified
as an independent. On this basis, we recommend a
vote against Item 4.
5 TO AUTHORIZE THE PREPARATION OF THE For For Mgmt
ANNUAL ACCOUNTS AND ANNUAL REPORT IN THE
ENGLISH LANGUAGE AND ADOPT DUTCH
STATUTORY ANNUAL ACCOUNTS
6 TO DISCHARGE MANAGEMENT BOARD AND For For Mgmt
SUPERVISORY BOARD FROM LIABILITY IN
EXERCISE OF THEIR DUTIES
7 TO RESOLVE THE FINAL DIVIDEND For For Mgmt
8 TO REPURCHASE UP TO 30% OF THE ISSUED For Against Mgmt
SHARE CAPITAL
Since the proposal would allow the company to
repurchase shares at a price up to 150 percent of
the market value, and the plan does not contain any
safeguards against selective buybacks, we advise a
vote against.
9 TO CANCEL SHARES TO BE ACQUIRED BY THE For For Mgmt
COMPANY IN ITS OWN SHARE CAPITAL
ISS opposes the share repurchase request under Item
8. Even if this proposal is defeated, however, the
current authorization will be valid for another six
months after this AGM. Cancellation of the shares
held in treasury would allow the company to
repurchase more shares at a premium up to 50
percent. On the other hand, if the shareholders did
not approve the request to cancel shares, Chicago
Bridge & Iron could decide to reissue the shares
held in treasury and thereby enable further share
repurchases. ISS prefers that the shares be
cancelled rather than issued for some undisclosed
purpose. We therefore recommend a vote in favor of
the proposal.
10 TO APPROVE THE EXTENSION OF THE AUTHORITY For For Mgmt
TO ISSUE AND/OR GRANT RIGHTS ON SHARES
AND TO LIMIT OR EXCLUDE PREEMPTIVE RIGHTS
11 TO INCREASE THE AMOUNT OF THE AUTHORIZED For For Mgmt
SHARE CAPITAL
12 TO APPOINT DELOITTE & TOUCHE AS THE For For Mgmt
COMPANY S INDEPENDENT PUBLIC ACCOUNTANTS
05/18/04 - A China Petroleum & Chemical Corp. 16941R108 04/16/04 60,000
Meeting for Holders of ADRs
1 TO CONSIDER AND APPROVE THE REPORT OF THE For For Mgmt
BOARD OF DIRECTORS OF SINOPEC CORP. FOR
THE YEAR ENDED 31 DECEMBER 2003.
2 TO CONSIDER AND APPROVE THE REPORT OF THE For For Mgmt
SUPERVISORY COMMITTEE OF SINOPEC CORP.
FOR THE YEAR ENDED 31 DECEMBER 2003.
3 TO CONSIDER AND APPROVE THE AUDITED For For Mgmt
ACCOUNTS AND AUDITED CONSOLIDATED
ACCOUNTS OF SINOPEC CORP. FOR THE YEAR
ENDED 31 DECEMBER 2003.
4 TO CONSIDER AND APPROVE SINOPEC CORP. S For For Mgmt
2003 PROFIT APPROPRIATION PLAN AND THE
FINAL DIVIDEND.
5 RATIFY AUDITORS For For Mgmt
6 TO AUTHORIZE THE BOARD OF DIRECTORS TO For Against Mgmt
ALLOT AND ISSUE NEW FOREIGN SHARES LISTED
OVERSEAS.
This request is being made to renew the authority
because the authority to issue shares effectively
expired with the convening of this shareholder
meeting. This authority complies with strict SEHK
regulations governing such plans, however, ISS
recommends voting against the issuance of shares
without preemptive rights unless the company
provides specific language and terms that there
will be (1) adequate restrictions on discounts and
(2) no authority to refresh the share issuance
amounts without prior shareholder approval. This is
in light of abuses made by a number of Hong Kong
companies that have issued shares at steep
discounts to related parties and renewed the share
issuance amount under this authority without
shareholder approval, both of which are permissible
under current law.
7 TO AMEND THE ARTICLES OF ASSOCIATION AND For For Mgmt
ITS SCHEDULES.
04/28/04 - A CNOOC LTD 126132109 04/06/04 50,000
Meeting for Holders of ADRs
1 TO RECEIVE AND CONSIDER THE AUDITED For For Mgmt
ACCOUNTS FOR THE YEAR ENDED DECEMBER 31,
2003 TOGETHER WITH THE REPORTS OF THE
DIRECTORS AND THE AUDITORS THEREON.
2 TO DECLARE THE FINAL DIVIDEND FOR THE For For Mgmt
YEAR ENDED DECEMBER 31, 2003 AND SPECIAL
CASH DIVIDEND.
3 TO RE-ELECT MR. SHOUWEI ZHOU AS EXECUTIVE For For Mgmt
DIRECTOR.
4 TO RE-ELECT PROFESSOR KENNETH S. COURTIS For For Mgmt
AS INDEPENDENT NON-EXECUTIVE DIRECTOR.
5 TO RE-ELECT DR. ERWIN SCHURTENBERGER AS For For Mgmt
INDEPENDENT NON-EXECUTIVE DIRECTOR.
6 TO ELECT MR. EVERT HENKES AS INDEPENDENT For For Mgmt
NON-EXECUTIVE DIRECTOR.
7 Ratify Auditors For For Mgmt
8 TO GRANT A GENERAL MANDATE TO THE For For Mgmt
DIRECTORS TO REPURCHASE SHARES IN THE
COMPANY.
9 TO GRANT A GENERAL MANDATE TO THE For Against Mgmt
DIRECTORS TO ISSUE, ALLOT AND DEAL WITH
ADDITIONAL SHARES IN THE COMPANY.
This authority complies with strict SEHK
regulations governing such plans, however, ISS
recommends voting against the issuance of shares
without preemptive rights unless the company
provides specific language and terms that there
will be (1) adequate restrictions on discounts and
(2) no authority to refresh the share issuance
amounts without prior shareholder approval. This is
in light of abuses made by a number of Hong Kong
companies that have issued shares at steep
discounts to related parties and renewed the share
issuance amount under this authority without
shareholder approval, both of which are permissible
under current law.
10 TO EXTEND THE GENERAL MANDATE GRANTED TO For For Mgmt
THE DIRECTORS TO ISSUE, ALLOT AND DEAL
WITH SHARES BY THE NUMBER OF SHARES
REPURCHASED.
11 TO AMEND THE ARTICLES OF ASSOCIATION OF For For Mgmt
THE COMPANY.
06/17/04 - A/S Compton Petroleum Corporation *CMT.* 204940100 05/03/04 150,000
1 Elect Mel F. Belich, Irvine J. Koop, John For For Mgmt
W. Preston, Jeffrey T. Smith, Ernie G. Sapieha and
John A. Thomson as Directors
2 Ratify Grant Thornton LLP as Auditors For For Mgmt
3 Amend Stock Option Plan For Against Mgmt
Vote Recommendation The total cost of the company's
plans of 6.80 percent is above the allowable cap
for this company of 4.45 percent. We also oppose
the amendment to increase shares reserved for
options, however, because it would appear that
non-employee directors participate in options on a
discretionary basis. According to the circular,
each of the non-executive directors received a
grant of options to acquire 25,000 common shares
and Mr. Thomson, elected to the board at the last
annual meeting of shareholders, received an initial
grant of options to acquire 75,000 common shares.
It is not clear, however, if these are maximum or
fixed grants set out in the plan, which is what we
require in order to view an option plan as having a
cap on director participation. The discretionary
participation of directors in stock options is a
practice which gives rise to the possibility of
self-dealing by directors in options. Directors who
are able to grant themselves options without limit
could find their independence compromised.
06/08/04 - A Devon Energy Corp. *DVN* 25179M103 04/09/04 15,000
1 Elect Directors For For Mgmt
2 Ratify Auditors For For Mgmt
3 Require a Majority Vote for the Election Against Against ShrHoldr
of Directors
In the view of many shareholders, the current
director election system simply creates
self-perpetuating boards. Incumbent members select
nominees to fill vacancies and decide whether to
renominate themselves. Thus, shareholders
effectively have no meaningful choice among
candidates, and the election process becomes a mere
ratification of the company's slate of nominees.
Withholding votes from a board member can serve as
a shareholder communication tool to express
displeasure with a given director. But because
directors are typically elected by a plurality
(those nominees receiving the most votes win board
seats), company nominees running unopposed are
reelected. Under current proxy rules, only
candidates nominated by the board can appear in the
company's proxy statement. A shareholder could
technically nominate a candidate from the floor of
the annual meeting, but, since most investors vote
by mail, floor nominations are unlikely to succeed.
Although some companies' bylaws outline procedures
for shareholders to suggest possible candidates to
board nominating panels, few of these individuals
actually make it to the ballots as nominees.
Instead, shareholders wishing to nominate an
alternative slate of candidates to run against
management's must go through an expensive and
time-consuming proxy solicitation process of their
own (i.e., a proxy contest). In October 2003, the
SEC proposed new proxy rules to give significant,
long-term shareholders greater ability to include
director nominees in management's proxy statement.
A final rule is expected in 2004. The proposal
entails a two-step, two-year process. In the first
year, one of two triggering events must occur, each
of which demonstrates shareholder dissatisfaction
with a company's proxy process: (i) one or more
directors at a company must receive withhold votes
totaling 35 percent or more of the votes cast, or
(ii) a shareholder proposal asking for open access,
which is submitted by the holders of at least one
percent of the shares (and owned for at least one
year), must be approved by a majority of the votes
cast. If one of these two conditions is met, then
for the following two years, the company would be
required to include in its proxy materials one or
more board nominees proposed by holders of at least
five percent of the company's shares (and owned for
at least two years). In addition, the number of
shareholder nominees permitted would be dictated by
the size of the board as follows: one nominee for
boards of eight or fewer directors, two nominees
for boards of nine to 19 directors, and three
nominees for boards having 20 or more directors.
ISS supports the general principle that
shareholders should have choice in director
elections and input in the nomination process
greater than they currently have under the
plurality system. We believe that requiring
directors to receive a majority of votes cast in an
uncontested election has some merit as it promotes
the accountability of directors and makes a
shareholder vote on director elections a more
powerful signal. However, this proposal lacks
clarity on the threshold requirement -- the
resolution refers to majority of shares "entitled
to vote" while the supporting statement refers both
to "shares entitled to be voted" and "majority of
votes cast." Requiring nominees to obtain the
majority of outstanding votes is a much more
difficult hurdle, one which we are not at this time
ready to endorse. The main concern in implementing
a majority threshold requirement is that an annual
board could be in effect be "decapitated" by a
failure to obtain majority shareholder support. In
the case of companies which have classified boards,
the concerns regarding a "decapitated" board is
mitigated. With staggered boards, only a minority
portion of the board is up for election each year,
and therefore only such minority portion may be
adversely affected by the failure of that year's
nominees to obtain majority shareholder support.
Irrespective of the structure of the company's
board, this proposal fails to address the
implementation mechanism in the event that
directors fail to garner the required majority
vote. In such a case, actual removal of affected
directors may not be feasible or desirable, and
alternative measures may be available to indicate
displeasure with the board (e.g., increased
disclosure requirements for "unratified" board
members). Given that: (i) the plurality voting
threshold is the currently accepted standard for
the election of directors of publicly-traded
companies, (ii) approval of this item could disrupt
board operations and the company's financial
performance in the event some or all of the
director nominees do not receive majority support
and do not get elected, (iii) requiring a majority
vote of the outstanding shares in effect provides
for a supermajority of votes cast, which would
adversely affect shareholders' ability to elect
directors in a contested election, and (iv) the
proposed provision may diminish the likelihood of a
successful open access campaign by providing for an
increased vote requirement in the election of
directors, we do not at this point in time believe
the proposed amendment warrants shareholder
support.
05/11/04 - A DIAMONDS NORTH RES LTD 252785100 04/02/04 75,000
1 Appoint Auditors For For Mgmt
G. Ross McDonald is the company's current auditor.
2 Authorize Board to Fix Remuneration of For For Mgmt
the Auditors
The circular does not provide the audit or
non-audit fees paid to the auditor over the most
recent fiscal year.
3 Fix Number of Directors at four For For Mgmt
This is a routine item.
4 Elect Directors For For Mgmt
4.1 Elect Mark Kolebaba as Director --- For
We recommend withholding votes from Mark Kolebaba
because he is an insider on the Audit and
Compensation Committees. The board is majority
independent.
4.2 Elect Bernard H. Kahlert as Director ---
For
4.3 Elect Maynard E. Brown as Director --- For
4.4 Elect Yale R. Simpson as Director --- For
5 Set the number of shares issuable under For For Mgmt
stock option plan
Shareholders are being asked to approve an
amendment to the company's stock option plan that
would, if passed, increase the number of shares
available for issuance pursuant to the plan from
2,862,578 to 4,938,305 shares. The total cost of
the company's plan is compared to an allowable cap
using a compensation model. The allowable caps are
industry-specific, market cap-based, and pegged to
the average amount paid by companies performing in
the top quartile of their peer groupings. Industry
classifications are established using standard
industry code (SIC) groups. Using historic data
tracked by Fairvest of the value of authorized
shares for issue at each company ranked in the top
quartile of its industry, a benchmark pay level is
established for each industry. The total cost of
the company's plans of 13.79 percent is above the
allowable cap for this company of 7.98 percent. We
also oppose the amendment to increase shares
reserved for options because it would appear that
non-employee directors participate in options on a
discretionary basis. This is a practice which gives
rise to the possibility of self-dealing by
directors in options. Directors who are able to
grant themselves options without limit could find
their independence compromised. Shareholders should
note that this plan could allow options to be
granted with a discounted exercise price if
permitted for by the TSX Venture Exchange. The
amended plan represents dilution of 16.67 percent
on a fully-diluted basis.
6 Other Business (Voting) For For Mgmt
As we cannot know the content of the issues to be
raised under this item we do not recommend
shareholders approve this resolution.
05/13/04 - A Dynatec Corp. *DY.* 267934107 04/13/04 1,844,800
1 Elect Ian Delaney, Bruce Walter, W. For For Mgmt
Robert Dengler, John Lill, Ronald
Fournier, Daniel Owen, David Banks,
Patrick James as Directors
2 Approve Auditors and Authorize Board to For For Mgmt
Fix Remuneration of Auditors
04/28/04 - A E.I. Du Pont De Nemours & Co. *DD* 263534109 03/09/04 20,000
1 Elect Directors For For Mgmt
1.1 Elect Director Alain J. P. Belda --- For
1.2 Elect Director Richard H. Brown --- For
1.3 Elect Director Curtis J. Crawford --- For
1.4 Elect Director John T. Dillon --- For
1.5 Elect Director Louisa C. Duemling --- For
1.6 Elect Director Charles O. Holliday, Jr.
--- For
1.7 Elect Director Deborah C. Hopkins --- For
1.8 Elect Director Lois D. Juliber --- For
1.9 Elect Director Masahisa Naitoh --- For
1.10 Elect Director William K. Reilly --- For
1.11 Elect Director H. Rodney Sharp, III ---
For
1.12 Elect Director Charles M. Vest --- For
2 Ratify Auditors For For Mgmt
3 Report on Executive Ties to Government Against Against ShrHoldr
ISS recognizes that companies can benefit from the
knowledge and expertise of former government
workers. These employees may be intimately familiar
with the internal processes of government
procurement and decision-making. The knowledge of
such employees can add real value to a company's
operations. ISS shares in the proponent's concern
for potential conflicts of interest at such
companies, but in this case, the company states
that it has specific policies in place to avoid
such conflicts of interest. Moreover, the
production of such a report annually could be
costly without providing substantial benefit to
shareholders. Given these factors, we see no reason
to support this request.
4 Adopt and Report on a Code of Corporate Against Against ShrHoldr
Conduct
In the case of Dupont, the company has already
committed itself to a code of conduct that upholds
a number of the core ILO standards, including
prohibitions on child labor, involuntary
servitude/forced labor, nondiscrimination, and
freedom of association ' although we acknowledge
that the company's existing code does not
specifically reference the right to collective
bargaining. However, it appears that the company's
code is in line with the codes of similar
companies. Dupont has endorsed the Global Compact
and supports the GRI, representing active
consideration of human and labor rights issues as
well as sustainable development in the communities
where the company operates. Also, while the
proponent has cited certain labor disputes in
Dupont's operations in the United States, ISS does
not believe that these incidents show the type of
systematic disregard to workplace human rights that
would merit a substantial amendment to the
company's current policies. Therefore, the fact
that the company already has policies in place that
substantially address many of the principles
outlined in the ILO conventions, and lacking
evidence to suggest systematic failure to comply
with these policies, we do not believe that support
of this proposal is warranted at this time.
5 Limit Executive Compensation Against Against ShrHoldr
The Compensation Committee is composed entirely of
independent directors and currently sets and reviews
the company's executive compensation program. Taking
into account the activities of the Compensation
Committee regarding the setting and monitoring of the
executive compensation, we agree with the company that
the proposed report would duplicate the Compensation
Committee's ongoing work to review, evaluate, and
modify the company's executive compensation policy and
programs. As such, we see no reason to support this
proposal.
05/06/04 - A Eastman Chemical Co. *EMN* 277432100 03/15/04 20,000
1 Elect Directors For For Mgmt
1.1 Elect Director Renee J. Hornbaker --- For
1.2 Elect Director Thomas H. McLain --- For
1.3 Elect Director Peter M. Wood --- For
2 Ratify Auditors For For Mgmt
3 Limit Awards to Executives Against Against ShrHoldr
ISS notes that the company has negative three-year
total shareholder return, but positive one year
TSR, and the total direct compensation to the
company's CEO has decreased by 53.21 percent from
fiscal 2002 to fiscal 2003. We further note that
the company has been proactive in its effort to
link pay and performance among its top executives
and that executive compensation is analyzed by an
independent Compensation Committee. ISS believes
that an independent Compensation Committee should
have the flexibility to determine the compensation
of its senior executives based on a number of
appropriate factors, rather then relying on an
arbitrary formula. Furthermore, we believe this
proposal is too restrictive, as it would limit
equity awards to time-based restricted shares. As
such, this item does not warrant shareholder
approval.
05/31/04 - A/S EASTSHORE ENERGY LTD 277799201 04/26/04 50,000
1 Fix Number of Directors at four For For Mgmt
This is a routine item.
2 Elect Gary W. Burns, Barry W. Harrison, For For Mgmt
Kenneth D. Cairns, and John A. Howard as
Directors
Given that shareholders may wish to express
differing views as to the suitability of the
director nominees, Fairvest takes the view that
shareholders should have the ability to cast
ballots with respect to individuals rather than the
entire slate. If this is possible, they will not be
forced to withhold votes for the board as a whole
as their only method of registering a negative view
of an individual or individuals. The board is
majority independent. There are no insiders on
either the Audit or the Human Resources and
Compensation Committee.
3 Appoint Auditors and Authorize Board to For For Mgmt
Fix Remuneration of Auditors
KPMG LLP have been the company's auditors since
2003. The circular does not provide the audit or
non-audit fees paid to the auditor over the most
recent fiscal year.
4 Amend Stock Option Plan For Against Mgmt
Shareholders are being asked to approve an amendment to
the company's stock option plan that would, if passed,
increase the number of shares available for issuance
pursuant to the plan from 1,150,000 Class A shares to
1,656,700 Class A shares. The total cost of the
company's plan is compared to an allowable cap using a
compensation model. The allowable caps are
industry-specific, market cap-based, and pegged to the
average amount paid by companies performing in the top
quartile of their peer groupings. Industry
classifications are established using standard industry
code (SIC) groups. Using historic data tracked by
Fairvest of the value of authorized shares for issue at
each company ranked in the top quartile of its
industry, a benchmark pay level is established for each
industry. The total cost of the company's plans of 7.54
percent is above the allowable cap for this company of
7.23 percent. We also oppose the amendment to increase
shares reserved for options because it would appear
that non-employee directors participate in options on a
discretionary basis. This is a practice which gives
rise to the possibility of self-dealing by directors in
options. Directors who are able to grant themselves
options without limit could find their independence
compromised. Shareholders should note that this plan
could allow options to be granted with a discounted
exercise price if permitted for by the TSX Venture
Exchange. The amended plan represents dilution of 9.10
percent on a fully-diluted basis.
5 Amend Stock Option Rolling Plan For Against Mgmt
In conjunction with anticipated changes in the TSX
rules governing option plans, shareholders are being
asked to approve a series of amendments to the
company's stock option plan. First, the plan would
become a rolling 10% plan, whereby the number of shares
reserved for issuance pursuant to the granting of
options would not be a fixed number; rather, 10 per
cent of the company's outstanding Class A shares from
time to time would be reserved for the plan. As well,
another amendment would allow the directors to amend
the plan without shareholder approval, other than a
reduction in exercise price or extension of the terms
of options held by insiders. Fairvest prefers companies
to adopt a fixed maximum number of shares to be
reserved pursuant to options plans, rather than
'rolling' stock option plans. We oppose this
resolution, however, because the plan would still allow
directors to participate on a discretionary basis,
which may impair their independence. As such, we
recommend a vote against this resolution.
06/29/04 - A/S ENERGY SAVINGS INCOME FD 292717105 05/14/04 270,000
1 Direct Montreal Trust Company of Canada, For For Mgmt
Trustee of the Fund, to Elect John A.
Brussa, Michael Kirby, Alek Krstajic,
Rebecca MacDonald, Brennan R. Mulcahy,
John Panneton, Hugh D. Segal and Brian
R.D Smith as Directors of Ontario Energy
Savings Corp.
2 Ratify Deloitte & Touche LLP as Auditors For For Mgmt
3 Amend Declaration of Trust to Expand For For Mgmt
Investment Powers of the Fund
4 Approve Unit Appreciation Rights Plan For For Mgmt
5 Approve Directors Deferred Unit For For Mgmt
Compensation Plan
05/07/04 - A ENERPLUS RESOURCES FD 29274D604 03/10/04 120,000
1 Elect Derek Fortune, Gordon Kerr, Douglas For For Mgmt
Martin, Robert Normand, Eric Tremblay,
Donald West, Harry Wheeler, Robert Zorich
as Directors of EnerMark Inc
2 Approve Auditors and Authorize Board to For For Mgmt
Fix Remuneration of Auditors
05/07/04 - A ENERPLUS RESOURCES FD 29274D604 03/10/04 20,000
1 Elect Derek Fortune, Gordon Kerr, Douglas For For Mgmt
Martin, Robert Normand, Eric Tremblay,
Donald West, Harry Wheeler, Robert Zorich
as Directors of EnerMark Inc
2 Approve Auditors and Authorize Board to For For Mgmt
Fix Remuneration of Auditors
05/11/04 - A Ensco International, Inc. *ESV* 26874Q100 03/15/04 30,000
1 Elect Directors For Split Mgmt
1.1 Elect Director David M. Carmichael ---
Withhold
We recommend that shareholders vote FOR Rita M.
Rodriguez but WITHHOLD votes from all the other
nominees. We recommend that shareholders WITHHOLD
votes from Compensation Committee members David M.
Carmichael and Thomas L. Kelly II for not aligning
CEO's compensation with shareholders interests.
1.2 Elect Director Thomas L. Kelly II ---
Withhold
1.3 Elect Director Rita M. Rodriguez --- For
05/04/04 - A EOG Resources, Inc. *EOG* 26875P101 03/08/04 35,000
1 Elect Directors For For Mgmt
1.1 Elect Director George A. Alcorn --- For
1.2 Elect Director Charles R. Crisp --- For
1.3 Elect Director Mark G. Papa --- For
1.4 Elect Director Edmund P. Segner, III ---
For
1.5 Elect Director Donald F. Textor --- For
1.6 Elect Director Frank G. Wisner --- For
2 Ratify Auditors For For Mgmt
3 Amend Omnibus Stock Plan For For Mgmt
V.
Vote Recommendation The total cost of the company's
plans of 6.10 percent is within the allowable cap
for this company of 7.14 percent. Equity grants
including stock options, and restricted stock
awards to top five named executive officers were
25.60 percent of the total shares awarded in the
current year.
4 Other Business For Against Mgmt
As we cannot know the content of these issues, we
do not recommend that shareholders approve this
request.
06/28/04 - A/S European Minerals Corp(formerly 29879A104 05/29/04 338,250
Kazakhstan Minerals Corporat *EPM.U*
1 Appoint Auditors and Authorize Board to For For Mgmt
Fix Remuneration of Auditors
PricewaterhouseCoopers LLP are the company's
current auditors. The circular does not provide the
audit or non-audit fees paid to the auditor over
the most recent fiscal year.
2 Elect William G. Kennedy, Anthony J. For Withhold Mgmt
Williams, Dr. Barry D. Rayment, and
Marvin J. Singer as Directors
Given that shareholders may wish to express
differing views as to the suitability of the
director nominees, Fairvest takes the view that
shareholders should have the ability to cast
ballots with respect to individuals rather than the
entire slate. If this is possible, they will not be
forced to withhold votes for the board as a whole
as their only method of registering a negative view
of an individual or individuals. We recommend
withholding votes from the entire slate because
William G. Kennedy is an insider on the Audit
Committee. The board is majority independent.
3 Approve Issuance of Shares in One or More For Against Mgmt
Private Placements
Shareholders are being asked to provide blanket
approval for the potential issuance of up to
57,902,122 shares, representing potential dilution
of 100 percent of the outstanding shares. The
shares have a 52-week high and low of $1.12 and
$0.32, respectively, and are currently trading at
$0.58 per share; as such any share issuances could
be issued at a 25 percent discount to the fair
market value as per Exchange regulations. Fairvest
prefers to see blanket approval for future private
placements to be capped at no more than 30 percent
of the outstanding shares. Given the potential for
excessive dilution, we do not recommend
shareholders approve this resolution.
06/07/04 - S EUROPEAN NICKEL PLC G3285C106 None 350,000
1 Accept Financial Statements and Statutory For For Mgmt
Reports
2 Approve Increase in Authorised Capital For For Mgmt
from GBP 1,500,000 to GBP 2,000,000
This item proposes to increase the Company's
authorised capital from GBP 1.5 million ($2.64
million) to GBP 2 million ($3.52 million), an
increase of 33.3 percent. The Company currently has
issued capital of GBP 950,760 ($1,673,337.60), or
95 percent of the current amount of authorised
capital. We have no objections to this proposal.
3 Authorise Issuance of Equity or For For Mgmt
Equity-Linked Securities with Pre-emptive
Rights up to Aggregate Nominal Amount of
GBP 678,724.73
The Company is proposing an amount for share
issuances with pre-emptive rights equivalent to 71
percent of current issued share capital. Although
this amount exceeds the recommended limit of 33%,
we are willing to permit authorities up to a
maximum of 100% of the issued share capital having
regard to the Company's size and scope.
4 Authorise Issuance of Equity or For Against Mgmt
Equity-Linked Securities without
Pre-emptive Rights up to Aggregate
Nominal Amount of GBP 230,000
The Company proposes an amount for share issuances
without pre-emptive rights up to 24.2 percent of
current issued share capital, which exceeds
guidelines for such issuances.
05/11/04 - A/S First Quantum Minerals Ltd (Formerly 335934105 04/06/04 110,000
First Quantum Ventures *FM.*
1 Elect Directors For For Mgmt
2 Ratify Auditors For For Mgmt
3 Adopt New By-Laws For For Mgmt
4 Approve 2004 Stock Option Plan For Against Mgmt
Vote Recommendation The total cost of the company's
plans of 6.54 percent is within the allowable cap
for this company of 10.12 percent. We oppose the
amendment to increase shares reserved for options,
however, because it would appear that non-employee
directors participate in options on a discretionary
basis. This is a practice which gives rise to the
possibility of self-dealing by directors in
options. Directors who are able to grant themselves
options without limit could find their independence
compromised.
04/27/04 - A FMC Corp. *FMC* 302491303 03/01/04 35,000
1 Elect Directors For For Mgmt
2 Ratify Auditors For For Mgmt
05/27/04 - A FOCUS ENERGY TR *FET.U* 34415R108 04/20/04 270,000
1 Fix Number of Directors at Six For For Mgmt
2 Elect Matthew J. Brister, John A. Brussa, For For Mgmt
Stuart G. Clark, Derek W. Evans, James H.
Mckelvie and Gerry A. Romanzin as
Directors of FET Resources
3 Ratify KPMG LLP as Auditors and Authorise For For Mgmt
Directors to Fix Auditor Remuneration
05/06/04 - A Fording Canadian Coal Trust 345425102 03/31/04 15,000
(Formerly FORDING INC) *FDG.U*
1 Elect Trustee Lloyd I. Barber For For Mgmt
2 Elect Trustee Michael A. Grandin For For Mgmt
3 Elect Trustee Michael S. Parrett For For Mgmt
4 Elect Trustee Harry G. Schaefer For For Mgmt
5 Elect Trustee Peter Valentine For For Mgmt
6 Elect Trustee Robert J. Wright For For Mgmt
7 Elect Trustee John B. ZaoZirny For For Mgmt
8 Elect Directors For Split Mgmt
8.1 Elect Director Dawn L. Farrell --- For
8.2 Elect Director Michael A. Grandin --- For
8.3 Elect Director Norman B. Keevil ---
Withhold
8.4 Elect Director Richard T. Mahler --- For
8.5 Elect Director Thomas J. O'Neil --- For
8.6 Elect Director Michael S. Parrett --- For
8.7 Elect Director Harry G. Schaefer --- For
8.8 Elect Director William W. Stinson --- For
8.9 Elect Director David A. Thompson --- For
9 Approve Auditors and Authorize Board to For For Mgmt
Fix Remuneration of Auditors
06/25/04 - A Gazprom Oao 368287207 06/01/04 4,000
Meeting for Holders of ADRs
1 ANNUAL REPORT, INCLUDING THE PROFIT AND For For Mgmt
LOSS REPORT
2 PAYMENT OF ANNUAL DIVIDENDS For For Mgmt
3 PAY REMUNERATION TO DIRECTORS AND AUDIT For For Mgmt
COMMISSION
4 ZAO PRICEWATERHOUSECOOPERS AUDIT AS THE For For Mgmt
EXTERNAL AUDITOR
5 AMENDMENTS AND ADDITIONS NO. 1 TO THE For For Mgmt
CHARTER OF THE COMPANY
6 AMENDMENTS AND ADDITIONS NO. 2 TO THE For Against Mgmt
CHARTER OF THE COMPANY
We disapprove in principle of bundling together
proposals that could be presented as separate
voting items because bundled resolutions leave
shareholders with an all-or-nothing choice, skewing
power disproportionately towards the board and away
from shareholders. Because the amendments would
include a provision allowing for non-board members
on committees, such as the audit committee, we
cannot recommend that shareholders support this
resolution.
7 AMENDMENTS AND ADDITIONS NO. 3 TO THE For For Mgmt
CHARTER OF THE COMPANY
8 ELECTION OF THE BOARD OF DIRECTORS. IF For Withhold Mgmt
YOU WISH TO VOTE SELECTIVELY, YOU MUST
CUMULATE YOUR SHARES. PLEASE CONTACT YOUR
REPRESENTATIVE IF YOU WISH TO DO SO.
9 ELECT ARKHIPOV DMITRIY ALEKSANDROVICH TO For For Mgmt
THE AUDIT COMMISSION OF THE COMPANY
10 ELECT BIKULOV VADIM KASYMOVICH TO THE For For Mgmt
AUDIT COMMISSION OF THE COMPANY
11 ELECT GULYUKINA SVETLANA ALEKSEEVNA TO For For Mgmt
THE AUDIT COMMISSION OF THE COMPANY
12 ELECT DOMARATSKAYA NELYA NIKOLAEVNA TO For For Mgmt
THE AUDIT COMMISSION OF THE COMPANY
13 ELECT ISHUTIN RAEFAEL VLADIMIROVICH TO For For Mgmt
THE AUDIT COMMISSION OF THE COMPANY
14 ELECT KOSTERIN MAKSIM NIKOLAEVICH TO THE For For Mgmt
AUDIT COMMISSION OF THE COMPANY
15 ELECT LOBANOVA NINA VLADISLAVOVNA TO THE For For Mgmt
AUDIT COMMISSION OF THE COMPANY
16 ELECT LYSAK OLGA ALEKSANDROVNA TO THE For For Mgmt
AUDIT COMMISSION OF THE COMPANY
17 ELECT TKACHENKO ANDREI PETROVICH TO THE For For Mgmt
AUDIT COMMISSION OF THE COMPANY
18 ELECT TOROPOV SERGEI VLADIMIROVICH TO THE For For Mgmt
AUDIT COMMISSION OF THE COMPANY
19 ELECT FEDOROV ALEKSANDR ANATOLIEVICH TO For For Mgmt
THE AUDIT COMMISSION OF THE COMPANY
20 ELECT SHUBIN YURIY IVANOVICH TO THE AUDIT For For Mgmt
COMMISSION OF THE COMPANY
05/18/04 - A Georgia Gulf Corp. *GGC* 373200203 03/29/04 60,000
1 Elect Directors For Split Mgmt
1.1 Elect Director Jerry R. Satrum ---
Withhold
We recommend a vote FOR the directors with the
exception of affiliated outsider Jerry R. Satrum.
We recommend that shareholders WITHHOLD votes from
Jerry R. Satrum for standing as an affiliated
outsider on the Audit Committee.
1.2 Elect Director Edward A. Schmitt --- For
1.3 Elect Director Yoshi Kawashima --- For
2 Ratify Auditors For For Mgmt
3 Amend Omnibus Stock Plan For For Mgmt
V.
Vote Recommendation The total cost of the company's
plans of 8.27 percent is within the allowable cap
for this company of 19.60 percent. Additionally,
this plan expressly forbids repricing.
4 Approve Executive Incentive Bonus Plan For For Mgmt
The performance measures included under the plan are
appropriate for the company given its line of business,
long-term strategic objectives, and industry-specific
measures for assessing market competitiveness.
Additionally, the plan is administered by a committee
of independent outsiders who must certify attainment of
these objective, measurable performance goals before
cash awards are paid to participants. Moreover,
preservation of the full deductibility of all
compensation paid reduces the company's corporate tax
obligation.
05/04/04 - A Georgia-Pacific Corp. *GP* 373298108 03/10/04 15,000
1 Elect Directors For Split Mgmt
1.1 Elect Director Barbara L. Bowles ---
Withhold
We recommend a vote FOR the directors with the
exceptions of James B. Williams, David R. Goode, Donald
V. Fites, and Barbara L. Bowles. We recommend that
shareholders WITHHOLD votes from James B. Williams,
David R. Goode, Donald V. Fites, and Barbara L. Bowles
for failing to remove a dead-hand, slow-hand, or
similar feature in the company's poison pill.
1.2 Elect Director Donald V. Fites ---
Withhold
1.3 Elect Director David R. Goode --- Withhold
1.4 Elect Director Karen N. Horn --- For
1.5 Elect Director William R. Johnson --- For
1.6 Elect Director James B. Williams ---
Withhold
2 Amend Omnibus Stock Plan For For Mgmt
V.
Vote Recommendation Although the total cost of the
company's plans of 2.87percent is within the
allowable cap for this company of 5.84 percent,
this company has repriced stock options without
shareholder approval in the past. The plan allows
repricing of underwater stock options without
shareholder approval, which we believe reduces the
incentive value of the plan.
3 Approve Executive Incentive Bonus Plan For For Mgmt
The performance measures included under the plan are
appropriate for the company given its line of business,
long-term strategic objectives, and industry-specific
measures for assessing market competitiveness.
Additionally, the plan is administered by a committee
of independent outsiders who must certify attainment of
these objective, measurable performance goals before
cash awards are paid to participants. Moreover,
preservation of the full deductibility of all
compensation paid reduces the company's corporate tax
obligation.
4 Ratify Auditors For For Mgmt
05/04/04 - A GREAT LAKES HYDRO *GLH.U* 390631109 03/29/04 100,000
1 Appoint Auditors of the Fund and For For Mgmt
Authorize GLPT Trustees to Fix
Remuneration of Auditors
Ernst & Young LLP, former auditor of the fund, is
not being proposed as auditors this year. The board
recommends that Deloitte & Touch LLP be approved as
the fund's independent accounting firm for the
coming year. There were no disagreements or
reportable events.
2 Direct the Sole Trustee to vote for the For For Mgmt
election of the GLPT Trustees: Andre
Bureau, Dian Cohen, Pierre Dupuis, Harry
A. Goldgut, Kenneth W. Harrigan, Edward C. Kress, and
Richard Legault
Given that unitholders may wish to express
differing views as to the suitability of the
trustee nominees, Fairvest takes the view that
unitholders should have the ability to cast ballots
with respect to individuals rather than the entire
slate. If this is possible, they will not be forced
to withhold votes for the board as a whole as their
only method of registering a negative view of an
individual or individuals. The Board of Trustees is
majority independent.
3 Direct the Sole Trustee to Appoint For For Mgmt
Auditors of GLPT and Authorize the GLPT
Trustees to Fix Remuneration of Auditors Ernst & Young
LLP, former auditor of the fund, is not being
proposed as auditors this year. The board
recommends that Deloitte & Touch LLP be approved as
the fund's independent accounting firm for the
coming year. There were no disagreements or
reportable events. For the last fiscal year, Ernst
& Young LLP billed the Fund and GLPT the following
fees: Audit Fees $132,686, Audit-related Fees
$49,228, Non-audit and other fees $55,750, for a
total of $237,664.
06/22/04 - A/S HARVEST ENERGY TR 41752X101 05/21/04 70,000
1 Re-appoint Valiant Trust Company as the For For Mgmt
Trustee of the Trust
This is a routine re-appointment.
2 Elect John Brussa, M. Bruce Chernoff, For For Mgmt
Hank Swartout, Verne Johnson, Hector
McFadyen as Directors of Harvest
Operations Corp.
Although these are routine appointments
shareholders may wish to express differing views as
to the suitability of the director nominees,
Fairvest takes the view that shareholders should
have the ability to cast ballots with respect to
individuals rather than the entire slate. If this
is possible, they will not be forced to withhold
votes for the board as a whole as their only method
of registering a negative view of an individual or
individuals. The board is a majority independent
and there are no insiders on the Audit or
Compensation Committees.
3 Ratify KPMG LLP as Auditors of the Trust For For Mgmt
KPMG LLP have been the company's auditors since 2002.
The circular does not provide the audit or non-audit
fees paid to the auditor over the most recent fiscal
year.
4 Amend Trust Unit Incentive Plan For Against Mgmt
This proposal seeks shareholder approval to amend the
Trust Unit Incentive Plan to reserve 366,250 additional
shares. The total cost of the company's plan is
compared to an allowable cap using a compensation
model. The allowable caps are industry-specific, market
cap-based, and pegged to the average amount paid by
companies performing in the top quartile of their peer
groupings. Industry classifications are established
using standard industry code (SIC) groups. Using
historic data tracked by Fairvest of the value of
authorized shares for issue at each company ranked in
the top quartile of its industry, a benchmark pay level
is established for each industry. The combined
shareholder value transfer for all equity-based plans
considered is 7.76 percent. The aggregate value of all
the proposals exceeds the company's allowable
shareholder value transfer cap of 5.80 percent.
However, Fairvest supports only those plans that
provide, in aggregate, the greatest shareholder value
transfer without exceeding the allowable cap and that
do not violate repricing or director participation
guidelines. The total cost of the Trust Unit Incentive
Plans of 6.49 percent is above the allowable cap for
this company of 5.80 percent. We oppose the amendment
to increase shares reserved for options, as well,
because it would appear that non-employee directors
participate in options on a discretionary basis. This
is a practice which gives rise to the possibility of
self-dealing by directors in options. Directors who are
able to grant themselves options without limit could
find their independence compromised. Unitholders should
note that the exercise price of incentive rights is
calculated by deducting from the grant price the
aggregate of all distributions, on a per unit basis,
made by the Trust after the grant date. The amended
Trust Unit Incentive Plan represents dilution of 7.77
percent on a fully-diluted basis.
5 Approve Unit Award Incentive Plan For Against Mgmt
This proposal reserves 150,000 shares under the Unit
Award Incentive Plan, which will grant restricted trust
units to directors, officers, employees and
consultants. The total cost of the company's plan is
compared to an allowable cap using a compensation
model. The allowable caps are industry-specific, market
cap-based, and pegged to the average amount paid by
companies performing in the top quartile of their peer
groupings. Industry classifications are established
using standard industry code (SIC) groups. Using
historic data tracked by Fairvest of the value of
authorized shares for issue at each company ranked in
the top quartile of its industry, a benchmark pay level
is established for each industry. The combined
shareholder value transfer for all equity-based plans
considered is 7.76 percent. The aggregate value of all
the proposals exceeds the company's allowable
shareholder value transfer cap of 5.80 percent.
However, Fairvest supports only those plans that
provide, in aggregate, the greatest shareholder value
transfer without exceeding the allowable cap and that
do not violate repricing or director participation
guidelines. The total cost of the Unit Award Incentive
Plan of 0.77 percent is within the allowable cap for
this company of 5.80 percent. We oppose the amendment
to increase shares reserved for options, however,
because it would appear that non-employee directors
participate in options on a discretionary basis. This
is a practice which gives rise to the possibility of
self-dealing by directors in options. Directors who are
able to grant themselves options without limit could
find their independence compromised. Shareholders
should note that this plan could allow options to be
granted with a discounted exercise price if permitted
for by the TSX Venture Exchange. The Unit Award
Incentive Plan represents dilution of 0.86 percent on a
fully-diluted basis.
6 Approve Directors and Officers For Against Mgmt
Compensation Plan
This proposal reserves 100,000 shares under the
Directors and Officers Compensation Plan, which
will grant deferred unit rights to directors and
officers. The total cost of the company's plan is
compared to an allowable cap using a compensation
model. The allowable caps are industry-specific,
market cap-based, and pegged to the average amount
paid by companies performing in the top quartile of
their peer groupings. Industry classifications are
established using standard industry code (SIC)
groups. Using historic data tracked by Fairvest of
the value of authorized shares for issue at each
company ranked in the top quartile of its industry,
a benchmark pay level is established for each
industry. The combined shareholder value transfer
for all equity-based plans considered is 7.76
percent. The aggregate value of all the proposals
exceeds the company's allowable shareholder value
transfer cap of 5.80 percent. However, Fairvest
supports only those plans that provide, in
aggregate, the greatest shareholder value transfer
without exceeding the allowable cap and that do not
violate repricing or director participation
guidelines. The total cost of the Directors and
Officers Compensation Plan of 0.51 percent is
within the allowable cap for this company of 5.80
percent. We oppose the amendment to increase shares
reserved for options, however, because it would
appear that non-employee directors participate in
options on a discretionary basis. This is a
practice which gives rise to the possibility of
self-dealing by directors in options. Directors who
are able to grant themselves options without limit
could find their independence compromised. The
amended plan represents dilution of 0.57 percent on
a fully-diluted basis.
7 Authorize New Class of Exchangeable Shares For Against Mgmt
Harvest Operations Corp. is currently authorized to
issue an unlimited number of common shares, first
preferred shares. As well, at last year's meeting,
unitholders approved the creation of class of
non-voting common shares, issuable in series. To
provide further financing flexibility the board of
directors of Harvest recommends creating a new class of
exchangeable shares, issueable in series. The
exchangeable shares will initially be exchangeable into
trust units on a one-for-one basis which then then be
adjusted to reflect trust unit distributions, as well
the shares will provide holders with economic,
ownership and voting rights that are substantially
equivalent to trust units. Fairvest prefers companies
and trusts to have simple straight-forward share
structures, where each security holder receives one
vote per each security held and all securities are of a
single class and therefore rank equally in terms of
dividends and asset distribution in the event of
liquidation or dissolution. As such we oppose the
creation of another class of shares.
06/10/04 - A/S HAWK ENERGY CORP 420090300 05/10/04 100,000
1 Fix Number of Directors at five For For Mgmt
This is a routine item.
2 Elect Stephen J. Fitzmaurice, David N. For For Mgmt
Bonnar, John D. Wright, Thomas W.
Buchanan, and Gregory G. Turnbull as
Directors
Given that shareholders may wish to express
differing views as to the suitability of the
director nominees, Fairvest takes the view that
shareholders should have the ability to cast
ballots with respect to individuals rather than the
entire slate. If this is possible, they will not be
forced to withhold votes for the board as a whole
as their only method of registering a negative view
of an individual or individuals. The board is
majority independent. There are no insiders on
either the Audit or Compensation Committees.
3 Appoint Auditors and Authorize Board to For For Mgmt
Fix Remuneration of Auditors
PricewaterhouseCoopers LLP have been the company's
auditors since 2003. The circular does not provide
the audit or non-audit fees paid to the auditor
over the most recent fiscal year.
4 Approve Stock Option Plan For Against Mgmt
This item will affirm the company's ten percent rolling
stock option plan. The total cost of the company's plan
is compared to an allowable cap using a compensation
model. The allowable caps are industry-specific, market
cap-based, and pegged to the average amount paid by
companies performing in the top quartile of their peer
groupings. Industry classifications are established
using standard industry code (SIC) groups. Using
historic data tracked by Fairvest of the value of
authorized shares for issue at each company ranked in
the top quartile of its industry, a benchmark pay level
is established for each industry. The total cost of the
company's plan of 7.60 percent is within the allowable
cap for this company of 7.62 percent. Fairvest prefers
companies to adopt a fixed maximum number of shares to
be reserved pursuant to options plans, rather than
'rolling' stock option plans. We oppose this
resolution, however, because it would appear that
non-employee directors participate in options on a
discretionary basis. This is a practice which gives
rise to the possibility of self-dealing by directors in
options. Directors who are able to grant themselves
options without limit could find their independence
compromised. Shareholders should note that this plan
could allow options to be granted with a discounted
exercise price if permitted for by the TSX Venture
Exchange. The amended plan could represent dilution of
up to 8.52 percent on a fully-diluted basis at any
point in time.
05/12/04 - A Hercules Inc. *HPC* 427056106 03/22/04 150,000
1 Elect Directors For For Mgmt
1.1 Elect Director Craig A. Rogerson --- For
1.2 Elect Director John C. Hunter, III --- For
1.3 Elect Director Robert D. Kennedy --- For
2 Amend Articles to Elect Directors by For For Mgmt
Plurality Vote
Conclusion ISS supports the general notion that
shareholders should have greater choice in director
elections and greater input in the nomination
process. Given that: (i) plurality voting is the
currently accepted standard for the election of
directors of publicly traded companies, (ii)
requiring a majority vote of the outstanding shares
could disrupt board operations and the company's
financial performance in the event some or all of
the director nominees do not receive majority
support and do not get elected, (iii) requiring a
majority vote of the outstanding shares can in
effect provide for a supermajority of votes cast,
which would adversely affect shareholders' ability
to elect directors in a contested election, and
(iv) a majority voting threshold may diminish the
likelihood of a successful open access campaign by
providing for an increased vote requirement in the
election of directors, ISS believes that
management's proposal towards a plurality voting
system warrants shareholder support.
3 Ratify Auditors For For Mgmt
4 Amend Articles to Provide Shareholders For For Mgmt
with Right to Act by Written Consent and
Call Special Meetings
Conclusion If this proposal is implemented,
shareholders would have greater ability to remove
directors or initiate shareholder resolutions
without waiting for the next scheduled meeting.
Shareholders could also find it easier to respond
to a beneficial offer as a bidder who already owns
shares would have the option to call a special
meeting. ISS commends management for submitting
this proposal, which demonstrates a commitment to
shareholders' interests.
04/14/04 - A HIGH POINT RESOURCES INC (formerly 42976P106 03/05/04 300,000
High Pt Energy Corp)
1 Fix Number of Directors For For Mgmt
2 Elect Glenn Carley, Glen Yeryk, Gary For For Mgmt
Bauer, John Brussa, Fred Coles, Christina
Fehr, Donald Rowden as Directors
Although these are routine appointments
shareholders may wish to express differing views as
to the suitability of the director nominees,
Fairvest takes the view that shareholders should
have the ability to cast ballots with respect to
individuals rather than the entire slate. If this
is possible, they will not be forced to withhold
votes for the board as a whole as their only method
of registering a negative view of an individual or
individuals. There are no insiders on the Audit or
Compensation Committees.
3 Approve Auditors and Authorize Board to For For Mgmt
Fix Remuneration of Auditors
Ernst & Young LLP have been the company's auditors
since 2001. The circular does not provide the audit
or non-audit fees paid to the auditor over the most
recent fiscal year.
05/11/04 - A Huaneng Power International Inc. 443304100 03/29/04 7,000
Meeting for Holders of ADRs
1 TO CONSIDER AND APPROVE THE WORKING For For Mgmt
REPORT FROM THE BOARD OF DIRECTORS OF THE
COMPANY FOR YEAR 2003.
2 TO CONSIDER AND APPROVE THE WORKING For For Mgmt
REPORT FROM THE SUPERVISORY COMMITTEE OF
THE COMPANY FOR YEAR 2003.
3 TO CONSIDER AND APPROVE THE AUDITED For For Mgmt
FINANCIAL STATEMENTS OF THE COMPANY FOR
YEAR 2003.
4 Ratify Auditors For For Mgmt
5 TO CONSIDER AND APPROVE THE PROPOSAL For For Mgmt
REGARDING THE ADJUSTMENT OF THE
REMUNERATION OF INDEPENDENT DIRECTORS.
6 TO CONSIDER AND APPROVE THE PROFIT For For Mgmt
DISTRIBUTION PLAN OF THE COMPANY FOR YEAR
2003.
The company
proposed to distribute RMB 5 ($0.60) and bonus issue of
five shares per 10 shares
held.
7 TO CONSIDER AND APPROVE THE PROPOSAL For For Mgmt
REGARDING ISSUE OF NEW SHARES BY
CONVERSION OF THE ADDITIONAL PAID-IN
CAPITAL AND THE SURPLUS RESERVE FUND.
The proposal seeks to capitalize a portion of the
company's capital reserve and retained earning and
distribute new fully paid shares to shareholders
free of charge; there is no cost to shareholders to
maintain their stakes and no risk of dilution. This
procedure transfers wealth to shareholders and does
not significantly impact share value. The only
impact on shareholders is that by increasing the
number of shares on issue, the company could
increase liquidity, enhance marketability, and
ultimately expand its shareholder base. This item
is pursuant to the bonus issue of item 6.
8 TO CONSIDER AND APPROVE THE PROPOSED For For Mgmt
AMENDMENTS TO THE ARTICLES OF ASSOCIATION.
The proposal seeks to amend artilcles of
association to reflect registered capital and its
capital structure due to 2003 bonus issue; to
insert a pragraph that requires shareholders'
approval for guarantee provided by the company that
has amount greater than 20 percent of the company's
net assets, board of directors' consent for amount
range between five to 20 percent of the company's
net assets, and chairman and vice chairman of the
board to decide on guarantee less than five
percent; and other technical amendments that will
have neutral effect to shareholders' value.
06/15/04 - S Huaneng Power International Inc. 443304100 05/04/04 7,000
Meeting for Holders of ADRs
1 TO APPROVE THE ACQUISITION OF 40% For For Mgmt
INTEREST IN HEBEI HANFENG POWER GENERATION LIMITED
LIABILITY COMPANY AND 90% INTEREST IN JINGGANGSHAN
HUANENG POWER GENERATION LIMITED LIABILITY COMPANY.
Items 1 and 2 concern proposed acquisitions by the
company of five power plants in the People's
Republic of China (the PRC). Item 1seeks
shareholder approval for the company's purchase of
a 40 percent interest in Hebei Hanfeng Power
Generation Ltd. Liability Co. (Hanfeng Power Plant)
and a 90 percent interest in Jinggangshan Huaneng
Power Generation Ltd. Liability Co. (Jinggangshan
Power Plant) from China Huaneng Group (Huaneng
Group) for an aggregate consideration of RMB1.9
billion ($235.2 million). On the other hand, Item 2
seeks shareholder approval for the company to
acquire a 55 percent interest in Huaneng Hunan
Yueyang Power Generation Ltd. Liability Co.
(Yueyang Power Plant) and a 60 percent interest in
Huaneng Chongqing Luohuang Power Generation Ltd.
Liability Co. (Luohuang Power Plant) and the entire
assets and liabilities of Huaneng Intl. Power Devt.
Corp. Yingkou Branch Co. (Yingkou Power Plant) from
Huaneng Intl. Power Devt. Corp. (HIPDC) for an
aggregate consideration of RMB2.6 billion ($309.4
million). The aggregate consideration payable by
the company under the two acquisition proposals
amounts to approximately RMB4.5 billion ($544.6
million). Half of the total consideration will be
financed by cash resources of the company and its
subsidiaries (the Group) while the remaining half
will be funded by bank loans. Huaneng Power Plant
operates in the Hebei Province, adjacent to the
capital Beijing and Tianjin which is an important
commercial port in the northern region of the PRC.
Jinggangshan Power Plant is situated in Jiangxi
Province, in the souteast part of the PRC. Yueyang
Power Plant operates in Hunan Province, a province
noted for its relatively high coal output in the
southern part of the PRC. Luohuang Power Plant is
situated in the Chonqing Muncipality, considered to
be the largest multi-functional modern industrial
and commercial city in the western part of the PRC.
Lastly, Yingkou Powerplant is located in Liaoning
Province, a coastal region considered to be an
essential passageway for foreign trade and
international communication in northeast China. The
acquisitions were deemed as fair as they were
examined by N M Rothschild & Sons (Hong Kong) Ltd.
(Rothschild), an independent financial evaluator.
The deals appear to be fair to shareholders in that
the consideration payable by the company for the
acquisition of the five power plants discussed
above falls within the range of comparable
transactions as found by Rothschild. The enterprise
value/earnings before interest, tax, depreciation
and amortization (EV/EBITDA) of 5.7 times and
earnings multiple of 8.7 times are lower than 1)
the average EV/EBITDA and earnings multiple of
comparable Hong Kong-listed companies of 8.9 times
and 17.5 times respectively and 2) the average
EV/EBITDA of 6.1 times and earnings multiple of
10.9 times for comparable acquisition transactions
in the Chinese electric power generation sector. In
addition, these proposals are in line with the
company's objective of acquiring existing and
developing new power plants. The acquisitions are
seen to increase the company's market share and
allow the company to maintain its competitive
position in a period when reforms in the PRC's
power generation sector are being undertaken and
competition is being introduced. In view of these,
we recommend shareholders to vote in favor of the
proposed acquisitions in Item 1 and Item 2.
2 TO APPROVE THE ACQUISITION OF 55% For For Mgmt
INTEREST IN HUANENG HUNAN YUEYANG POWER GENERATION
LIMITED LIABILITY COMPANY, 60% INTEREST IN HUANENG
CHONGNING LUOBUANG POWER GENERATION LIMITED LIABILITY
COMPANY, ALL AS MORE FULLY DESCRIBED IN THE CIRCULAR.
Refer to the discussion in Item 1.
3 TO APPROVE THE GUARANTEE ARRANGEMENTS AND For Against Mgmt
AGREEMENTS, ALL AS MORE FULLY DESCRIBED
IN THE CIRCULAR.
This item seeks approval for guarantee arrangements
and agreements between Hanfeng Power Plant,
Jinggangshan Power Plant and Huaneng Group together
with the company's assumption of the existing
guarantee of Jinggangshan Power Plant originally
provided by Huaneng Group. However, the company did
not provide sufficient information on the terms of
the agreements. As such, we are unable to ascertain
whether the terms of the agreements are fair and
reasonable to the company and its shareholders.
Given that this proposal may potentially increase
the company's liabilities, we recommend
shareholders to vote against this resolution.
4 TO APPROVE THE ENTRUSTED LOAN For Against Mgmt
ARRANGEMENT, ALL AS MORE FULLY DESCRIBED
IN THE CIRCULAR.
Item 4 concerns the entrusted loan arrangement
between Yueyang Power Plant, HIPDC and China
Huaneng Finance Co., the entrusted loan arrangement
in respect of Yingkou Power Plant and other loan
arrangements and agreements with respect to other
power plants proposed to be acquired by the company
in Items 1 and 2. Given that this proposal may
potentially increase the company's liabilities and
insufficient information was provided, we are
unable to ascertain whether the terms of the
agreements are fair and reasonable to the company
and its shareholders. As such, we recommend
shareholders to vote against this resolution.
5 TO APPROVE THE LOAN AND DEPOSIT For Against Mgmt
ARRANGEMENT, ALL AS MORE FULLY DESCRIBED
IN THE CIRCULAR.
This item seeks to approve loan and deposit
arrangements concerning several power plants
proposed to be acquired by the company in Items 1
and 2. In view of the insufficient data available,
we are unable to ascertain whether the terms of the
agreements are fair and reasonable to the company
and its shareholders. As this proposal may
potentially increase the company's liabilities, a
vote against this resolution is recommended.
05/26/04 - A ICI (Imperial Chemical Industries 452704505 04/07/04 80,000
Plc)
Meeting for Holders of ADRs
1 ADOPTION OF THE DIRECTORS REPORT AND For For Mgmt
ACCOUNTS FOR THE YEAR TO DECEMBER 31,
2003.
2 APPROVE THE DIRECTORS REMUNERATION REPORT. For For Mgmt
3 CONFIRMATION OF DIVIDENDS. For For Mgmt
4 RE-ELECTION OF DR JDG MCADAM AS A For For Mgmt
DIRECTOR.
5 RE-ELECTION OF LORD BUTLER AS A DIRECTOR. For For Mgmt
6 ELECTION OF MR PB ELLWOOD AS A DIRECTOR. For For Mgmt
7 ELECTION OF MR DCM HAMILL AS A DIRECTOR. For For Mgmt
8 ELECTION OF BARONESS NOAKES AS A DIRECTOR. For For Mgmt
9 Ratify Auditors For For Mgmt
10 REMUNERATION OF AUDITORS. For For Mgmt
11 ICI EXECUTIVE SHARE OPTION PLAN 2004. For For Mgmt
12 ALLOTMENT OF SHARES. For For Mgmt
13 DISAPPLICATION OF PRE-EMPTION RIGHTS. For For Mgmt
14 PURCHASE BY THE COMPANY OF ITS OWN SHARES. For For Mgmt
04/28/04 - S Impact Energy, Inc. 45254X105 03/29/04 955,800
1 Approve Plan of Arrangement with Thunder For For Mgmt
Energy Inc
04/21/04 - A/S Inco Ltd. *N.* 453258402 03/16/04 60,000
1 Amend Bylaws Re:Declassify the Board For For Mgmt
2 Elect Directors For For Mgmt
3 Approve Auditors and Authorize Board to For For Mgmt
Fix Remuneration of Auditors
4 Other Business (Voting) For Against Mgmt
As we cannot know the content of the issues to be
raised under this item we do not recommend
shareholders approve this resolution.
06/10/04 - A Ivanhoe Mines Ltd. (Formerly 46579N103 04/21/04 100,000
Indochina Goldfields Ltd) *IVN*
1 Amend By-Law No. 1 For For Mgmt
2 Approve Issuance of up to 50 million For For Mgmt
Equity Securities
3 Approve Increase in Number of Directors For For Mgmt
to 12
4 Elect Directors For For Mgmt
5 Appoint Deloitte & Touche, Chartered For For Mgmt
Accountants as Auditors and Authorize
Board to Fix Remuneration of Auditors
05/20/04 - A Jiangxi Copper Y4446C100 04/20/04 3,500,000
1 Accept Report of Directors For For Mgmt
2 Accept Report of the Supervisory Committee For For Mgmt
3 Accept Financial Statements and Auditors' For For Mgmt
Reports
4 Approve Proposal for Profit Distribution For For Mgmt
The board is proposing a final dividend of RMB0.012
($0.001) per 10 shares.
5 Reappoint Deloitte Touche Tohmatsu For For Mgmt
Shanghai CPA Ltd. and Deloitte Touche
Tohmatsu as the Company's PRC and
International Auditors and Authorize Any
Two Executive Directors to Fix Their
Remuneration and to Enter into the
Service Agreement with the Auditors
6 Approve Issuance of Equity or For Against Mgmt
Equity-Linked Securities without
Preemptive Rights
ISS recommends voting against the issuance of
shares without preemptive rights unless the company
provides specific language and terms that there
will be (1) adequate restrictions on discounts and
(2) no authority to refresh the share issuance
amounts without prior shareholder approval. This is
in light of abuses made by a number of Hong Kong
companies that have issued shares at steep
discounts to related parties and renewed the share
issuance amount under this authority without
shareholder approval, which are permissible under
current law.
06/01/04 - A/S KENSINGTON ENERGY LTD 489906107 04/15/04 950,000
1 Elect P. Gren Schoch, Donald S. Wood, For For Mgmt
John M. Gareau, Richard R. Couillard,
David H. Erickson, and Thomas L. Love as
Directors
Given that shareholders may wish to express
differing views as to the suitability of the
director nominees, Fairvest takes the view that
shareholders should have the ability to cast
ballots with respect to individuals rather than the
entire slate. If this is possible, they will not be
forced to withhold votes for the board as a whole
as their only method of registering a negative view
of an individual or individuals. The board is
majority independent. There are no insiders on
either the Audit or Compensation Committees.
2 Appoint Auditors and Authorize Board to For For Mgmt
Fix Remuneration of Auditors
Ernst & Young LLP have been the company's auditors
since 1995. For fiscal 2003, the auditors were paid
the following fees: $28,000 for audit of financial
statements, $2,050 for reviews of interim financial
statements and other meetings, $3,500 for
information circulars and other filing documents
and meetings, and $5,591 for tax advice and
compliance. In total, the fees paid to the auditors
were $38,141.
3 Amend Stock Option Plan For Against Mgmt
Shareholders are being asked to approve an amendment to
the company's stock option plan that would, if passed,
increase the number of shares available for issuance
pursuant to the plan by 1,821,560 shares. The total
cost of the company's plan is compared to an allowable
cap using a compensation model. The allowable caps are
industry-specific, market cap-based, and pegged to the
average amount paid by companies performing in the top
quartile of their peer groupings. Industry
classifications are established using standard industry
code (SIC) groups. Using historic data tracked by
Fairvest of the value of authorized shares for issue at
each company ranked in the top quartile of its
industry, a benchmark pay level is established for each
industry. The total cost of the company's plans of 6.57
percent is within the allowable cap for this company of
6.92 percent. We oppose the amendment to increase
shares reserved for options, however, because it would
appear that non-employee directors participate in
options on a discretionary basis. This is a practice
which gives rise to the possibility of self-dealing by
directors in options. Directors who are able to grant
themselves options without limit could find their
independence compromised. The amended plan represents
dilution of 9.09 percent on a fully-diluted basis.
4 Approve Issuance of Shares in One or More For Against Mgmt
Private Placements
Shareholders are being asked to provide blanket
approval for the potential issuance of up to
29,822,017 common shares, representing potential
dilution of 50 percent of the outstanding shares.
The shares have a 52-week high and low of $1.60 and
$0.50, respectively, and are currently trading at
$1.10 per share; as such any share issuances could
be issued at a 20 percent discount to the fair
market value as per Exchange regulations. Fairvest
prefers to see blanket approval for future private
placements to be capped at no more than 30 percent
of the outstanding shares. Given the potential for
excessive dilution, we do not recommend
shareholders approve this resolution.
05/12/04 - A/S KETCH RES LTD *KER.* 492562103 03/26/04 140,000
1 Fix Number of Directors at Seven For For Mgmt
2 Elect Daryl E. Birnie, C. Keith Caldwell, For Withhold Mgmt
J. Paul Charron, Grant B. Fagerheim, James H.
McKelvie, Gerry A. Romanzin and Grant A. Zawalsky as
Directors
Given that shareholders may wish to express
differing views as to the suitability of the
director nominees, Fairvest takes the position that
shareholders should have the ability to cast
ballots with respect to individuals rather than the
entire slate. We recommend withholding votes from
the entire slate because Grant Fagerheim (the CEO)
is an insider on the Compensation Committee.
3 Ratify Deloitte & Touche LLP as Auditors For For Mgmt
4 Amend Stock Option Plan For Against Mgmt
Vote Recommendation The total cost of the company's
plans of 5.47 percent is within the allowable cap
for this company of 7.81 percent. We oppose the
amendment to increase shares reserved for options,
however, because it would appear that non-employee
directors participate in options on a discretionary
basis. This is a practice which gives rise to the
possibility of self-dealing by directors in
options. Directors who are able to grant themselves
options without limit could find their independence
compromised. Note that potential dilution is 9.01
percent of fully diluted shares.
06/01/04 - A Labrador Iron Ore Royalty Income 504904103 04/16/04 100,000
Fund *LIF.U*
1 Approve Increase in the Number of For For Mgmt
Trustees from 5 to 6
2 Elect Bruce Bone, William Corcoran, James For For Mgmt
McCartney, Paul Palmer, Alan Thomas and
Donald Worth as Trustees
3 Appoint Deloitte & Touche LLP as Auditors For For Mgmt
05/19/04 - A/S Lionore Mining International Ltd. 535913107 04/12/04 250,000
*LIM*
1 Elect Alan Thompson, Gilbert Playford, For For Mgmt
Louis Riopel, Donald Bailey, Ted Mayers,
Colin Steyn, Oyvind Hushovd, Joshua Pitt,
as Directors
2 Approve Auditors and Authorize Board to For For Mgmt
Fix Remuneration of Auditors
3 Amend Articles of Continuance For For Mgmt
Re:Preferred Share Rights
4 Adopt New By-Laws For For Mgmt
05/04/04 - A Lone Star Technologies, Inc. *LSS* 542312103 03/15/04 50,000
1 Elect Directors For For Mgmt
2 Approve Omnibus Stock Plan For Against Mgmt
05/03/04 - A Louisiana-Pacific Corp *LPX* 546347105 03/05/04 80,000
1 Elect Directors For Split Mgmt
1.1 Elect Director Dustan E. McCoy --- For
We recommend a vote FOR the directors with the
exception of affiliated outsider Lee C. Simpson. We
recommend that shareholders WITHHOLD votes from Lee
C. Simpson for standing as an affiliated outsider
on the Nominating Committee.
1.2 Elect Director Lee C. Simpson --- Withhold
1.3 Elect Director Colin D. Watson --- For
2 Amend Omnibus Stock Plan For For Mgmt
V.
Vote Recommendation The total cost of the company's
plans of 7.31 percent is within the allowable cap
for this company of 8.34 percent. Additionally,
this plan expressly forbids repricing. ISS noted
that the top five named officers received
approximately 49 percent of the total 2003 equity
grants.
3 Amend Non-Employee Director Restricted For For Mgmt
Stock Plan
V.
Vote Recommendation The total cost of the company's
plans of 4.11 percent is within the allowable cap
for this company of 8.34 percent. Additionally,
this plan expressly forbids repricing.
4 Amend Non-Employee Director Stock Option For For Mgmt
Plan
VI.
Vote Recommendation The total cost of the company's
plans of 4.11 percent is within the allowable cap
for this company of 8.34 percent. Additionally,
this plan expressly forbids repricing.
5 Amend Executive Incentive Bonus Plan For For Mgmt
The performance measures included under the plan are
appropriate for the company given its line of business,
long-term strategic objectives, and industry-specific
measures for assessing market competitiveness.
Additionally, the plan is administered by a committee
of independent outsiders who must certify attainment of
these objective, measurable performance goals before
cash awards are paid to participants. Moreover,
preservation of the full deductibility of all
compensation paid reduces the company's corporate tax
obligation.
6 Ratify Auditors For For Mgmt
7 Separate Chairman and CEO Positions Against For ShrHoldr
Based on the above structure, LP did not meet most
of the criteria and therefore ISS recommends voting
FOR this proposal.
8 Report on Greenhouse Gas Emissions Against Against ShrHoldr
In this case, Louisiana Pacific provides some
disclosure on the topics brought forth by the
proponents in its Environmental, Forestry and Safety
Report and other environmental sections of the
company's web site. Moreover, the request to study the
feasibility of obtaining Forest Stewardship Council
(FSC) certification by January 2005 may not be feasible
and may not serve to enrich shareholder value. It
appears from existing disclosure that the company is
committed to improved environmental performance and the
reduction of greenhouse gas emissions and has engaged
other organizations in addressing and monitoring its
performance these issues. While the company could
continue to expand its disclosure in these areas, we
agree with management that it has substantially
addressed the intent of this proposal. As such, we
believe that preparation of a new and separate report
may not provide enough additional useful information to
justify the time and expense of creating such a
document.
05/19/04 - A LUKE ENERGY LTD 54985P100 04/07/04 100,000
1 Elect Ronald L. Belsher, Mary Blue, David For Withhold Mgmt
Crevier, Alain Lambert, Hugh Mogensen,
Harold Pedersen, Lyle Schultz, and Ronald
Woods as Directors
Given that shareholders may wish to express
differing views as to the suitability of the
director nominees, Fairvest takes the view that
shareholders should have the ability to cast
ballots with respect to individuals rather than the
entire slate. If this is possible, they will not be
forced to withhold votes for the board as a whole
as their only method of registering a negative view
of an individual or individuals. We recommend
withholding votes from the entire slate because
Harold Pedersen is an insider on the Compensation
Committee. The board is majority independent.
2 Appoint Auditors and Authorize Board to For For Mgmt
Fix Remuneration of Auditors
KPMG LLP have been the company's auditors since
2003. The circular does not provide the audit or
non-audit fees paid to the auditor over the most
recent fiscal year.
05/03/04 - A Maverick Tube Corp. *MVK* 577914104 03/05/04 50,000
1 Elect Directors For For Mgmt
2 Approve Omnibus Stock Plan For For Mgmt
V.
Vote Recommendation The total cost of the company's
plans of 2.81 percent is within the allowable cap
for this company of 10.32 percent. Additionally,
this plan expressly forbids repricing.
3 Approve Non-Employee Director Omnibus For For Mgmt
Stock Plan
VI.
Vote Recommendation The total cost of the company's
plans of 1.98 percent is within the allowable cap
for this company of 10.32 percent.
4 Ratify Auditors For For Mgmt
06/17/04 - A/S MUSTANG RES INC CDA 62820Q100 05/14/04 100,000
1 Fix Number of Directors at four For For Mgmt
This is a routine item.
2 Elect Richard A.M. Todd, Donald For For Mgmt
Archibald, Bill Friley, Jr., and Kel
Johnston as Directors
Given that shareholders may wish to express
differing views as to the suitability of the
director nominees, Fairvest takes the view that
shareholders should have the ability to cast
ballots with respect to individuals rather than the
entire slate. If this is possible, they will not be
forced to withhold votes for the board as a whole
as their only method of registering a negative view
of an individual or individuals. The board is
majority independent. There are no insiders on
either the Compensation or Audit Committees.
3 Appoint Auditors and Authorize Board to For For Mgmt
Fix Remuneration of Auditors
Collins Barrow LLP have been the company's auditors
since 2002. The circular does not provide the audit
or non-audit fees paid to the auditor over the most
recent fiscal year.
4 Approve and Ratify Corporation's current For Against Mgmt
Stock Option Plan
This item will reaffirm the company's ten percent
rolling stock option plan. The total cost of the
company's plan is compared to an allowable cap
using a compensation model. The allowable caps are
industry-specific, market cap-based, and pegged to
the average amount paid by companies performing in
the top quartile of their peer groupings. Industry
classifications are established using standard
industry code (SIC) groups. Using historic data
tracked by Fairvest of the value of authorized
shares for issue at each company ranked in the top
quartile of its industry, a benchmark pay level is
established for each industry. The total cost of
the company's plan of 9.19 percent is above the
allowable cap for this company of 6.66 percent.
Fairvest prefers companies to adopt a fixed maximum
number of shares to be reserved pursuant to options
plans, rather than 'rolling' stock option plans. We
also oppose this resolution because it would appear
that non-employee directors participate in options
on a discretionary basis. This is a practice which
gives rise to the possibility of self-dealing by
directors in options. Directors who are able to
grant themselves options without limit could find
their independence compromised. Shareholders should
note that this plan could allow options to be
granted with a discounted exercise price if
permitted for by the TSX Venture Exchange. The
amended plan could represent dilution of up to
10.84 percent on a fully-diluted basis at any point
in time.
5 Approve adoption of a new Stock Option For Against Mgmt
Plan to be implemented upon listing of
the shares on the Toronto Stock Exchange
Shareholders are being asked to approve a new stock
option plan in conjunction with the company's plans
to de-list from the TSX Venture Exchange and list
on the Toronto Stock Exchange. If passed, this plan
would reserve for issuance under it the lesser of
10% of the outstanding common shares and 2,500,000
Class A Shares. The total cost of the company's
plan is compared to an allowable cap using a
compensation model. The allowable caps are
industry-specific, market cap-based, and pegged to
the average amount paid by companies performing in
the top quartile of their peer groupings. Industry
classifications are established using standard
industry code (SIC) groups. Using historic data
tracked by Fairvest of the value of authorized
shares for issue at each company ranked in the top
quartile of its industry, a benchmark pay level is
established for each industry. The total cost of
the company's plans of 9.19 percent is above the
allowable cap for this company of 6.66 percent. We
also oppose this resolution because it would appear
that non-employee directors participate in options
on a discretionary basis. The amended plan
represents dilution of 10.84 percent on a
fully-diluted basis.
06/01/04 - A Nabors Industries, Ltd. *NBR* G6359F103 04/08/04 25,000
Meeting for Holders of ADRs
1 Elect Directors For For Mgmt
1.1 Elect Director James L. Payne --- For
These are routine board elections.
1.2 Elect Director Hans W. Schmidt --- For
2 Ratify Auditors For For Mgmt
3 SHAREHOLDER PROPOSAL TO CHANGE NABORS Against Against Mgmt
JURISDICTION OF INCORPORATION FROM
BERMUDA TO DELAWARE.
ISS believes that support of this shareholder
resolution is not warranted at this time as the
board has adequately addressed many of the concerns
associated with this proposal. Based on our
assessment of the significant economic benefits to
shareholders and the company's good disclosure,
transparency, and the commitments made to reduce
shareholders' jurisdictional concerns, ISS
recommends that shareholders oppose this
shareholder-requisitioned proposal.
05/11/04 - A/S NAL OIL & GAS TR *NAE.U* 628949109 04/08/04 150,000
1 Elect J. Charles Caty, Irvine J. Koop, For For Mgmt
Dennis G. Flanagan, and Barry D. Stewart
as independent Directors
Given that unitholders may wish to express
differing views as to the suitability of the
director nominees, Fairvest takes the view that
unitholders should have the ability to cast ballots
with respect to individuals rather than the entire
slate. If this is possible, they will not be forced
to withhold votes for the board as a whole as their
only method of registering a negative view of an
individual or individuals. The board is majority
independent.
2 Appoint Auditors For For Mgmt
KPMG LLP have been the trust's auditors since 1996. The
circular does not provide the audit or non-audit fees
paid to the auditor over the most recent fiscal year.
3 Amend the Amended and Restated Unanimous For For Mgmt
Shareholder Agreement
This amendment to the Amended and Restated
Unanimous Shareholder Agreement (USA) will preserve
the current process for appointing and electing
directors to the Board. As such, three directors
will continue to be appointed by the trust's
Manager, NAL Energy Resource Management Limited
(which is a wholly-owned subsidiary of Manulife
Financial). Four (all independent directors) on the
board will continue to be elected by unitholders.
This amendment is necessary, according to the
circular, because of a change in the ownership of
NAL Energy Inc. Given that this resolution
preserves the status quo of the unitholders' right
to elect a majority of the board, we do not oppose
it.
05/19/04 - A National-Oilwell, Inc. *NOI* 637071101 03/22/04 50,000
1 Elect Directors For For Mgmt
06/01/04 - A Newalta Income Fund *NAL.U* 65020R109 04/22/04 50,000
1 Approve Deloitte & Touche LLP as Auditors For For Mgmt
and Authorize Board to Fix Remuneration
of Auditors
2 Elect A. P. Cadotte, R. M. MacDonald, R. For For Mgmt
Vance Milligan, F. Pardo, R. H. Pinder,
C. H. Riddell, R. L. Sifton and B. D.
Stewart as Trustees
04/29/04 - A NORANDA INCOME FUND 655432102 03/19/04 150,000
1 Approve Auditors of the Fund and For For Mgmt
Authorize Board to Fix Remuneration of
Auditors
Ernst & Young LLP have been the Fund's auditors
since its inception in 2002. The circular does not
provide the audit or non-audit fees paid to the
auditor over the most recent fiscal year.
2 Elect Don Wells, James Bacon, Lisa de For For Mgmt
Wilde, Bob Sippel, Roger Garon, George
Jones, Aaron Regent as Trustees
Although these are routine appointments
shareholders may wish to express differing views as
to the suitability of the director nominees,
Fairvest takes the view that shareholders should
have the ability to cast ballots with respect to
individuals rather than the entire slate. If this
is possible, they will not be forced to withhold
votes for the board as a whole as their only method
of registering a negative view of an individual or
individuals. There are no insiders on the Audit or
Compensation Committee.
3 Approve Auditors of the Operating Trust For For Mgmt
and Authorize Board to Fix Remuneration
of Auditors
Ernst & Young LLP have been the Operating Trust's
auditors since its inception in 2002. The circular
does not provide the audit or non-audit fees paid
to the auditor over the most recent fiscal year.
06/04/04 - A/S Northern Orion Resources Inc *NNO.* 665575106 04/22/04 2,194,700
1 Fix Number of Directors at Five For For Mgmt
2 Elect Director David Cohen For For Mgmt
3 Elect Director Robert Cross For For Mgmt
4 Elect Director John K. Burns For For Mgmt
5 Elect Director Robert Gayton For For Mgmt
6 Elect Director Michael Beckett For For Mgmt
7 Appoint Deloitte & Touche LLP as Auditors For For Mgmt
8 Authorize Board to Fix Remuneration of For For Mgmt
the Auditors
9 Amend Stock Option Plan Re: Increase For Against Mgmt
number of Shares Reserved
Vote Recommendation The total cost of the company's
plans of 4.94 percent is within the allowable cap
for this company of 6.66 percent. We oppose the
amendment to increase shares reserved for options,
however, because it would appear that non-employee
directors have the ability to participate in
options on a discretionary basis. Directors who are
able to grant themselves options without limit
could find their independence compromised.
10 Amend Stock Option Plan Re: Change to For Against Mgmt
Rolling Plan
Fairvest generally prefers option plans that
reserve a fixed number of options rather than
rolling option plans where the number of shares
reserved under option could fluctuate drastically
depending on the number of shares outstanding.
Given that we have recommended a vote against the
proposed amended stock option plan in item # 9
above due to certain negative aspects of the plan,
we do not recommend a vote in favour of this
resolution.
11 Approve Issuance of Shares in One or More For Against Mgmt
Private Placements
Given the potential for excessive dilution, we do
not recommend shareholders approve this resolution.
12 Amend Notice of Articles For Against Mgmt
Although unlimited authorized capital is permitted
under the BCA, the act by which the company is now
governed, Fairvest prefers to see companies with a
fixed maximum limit on authorized capital which can be
increased when needed. As such, we oppose this
amendment and recommend a vote against this resolution
for this reason.
13 Other Business For Against Mgmt
As we can not know the content of these issues, we
cannot recommend that shareholders approve this
request.
05/18/04 - A Northland Power Income Fund *NPI.U* 666910104 04/05/04 120,000
1 To Direct Computershare Trust Company of For For Mgmt
Canada to Vote Trust Units to Elect A.
Warren Moysey, F. David Rounthwaite and
John N. Turner as Trustees.
2 Direct Trust Units to be Voted for the For For Mgmt
Reappointment of Ernst & Young LLP as
Auditors of Commercial Trust, the Fund's
Subsidiary.
3 Ratify Ernst & Young as Auditors for the For For Mgmt
Fund
04/30/04 - A Occidental Petroleum Corp. *OXY* 674599105 03/03/04 25,000
1 Elect Directors For For Mgmt
2 Ratify Auditors For For Mgmt
3 Amend Non-Employee Director Restricted For For Mgmt
Stock Plan
V.
Vote Recommendation The total cost of the company's
plans of 4.89 percent is within the allowable cap
for this company of 7.12 percent.
4 Prohibit Awards to Executives Against Against ShrHoldr
05/13/04 - A PARAMOUNT ENERGY TR *PMT.U* 699219101 04/01/04 200,000
1 To Re-appoint Computershare Trust Company For For Mgmt
of Canada as Trustee of Paramount Energy
Trust
2 To Instruct Computershare Trust Company For For Mgmt
of Canada to Fix number of Directors at
Six.
3 To Instruct Computershare Trust Company For Withhold Mgmt
of Canada to Elect as Directors Clayton
H. Riddell, Susan L. Riddell Rose, Karen
A. Genoway, Donald J. Nelson, John W.
Peltier and Howard R. Ward.
Although these are routine appointments,
unitholders may wish to express differing views as
to the suitability of the director nominees. For
this reason, Fairvest takes the view that
unitholders should have the ability to cast ballots
with respect to individuals rather than the entire
slate. If this is possible, they will not be forced
to withhold votes for the board as a whole as their
only method of registering a negative view of an
individual or individuals. We recommend withholding
votes from the entire slate because Mr. Clayton
Riddell is an insider on the Compensation
Committee.
4 Ratify KPMG LLP as Auditors For For Mgmt
06/29/04 - A PATTERSON-UTI ENERGY INC. *PTEN* 703481101 05/28/04 20,000
1 Elect Directors For For Mgmt
2 Increase Authorized Common Stock For For Mgmt
The requested increase of 100,000,000 shares is
below the allowable threshold of 160,000,000
shares.
3 Amend Omnibus Stock Plan For For Mgmt
Given that the company will be entitled to a business
expense deduction due to the favorable tax treatment
attributable to Section 162(m), we believe the proposed
amendment warrants shareholder approval.
4 Amend Omnibus Stock Plan For For Mgmt
Given that the company will be entitled to a business
expense deduction due to the favorable tax treatment
attributable to Section 162(m), we believe the proposed
amendment warrants shareholder approval.
5 Ratify Auditors For For Mgmt
04/28/04 - A/S Peak Energy Services Ltd. *PES.U* 704909100 03/24/04 500,000
1 Fixing the Size of the Board of Directors For For Mgmt
of Peak at Five
This is a routine item.
2 Elect Christopher E. Haslam, Frederick A. For For Mgmt
Moore, William A. Gallacher, Lloyd Swift
and Richard A. Grafton as Directors
Although these are routine appointments given that
shareholders may wish to express differing views as
to the suitability of the director nominees,
Fairvest takes the view that shareholders should
have the ability to cast ballots with respect to
individuals rather than the entire slate. If this
is possible, they will not be forced to withhold
votes for the board as a whole as their only method
of registering a negative view of an individual or
individuals. The Five member board comprise of one
insider, the President and CEO of the company Mr.
Haslam and four independent outside directors. All
members of the audit and compensation committees
are independent and we thus support this slate.
3 Ratify KPMG LLP as Auditors For For Mgmt
KPMG have been the company's auditors since 1996. The
company's materials indicate that according to the
auditor, the financial statements present fairly, in
all material respects, the financial position of the
company as at December 31, 2003 and 2002.
4 Approve Arrangement for Trust Conversion For For Mgmt
Shareholders are asked to approve the special
resolution for an Arrangement providing for the
conversion of the company to an Energy services trust.
Shareholders who are non tax-exempt and Canadian
Resident will have a choice between i) one trust unit
of Peak Energy Services Trust for every two shares held
or ii) one exchangeable share, exchangeable to one
Trust unit with an adjustment for monthly cash
distributions. Non-resident, tax-exempt and U.S
shareholders will only have the option to accept a
trust unit for every two shares held. A total of 3.4
million exchangeable shares are issuable. In the event
that shareholders elect to receive more than this
maximum number of shares in aggregate, they will then
be prorated and the balance made up of trust units. All
unconverted exchangeable shares will be automatically
converted to units on the fifth anniversary of the
Arrangement. Monthly distributions made by the trust
will increase the exchange ratio in favour of the
holders. Option holders of the company could either
exercise vested options and subsequently convert into a
unit or accept a cash payment for the exercise price
differential. Rights of dissent are available to
shareholders. In order to restructure the company into
a trust the following transactions will be made;
AcquisitionCo will take up the shares of the company
and in exchange will issue trust notes to shareholders,
which will be converted to units when the Arrangement
comes into effect. The Trust will then transfer the
notes to Peak Commercial Trust (PCT) in exchange for
PCT notes and units. AcquisitionCo and the company will
be combined to form AmalgamationCo. PCT will hold all
outstanding shares of AmalgamationCo. AmalgamationCo in
turn will hold all assets of company through its
holding in the partnership. At the conclusion of the
Arrangement, shareholders will own all the units to the
Trust, which in turn will hold the stock of PCT. PCT
holds all outstanding shares of AmalgamationCo. The
option to convert to a Trust has been among several
other alternatives considered with a view to enhancing
shareholder value. The board recommends the conversion
on the basis that the operating nature of the
organization would remain unchanged while yielding tax
advantages. Furthermore shareholders who are tax-exempt
or are in tax deferral plans would retain the full
distributions made by the company. The board also feels
that the structure would better facilitate business
acquisitions and expansions as well as enhance external
liquidity. The board retained Orion Securities to carry
out the fairness opinion. The fairness opinion
concludes that the Arrangement is fair from a financial
view point to the shareholders. We also note that the
stock rose strong 24.2 percent immediately following
the announcement of the Arrangement and currently sits
at a 35.2 percent premium. We support the special
resolution on the basis that structure will add
considerable value to shareholders particularly due to
the high effective taxation rates incurred by the
company in recent years. We however add that the
shareholders obligations will no longer be limited to
the investment in the company due to the legal nature
of the trust structure.
5 Approve a Trust Unit Rights Incentive Plan For Against Mgmt
Following the conversion to an energy services trust,
management proposes the adoption of a unit rights
incentive plan. Given that the existing option plan
will be cancelled with all unexercised options being
offered its exercise price differential, the proposed
unit rights plan will effectively take its place. A
maximum of 997,117 units will be reserved for the Plan,
representing 5.1 percent of the units and exchangeable
shares following the Arrangement. The exercise period
is set at five years, while vesting will be decided for
each grant. All directors, officers, consultants and
employees are eligible for this plan. The exercise
price will be set by adjusting (reducing) the trading
price preceding the grant date by, the excess of the
net income of the trust over 10 percent of the
unitholders equity for each year, divided by the
weighted average number of units. While the units
reserved under the plan is well under fairvest's
benchmark of 10 percent we oppose the resolution as it
appears that non-employee directors participate in unit
rights on a discretionary basis. This is a practice
which gives rise to the possibility of self-dealing by
directors in unit rights. Directors who are able to
grant themselves options without limit could find their
independence compromised.
05/18/04 - A Petrochina Co. Ltd. 71646E100 04/05/04 40,000
Meeting for Holders of ADRs
1 TO APPROVE THE REPORT OF THE BOARD OF For For Mgmt
DIRECTORS OF THE COMPANY FOR THE YEAR
2003.
2 TO APPROVE THE REPORT OF THE SUPERVISORY For For Mgmt
COMMITTEE OF THE COMPANY FOR THE YEAR
2003.
3 TO APPROVE THE AUDITED FINANCIAL For For Mgmt
STATEMENTS OF THE COMPANY FOR THE YEAR
2003.
4 TO APPROVE THE DECLARATION AND PAYMENT OF For For Mgmt
A FINAL DIVIDEND FOR THE YEAR ENDED
DECEMBER 31, 2003 IN THE AMOUNT AND IN
THE MANNER RECOMMENDED BY THE BOARD OF
DIRECTORS.
5 TO APPROVE THE AUTHORISATION OF THE BOARD For For Mgmt
OF DIRECTORS TO DETERMINE THE
DISTRIBUTION OF INTERIM DIVIDEND FOR 2004.
6 RATIFY AUDITORS For For Mgmt
7 TO APPROVE THE PROPOSAL IN RELATION TO For For Mgmt
THE RE-ELECTION OF MR. CHEN GENG AS A
DIRECTOR OF THE COMPANY.
8 TO APPROVE THE PROPOSAL IN RELATION TO For For Mgmt
THE ELECTION OF MR. ZHOU JIPING AS A
DIRECTOR OF THE COMPANY.
9 TO APPROVE THE PROPOSAL IN RELATION TO For For Mgmt
THE ELECTION OF MR. DUAN WENDE AS A
DIRECTOR OF THE COMPANY.
10 TO APPROVE THE PROPOSAL IN RELATION TO For For Mgmt
THE ELECTION OF MR. SUN XIANFENG AS A
SUPERVISOR OF THE COMPANY.
11 TO APPROVE THE PROPOSAL IN RELATION TO For For Mgmt
THE ELECTION OF MR. XU FENGLI AS A
SUPERVISOR OF THE COMPANY.
12 TO ALLOT AND DEAL WITH ADDITIONAL For Against Mgmt
DOMESTIC SHARES.
ISS recommends voting against the issuance of
shares without preemptive rights unless the company
provides specific language and terms that there
will be (1) adequate restrictions on discounts and
(2) no authority to refresh the share issuance
amounts without prior shareholder approval. This is
in light of abuses made by a number of Hong Kong
companies that have issued shares at steep
discounts to related parties and renewed the share
issuance amount under this authority without
shareholder approval, which are permissible under
current law.
04/14/04 - A/S Petrofund Energy Trust (Formerly NCE 71648W108 02/27/04 90,000
PETROFUND)
Meeting For Trust Unitholders and PC
Exchangeable Shareholders
1 Elect James Allard, Sandra Cowan, John For For Mgmt
Driscoll, Jeffery Errico, Wayne Newhouse,
Frank Potter, Peter Thomson as Directors
of Petrofund Corp.
2 Ratify Auditors of the Trust For For Mgmt
3 Approve Restricted Unit Plan For For Mgmt
Please see the section below entitled 'Multiple
Plan Notes' for a further discussion of this and
other plans. Vote Recommendation The total cost of
the Restricted Unit Plan of 1.33 percent is within
the allowable cap for this company of 4.39 percent.
The plan includes an acceptable limit on the
participation of non-employee directors negating
Fairvest's concerns of self-dealing and compromised
director independence.
4 Approve Long Term Incentive Plan For For Mgmt
Multiple Plan Notes: The combined shareholder value
transfer for all equity compensation plans considered
is 2.53 percent. The aggregate value of all the
proposals does not exceed the company's allowable
shareholder value transfer cap of 4.39 percent.
Fairvest supports those plans that provide, in
aggregate, the greatest shareholder value transfer
without exceeding the allowable cap and that do not
violate repricing guidelines. Vote
Recommendation The total cost of the Long Term
Incentive Plan of 1.12 percent is within the allowable
cap for this company of 4.39 percent.
5 Amend the Trust Indenture and the Royalty For For Mgmt
Agreement
05/13/04 - A Pioneer Natural Resources Co. *PXD* 723787107 03/17/04 70,000
1 Elect Directors For For Mgmt
2 Ratify Auditors For For Mgmt
05/05/04 - A/S Placer Dome Inc. *PDG.* 725906101 03/19/04 80,000
1 Elect Directors For For Mgmt
2 Ratify Ernst & Young LLP as Auditors For For Mgmt
3 Adopt or Amend Shareholder Rights Plan For For Mgmt
(Poison Pill)
05/11/04 - A/S Precision Drilling Corporation *PD.* 74022D100 03/22/04 20,000
1 Elect W.C. Dunn, Robert J.S. Gibson, For For Mgmt
Murray K. Mullen, Patrick M. Murray, Fred
W. Pheasey, Robert L. Phillips, Hank B. Swartout,
H.Garth Wiggins as Directors
2 Ratify Auditors For For Mgmt
3 Approve 2004 Stock Option Plan For Against Mgmt
Vote Recommendation We commend the company for
expressly forbidding the repricing of stock options
under the plan and limiting director participation
in the plan. However, the total cost of the
company's plans of 3.54 percent is above the
allowable cap for this company of 3.51 percent.
05/13/04 - A/S Progress Energy Ltd. 742981103 04/08/04 107,500
1 Fix Number of Directors at Six For For Mgmt
2 Elect John M. Stewart, David D. Johnson, For For Mgmt
John A. Brussa, Frederick C. Coles, Gary
E. Perron and Terrance D. Svarich as Directors
3 Approve KPMG LLP as Auditors and For For Mgmt
Authorize Board to Fix Remuneration of
Auditors
4 Amend Stock Option Plan to Increase For Against Mgmt
Shares Reserved Thereunder
Vote Recommendation The total cost of the company's
plans of 5.34 percent is within the allowable cap
for this company of 5.72 percent. We cannot
recommend that shareholders support this proposal,
however, because the existing limit for
non-executive stock option grants and the proposed
limit are both objectionable to us. This is
particularly true of the proposed new cap of
250,000 shares underlying options each year for
non-employee directors as a group. Over a ten year
period, grants of this size would be equal to over
seven percent of the shares currently outstanding,
and this figure does not include the options
currently held by non-employee directors. Large
option grants to directors is a practice which
gives rise to the possibility of self-dealing by
directors in options. Directors who are able to
grant themselves options except on a very limited
basis could find their independence compromised.
5 Amend Stock Option Plan to Convert to For Against Mgmt
Rolling Plan
Vote Recommendation The total cost of the company's
plan if it is converted to a ten percent rolling
plan is 6.15 percent which is above the allowable
cap for this company of 5.72 percent. An amendment
to the non-employee director cap is not set out in
this agenda item. We note that the current limit of
shares underlying option grants to non-employee
directors is two percent of outstanding shares.
Fairvest took exception to this limit in 2002 when
the company sought an increase to shares reserved
under its plan. We continue to prefer a limit on
director options of a maximum equal to one percent
of outstanding shares for companies such as
Progress Energy Ltd.
06/28/04 - A/S Progress Energy Ltd. 742981103 05/28/04 107,500
1 Approve Plan of Arrangement with Cequel For For Mgmt
Energy
2 Approve Stock Option Plan for Cyries For For Mgmt
Energy
3 Approve Stock Option Plan for ProEx Energy For For Mgmt
4 Approve a Performance Unit Incentive Plan For For Mgmt
for Progress Energy Trust
5 Approve Issuance of Trust Units of Trust For For Mgmt
in Private Placement
6 Approve Issuance of Shares of Cyries, For For Mgmt
Warrants and Performance Shares in
Private Placements
7 Approve Issuance of Shares of ProEx, For For Mgmt
Warrants and Performance Shares in
Private Placements
8 Amend Stock Option Plan For For Mgmt
9 Fix Number of Directors at Six and Elect For For Mgmt
John M. Stewart, David D. Johnson, John
A. Brussa, Fredric C. Coles, Gary E.
Perron and Terrance D. Svarich as
Directors
10 Ratify KPMG LLP as Auditors For For Mgmt
04/26/04 - A Randgold Resources Ltd. 752344309 04/12/04 40,000
Meeting for Holders of ADRs
1 ORDINARY RESOLUTION - ADOPTION OF THE For For Mgmt
DIRECTORS REPORT AND ACCOUNTS
2 ORDINARY RESOLUTION - ADOPTION OF THE For Against Mgmt
REPORT OF THE REMUNERATION COMMITTEE
Notice periods that exceed two years are now out of
line with market practice. Because this company has
now had ample time to comply with this
recommendation or at least to shorten notice
periods to two years, and the company still has
not, we recommend that shareholders oppose this
item.
3 ORDINARY RESOLUTION - RE-ELECTION OF For For Mgmt
DIRECTOR: R I ISRAEL (CHAIRMAN OF
REMUNERATION COMMITTEE)
4 ORDINARY RESOLUTION - RE-ELECTION OF For For Mgmt
DIRECTOR: P LIETARD (MEMBER OF AUDIT AND
REMUNERATION COMMITTEES)
5 RATIFY AUDITORS For For Mgmt
6 ORDINARY RESOLUTION - APPROVE THE FEES For For Mgmt
PAYABLE TO THE DIRECTORS
7 SPECIAL RESOLUTION - AUTHORISE THE SUB For For Mgmt
DIVISION OF THE COMPANY S SHARE CAPITAL
8 SPECIAL RESOLUTION - AUTHORISE THE For For Mgmt
CANCELLATION OF US$100 MILLION SHARE
PREMIUM
9 SPECIAL RESOLUTION - AUTHORISE THE For For Mgmt
PURCHASE OF SHARES FOR CASH
10 SPECIAL RESOLUTION - AUTHORISE NEW For Against Mgmt
ARTICLES OF ASSOCIATION RELATING TO
DISCLOSURE BY HOLDERS OF COMPANY S SHARES
We disapprove of disenfranchising shareholders down
to the ridiculously low threshold of 0.25 percent
of a class. The legal disclosure threshold of 3
percent is perfectly adequate.
11 SPECIAL RESOLUTION - AMEND THE ARTICLES For For Mgmt
OF ASSOCIATION TO FACILITATE ELECTRONIC
COMMUNICATION WITH SHAREHOLDERS
04/07/04 - A Rio Tinto Plc (Formerly Rtz Corp. 767204100 03/01/04 15,000
Plc)
Meeting for Holders of ADRs
1 AUTHORITY TO ALLOT RELEVANT SECURITIES For For Mgmt
UNDER SECTION 80 OF THE COMPANIES ACT 1955
2 AUTHORITY TO ALLOT EQUITY SECURITIES FOR For For Mgmt
CASH UNDER SECTION 89 OF THE COMPANIES
ACT 1955
3 AUTHORITY TO PURCHASE RIO TINTO PLC For For Mgmt
SHARES BY THE COMPANY OR RIO TINTO LIMITED
4 APPROVAL OF THE MINING COMPANIES For For Mgmt
COMPARATIVE PLAN 2004 AND THE RIO TINTO
SHARE OPTION PLAN 2004
5 ELECTION OF SIR JOHN KERR AS A DIRECTOR For For Mgmt
6 RE-ELECTION OF MR LEIGH CLIFFORD AS A For For Mgmt
DIRECTOR
7 RE-ELECTION OF MR GUY ELLIOTT AS A For For Mgmt
DIRECTOR
8 RE-ELECTION OF SIR RICHARD SYKES AS A For For Mgmt
DIRECTOR (MEMBER OF THE REMUNERATIONS
COMMITTEE)
9 RE-ELECTION OF RICHARD GIORDANO AS A For For Mgmt
DIRECTOR (MEMBER OF THE AUDIT,
NOMINATIONS, SOCIAL/ENVIRONMENTAL
ACCOUNT. COMMITTEES)
10 Ratify Auditors For For Mgmt
11 APPROVAL OF REMUNERATION REPORT For For Mgmt
12 RECEIVE ANNUAL REPORT AND FINANCIAL For For Mgmt
STATEMENTS FOR THE YEAR ENDED 31 DECEMBER
2003
04/14/04 - A Schlumberger Ltd. *SLB* 806857108 02/25/04 20,000
Meeting for Holders of ADRs
1 Elect Directors For For Mgmt
2 ADOPTION AND APPROVAL OF FINANCIALS AND For For Mgmt
DIVIDENDS
3 APPROVAL OF ADOPTION OF THE 2004 STOCK For For Mgmt
AND DEFERRAL PLAN FOR NON-EMPLOYEE
DIRECTORS
4 APPROVAL OF AUDITORS For For Mgmt
05/04/04 - A Sempra Energy *SRE* 816851109 03/09/04 40,000
1 Elect Directors For For Mgmt
1.1 Elect Director Stephen L. Baum --- For
1.2 Elect Director Wilford D. Godbold, Jr.
--- For
1.3 Elect Director Richard G. Newman --- For
2 Approve Omnibus Stock Plan For For Mgmt
V.
Vote Recommendation We commend the company for
expressly forbidding the repricing of stock options
under the plan. Although, the total cost of the
company's plans of 11.15 percent is above the
allowable cap for this company of 6.76 percent, the
proposal is designed to bring the plan into
compliance with Section 162 (m) of the Internal
Revenue in order to preserve the tax deductibility
and provides for the issuance of awards with
performance-based criteria. Additionally, the plan
forbids repricing. We believe these are positive
amendments, therefore, we believe that this
proposal warrants shareholder support.
3 Ratify Auditors For For Mgmt
4 Declassify the Board of Directors Against For ShrHoldr
5 Submit Shareholder Rights Plan (Poison Against For ShrHoldr
Pill) to Shareholder Vote
In this case, the company's rights plan was not
approved by shareholders nor does it embody the
above features that ISS recommends. We therefore
agree with the proponent that the current pill
should be redeemed and any new pill be put to a
shareholder vote.
6 Prohibit Auditor from Providing Non-Audit Against Against ShrHoldr
Services
In the case of Sempra Energy, the tax and other
fees is represents only 17.62 percent of the total
fees paid to the auditor for 2003. In view of the
reasonable level of non-audit fees for 2003 and the
Audit Committee procedures for mitigating potential
conflicts of interest, we do not believe support of
this proposal is warranted at this time.
7 Separate Chairman and CEO Positions Against For ShrHoldr
Although Sempra Energy has a greater than 2/3
independent outsiders on its board, all-independent key
committees, and established governance guidelines, the
company has not designated a lead/presiding director
with duties that meet all of our minimum requirements.
The independent directors meet in executive session at
the conclusion of each regularly scheduled board
meeting and the chair of Compensation Committee
presides over these sessions. However, it is not
clearly stated, in the company's proxy statement nor
its website, that such presiding director presides at
all meetings of the board at which the chairman is not
present; serves as liaison between the chairman and the
independent directors; approves information sent to the
board; approves meetings schedules to assure that there
is sufficient time for discussion of all agenda items;
or has the authority to call meetings of the
independent directors. Absent an offsetting governance
structure, we believe that a company of this size
should be able to find two qualified people willing to
serve in the separate positions of chairman and CEO.
04/30/04 - A/S Shawcor Ltd. *SCL.A* 820904209 03/15/04 80,000
Agenda for Holders of Class A and Class B
Shares
1 Elect Anthony Griffiths, Geoffrey Hyland, For For Mgmt
Murray Mullen, John Murphy, Robert
Ritchie, Paul Robinson, Leslie Shaw,
Virginia Shaw, William Sheridan, Zoltan
Simo and Donald Vaughn as Directors
2 Appoint Ernst & Young LLP as Auditors and For For Mgmt
Authorize Board to Fix Remuneration of
Auditors
3 Amend Articles Re: Designated Securities None Against Mgmt
The Principal Shareholders control approximately 84.95
percent of the Class B shares outstanding and
approximately 58.9 percent of the total shareholder
votes available. As such, this amendment will entrench
the Principal Shareholders' controlling share ownership
position without requiring them to increase their
equity holdings in the company. Fairvest supports the
policy of one share, one vote. We do not believe that
any shareholder objectives (other than those of the
Principal Shareholders) will be furthered through the
adoption of this resolution. As such, we recommend
shareholders vote against this item.
04/20/04 - A Smith International, Inc. *SII* 832110100 02/27/04 30,000
1 Elect Directors For Split Mgmt
1.1 Elect Director James R. Gibbs --- For
We recommend a vote FOR the directors with the
exception of Jerry W. Neely. We recommend that
shareholders WITHHOLD votes from Jerry W. Neely for
standing as an affiliated outsider on the Audit and
on the Compensation committees.
1.2 Elect Director Jerry W. Neely --- Withhold
2 Ratify Auditors For For Mgmt
06/11/04 - A/S South Atlantic Ventures Ltd. 83636R108 05/07/04 10,000
1 Appoint Auditors and Authorize Board to For For Mgmt
Fix Remuneration of Auditors
Deloitte & Touche LLP are the company's current
auditors. The circular does not provide the audit
or non-audit fees paid to the auditor over the most
recent fiscal year.
2 Elect Lukas H. Lundin as Director For For Mgmt
The board is majority independent. There are no
insiders on the Audit Committee.
3 Elect Edward F. Posey as Director For For Mgmt
4 Elect William A. Rand as Director For For Mgmt
5 Elect Brian D. Edgar as Director For For Mgmt
6 Elect Pierre Besuchet as Director For For Mgmt
7 Elect John H. Craig as Director For For Mgmt
8 Change Company Name to Lundin Mining For For Mgmt
Corporation
Shareholders are being asked to approve a change in
the corporation's name to Lundin Mining
Corporation. The circular states that the name
change is in view of the corporation's focus in
Scandinavia and reflects the board's commitment to
the success of the corporation in light of the
proposed acquisition of the Zinkgruvan mine located
in Southern Sweden. Fairvest des not oppose this
resolution.
9 Ratify granting of Stock Options to For Against Mgmt
insiders
Disinterested shareholder approval is being sought
to approve the granting of an aggregate of 160,000
options to insiders on December 5, 2003. The total
cost of the grants is compared to an allowable cap
using a compensation model. The allowable caps are
industry-specific, market cap-based, and pegged to
the average amount paid by companies performing in
the top quartile of their peer groupings. Industry
classifications are established using standard
industry code (SIC) groups. Using historic data
tracked by Fairvest of the value of authorized
shares for issue at each company ranked in the top
quartile of its industry, a benchmark pay level is
established for each industry. The total cost of
the company's grants of 5.16 percent is within the
allowable cap for this company of 6.74 percent. We
oppose the grants, however, because it would appear
that non-employee directors participate in options
on a discretionary basis. This is a practice which
gives rise to the possibility of self-dealing by
directors in options. Directors who are able to
grant themselves options without limit could find
their independence compromised. Shareholders should
note that this plan could allow options to be
granted with a discounted exercise price if
permitted for by the TSX Venture Exchange. The
amended plan represents dilution of 6.85 percent on
a fully-diluted basis.
06/11/04 - A/S South Atlantic Ventures Ltd. 83636R108 05/07/04 175,000
1 Appoint Auditors and Authorize Board to For For Mgmt
Fix Remuneration of Auditors
Deloitte & Touche LLP are the company's current
auditors. The circular does not provide the audit
or non-audit fees paid to the auditor over the most
recent fiscal year.
2 Elect Lukas H. Lundin as Director For For Mgmt
The board is majority independent. There are no
insiders on the Audit Committee.
3 Elect Edward F. Posey as Director For For Mgmt
4 Elect William A. Rand as Director For For Mgmt
5 Elect Brian D. Edgar as Director For For Mgmt
6 Elect Pierre Besuchet as Director For For Mgmt
7 Elect John H. Craig as Director For For Mgmt
8 Change Company Name to Lundin Mining For For Mgmt
Corporation
Shareholders are being asked to approve a change in
the corporation's name to Lundin Mining
Corporation. The circular states that the name
change is in view of the corporation's focus in
Scandinavia and reflects the board's commitment to
the success of the corporation in light of the
proposed acquisition of the Zinkgruvan mine located
in Southern Sweden. Fairvest des not oppose this
resolution.
9 Ratify granting of Stock Options to For Against Mgmt
insiders
Disinterested shareholder approval is being sought
to approve the granting of an aggregate of 160,000
options to insiders on December 5, 2003. The total
cost of the grants is compared to an allowable cap
using a compensation model. The allowable caps are
industry-specific, market cap-based, and pegged to
the average amount paid by companies performing in
the top quartile of their peer groupings. Industry
classifications are established using standard
industry code (SIC) groups. Using historic data
tracked by Fairvest of the value of authorized
shares for issue at each company ranked in the top
quartile of its industry, a benchmark pay level is
established for each industry. The total cost of
the company's grants of 5.16 percent is within the
allowable cap for this company of 6.74 percent. We
oppose the grants, however, because it would appear
that non-employee directors participate in options
on a discretionary basis. This is a practice which
gives rise to the possibility of self-dealing by
directors in options. Directors who are able to
grant themselves options without limit could find
their independence compromised. Shareholders should
note that this plan could allow options to be
granted with a discounted exercise price if
permitted for by the TSX Venture Exchange. The
amended plan represents dilution of 6.85 percent on
a fully-diluted basis.
06/17/04 - A/S SPUR VENTURES INC 85216L104 05/03/04 500,000
1 Ratify PricewaterhouseCoopers LLP as For For Mgmt
Auditors
PricewaterhouseCoopers LLP have been the company's
auditors since 1993.
2 Authorize Board to Fix Remuneration of For For Mgmt
the Auditors
The circular does not provide the audit or
non-audit fees paid to the auditor over the most
recent fiscal year.
3 Fix Number of Directors For For Mgmt
4 Elect Directors For Split Mgmt
4.1 Elect Director Steven G. Dean --- For
The board is a majority independent.
4.2 Elect Director Robert G. Atkinson ---
Withhold
We recommend withholding votes from Robert Atkinson
because he is an insider on the Audit Committee.
4.3 Elect Director Yingbin Ian He --- For
4.4 Elect Director W. David Black --- For
4.5 Elect Director David Cohen --- For
4.6 Elect Director Gordon D. Ewart --- For
4.7 Elect Director Ruston Goepel --- For
4.8 Elect Director Dongdong Huang --- For
5 Approve Stock Option Plan Grants For Against Mgmt
This resolution would allow the board to grant options,
outside of a formal option plan, which may represent
more than ten percent of outstanding shares to insiders
of the company and to reprice existing options without
further shareholder approval. Given the lack of set
terms on such options, we are unable to assess any
objective cost to this proposal. As shareholders are
being given no information relating to the potential
effects of options to be granted and or repriced, we do
not recommend shareholders approve this resolution.
6 Amend Stock Option Plan For Against Mgmt
This proposal seeks shareholder approval to amend the
Stock Option Plan to reserve 1,110,035 additional
shares. The total cost of the company's plan is
compared to an allowable cap using a compensation
model. The allowable caps are industry-specific, market
cap-based, and pegged to the average amount paid by
companies performing in the top quartile of their peer
groupings. Industry classifications are established
using standard industry code (SIC) groups. Using
historic data tracked by Fairvest of the value of
authorized shares for issue at each company ranked in
the top quartile of its industry, a benchmark pay level
is established for each industry. The total cost of the
company's plans of 12.10 percent is above the allowable
cap for this company of 7.39 percent. We oppose the
amendment to increase shares reserved for options,
however, because it would appear that non-employee
directors participate in options on a discretionary
basis. This is a practice which gives rise to the
possibility of self-dealing by directors in options.
Directors who are able to grant themselves options
without limit could find their independence
compromised. Shareholders should note that this plan
could allow options to be granted with a discounted
exercise price if permitted for by the TSX Venture
Exchange. The amended plan represents dilution of 14.75
percent on a fully-diluted basis.
7 Amend Notice of Articles Re: Pre-Existing For For Mgmt
Company Provisions
The new British Columbia Business Corporations Act
effectively adds certain provisions, called
'pre-existing company provisions' to every
company's Notice of Articles until such time as the
shareholders of the company remove them by way of a
special resolution. For the most part, the
Corporation is exempt from the Provisions due to
either: a) having articles which, prior to the
enactment of the new Act, exempt the Corporation
from such requirements; or b) being a public
company. Deleting the Provisions will permit a
66.67% majority rather than a 75% majority be
required to effect certain corporate changes,
including certain amalgamations or the continuance
of the Corporation out of British Columbia.
Management believes that this resolution will
provide the Corporation with greater flexibility
for future corporate activities.
8 Approve Unlimited Capital Authorization For Against Mgmt
The updated British Columbia Business Corporations Act
now allows companies to have an unlimited authorized
capital, similar to other Canadian jurisdictions. The
company currently has 100 million common and preferred
shares authorized and just over 28 million common
shares outstanding. Given the Fairvest prefers to see
companies with a fixed maximum limit on authorized
capital, with at least 30 percent of the authorized
stock be issued and outstanding. Limited capital
structures protect against excessive dilution and can
be increased when needed. As such we do not recommend
shareholders approve this resolution.
9 Adopt New Articles For For Mgmt
In conjunction with the new British Columbia Business
Corporations Act the company is proposing to adopt a
new set of Articles to to provide the company with
greater flexibility for future corporate activities.
The New Articles are intended to bring the company's
governing rules into alignment with the new Business
Corporations Act and provide the company with a more
effective governance structure. We do not oppose this
resolution at this time given the mandatory transition
rollover required under the new Business Corporations
Act.
10 Other Business For Against Mgmt
As we cannot know the content of the issues to be
raised under this item we do not recommend
shareholders approve this resolution.
05/27/04 - A/S STARPOINT ENERGY LTD *SPN.* 855568101 04/19/04 400,000
1 Fix Number of Directors For For Mgmt
2 Elect Paul Colborne, Jim Bertram, Fred For For Mgmt
Coles, Kenney Cugnet, Ian Dundas, Robert
G. Peters, James M. Pasieka as Directors
3 Approve Auditors and Authorize Board to For For Mgmt
Fix Remuneration of Auditors
4 Amend Stock Option Plan For Against Mgmt
Vote Recommendation The total cost of the company's
plans of 3.73 percent is within the allowable cap for
this company of 7.25 percent. We oppose the amendment
to increase shares reserved for options, however,
because it would appear that non-employee directors
participate in options on a discretionary basis. This
is a practice which gives rise to the possibility of
self-dealing by directors in options. Directors who are
able to grant themselves options without limit could
find their independence compromised.
5 Approve Issuance of Shares in One or More For Against Mgmt
Private Placements
Fairvest prefers to see blanket approval for future
private placements to be capped at no more than 30
percent of the outstanding shares. Given the
potential for excessive dilution, we do not
recommend shareholders approve this resolution.
06/24/04 - A/S StockGroup Information Systems, Inc. 861273100 05/14/04 150,000
*SWEB*
1 Elect Directors For For Mgmt
2 Other Business For Against Mgmt
3 Approve Reverse Stock Split For For Mgmt
05/05/04 - A Superior Plus Income Fund (Formerly 867946105 03/17/04 100,000
Superior Propane Income *SPF.U*
1 Elect G. D. Billing, R. J. Engbloom, P. For For Mgmt
A. W. Green, A. G. Lennox, J. S. A.
MacDonald, G. N. Mackey, D. P. Smith, N.
R. Gish and C. P. Valentine as Directors
2 Ratify Deloitte & Touche LLP as Auditors For For Mgmt
06/15/04 - A/S Tahera Corp. (Formerly Lytton 873786107 04/23/04 200,000
Minerals )
1 Elect Andrew Adams, Colin Benner, Robert For For Mgmt
Dickson, R. Peter Gillin, Jonathan
Goodman, Patrick Lavelle as Directors
Although these are routine appointments
shareholders may wish to express differing views as
to the suitability of the director nominees,
Fairvest takes the view that shareholders should
have the ability to cast ballots with respect to
individuals rather than the entire slate. If this
is possible, they will not be forced to withhold
votes for the board as a whole as their only method
of registering a negative view of an individual or
individuals. The board is a majority independent
and there are no insiders on the Audit or
Compensation Committees.
2 Approve Deloitte & Touche LLP as Auditors For For Mgmt
and Authorize Board to Fix Remuneration
of Auditors
Deloitte & Touche LLP have been the company's
auditors since 1999. The circular does not provide
the audit or non-audit fees paid to the auditor
over the most recent fiscal year.
3 Change Company Name to Tahera Diamond For For Mgmt
Corporation
The company is proposing to change its name in
order to reflect the focus of the corporation on
the diamond sector.
4 Allow Board to Appoint Additional For For Mgmt
Directors Between Annual Meetings
This amendment will allow the board to appoint
additional directors between annual meetings of
shareholders as allowed under the CBCA. As such
number of directors so appointed may not exceed
one-third of the number of directors elected by
shareholders at the last AGM and must be re-elected
at the next AGM, we do not oppose this resolution.
5 Approve Restricted Share Plan For Against Mgmt
This item will create a new Restricted Share plan,
reserving 5 million shares for issuance. The total cost
of the company's plan is compared to an allowable cap
using a compensation model. The allowable caps are
industry-specific, market cap-based, and pegged to the
average amount paid by companies performing in the top
quartile of their peer groupings. Industry
classifications are established using standard industry
code (SIC) groups. Using historic data tracked by
Fairvest of the value of authorized shares for issue at
each company ranked in the top quartile of its
industry, a benchmark pay level is established for each
industry. The total cost of the company's Restricted
Share Plan of 0.95 percent is within the allowable cap
for this company of 6.55 percent. Please see the
section below entitled 'Multiple Plan Notes' for a
further discussion of this and other plans. We oppose
the amendment to increase shares reserved for options,
however, because it would appear that non-employee
directors participate in options on a discretionary
basis. This is a practice which gives rise to the
possibility of self-dealing by directors in options.
Directors who are able to grant themselves options
without limit could find their independence
compromised. The Restricted Share Plan represents
dilution of 1.04 percent on a fully-diluted basis.
6 Approve 2004 Stock Option Plan For Against Mgmt
This item will create a new 2004 Stock Option Plan (15
million shares will be reserved) to supercede the
existing 1999 Stock Option Plan. The total cost of the
company's plan is compared to an allowable cap using a
compensation model. The allowable caps are
industry-specific, market cap-based, and pegged to the
average amount paid by companies performing in the top
quartile of their peer groupings. Industry
classifications are established using standard industry
code (SIC) groups. Using historic data tracked by
Fairvest of the value of authorized shares for issue at
each company ranked in the top quartile of its
industry, a benchmark pay level is established for each
industry. The combined shareholder value transfer for
all equity-based plans considered is 8.11 percent,
which exceed the company's allowable shareholder value
transfer cap of 6.55 percent. However, Fairvest will
support those plans that provide, in aggregate, the
greatest shareholder value transfer without exceeding
the allowable cap and that do not violate repricing
guidelines. The total cost of the company's stock
option plans of 7.17 percent is above the allowable cap
for this company of 6.55 percent. We oppose the
amendment to increase shares reserved for options, as
well, because it would appear that non-employee
directors participate in options on a discretionary
basis. This is a practice which gives rise to the
possibility of self-dealing by directors in options.
Directors who are able to grant themselves options
without limit could find their independence
compromised. Shareholders should note that this plan
could allow options to be granted with a discounted
exercise price if permitted for by the TSX Venture
Exchange. Option-driven dilution represents 8.74
percent on a fully-diluted basis.
7 Approve Reduction in Stated Capital For For Mgmt
The board proposes to reduce the stated capital by
$43,339,869. This would allow the elimination of the
total deficit of the same amount. This proposal would
also reduce the paid-up capital of the common shares.
This is a routine accounting request, which we do not
oppose.
05/04/04 - A/S Talisman Energy Inc. *TLM.* 87425E103 03/18/04 30,000
1 Elect Douglas D. Baldwin, James W. For For Mgmt
Buckee, Kevin S. Dunne, Al L. Flood, Dale
G. Parker, Lawrence G. Tapp, Stella M.
Thompson, Robert G. Welty, Charles W.
Wilson as Directors
2 Ratify Auditors For For Mgmt
3 Approve 3:1 Stock Split For For Mgmt
05/13/04 - A The Dow Chemical Company *DOW* 260543103 03/15/04 40,000
1 Elect Directors For For Mgmt
2 Ratify Auditors For For Mgmt
3 Declassify the Board of Directors For For Mgmt
ISS commends management for submitting this
proposal, which demonstrates a commitment to
shareholders' interests.
4 Report on Social Initiatives in Bhopal Against Against ShrHoldr
ISS generally supports proposals for increased
disclosure that promote good corporate citizenship
while enhancing long-term shareholder value. Increased
transparency can better inform shareholders on the
potential risks and opportunities associated with their
investment. In this case ISS notes that the proposal
also calls for certain actions to be taken as a
function of the reporting initiative. Amplifying
statements to the Securities and Exchange Commission
from the proponent have recommended that these actions
include Dow's dispatch of staff and equipment to Bhopal
to supervise remediation; Disclosure of all information
held by Union Carbide related to the health impacts of
methyl isocyanate; Conducting and disclosing further
health studies on methyl isocyanate to assist in
meeting continuing medical needs of the Bhopal victims;
and Conduct meetings with survivors of the Bhopal
tragedy and report on the results. Further the
proponent has noted that the company should disclose
further information on legal risks associated with
Bhopal and potential opportunity costs, including
impact on the company's operations in Asia, associated
with Dow Chemicals stance on the Bhopal tragedy. ISS
believes that this resolution merits serious
consideration based on the impact of the tragic
accident in Bhopal on the company and on thousands of
people. That said, while we agree with the proponents
that Dow Chemical should undertake efforts to increase
its disclosure on this topic, we are concerned with the
structure of this resolution, specifically the actions
that the proponents are linking to the report. ISS
notes that the company has disclosed certain
information on Bhopal both on the Dow Chemicals website
and on www.bhopal.com, a website sponsored by Union
Carbide specifically discussing information on the
tragedy. Further, while we have noted that the company
could improve its transparency on certain issues, it
may not be appropriate to disclose certain legal risks
or potential opportunity costs that may be speculative
in nature and potentially misunderstood or
mischaracterized. Moreover, while ISS believes that the
company could benefit from increased disclosure, we do
not believe that the actions requested by the
proponents to accompany this report are necessary per
se, or an appropriate expenditure of shareholder
assets. Therefore, ISS urges Dow Chemical to increase
the scope and detail of discussion on the Bhopal
tragedy; however, based on the structure and potential
expenses associated with the actions requested by this
proposal we are not compelled to recommend shareholder
support for the resolution.
05/20/04 - A The Williams Companies, Inc. *WMB* 969457100 03/26/04 100,000
1 Elect Directors For For Mgmt
1.1 Elect Director Charles M. Lillis --- For
1.2 Elect Director William G. Lowrie --- For
1.3 Elect Director Joseph H. Williams --- For
2 Ratify Auditors For For Mgmt
3 Limit Awards to Executives Against Against ShrHoldr
ISS believes that an independent Compensation
Committee should have the flexibility to determine
the compensation of its senior executives based on
a number of appropriate factors, rather then
relying on an arbitrary formula. Furthermore, we
believe this proposal is too restrictive, as it
would limit equity awards to time-based restricted
shares. As such, this item does not warrant
shareholder approval.
05/28/04 - A/S TOTAL ENERGY SVCS LTD *TOT.* 891925109 04/23/04 200,000
1 Elect Larry P. Coston, Daniel K. Halyk, For For Mgmt
Bruce L. Pachkowski, Thomas P. Stan, Ian
Whittaker, Gregory S. Fletcher as
Directors
Although these are routine appointments given that
shareholders may wish to express differing views as
to the suitability of the director nominees,
Fairvest takes the view that shareholders should
have the ability to cast ballots with respect to
individuals rather than the entire slate. If this
is possible, they will not be forced to withhold
votes for the board as a whole as their only method
of registering a negative view of an individual or
individuals. Of the slate of six directors two are
insiders while the remaining four are independent
outside directors. Neither of the insiders sit on
the audit or compensation committees. We support
the slate.
2 Ratify KPMG LLP as Auditors and Authorise For For Mgmt
Board to Fix Remuneration of Auditors
KPMG LLP have been the company's auditors since
1998. The company's materials indicate that
according to the auditor, the financial statements
present fairly, in all material respects, the
financial position of the company as at 31
December, 2003.
04/23/04 - A/S TRANSCANADA CORP *TRP.* 89353D107 03/05/04 60,000
1 Elect Directors For For Mgmt
2 Appoint KPMG LLP as Auditors and For For Mgmt
Authorize Board to Fix Remuneration of
Auditors
3 Amend Stock Option Plan For For Mgmt
Vote Recommendation The total cost of the
company's plans of 0.88 percent is within the allowable
cap for this company of 3.00 percent. As directors are
not eligible participants under the plan, there are no
issues regarding discretionary director participation
in this instance. As such, we recommend a vote in
favour of the amended plan.
4 Ratify, Confirm and Approve the For For Mgmt
Shareholder Rights Plan
05/20/04 - A Ultra Petroleum Corp. *UPL* 903914109 04/08/04 40,000
1 Elect Directors For For Mgmt
1.1 Elect Michael D. Watford as a Director
--- For
1.2 Elect William C. Helton as a Director ---
For
1.3 Elect James E. Nielson as a Director ---
For
1.4 Elect Robert E. Rigney as a Director ---
For
1.5 Elect James C. Roe as a Director --- For
2 Approve Auditors and Authorize Board to For For Mgmt
Fix Remuneration of Auditors
3 Other Business For Against Mgmt
As we can not know the content of these issues, we
cannot recommend that shareholders approve this
request.
05/20/04 - A Ultra Petroleum Corp. *UPL* 903914109 04/08/04 10,000
1 Elect Directors For For Mgmt
2 Approve Auditors and Authorize Board to For For Mgmt
Fix Remuneration of Auditors
3 Other Business For Against Mgmt
As we can not know the content of these issues, we
cannot recommend that shareholders approve this
request.
04/27/04 - A United States Steel Corp. *X* 912909108 02/27/04 30,000
1 Elect Directors For For Mgmt
2 Ratify Auditors For For Mgmt
05/18/04 - A VERMILION ENERGY TR *VET.U* 923728109 04/02/04 220,000
1 Ratify Auditors of the Trust For For Mgmt
2 Elect Larry J. Macdonald, Jeffrey S. For For Mgmt
Boyce, Claudio A. Ghersinich, Lorenzo
Donadeo, Joseph F. Killi as Directors of
Vermilion Resources Ltd
3 Amend Trust Unit Rights Incentive Plan For Against Mgmt
Vote Recommendation The total cost of the company's
plans of 1.98 percent is within the allowable cap for
this company of 4.77 percent. We oppose the amendment
to increase shares reserved for options, however,
because it would appear that non-employee directors
participate in options on a discretionary basis. This
is a practice which gives rise to the possibility of
self-dealing by directors in options. Directors who are
able to grant themselves options without limit could
find their independence compromised.
05/25/04 - A WEATHERFORD INTL LTD *WFT* G95089101 04/06/04 35,000
Meeting for Holders of ADRs
1 Elect Directors For For Mgmt
1.1 Elect Director Philip Burguieres --- For
These are routine board elections.
1.2 Elect Director Nicholas F. Brady --- For
1.3 Elect Director David J. Butters --- For
1.4 Elect Director Bernard J. Duroc-Danner
--- For
1.5 Elect Director Sheldon B. Lubar --- For
1.6 Elect Director William E. Macaulay --- For
1.7 Elect Director Robert B. Millard --- For
1.8 Elect Director Robert K. Moses, Jr. ---
For
1.9 Elect Director Robert A. Rayne --- For
2 Ratify Auditors For For Mgmt
04/06/04 - A WMC RESOURCES LTD 92928R106 03/03/04 22,700
Meeting for Holders of ADRs
1 RE-ELECTION OF MR P J KNIGHT For For Mgmt
2 RE-ELECTION OF MR I E WEBBER For For Mgmt
3 ELECTION OF MR G W MCGREGOR For For Mgmt
4 ELECTION OF MR G J PIZZEY For For Mgmt
Vote Summary Report
Apr 01, 2004 - Jun 30, 2004
Gold Shares Fund
Mtg Company/ Mgmt Vote Record Shares
Date/Type Ballot Issues Security Rec Cast Date Prpnent Voted
- ----------------- ---------------------------- ------------ ----------- ------------- ------------ ----------- ----------
- -------------------------------------------------------------------------------------------------------------------------
06/22/04 - A Aber Diamond Corp. 002893105 05/17/04 22,000
(formerly Aber Resources
Ltd. ) *ABZ*
1 Elect James Fernandez, Robert For For Mgmt
Gannicott, Lars-Eric Johansson,
Thomas O'Neill, J. Roger
Phillimore, D. Grenville Thomas
and Eira Thomas as Directors
2 Appoint KPMG LLP as Auditors For Mgmt
and Authorize Board to Fix
Remuneration of Auditors
05/28/04 - A/S Agnico-Eagle Mines Ltd. 008474108 04/12/04 25,000
*AGE.*
1 Elect Directors For For Mgmt
1.1 Elect Director Leanne M. Baker
--- For
1.2 Elect Director Douglas R.
Beaumont --- For
1.3 Elect Director Sean Boyd --- For
1.4 Elect Director Alan Green ---
For
1.5 Elect Director Bernard Kraft
--- For
1.6 Elect Director Mel Leiderman
--- For
1.7 Elect Director James D. Nasso
--- For
1.8 Elect Director Ernest Sheriff
--- For
2 Approve Auditors and Authorize For For Mgmt
Board to Fix Remuneration of
Auditors
3 Amend Stock Option Plan For For Mgmt
Vote Recommendation The total cost of
the company's plans of 3.09 percent is
within the allowable cap for this company of
4.41 percent. As well, the company has
limited non-employee director participation
negating our concern with self-dealing and
compromised independence.
04/07/04 - S Anglogold Ashanti Ltd. 043743202 03/05/04 17,500
Meeting for Holders of ADRs
1 SPECIAL RESOLUTION TO (A) ADOPT For For Mgmt
A NEW REGULATION 14: (I) TO
MAKE SHARES ISSUED BETWEEN THE
VOTING RECORD TIME AND THE
RECORD TIME SUBJECT TO THE
SCHEME; AND (II) TO MAKE ANY
SHARES ISSUED AFTER THE RECORD
TIME AUTOMATICALLY EXCHANGEABLE
FOR NEW ANGLOGOLD
In this item shareholders are asked to amend the
company's articles of association regarding Ashanti
shares that are issued after the voting record or
the record time. The proposed amendment states that
such shares would automatically be considered as a
share subject to the scheme. We see no reason to
oppose this request.
2 ORDINARY RESOLUTION TO APPROVE For For Mgmt
THE DE-LISTING OF ASHANTI FROM
THE GHANA STOCK EXCHANGE ON THE
EFFECTIVE DATE.
04/07/04 - S Anglogold Ashanti Ltd. 043743202 03/11/04 17,500
Meeting for Holders of ADRs
1 THE SCHEME For For Mgmt
At this meeting, shareholders are asked to
approve the merger agreement between
AngloGold and Ashanti. According to the
agreement AngloGold would purchase all of
the outstanding shares of Ashanti in
exchange for 0.29 AngloGold shares per
Ashanti share acquired. The exchange ratio
represents a 12 percent premium over the
trading price of Ashanti shares on the day
prior to the first cautionary announcement
regarding the deal, on Mar. 16, 2003. On the
last practicable date prior to the firm
announcement of the deal, Aug. 1, 2003, the
premium amounted to four percent. Following
the exchange, current Ashanti shareholders
will hold 15.4 percent of the combined
company. When the merger is completed,
AngloGold will also change its name to
AngloGold Ashanti Ltd. The companies expect
to achieve an enhanced production profile
with the combined company, as well as
reduced financing, as well as
administrative, and procurement costs. The
scale of the company's production and
reserves will also be greatly enhanced.
Futhermore, with the new company's growth,
production and liquidity potential, it is
expected to achieve an increased investment
appeal. Based on the strong strategic
reasons of the merger, as well as the
favorable exchange ratio, we recommend
shareholders to vote in favor of this merger.
06/29/04 - S Anglogold Ashanti Ltd. 035128206 06/09/04 5,075
Meeting for Holders of ADRs
1 ORDINARY RESOLUTION NUMBER 1 For For Mgmt
AUTHORITY TO ISSUE SHARES FOR
THE CONVERSION OF THE US
$1,000,000,000, 2.375%
GUARANTEED CONVERTIBLE BONDS
DUE 2009
2 ORDINARY RESOLUTION NUMBER 2 For For Mgmt
AUTHORITY TO ISSUE SHARES
3 ORDINARY RESOLUTION NUMBER 3 For For Mgmt
AUTHORITY TO ISSUE SHARES FOR
CASH
06/23/04 - A/S Bema Gold Corp. *BGO.* 08135F107 05/10/04 980,000
1 Elect Directors For For Mgmt
2 Ratify PricewaterhouseCoopers For For Mgmt
LLP as Auditors
3 Amend Stock Option Plan to For For Mgmt
Increase Shares Resreved
Thereunder
4 Amend Stock Option Plan Re: For For Mgmt
Expiry Date of Options
06/01/04 - A/S Breakwater Resources Ltd. 106902307 04/13/04 275,000
*BWR*
1 Elect C. K. Benner, G. F. Bub, For For Mgmt
D. K. Charter, J. C. Goodman,
G. A. C. MacRae, A. J. Palmiere and A. M. Sinclair,
Jr. as Directors
Although these are routine appointments,
shareholders may wish to express differing views as
to the suitability of the director nominees. For
this reason, Fairvest takes the position that
shareholders should have the ability to cast
ballots with respect to individuals rather than the
entire slate. If this is possible, they will not be
forced to withhold votes for the board as a whole
as their only method of registering a negative view
of an individual or individuals. We recommend a
vote FOR the entire slate. There are no insiders on
the Audit or Compensation Committees. The board is
majority independent, with two insiders, one
affiliated outsider and four independent directors.
2 Ratify Deloitte & Touche LLP as For For Mgmt
Auditors
Deloitte & Touche LLP are currently the company's
auditors. The company's materials indicate that
according to the auditor, the financial statements
present fairly, in all material respects, the
financial position of the company as at December
31, 2003 and 2002.
3 Amend Stock Option and Share For Against Mgmt
Purchase Components of the
Share Incentive Plan
Please see the section below entitled 'Multiple
Plan Notes' for a further discussion of this and
other plans. Vote Recommendation The total cost of
this amendment to the stock option component of the
company's plan is compared to an allowable cap
using a compensation model. The allowable caps are
industry-specific, market cap-based, and pegged to
the average amount paid by companies performing in
the top quartile of their peer groupings. Industry
classifications are established using standard
industry code (SIC) groups. Using historic data
tracked by Fairvest of the value of authorized
shares for issue at each company ranked in the top
quartile of its industry, a benchmark pay level is
established for each industry. The total cost of
this amendment to the company's plan of 4.14
percent is within the allowable cap for this
company of 15.05 percent. We oppose the amendment
to increase shares reserved for options, however,
because it would appear that non-employee directors
participate in options on a discretionary basis.
This is a practice which gives rise to the
possibility of self-dealing by directors in
options. Directors who are able to grant themselves
options without limit could find their independence
compromised. Note that potential dilution is 5.13
percent of fully diluted shares. We note that the
amendment to increase shares reserved to the share
purchase component of the company's share incentive
plan has not been costed under the compensation
model. There are currently 2,156,796 shares
reserved for future purchase. The amendment would
increase the shares reserved for purchase by 1
million shares. As this increase has been bundled
with an increase to the share option component, we
are not at liberty to recommend that shareholders
approve the increase to the shares reserved for
share purchase under the Share Incentive Plan.
4 Amend Share Bonus Component of For Against Mgmt
the Share Incentive Plan
Multiple Plan Notes: The combined shareholder value
transfer for all amendments to this plan is 4.35
percent. The aggregate value of all the proposals
does not exceed the company's allowable shareholder
value transfer cap of 15.05 percent. Vote
Recommendation The total cost of the share bonus
component of company's plan is compared to an
allowable cap using a compensation model. The
allowable caps are industry-specific, market
cap-based, and pegged to the average amount paid by
companies performing in the top quartile of their
peer groupings. Industry classifications are
established using standard industry code (SIC)
groups. Using historic data tracked by Fairvest of
the value of authorized shares for issue at each
company ranked in the top quartile of its industry,
a benchmark pay level is established for each
industry. The total cost of this amendment to the
company's plan of 0.21 percent is within the
allowable cap for this company of 15.05 percent. We
oppose the amendment to increase shares reserved
for options, however, because it would appear that
non-employee directors participate in options on a
discretionary basis. This is a practice which gives
rise to the possibility of self-dealing by
directors in options. Directors who are able to
grant themselves options without limit could find
their independence compromised. Note that potential
dilution is 0.25 percent of fully diluted shares.
5 Approve Grant of Four Million For Against Mgmt
Stock Options
This proposal relates to Item 3, the proposed
amendment to the Stock Option and Share Purchase
components of the Share Incentive Plan. The company
has granted options in excess of the number of
shares reserved under the Share Incentive Plan.
Specifically, 700,000 options to purchase common
shares were granted to five senior officers and one
senior employee on February 19, 2004, at an
exercise price of $0.75, expiring February 18,
2009, 2,250,000 options to purchase common shares
were granted to two executive officers on March 9,
2004, at an exercise price of $0.67, expiring March
8, 2009, 1,000,000 options to purchase common
shares were granted to five outside directors on
March 9, 2004, at an exercise price of $0.67,
expiring March 8, 2009 and 50,000 options to
purchase common shares were granted to a senior
employee on April 29, 2004, at an exercise price
equal to the price of the common shares on the TSX
at the close of trading on May 3, 2004, expiring
April 28, 2009. These grants are subject to
regulatory and shareholder approval. In accordance
with our recommendation against the resolution to
increase the shares reserved for stock option
grants (Item 3) we oppose this proposal to confirm
option grants in excess of those previously
approved by shareholders.
05/19/04 - A/S FNX MINING COMPANY INC 30253R101 04/12/04 200,000
(formerly Fort Knox Gold
Resources In *FNX.*
1 Elect A. Terrance MacGibbon, For For Mgmt
Terrence Podolsky, Donald M.
Ross, Robert D. Cudney, Wayne
G. Beach, James W. Ashcroft,
Frank McKenna, John Lydall, J.
Duncan Gibson as Directors
2 Ratify KPMG LLP as Auditors and For For Mgmt
Authorise Board to Fix Auditor
Remuneration.
3 Approve Issuance of Shares in For Against Mgmt
One or More Private Placements
We oppose the resolution due to the level of
dilution it presents.
05/06/04 - A Freeport-McMoRan Copper & 35671D881 03/12/04 12,500
Gold Inc. *FCX*
Meeting For Preferred
Shareholders
1.1 Elect Director Robert J. For For Mgmt
Allison, Jr.
Please note that ISS does not provide vote
recommendations for any agendas representing
preferred stockholders, warrant holders or debt
holders. Therefore no analysis will be provided.
1.2 Elect Director R. Leigh Clifford For Withhold Mgmt
Please note that ISS does not provide vote
recommendations for any agendas representing
preferred stockholders, warrant holders or
debt holders. Therefore no analysis will be
provided.
1.3 Elect Director James R. Moffett For For Mgmt
Please note that ISS does not provide vote
recommendations for any agendas representing
preferred stockholders, warrant holders or
debt holders. Therefore no analysis will be
provided.
1.4 Elect Director B.M. Rankin, Jr. For For Mgmt
Please note that ISS does not provide vote
recommendations for any agendas representing
preferred stockholders, warrant holders or
debt holders. Therefore no analysis will be
provided.
1.5 Elect Director J. Taylor Wharton For For Mgmt
Please note that ISS does not provide vote
recommendations for any agendas representing
preferred stockholders, warrant holders or
debt holders. Therefore no analysis will be
provided.
05/06/04 - A/S Glamis Gold Ltd. *GLG.* 376775102 03/22/04 25,000
1 Fix Number of Directors For For Mgmt
2 Elect Directors For For Mgmt
2.1 Elect Director A. Dan Rovig ---
For
2.2 Elect Director C. Kevin
McArthur --- For
2.3 Elect Director Kenneth F.
Williamson --- For
2.4 Elect Director Jean Depatie ---
For
2.5 Elect Director A. Ian S.
Davidson --- For
2.6 Elect Director P. Randy Reifel
--- For
3 Approve Auditors and Authorize For For Mgmt
Board to Fix Remuneration of
Auditors
4 Amend Stock Option Plan For For Mgmt
Please see the section below entitled 'Multiple
Plan Notes' for a further discussion of this and
other plans.
Vote Recommendation The total cost of the
Incentive Share Purchase Option Plan of 2.77
percent is within the allowable cap for this
company of 3.73 percent, as is the combined cost of
both equity compensation plans (3.42%).
Additionally, this plan expressly forbids repricing
and limits non-executive director participation.
5 Approve Equity Incentive Plan For For Mgmt
Multiple Plan Notes: The combined
shareholder value transfer for all plans
considered is 3.42 percent. The aggregate
value of all the proposals does not exceed
the company's allowable shareholder value
transfer cap of 3.73 percent. Fairvest
supports those plans that provide, in
aggregate, the greatest shareholder value
transfer without exceeding the allowable cap
and that do not violate repricing
guidelines. Vote
Recommendation The total cost of the
Equity Incentive Plan of 0.66 percent is
within the allowable cap for this company of
3.73 percent as is the combined cost of both
equity compensation plans (3.42%). As well
this plan includes a limit on the
participation of outside directors.
05/06/04 - A/S Glamis Gold Ltd. *GLG.* 376775102 03/22/04 75,000
1 Fix Number of Directors For For Mgmt
2 Elect Directors For For Mgmt
2.1 Elect Director A. Dan Rovig ---
For
2.2 Elect Director C. Kevin
McArthur --- For
2.3 Elect Director Kenneth F.
Williamson --- For
2.4 Elect Director Jean Depatie ---
For
2.5 Elect Director A. Ian S.
Davidson --- For
2.6 Elect Director P. Randy Reifel
--- For
3 Approve Auditors and Authorize For For Mgmt
Board to Fix Remuneration of
Auditors
4 Amend Stock Option Plan For For Mgmt
Please see the section below entitled 'Multiple
Plan Notes' for a further discussion of this and
other plans.
Vote Recommendation The total cost of the
Incentive Share Purchase Option Plan of 2.77
percent is within the allowable cap for this
company of 3.73 percent, as is the combined cost of
both equity compensation plans (3.42%).
Additionally, this plan expressly forbids repricing
and limits non-executive director participation.
5 Approve Equity Incentive Plan For For Mgmt
Multiple Plan Notes: The combined
shareholder value transfer for all plans
considered is 3.42 percent. The aggregate
value of all the proposals does not exceed
the company's allowable shareholder value
transfer cap of 3.73 percent. Fairvest
supports those plans that provide, in
aggregate, the greatest shareholder value
transfer without exceeding the allowable cap
and that do not violate repricing
guidelines. Vote
Recommendation The total cost of the
Equity Incentive Plan of 0.66 percent is
within the allowable cap for this company of
3.73 percent as is the combined cost of both
equity compensation plans (3.42%). As well
this plan includes a limit on the
participation of outside directors.
06/16/04 - A Goldcorp Inc. *G.* 380956409 04/30/04 100,000
1 Elect Directors For Split Mgmt
1.1 Elect Director D.R. Beatty ---
For
We recommended withholding votes from Brian
Jones given his low attendance at board
meetings.
1.2 Elect Director R.M. Goldsack
--- For
1.3 Elect Director S.R. Horne ---
For
1.4 Elect Director J.P. Hutch ---
For
1.5 Elect Director B.W. Jones ---
Withhold
1.6 Elect Director R.R. McEwen ---
For
1.7 Elect Director D.R.M. Quick ---
For
1.8 Elect Director M.L. Stein ---
For
2 Approve KPMG LLP as Auditors For For Mgmt
and Authorize Board to Fix
Remuneration of Auditors
05/07/04 - S Harmony Gold Mining Ltd. 413216300 04/14/04 50,000
Meeting for Holders of ADRs
1 ORDINARY RESOLUTION NUMBER 1 For For Mgmt
2 ORDINARY RESOLUTION NUMBER 2 For For Mgmt
3 ORDINARY RESOLUTION NUMBER 3 For For Mgmt
4 ORDINARY RESOLUTION NUMBER 4 For For Mgmt
05/07/04 - A Hecla Mining Co. *HL* 422704106 03/11/04 50,000
1 Elect Directors For For Mgmt
1.1 Elect Director Ted Crumley ---
For
1.2 Elect Director Charles L.
McAlpine --- For
1.3 Elect Director Jorge E. Ordonez
C. --- For
2 Amend Omnibus Stock Plan For For Mgmt
V.
Vote Recommendation The total cost of the company's
plans of 5.32 percent is within the allowable cap
for this company of 8.97 percent. In 2003, the
company granted over 25 percent of its total grants
to its top five named executives.
06/08/04 - A/S Iamgold Corporation 450913108 04/28/04 375,000
(Formerly Iamgold Intl.
Mining ) *IMG.*
1 Approve Issuance of Common For For Mgmt
Shares of IAMGold in Connection
with Business Combination with
Wheaton River Minerals Ltd.
2 Amend Articles to Increase For For Mgmt
Maximum Number of Directors
from Ten to Sixteen and Change
Name to Axiom Gold in the Event
the Share Issue Resolution(item
1) is Passed.
3 Amend Share Incentive Plan For For Mgmt
Vote Recommendation The total cost of
the company's plans of 2.81 percent is
within the allowable cap for this company of
3.46 percent. While we generally oppose
option plans when non-executive directors
are allowed to participate in such plans due
the possibility of self-dealing, Fairvest
has received a written confirmation from
IAMGOLD that non-executive directors will
not participate in the Axiom Option Plan. We
therefore support this resolution.
4 Adopt New By-Laws For For Mgmt
5 Elect William D. Pugliese, For For Mgmt
Gordon J. Bogden, John A.
Boultbee, Derek Bullock, Donald
K. Charter, Joseph F. Conway,
Mahendra Naik, Robert A.
Quartermain as Directors and
Additional Eight Directors From
Wheaton River Minerals
6 Ratify Deloitte & Touche as For For Mgmt
Auditors and KPMG LLP if Combination is not Completed.
04/21/04 - A/S Inco Ltd. *N.* 453258402 03/16/04 12,500
1 Amend Bylaws Re:Declassify the For For Mgmt
Board
2 Elect Directors For For Mgmt
3 Approve Auditors and Authorize For For Mgmt
Board to Fix Remuneration of
Auditors
4 Other Business (Voting) For Against Mgmt
As we cannot know the content of the issues to be
raised under this item we do not recommend
shareholders approve this resolution.
06/10/04 - A Ivanhoe Mines Ltd. 46579N103 04/21/04 225,000
(Formerly Indochina
Goldfields Ltd) *IVN*
1 Amend By-Law No. 1 For For Mgmt
2 Approve Issuance of up to 50 For For Mgmt
million Equity Securities
3 Approve Increase in Number of For For Mgmt
Directors to 12
4 Elect Directors For For Mgmt
5 Appoint Deloitte & Touche, For For Mgmt
Chartered Accountants as
Auditors and Authorize Board to
Fix Remuneration of Auditors
05/11/04 - A/S Meridian Gold Inc. *MNG.* 589975101 03/29/04 15,000
1 Elect John A. Eckersley, Robert For For Mgmt
A. Horn, Brian J. Kennedy, Christopher R. Lattanzi,
Malcolm W. MacNaught, Gerald E. Munera, Carl L.
Renzoni as Directors
2 Ratify Auditors For For Mgmt
3 Amend Bylaws Re:Mandatory For Against Mgmt
Retirement Age
Given that Meridian has already adopted wholly
independent key committees and Fairvest prefers to
see boards engaging in self-evaluations on an
annual basis, we do not feel that the less dynamic
practice of fixing a retirement age and term
limits, is acceptable at this time for this
company.
04/28/04 - A Newmont Mining Corp. 651639106 03/02/04 35,000
(Holding Company) *NEM*
1 Elect Directors For For Mgmt
1.1 Elect Director Glen A. Barton
--- For
1.2 Elect Director Vincent A.
Calarco --- For
1.3 Elect Director Michael S.
Hamson --- For
1.4 Elect Director Leo I. Higdon,
Jr. --- For
1.5 Elect Director Pierre Lassonde
--- For
1.6 Elect Director Robert J. Miller
--- For
1.7 Elect Director Wayne W. Murdy
--- For
1.8 Elect Director Robin A.
Plumbridge --- For
1.9 Elect Director John B. Prescott
--- For
1.10 Elect Director Michael K.
Reilly --- For
1.11 Elect Director Seymour Schulich
--- For
1.12 Elect Director James V. Taranik
--- For
2 Ratify Auditors For For Mgmt
3 Submit Shareholder Rights Plan Against For ShrHoldr
(Poison Pill) to Shareholder
Vote
ISS Conclusion: In this case, the company's rights
plan was not approved by shareholders nor does it
embody the above features that ISS recommends. We
therefore agree with the proponent that the current
pill should be put to a shareholder vote and any
new pill be put to a shareholder vote.
06/04/04 - A/S Northern Orion Resources 665575106 04/22/04 1,672,500
Inc *NNO.*
1 Fix Number of Directors at Five For For Mgmt
2 Elect Director David Cohen For For Mgmt
3 Elect Director Robert Cross For For Mgmt
4 Elect Director John K. Burns For For Mgmt
5 Elect Director Robert Gayton For For Mgmt
6 Elect Director Michael Beckett For For Mgmt
7 Appoint Deloitte & Touche LLP For For Mgmt
as Auditors
8 Authorize Board to Fix For For Mgmt
Remuneration of the Auditors
9 Amend Stock Option Plan Re: For Against Mgmt
Increase number of Shares
Reserved
Vote Recommendation The total cost of the company's
plans of 4.94 percent is within the allowable cap
for this company of 6.66 percent. We oppose the
amendment to increase shares reserved for options,
however, because it would appear that non-employee
directors have the ability to participate in
options on a discretionary basis. Directors who are
able to grant themselves options without limit
could find their independence compromised.
10 Amend Stock Option Plan Re: For Against Mgmt
Change to Rolling Plan
Fairvest generally prefers option plans that
reserve a fixed number of options rather than
rolling option plans where the number of shares
reserved under option could fluctuate drastically
depending on the number of shares outstanding.
Given that we have recommended a vote against the
proposed amended stock option plan in item # 9
above due to certain negative aspects of the plan,
we do not recommend a vote in favour of this
resolution.
11 Approve Issuance of Shares in For Against Mgmt
One or More Private Placements
Given the potential for excessive dilution,
we do not recommend shareholders approve
this resolution.
12 Amend Notice of Articles For Against Mgmt
Although unlimited authorized capital is
permitted under the BCA, the act by which
the company is now governed, Fairvest
prefers to see companies with a fixed
maximum limit on authorized capital which
can be increased when needed. As such, we
oppose this amendment and recommend a vote
against this resolution for this reason.
13 Other Business For Against Mgmt
As we can not know the content of these issues, we
cannot recommend that shareholders approve this
request.
05/14/04 - A/S Northgate Exploration, 666416102 04/07/04 5,000
Ltd. *NGX.*
1 Elect Directors For For Mgmt
2 Ratify KPMG LLP as Auditors For For Mgmt
3 Authorize Board to Fix For For Mgmt
Remuneration of the Auditors
4 Change Company Name to For For Mgmt
'Northgate Minerals Corporation'
5 Adopt Shareholder Rights Plan For For Mgmt
(Poison Pill)
05/05/04 - A/S Placer Dome Inc. *PDG.* 725906101 03/19/04 175,000
1 Elect Directors For For Mgmt
2 Ratify Ernst & Young LLP as For For Mgmt
Auditors
3 Adopt or Amend Shareholder For For Mgmt
Rights Plan (Poison Pill)
05/12/04 - A/S Queenstake Resources Ltd. 748314101 04/07/04 700,000
*QRL*
1 Elect Directors For For Mgmt
2 Approve Auditors and Authorize For For Mgmt
Board to Fix Remuneration of
Auditors
3 Amend Incentive Share Option For Against Mgmt
Plan
Vote Recommendation The total cost of the company's
plans of 4.53 percent is within the allowable cap
for this company of 22.00 percent. We oppose the
amendment to increase shares reserved for options,
however, because it would appear that non-employee
directors participate in options on a discretionary
basis. This is a practice which gives rise to the
possibility of self-dealing by directors in
options. Directors who are able to grant themselves
options without limit could find their independence
compromised.
4 Ratify Stock Option Plan Grants For Against Mgmt
The conditional option grants appear to have
been granted as such, given the fact that
the company's option plan does not currently
have sufficent share available for any
future option grants. Given our against
recommendation on the resolution to increase
the size of the stock option plan, we cannot
recommend shareholders approve this
resolution.
5 Adopt Shareholder Rights Plan For Against Mgmt
(Poison Pill)
The company claims that adopting the rights plan is
in the best interests of shareholders, ensuring
their fair treatment in a takeover bid. However, we
find that this plan also provides the board and
management with excessive opportunity to interpret
provisions of the plan. This plan does not allow
shareholders enough control of the process to
sufficiently safeguard their interests. The
Queenstake shareholder rights plan is not a 'new
generation' rights plan and therefore we must
recommend a vote against its approval.
04/26/04 - A Randgold Resources Ltd. 752344309 04/12/04 62,500
Meeting for Holders of ADRs
1 ORDINARY RESOLUTION - ADOPTION For For Mgmt
OF THE DIRECTORS REPORT AND
ACCOUNTS
2 ORDINARY RESOLUTION - ADOPTION For Against Mgmt
OF THE REPORT OF THE
REMUNERATION COMMITTEE
Notice periods that exceed two years are now out of
line with market practice. Because this company has
now had ample time to comply with this
recommendation or at least to shorten notice
periods to two years, and the company still has
not, we recommend that shareholders oppose this
item.
3 ORDINARY RESOLUTION - For For Mgmt
RE-ELECTION OF DIRECTOR: R I
ISRAEL (CHAIRMAN OF
REMUNERATION COMMITTEE)
4 ORDINARY RESOLUTION - For For Mgmt
RE-ELECTION OF DIRECTOR: P
LIETARD (MEMBER OF AUDIT AND
REMUNERATION COMMITTEES)
5 RATIFY AUDITORS For For Mgmt
6 ORDINARY RESOLUTION - APPROVE For For Mgmt
THE FEES PAYABLE TO THE
DIRECTORS
7 SPECIAL RESOLUTION - AUTHORISE For For Mgmt
THE SUB DIVISION OF THE COMPANY
S SHARE CAPITAL
8 SPECIAL RESOLUTION - AUTHORISE For For Mgmt
THE CANCELLATION OF US$100
MILLION SHARE PREMIUM
9 SPECIAL RESOLUTION - AUTHORISE For For Mgmt
THE PURCHASE OF SHARES FOR CASH
10 SPECIAL RESOLUTION - AUTHORISE For Against Mgmt
NEW ARTICLES OF ASSOCIATION
RELATING TO DISCLOSURE BY
HOLDERS OF COMPANY S SHARES
We disapprove of disenfranchising
shareholders down to the ridiculously low
threshold of 0.25 percent of a class. The
legal disclosure threshold of 3 percent is
perfectly adequate.
11 SPECIAL RESOLUTION - AMEND THE For For Mgmt
ARTICLES OF ASSOCIATION TO
FACILITATE ELECTRONIC
COMMUNICATION WITH SHAREHOLDERS
05/27/04 - A SINO GOLD LTD Q8505T101 05/25/04 150,000
1 Elect Nicholas Curtis as For For Mgmt
Director
Nicholas Curtis is an affiliated outsider by
virtue of his being an employee of Sino
Mining International in 2000, when it
spun-off Sino Gold. Source: Sino Gold
website. The board has seven members made up
of two executives, three independent
outsiders and two affiliated outsiders.
2 Elect Xu Hanjing as Director For For Mgmt
Xu Hanjing is an executive director.
3 Elect Zhong Jianguo as Director For For Mgmt
Zhong Jianguo is classified as an affiliated
outsider, being the CFO of Sino Mining
Intl., a substantial shareholder of the
company.
4 Ratify Past Issuance of 16.8 For For Mgmt
Million Ordinary Shares of
AUD2.50 Per Share to Clients of
Southern Cross Equities Ltd and
BMO Nesbitt Burns last Dec. 2003 This item requests
shareholder approval for the past issuance of 16.8
million shares on December 2003 at an issue price
of A$2.50 ($1.88) per share. Funds raised will be
used to finance the company's Jinfeng Project in
Guizhou Province. The shares represent 13 percent
of the company's outstanding capital. This falls
within the limits established by ISS guidelines for
issuances without preemptive rights (20 percent).
Australian companies routinely seek approval of
previous share distributions. We approve of such
proposals so long as the prior issuances conform to
ISS dilution guidelines.
5 Approve Issue Of Options to None Against Mgmt
Subscribe for 100,000 Fully
Paid Ordinary Shares to
Nicholas Curtis
The options are granted as incentive options which
have an exercise price of A$2.69 ($2.02) pursuant
to the Sino Gold Executive and Employee Option
Plan. The exercise price represents a 29 percent
premium to the share price of A$2.08 ($1.56) at the
time of this analysis. The options will be issued
no later than 12 months after the AGM. ISS notes
that the Executive and Employee Option Plan allows
that the number of shares on the exercise of the
options, taken together will all other share and
option plans of the company, should not exceed 10
percent of the company's share capital. Our
guidelines establish that shares available for all
option plans, when an absolute number is specified,
represent no more than 5 percent of a company's
outstanding shares. We also note that the options
lack performance criteria. Due to the lack of
performance criteria, and because the proposed
grants are pursuant to an option plan which ISS
finds unacceptable due to excessive dilution, ISS
recommends that shareholders vote against the
proposed grants in Items 5 to 10.
6 Approve Issue Of Options to None Against Mgmt
Subscribe for 100,000 Fully
Paid Ordinary Shares to Jake
Klein
Refer to Item 5.
7 Approve Issue Of Options to None Against Mgmt
Subscribe for 75,000 Fully Paid
Ordinary Shares to Xu Hanjing
Refer to Item 5.
8 Approve Issue of Options to None Against Mgmt
Subscribe for 20,000 Fully Paid
Ordinary Shares to Brian
Davidson
Refer to Item 5.
9 Approve Issue Of Options to None Against Mgmt
Suscribe for 20,000 Fully Paid
Ordinary Shares to Peter Cassidy
Refer to Item 5.
10 Approve Issue of Options to None Against Mgmt
Subscribe for 20,000 Fully Paid
Ordinay Shares to James Askew
Refer to Item 5.
06/11/04 - A/S South Atlantic Ventures 83636R108 05/07/04 100,000
Ltd.
1 Appoint Auditors and Authorize For For Mgmt
Board to Fix Remuneration of
Auditors
Deloitte & Touche LLP are the company's current
auditors. The circular does not provide the audit
or non-audit fees paid to the auditor over the most
recent fiscal year.
2 Elect Lukas H. Lundin as For For Mgmt
Director
The board is majority independent. There are
no insiders on the Audit Committee.
3 Elect Edward F. Posey as For For Mgmt
Director
4 Elect William A. Rand as For For Mgmt
Director
5 Elect Brian D. Edgar as Director For For Mgmt
6 Elect Pierre Besuchet as For For Mgmt
Director
7 Elect John H. Craig as Director For For Mgmt
8 Change Company Name to Lundin For For Mgmt
Mining Corporation
Shareholders are being asked to approve a change in
the corporation's name to Lundin Mining
Corporation. The circular states that the name
change is in view of the corporation's focus in
Scandinavia and reflects the board's commitment to
the success of the corporation in light of the
proposed acquisition of the Zinkgruvan mine located
in Southern Sweden. Fairvest des not oppose this
resolution.
9 Ratify granting of Stock For Against Mgmt
Options to insiders
Disinterested shareholder approval is being sought
to approve the granting of an aggregate of 160,000
options to insiders on December 5, 2003. The total
cost of the grants is compared to an allowable cap
using a compensation model. The allowable caps are
industry-specific, market cap-based, and pegged to
the average amount paid by companies performing in
the top quartile of their peer groupings. Industry
classifications are established using standard
industry code (SIC) groups. Using historic data
tracked by Fairvest of the value of authorized
shares for issue at each company ranked in the top
quartile of its industry, a benchmark pay level is
established for each industry. The total cost of
the company's grants of 5.16 percent is within the
allowable cap for this company of 6.74 percent. We
oppose the grants, however, because it would appear
that non-employee directors participate in options
on a discretionary basis. This is a practice which
gives rise to the possibility of self-dealing by
directors in options. Directors who are able to
grant themselves options without limit could find
their independence compromised. Shareholders should
note that this plan could allow options to be
granted with a discounted exercise price if
permitted for by the TSX Venture Exchange. The
amended plan represents dilution of 6.85 percent on
a fully-diluted basis.
05/20/04 - A Tiffany & Co. *TIF* 886547108 03/25/04 7,500
1 Elect Directors For For Mgmt
1.1 Elect Director Michael J.
Kowalski --- For
We recommend a vote FOR the directors.
1.2 Elect Director Rose Marie Bravo
--- For
1.3 Elect Director William R.
Chaney --- For
1.4 Elect Director Samuel L. Hayes
III --- For
1.5 Elect Director Abby F.
Kohnstamm --- For
1.6 Elect Director Charles K.
Marquis --- For
1.7 Elect Director J. Thomas Presby
--- For
1.8 Elect Director James E. Quinn
--- For
1.9 Elect Director William A.
Shutzer --- For
2 Ratify Auditors For For Mgmt
06/24/04 - A/S Yamana Gold Inc. *YRI* 98462Y100 05/21/04 75,000
1 Elect Peter Marrone, Victor H. For Withhold Mgmt
Bradley, James Askew, Patrick
J. Mars, Juvenal Mesquita
Filho, Antenor F. Silva Jr. and
Lance Tigert as Directors
Given that shareholders may wish to express
differing views as to the suitability of the
director nominees, Fairvest takes the position that
shareholders should have the ability to cast
ballots with respect to individuals rather than the
entire slate. If this is possible, they will not be
forced to withhold votes for the board as a whole
as their only method of registering a negative view
of an individual or individuals. We recommend
withholding votes from the entire slate because
there is an insider on the Compensation Committee.
2 Ratify Deloitte & Touche LLP as For For Mgmt
Auditors
3 Approve Share Subscription For For Mgmt
Arrangements
4 Amend Stock Option Plan For Against Mgmt
Vote Recommendation The total cost of the
company's plans of 4.90 percent is within
the allowable cap for this company of 5.87
percent. We oppose the amendment to increase
shares reserved for options, however,
because it would appear that non-employee
directors participate in options on a
discretionary basis. This is a practice
which gives rise to the possibility of
self-dealing by directors in options.
Directors who are able to grant themselves
options without limit could find their
independence compromised.
Vote Summary Report
Apr 01, 2004 - Jun 30, 2004
World Precious Minerals Fund
Mtg Company/ Mgmt Vote Record Shares
Date/Type Ballot Issues Security Rec Cast Date Prpnent Voted
- ----------------- ------------------------------ ------------ ----------- ------------- ------------ ----------- ----------
- ---------------------------------------------------------------------------------------------------------------------------
06/22/04 - A Aber Diamond Corp. (formerly 002893105 05/17/04 75,000
Aber Resources Ltd. ) *ABZ*
1 Elect James Fernandez, Robert For For Mgmt
Gannicott, Lars-Eric Johansson,
Thomas O'Neill, J. Roger
Phillimore, D. Grenville Thomas
and Eira Thomas as Directors
2 Appoint KPMG LLP as Auditors and For Mgmt
Authorize Board to Fix
Remuneration of Auditors
05/26/04 - A Acetex Corp. *ATX.* 003910106 04/16/04 430,000
1 Elect Brooke Wade, Kenneth For For Mgmt
Vidalin, John Zaozirny, John
Garcia, Pierre Dutheil, Arnold
Cader as Directors
2 Approve Auditors and Authorize For For Mgmt
Board to Fix Remuneration of
Auditors
05/28/04 - A/S Agnico-Eagle Mines Ltd. 008474108 04/12/04 50,000
*AGE.*
1 Elect Directors For For Mgmt
1.1 Elect Director Leanne M. Baker
--- For
1.2 Elect Director Douglas R.
Beaumont --- For
1.3 Elect Director Sean Boyd --- For
1.4 Elect Director Alan Green --- For
1.5 Elect Director Bernard Kraft ---
For
1.6 Elect Director Mel Leiderman ---
For
1.7 Elect Director James D. Nasso ---
For
1.8 Elect Director Ernest Sheriff ---
For
2 Approve Auditors and Authorize For For Mgmt
Board to Fix Remuneration of
Auditors
3 Amend Stock Option Plan For For Mgmt
Vote Recommendation The total cost of
the company's plans of 3.09 percent is within
the allowable cap for this company of 4.41
percent. As well, the company has limited
non-employee director participation negating
our concern with self-dealing and compromised
independence.
06/21/04 - A/S Alamos Gold Inc (Formerly 011527108 05/12/04 300,000
ALAMOS MINERALS LTD)
1 Approve Auditors and Authorize For For Mgmt
Board to Fix Remuneration of
Auditors
2 Fix Number of Directors For For Mgmt
3 Elect Directors For Split Mgmt
3.1 Elect Director John A. McCluskey
--- Withhold
We recommend withholding votes from John
McCluskey because he is an insider on the
Audit Committee.
3.2 Elect Director Richard W. Hughes
--- For
3.3 Elect Director James M. McDonald
--- For
3.4 Elect Director Leonard Harris ---
For
3.5 Elect Director Alan Richard Hill
--- For
4 Adopt New Articles For Against Mgmt
Given our reservations with regard to
unlimited capital authorization and a low
shareholder quorum requirement, and the fact
that the company has two years to complete the
mandatory transition rollover required under
the new Business Corporations Act, we do not
recommend shareholders approve this resolution.
5 Approve 2004 Incentive Stock For Against Mgmt
Option Plan
Vote Recommendation The total cost of the company's
plans of 10.31 percent is above the allowable cap
for this company of 6.33 percent. We oppose the
amendment to increase shares reserved for options,
however, because it would appear that non-employee
directors participate in options on a discretionary
basis. This is a practice which gives rise to the
possibility of self-dealing by directors in
options. Directors who are able to grant themselves
options without limit could find their independence
compromised.
05/20/04 - A Algoma Steel Inc. *AGA* 01566M204 04/08/04 100,000
1 Elect Steven Bowsher, Benjamin For Withhold Mgmt
Duster, Brad James, John Kallio,
Patrick Lavelle, James Lawson,
Charles Masson, Murray Nott,
Francis Petro and Denis Turcotte
as Directors
Although these are routine appointments given that
shareholders may wish to express differing views as
to the suitability of the director nominees,
Fairvest takes the view that shareholders should
have the ability to cast ballots with respect to
individuals rather than the entire slate. If this
is possible, they will not be forced to withhold
votes for the board as a whole as their only method
of registering a negative view of an individual or
individuals. We recommend withholding votes from
the entire slate because Murray Nott is an insider
on the Audit Committee.
2 Ratify Ernst & Young LLP, For For Mgmt
Chartered Accountants as Auditors
and Authorise the Board the Fix
Remuneration of Auditors.
06/17/04 - A/S AMERIGO RESOURCES 03074G109 05/07/04 1,220,000
LTD(formerly GOLDEN TEMPLE
MNG CORP)
1 Ratify PricewaterhouseCoopers LLP For For Mgmt
as Auditors
2 Authorize Board to Fix For For Mgmt
Remuneration of the Auditors
3 Elect Director Ian E. Gallie For Withhold Mgmt
Given the classified board structure, the
presence of an insider on the Audit Committee
and the lack of an independent Compensation
Committee, we recommend shareholders voice
their discontent with the current board
situation by withholding votes from Ian
Gallie, the only director being nominated this
year.
4 Adopt New Articles For Against Mgmt
Fairvest prefers to see companies with a fixed
maximum limit on authorized capital, with at
least 30 percent of the authorized stock
issued and outstanding. Limited capital
structures protect against excessive dilution
and can be increased when needed. As such we
do not recommend shareholders approve this
resolution.
5 Approve Issuance of Shares in One For Against Mgmt
or More Private Placements
Given the potential for excessive dilution, we
do not recommend shareholders approve this
resolution.
6 Other Business For Against Mgmt
As we can not know the content of these issues, we
cannot recommend that shareholders approve this
request.
06/04/04 - S AMT INTL MNG CORP 001983105 04/28/04 1,000,000
1 Offer Received From Copper For Against Mgmt
International Corporation
The company has received four offers for the assets
of the company each of which if accepted would
bring about a reorganisation of the business. The
company is currently delisted due to the lack of
market capital and assets to qualify for listing
and previously was under cease trade orders due to
default in filing audited and unaudited financial
statements. The company is in financial difficulty
and has hitherto been supported by its main
shareholder Norshield Investment Corporation in
exchange for preferred shares, debentures, notes
etc. All such financing may be convertible to
common shares which would effectively raise
Norshield's holding of the company from 18.3
percent to 55 percent. Due to its financial
difficulties certain properties held by its main
subsidiary AMT (USA) were reverted back to its
vendors following the inability to meet
obligations.
The board of directors has decided that the
four offers be placed before the shareholders and
that the offer with the largest number of votes
cast in favour would be implemented. The first
offer is by Copper International Corporation (CIC),
a private Canadian Mining company. CIC requests a
90 day option to be granted to them to purchase 100
percent of Norshield's rights for a total
consideration of $1.7 million in cash and 20
percent of CIC. The company however must be
restored as a reporting issuer prior to the
closing. The second offer by Palos Capital
Corporation (Palos), a company that provides
financial solutions and advice to emerging
companies. Palos has been successful in financing,
restructuring and administering dozens of public
companies. As per the offer Palos would raise
capital in order to cover costs of reorganisation,
reinstate the reporting status of the company,
re-introduce the company to the investment
community and hire a management team. The
remuneration for the above services has not been
determined. The third and fourth offers are by
Redhawk Resources a publicly traded Canadian Mining
Company with experience in Exploration, development
and financing operations. Redhawk has plans of
exploring and developing the company's copper creek
project which it believes lucrative short and long
term potential. The first of the offers is $1.45
million for 100 percent of Norshields rights with
all creditors of AMT (USA) being paid off by
Norshield prior to closing. The second offer is
$1.45 million for 75 percent of AMT (USA) with all
creditors being paid off prior to closing. Having
considered all four options it is our position that
the first offer (1) by Redhawk represents the
superior proposal and that its implementation would
be in the best interest of the shareholders. This
is mainly due to the experience of Redhawk in
exploration and development operations and its
plans for the copper creek project. These plans
were formulated following full due diligence and
on-site project investigations and we believe if
realised could greatly contribute to a recovery of
the company. Moreover the implementation of this
offer would result in the company's debt being paid
off by Norshield thereby releasing the company of
its financial burdens.
2 Offer Received From Palos Capital For Against Mgmt
Corporation
3 Offer One (1) Received From For For Mgmt
Redhawk Resources Inc
4 Offer Two (2) Received From For Against Mgmt
Redhawk Resources Inc
04/07/04 - S Anglogold Ashanti Ltd. 043743202 03/05/04 32,500
Meeting for Holders of ADRs
1 SPECIAL RESOLUTION TO (A) ADOPT A For For Mgmt
NEW REGULATION 14: (I) TO MAKE
SHARES ISSUED BETWEEN THE VOTING
RECORD TIME AND THE RECORD TIME
SUBJECT TO THE SCHEME; AND (II)
TO MAKE ANY SHARES ISSUED AFTER
THE RECORD TIME AUTOMATICALLY
EXCHANGEABLE FOR NEW ANGLOGOLD In this item
shareholders are asked to amend the company's
articles of association regarding Ashanti shares
that are issued after the voting record or the
record time. The proposed amendment states that
such shares would automatically be considered as a
share subject to the scheme. We see no reason to
oppose this request.
2 ORDINARY RESOLUTION TO APPROVE For For Mgmt
THE DE-LISTING OF ASHANTI FROM
THE GHANA STOCK EXCHANGE ON THE
EFFECTIVE DATE.
04/07/04 - S Anglogold Ashanti Ltd. 043743202 03/11/04 32,500
Meeting for Holders of ADRs
1 THE SCHEME For For Mgmt
At this meeting, shareholders are asked to
approve the merger agreement between AngloGold
and Ashanti. According to the agreement
AngloGold would purchase all of the
outstanding shares of Ashanti in exchange for
0.29 AngloGold shares per Ashanti share
acquired. The exchange ratio represents a 12
percent premium over the trading price of
Ashanti shares on the day prior to the first
cautionary announcement regarding the deal, on
Mar. 16, 2003. On the last practicable date
prior to the firm announcement of the deal,
Aug. 1, 2003, the premium amounted to four
percent. Following the exchange, current
Ashanti shareholders will hold 15.4 percent of
the combined company. When the merger is
completed, AngloGold will also change its name
to AngloGold Ashanti Ltd. The companies expect
to achieve an enhanced production profile with
the combined company, as well as reduced
financing, as well as administrative, and
procurement costs. The scale of the company's
production and reserves will also be greatly
enhanced. Futhermore, with the new company's
growth, production and liquidity potential, it
is expected to achieve an increased investment
appeal. Based on the strong strategic reasons
of the merger, as well as the favorable
exchange ratio, we recommend shareholders to
vote in favor of this merger.
06/29/04 - S Anglogold Ashanti Ltd. 035128206 06/09/04 9,425
Meeting for Holders of ADRs
1 ORDINARY RESOLUTION NUMBER 1 For For Mgmt
AUTHORITY TO ISSUE SHARES FOR THE
CONVERSION OF THE US
$1,000,000,000, 2.375% GUARANTEED
CONVERTIBLE BONDS DUE 2009
2 ORDINARY RESOLUTION NUMBER 2 For For Mgmt
AUTHORITY TO ISSUE SHARES
3 ORDINARY RESOLUTION NUMBER 3 For For Mgmt
AUTHORITY TO ISSUE SHARES FOR CASH
05/20/04 - A APOLLO GOLD CORP *APG* 03761E102 04/08/04 529,500
1 Elect Directors For For Mgmt
1.1 Elect as Director G. Michael
Hobart --- For
1.2 Elect as Director R. David
Russell --- For
1.3 Elect as Director Gerald J.
Schissler --- For
1.4 Elect as Director Charles Stott
--- For
1.5 Elect as Director G. W. Thompson
--- For
1.6 Elect as Director W.S. Vaughn ---
For
1.7 Elect as Director Robert A. Watts
--- For
2 Ratify Deloitte & Touche LLP as For For Mgmt
Auditors and Authorise Directors
to Fix Auditor Remuneration.
3 Approve Issuance of Shares in One For Against Mgmt
or More Private Placements
We cannot support the proposal due to the
excessive level of potential dilution it
represents.
06/23/04 - A/S Bema Gold Corp. *BGO.* 08135F107 05/10/04 150,000
1 Elect Directors For For Mgmt
2 Ratify PricewaterhouseCoopers LLP For For Mgmt
as Auditors
3 Amend Stock Option Plan to For For Mgmt
Increase Shares Resreved
Thereunder
4 Amend Stock Option Plan Re: For For Mgmt
Expiry Date of Options
06/23/04 - A/S Bema Gold Corp. *BGO.* 08135F107 05/10/04 2,285,000
1 Elect Directors For For Mgmt
2 Ratify PricewaterhouseCoopers LLP For For Mgmt
as Auditors
3 Amend Stock Option Plan to For For Mgmt
Increase Shares Resreved
Thereunder
4 Amend Stock Option Plan Re: For For Mgmt
Expiry Date of Options
05/06/04 - S BENDIGO MINING NL Q14633103 None 2,000,000
1 Approve Issuance of Up to a For Against Mgmt
Maximum of Such Number of Fully
Paid Ordinary Shares That Equals
AUD120 Million Divided by the
Issue Price Per Share to Project
Investors
In this item, shareholder approval is being sought
to issue a maximum number of shares to raise A$120
million ($90 million). The shares will be issued to
professional and institutional investors which have
not been named at this time.They may or may not be
existing shareholders of the company. A further
share purchase plan of A$15 million ($11million) is
to be carried out after the fund raising. Money
raised will be used for the development of the New
Bendigo Gold Project where it is projected that
33.6 million tons of gold will be mined over the
span of 25 years from an underground mine site at
the rate of 1.6 million tonnes per year. A period
of seven years is allowed to reach the design rate.
Based on the current share price of the company
which stands at A$0.135 ($0.10) per share, there
will be a worst-case dilution of 95 percent to
existing shareholders if the placement pushes
through. While the intended use of the funds and
the pursuit of the project itself would have long
term benefits to Bendigo, the company should find
an optimal mix of financing that would not
excessively dilute existing shareholders interest.
If financing through the issuance of securities is
the only viable option, then existing shareholders
should as least be given preemptive rights over
those shares so as to maintain their current level
of shareholding. The share purchase plan offered to
existing shareholders after the institutional
placement would somewhat reduce the impact of the
dilution but not enough to a level which ISS may
consider acceptable. The four resolutions presented
in this meeting are interdependent on each other
such that for all resolutions to take effect each
one must be passed. Given that we recommend voting
against Item 1, then ISS would also have to
recommend voting against the related resolutions in
Items 2,3 and 4.
2 Approve the Consolidation of All For Against Mgmt
the Ordinary Shares in the
Company on the Basis that Every
Ten Shares Be Converted into One
Share
Refer to Item 1.
3 Change Company Type from a Public For Against Mgmt
No Liability Company to a Public
Company Limited by Shares and Its
Name from Bendigo Mining NL to
Bendigo Mining Ltd
Refer to Item 1.
4 Adopt New Constitution Pursuant For Against Mgmt
to the Passing of Resolutions
One, Two and Three
Refer to Item 1.
05/11/04 - A Blackrock Ventures Inc. 091917104 03/26/04 200,000
*BVI*
1 Elect C. B. Burton, J. L. For For Mgmt
Festival, V. M. Luhowy, K. J.
MacIntyre, S. Schulich and K. F.
Williamson as Directors
2 Ratify PricewaterhouseCoopers LLP For For Mgmt
as Auditors
06/22/04 - A Bolivar Gold Corp. (formerly 097614101 05/10/04 2,435,000
TECNOPETROL INC)
1 Elect Jose Francisco Arata, For For Mgmt
Miguel de la Campa, Serafino
Iacono, Andres Carrera, Stephen
Wilkinson, and Robert Hines as
Directors
2 Appoint Auditors and Authorize For For Mgmt
Board to Fix Remuneration of
Auditors
3 Approve Stock Option Plan For Against Mgmt
The total cost of the company's plans of 8.67
percent is above the allowable cap for this
company of 6.33 percent. We oppose the
amendment to increase shares reserved for
options, as well, because it would appear that
non-employee directors participate in options
on a discretionary basis. This is a practice
which gives rise to the possibility of
self-dealing by directors in options.
Directors who are able to grant themselves
options without limit could find their
independence compromised.
4 Approve Issuance of Shares in One For Against Mgmt
or More Private Placements
Given the potential for excessive dilution, we
do not recommend shareholders approve this
resolution.
5 Amend Articles to eliminate For For Mgmt
non-board lot holdings
06/01/04 - A/S Breakwater Resources Ltd. 106902307 04/13/04 325,000
*BWR*
1 Elect C. K. Benner, G. F. Bub, D. For For Mgmt
K. Charter, J. C. Goodman, G. A.
C. MacRae, A. J. Palmiere and A.
M. Sinclair, Jr. as Directors
Although these are routine appointments,
shareholders may wish to express differing views as
to the suitability of the director nominees. For
this reason, Fairvest takes the position that
shareholders should have the ability to cast
ballots with respect to individuals rather than the
entire slate. If this is possible, they will not be
forced to withhold votes for the board as a whole
as their only method of registering a negative view
of an individual or individuals. We recommend a
vote FOR the entire slate. There are no insiders on
the Audit or Compensation Committees. The board is
majority independent, with two insiders, one
affiliated outsider and four independent directors.
2 Ratify Deloitte & Touche LLP as For For Mgmt
Auditors
Deloitte & Touche LLP are currently the company's
auditors. The company's materials indicate that
according to the auditor, the financial statements
present fairly, in all material respects, the
financial position of the company as at December
31, 2003 and 2002.
3 Amend Stock Option and Share For Against Mgmt
Purchase Components of the Share
Incentive Plan
Please see the section below entitled 'Multiple
Plan Notes' for a further discussion of this and
other plans. Vote Recommendation The total cost of
this amendment to the stock option component of the
company's plan is compared to an allowable cap
using a compensation model. The allowable caps are
industry-specific, market cap-based, and pegged to
the average amount paid by companies performing in
the top quartile of their peer groupings. Industry
classifications are established using standard
industry code (SIC) groups. Using historic data
tracked by Fairvest of the value of authorized
shares for issue at each company ranked in the top
quartile of its industry, a benchmark pay level is
established for each industry. The total cost of
this amendment to the company's plan of 4.14
percent is within the allowable cap for this
company of 15.05 percent. We oppose the amendment
to increase shares reserved for options, however,
because it would appear that non-employee directors
participate in options on a discretionary basis.
This is a practice which gives rise to the
possibility of self-dealing by directors in
options. Directors who are able to grant themselves
options without limit could find their independence
compromised. Note that potential dilution is 5.13
percent of fully diluted shares. We note that the
amendment to increase shares reserved to the share
purchase component of the company's share incentive
plan has not been costed under the compensation
model. There are currently 2,156,796 shares
reserved for future purchase. The amendment would
increase the shares reserved for purchase by 1
million shares. As this increase has been bundled
with an increase to the share option component, we
are not at liberty to recommend that shareholders
approve the increase to the shares reserved for
share purchase under the Share Incentive Plan.
4 Amend Share Bonus Component of For Against Mgmt
the Share Incentive Plan
Multiple Plan Notes: The combined shareholder value
transfer for all amendments to this plan is 4.35
percent. The aggregate value of all the proposals
does not exceed the company's allowable shareholder
value transfer cap of 15.05 percent. Vote
Recommendation The total cost of the share bonus
component of company's plan is compared to an
allowable cap using a compensation model. The
allowable caps are industry-specific, market
cap-based, and pegged to the average amount paid by
companies performing in the top quartile of their
peer groupings. Industry classifications are
established using standard industry code (SIC)
groups. Using historic data tracked by Fairvest of
the value of authorized shares for issue at each
company ranked in the top quartile of its industry,
a benchmark pay level is established for each
industry. The total cost of this amendment to the
company's plan of 0.21 percent is within the
allowable cap for this company of 15.05 percent. We
oppose the amendment to increase shares reserved
for options, however, because it would appear that
non-employee directors participate in options on a
discretionary basis. This is a practice which gives
rise to the possibility of self-dealing by
directors in options. Directors who are able to
grant themselves options without limit could find
their independence compromised. Note that potential
dilution is 0.25 percent of fully diluted shares.
5 Approve Grant of Four Million For Against Mgmt
Stock Options
This proposal relates to Item 3, the proposed
amendment to the Stock Option and Share Purchase
components of the Share Incentive Plan. The company
has granted options in excess of the number of
shares reserved under the Share Incentive Plan.
Specifically, 700,000 options to purchase common
shares were granted to five senior officers and one
senior employee on February 19, 2004, at an
exercise price of $0.75, expiring February 18,
2009, 2,250,000 options to purchase common shares
were granted to two executive officers on March 9,
2004, at an exercise price of $0.67, expiring March
8, 2009, 1,000,000 options to purchase common
shares were granted to five outside directors on
March 9, 2004, at an exercise price of $0.67,
expiring March 8, 2009 and 50,000 options to
purchase common shares were granted to a senior
employee on April 29, 2004, at an exercise price
equal to the price of the common shares on the TSX
at the close of trading on May 3, 2004, expiring
April 28, 2009. These grants are subject to
regulatory and shareholder approval. In accordance
with our recommendation against the resolution to
increase the shares reserved for stock option
grants (Item 3) we oppose this proposal to confirm
option grants in excess of those previously
approved by shareholders.
05/12/04 - A/S Campbell Resources Inc. 134422609 04/07/04 50,000
*CCH.*
1 Elect Louis Archambault, Michel For For Mgmt
Blouin, Graham G. Clow, Andre Y.
Fortier, Nicolas Guay, James C.
McCartney, G.E. Kurt Pralle, and
James D. Raymond as Directors
Given that shareholders may wish to express
differing views as to the suitability of the
director nominees, Fairvest takes the view that
shareholders should have the ability to cast
ballots with respect to individuals rather than the
entire slate. If this is possible, they will not be
forced to withhold votes for the board as a whole
as their only method of registering a negative view
of an individual or individuals. The board is
majority independent.
2 Ratify issuance of shares to For For Mgmt
Investissement Quebec and the
release from escrow of those
shares
In connection with the financing of the Copper Rand
5000 Project, the company issued shares in a
private placement to Investissement Quebec that had
been given blanket approval by shareholders at the
last annual and special meeting, held in May 2003.
A total of 10,458,591 common shares were to be
issued to Investissement Quebec; however, pursuant
to the private placement, only 9,125,980 were
issued. The remaining 1,332,611 common shares were
issued subject to an escrow agreement until
shareholders could ratify their issuance and
approve their release at this year's meeting.
Fairvest does not oppose this resolution.
3 Appoint Auditors and Authorize For For Mgmt
Board to Fix Remuneration of
Auditors
Samson Belair/Deloitte & Touche have been the
company's auditors since 2001. The circular does
not provide the audit or non-audit fees paid to the
auditor over the most recent fiscal year.
06/29/04 - A CHESAPEAKE GOLD CORP 165184102 05/17/04 240,000
1 Elect Directors For Split Mgmt
1.1 Elect Director P. Randy Reifel
--- Withhold
We recommend withholding votes from P. Randy
Reifel because he is an insider on the Audit
Committee.
1.2 Elect Director Gerald L. Sneddon
--- For
1.3 Elect Director John Perston ---
For
1.4 Elect Director Daniel J. Kunz ---
For
2 Ratify Moen & Company as Auditors For For Mgmt
Moen & Company have been the company's
auditors since 2002.
3 Authorize Board to Fix For For Mgmt
Remuneration of the Auditors
The circular does not provide the audit or
non-audit fees paid to the auditor over the
most recent fiscal year.
05/20/04 - A Coeur D' Alene Mines Corp. 192108108 04/01/04 100,000
*CDE*
1 Elect Directors For For Mgmt
1.1 Elect Director Cecil D. Andrus
--- For
1.2 Elect Director James J. Curran
--- For
1.3 Elect Director James A. McClure
--- For
1.4 Elect Director Robert E. Mellor
--- For
1.5 Elect Director John H. Robinson
--- For
1.6 Elect Director J. Kenneth
Thompson --- For
1.7 Elect Director Timothy R.
Winterer --- For
1.8 Elect Director Dennis E. Wheeler
--- For
2 Increase Authorized Common Stock For For Mgmt
3 Other Business For Against Mgmt
As we cannot know the content of these issues, we
do not recommend that shareholders approve this
request.
05/10/04 - A/S Corriente Resources Inc. 22027E102 03/29/04 425,000
*CTQ*
1 Elect Directors For For Mgmt
1.1 Elect Director Kenneth R. Shannon
--- For
The board is a majority independent and there
are no insiders on the Audit or Compensation
Committee.
1.2 Elect Director Leonard Harris ---
For
1.3 Elect Director Richard P. Clark
--- For
1.4 Elect Director Anthony F. Holler
--- For
1.5 Elect Director G. Ross McDonald
--- For
2 Ratify Auditors For For Mgmt
PricewaterhouseCoopers LLP are currently the
company's auditors.
3 Authorize Board to Fix For For Mgmt
Remuneration of the Auditors
The circular does not provide the audit or
non-audit fees paid to the auditor over the
most recent fiscal year.
4 Amend Stock Option Plan For Against Mgmt
This item will reserve an additional 1,578,464
shares under the company's Stock Option Plan.
The total cost of the company's plan is
compared to an allowable cap using a
compensation model. The allowable caps are
industry-specific, market cap-based, and
pegged to the average amount paid by companies
performing in the top quartile of their peer
groupings. Industry classifications are
established using standard industry code (SIC)
groups. Using historic data tracked by
Fairvest of the value of authorized shares for
issue at each company ranked in the top
quartile of its industry, a benchmark pay
level is established for each industry. The
total cost of the company's plans of 6.08
percent is within the allowable cap for this
company of 14.04 percent. We oppose the
amendment to increase shares reserved for
options, however, because it would appear that
non-employee directors participate in options
on a discretionary basis. This is a practice
which gives rise to the possibility of
self-dealing by directors in options.
Directors who are able to grant themselves
options without limit could find their
independence compromised. The amended plan
represents dilution of 7.69 percent on a
fully-diluted basis.
5 Amend Articles RE: Remove the For Against Mgmt
Pre-Existing Company Provisions In conjunction with
the adoption of new Articles, the company is
required to alter it's Notice of Articles to remove
the application of pre-existing company provisions
that are required pursuant to the British Columbia
Business Corporations Act. While this is a routine
item, proposed to enable the company to facilitate
the completion of adopting new Articles, we
recommend shareholders vote against this resolution
given our opposition to the item 6.
6 Adopt New Articles For Against Mgmt
Shareholders are being asked to approve the
adoption of new Articles of Incorporation. The
new Articles include minor changes and updates
including: permitting unlimited authorized
capital and allowing the auditors'
remuneration to be set by directors, without
the necessity of shareholder approval each
year. The amendments are being proposed given
the recent amendments to the British Columbia
Business Corporations Act. Fairvest prefers
companies to have a fixed limit on authorized
capital and feels that auditor remuneration is
and issue of growing interest to shareholders.
As such we do not recommend shareholders
approve this resolution.
7 Increase Authorized Capital For Against Mgmt
Shareholders are being requested to approve an
amendement to the articles of the corporation
in order to change the authorized capital from
50,000,000 shares to an unlimited number of
shares. The company currently has
approximately 45 million shares issued and
outstanding. Although unlimited authorized
capital is now permitted under the updated
British Columbia Business Corporations Act ,
the Act by which the company is governed,
Fairvest prefers to see companies with a fixed
maximum limit on authorized capital which can
be increased when needed.
8 Other Business For Against Mgmt
As we cannot know the content of the issues to be
raised under this item we do not recommend
shareholders approve this resolution.
05/11/04 - A DIAMONDS NORTH RES LTD 252785100 04/02/04 1,800,000
1 Appoint Auditors For For Mgmt
G. Ross McDonald is the company's current auditor.
2 Authorize Board to Fix For For Mgmt
Remuneration of the Auditors
The circular does not provide the audit or
non-audit fees paid to the auditor over the
most recent fiscal year.
3 Fix Number of Directors at four For For Mgmt
This is a routine item.
4 Elect Directors For For Mgmt
4.1 Elect Mark Kolebaba as Director
--- For
We recommend withholding votes from Mark
Kolebaba because he is an insider on the Audit
and Compensation Committees. The board is
majority independent.
4.2 Elect Bernard H. Kahlert as
Director --- For
4.3 Elect Maynard E. Brown as
Director --- For
4.4 Elect Yale R. Simpson as Director
--- For
5 Set the number of shares issuable For For Mgmt
under stock option plan
Shareholders are being asked to approve an
amendment to the company's stock option plan that
would, if passed, increase the number of shares
available for issuance pursuant to the plan from
2,862,578 to 4,938,305 shares. The total cost of
the company's plan is compared to an allowable cap
using a compensation model. The allowable caps are
industry-specific, market cap-based, and pegged to
the average amount paid by companies performing in
the top quartile of their peer groupings. Industry
classifications are established using standard
industry code (SIC) groups. Using historic data
tracked by Fairvest of the value of authorized
shares for issue at each company ranked in the top
quartile of its industry, a benchmark pay level is
established for each industry. The total cost of
the company's plans of 13.79 percent is above the
allowable cap for this company of 7.98 percent. We
also oppose the amendment to increase shares
reserved for options because it would appear that
non-employee directors participate in options on a
discretionary basis. This is a practice which gives
rise to the possibility of self-dealing by
directors in options. Directors who are able to
grant themselves options without limit could find
their independence compromised. Shareholders should
note that this plan could allow options to be
granted with a discounted exercise price if
permitted for by the TSX Venture Exchange. The
amended plan represents dilution of 16.67 percent
on a fully-diluted basis.
6 Other Business (Voting) For For Mgmt
As we cannot know the content of the issues to be
raised under this item we do not recommend
shareholders approve this resolution.
05/13/04 - A Dynatec Corp. *DY.* 267934107 04/13/04 170,000
1 Elect Ian Delaney, Bruce Walter, For For Mgmt
W. Robert Dengler, John Lill,
Ronald Fournier, Daniel Owen,
David Banks, Patrick James as
Directors
2 Approve Auditors and Authorize For For Mgmt
Board to Fix Remuneration of
Auditors
06/30/04 - A ECU SILVER MNG INC 26830P105 05/10/04 900,000
1 Elect Michel Roy, Clifford For Withhold Mgmt
Belanger, David Hu, Michael T.
Mason, and Olivier Regis as
Directors
Given that shareholders may wish to express
differing views as to the suitability of the
director nominees, Fairvest takes the view that
shareholders should have the ability to cast
ballots with respect to individuals rather than the
entire slate. If this is possible, they will not be
forced to withhold votes for the board as a whole
as their only method of registering a negative view
of an individual or individuals. The board is
majority independent. The circular does not
disclose the members of the Audit Committee
specifically but does state that it is composed of
a majority of unrelated directors, as that term is
defined in the policies of the TSX Venture
Exchange. Thus it is possible that there is an
insider on the Audit Committee and, as such, we
recommend withholding votes from the entire slate
of directors.
2 Appoint Auditors and Authorize For For Mgmt
Board to Fix Remuneration of
Auditors
Guimond & Associate Inc. are the company's
current auditors. The circular does not
provide the audit or non-audit fees paid to
the auditor over the most recent fiscal year.
05/13/04 - A Eldorado Gold Corp Ltd. 284902103 04/13/04 500,000
1 Elect Directors For For Mgmt
1.1 Elect Director John S. Auston ---
For
1.2 Elect Director K. Ross Cory ---
For
1.3 Elect Director Robert R. Gilmore
--- For
1.4 Elect Director Wayne D. Lenton
--- For
1.5 Elect Director Hugh C. Morris ---
For
1.6 Elect Director Paul N. Wright ---
For
2 Ratify Auditors For For Mgmt
3 Authorize Board to Fix For For Mgmt
Remuneration of the Auditors
4 Amend Incentive Stock Option Plan For Against Mgmt
Vote Recommendation The total cost of
the company's plans of 1.83 percent is within
the allowable cap for this company of 5.28
percent. We oppose the amendment to increase
shares reserved for options, however, because
non-employee directors participate in options
on a discretionary basis. This is a practice
which gives rise to the possibility of
self-dealing by directors in options.
Directors who are able to grant themselves
options without limit could find their
independence compromised.
06/28/04 - A/S European Minerals 29879A104 05/29/04 35,000
Corp(formerly Kazakhstan
Minerals Corporat *EPM.U*
1 Appoint Auditors and Authorize For For Mgmt
Board to Fix Remuneration of
Auditors
PricewaterhouseCoopers LLP are the company's
current auditors. The circular does not provide the
audit or non-audit fees paid to the auditor over
the most recent fiscal year.
2 Elect William G. Kennedy, Anthony For Withhold Mgmt
J. Williams, Dr. Barry D. Rayment, and Marvin J.
Singer as Directors
Given that shareholders may wish to express
differing views as to the suitability of the
director nominees, Fairvest takes the view that
shareholders should have the ability to cast
ballots with respect to individuals rather than the
entire slate. If this is possible, they will not be
forced to withhold votes for the board as a whole
as their only method of registering a negative view
of an individual or individuals. We recommend
withholding votes from the entire slate because
William G. Kennedy is an insider on the Audit
Committee. The board is majority independent.
3 Approve Issuance of Shares in One For Against Mgmt
or More Private Placements
Shareholders are being asked to provide
blanket approval for the potential issuance of up
to 57,902,122 shares, representing potential
dilution of 100 percent of the outstanding shares.
The shares have a 52-week high and low of $1.12 and
$0.32, respectively, and are currently trading at
$0.58 per share; as such any share issuances could
be issued at a 25 percent discount to the fair
market value as per Exchange regulations. Fairvest
prefers to see blanket approval for future private
placements to be capped at no more than 30 percent
of the outstanding shares. Given the potential for
excessive dilution, we do not recommend
shareholders approve this resolution.
06/28/04 - A/S European Minerals 29879A104 05/29/04 800,000
Corp(formerly Kazakhstan
Minerals Corporat *EPM.U*
1 Appoint Auditors and Authorize For For Mgmt
Board to Fix Remuneration of
Auditors
PricewaterhouseCoopers LLP are the company's
current auditors. The circular does not provide the
audit or non-audit fees paid to the auditor over
the most recent fiscal year.
2 Elect William G. Kennedy, Anthony For Withhold Mgmt
J. Williams, Dr. Barry D. Rayment, and Marvin J.
Singer as Directors
Given that shareholders may wish to express
differing views as to the suitability of the
director nominees, Fairvest takes the view that
shareholders should have the ability to cast
ballots with respect to individuals rather than the
entire slate. If this is possible, they will not be
forced to withhold votes for the board as a whole
as their only method of registering a negative view
of an individual or individuals. We recommend
withholding votes from the entire slate because
William G. Kennedy is an insider on the Audit
Committee. The board is majority independent.
3 Approve Issuance of Shares in One For Against Mgmt
or More Private Placements
Shareholders are being asked to provide blanket
approval for the potential issuance of up to
57,902,122 shares, representing potential dilution
of 100 percent of the outstanding shares. The
shares have a 52-week high and low of $1.12 and
$0.32, respectively, and are currently trading at
$0.58 per share; as such any share issuances could
be issued at a 25 percent discount to the fair
market value as per Exchange regulations. Fairvest
prefers to see blanket approval for future private
placements to be capped at no more than 30 percent
of the outstanding shares. Given the potential for
excessive dilution, we do not recommend
shareholders approve this resolution.
06/07/04 - S EUROPEAN NICKEL PLC G3285C106 None 400,000
1 Accept Financial Statements and For For Mgmt
Statutory Reports
2 Approve Increase in Authorised For For Mgmt
Capital from GBP 1,500,000 to GBP
2,000,000
This item proposes to increase the Company's
authorised capital from GBP 1.5 million ($2.64
million) to GBP 2 million ($3.52 million), an
increase of 33.3 percent. The Company currently has
issued capital of GBP 950,760 ($1,673,337.60), or
95 percent of the current amount of authorised
capital. We have no objections to this proposal.
3 Authorise Issuance of Equity or For For Mgmt
Equity-Linked Securities with
Pre-emptive Rights up to
Aggregate Nominal Amount of GBP
678,724.73
The Company is proposing an amount for share
issuances with pre-emptive rights equivalent to 71
percent of current issued share capital. Although
this amount exceeds the recommended limit of 33%,
we are willing to permit authorities up to a
maximum of 100% of the issued share capital having
regard to the Company's size and scope.
4 Authorise Issuance of Equity or For Against Mgmt
Equity-Linked Securities without
Pre-emptive Rights up to
Aggregate Nominal Amount of GBP
230,000
The Company proposes an amount for share
issuances without pre-emptive rights up to
24.2 percent of current issued share capital,
which exceeds guidelines for such issuances.
05/28/04 - A/S First Point Minerals Corp 335937108 04/16/04 770,000
1 Elect Directors For For Mgmt
1.1 Elect Director William H.
Myckatyn --- For
The board is majority independent. There are
no insiders on either the Audit or
Compensation Committees.
1.2 Elect Director Roderick W.
Kirkham --- For
1.3 Elect Director Peter M.D.
Bradshaw --- For
1.4 Elect Director Robert A. Watts
--- For
1.5 Elect Director Patrick J. Mars
--- For
2 Appoint Auditors For For Mgmt
De Visser Gray has been the company's auditors
since 1996.
3 Authorize Board to Fix For For Mgmt
Remuneration of the Auditors
The circular does not provide the audit or
non-audit fees paid to the auditor over the
most recent fiscal year.
4 Approve Incentive Stock Option For Against Mgmt
Plan
This item will confirm the company's ten percent
rolling stock option plan. The total cost of the
company's plan is compared to an allowable cap
using a compensation model. The allowable caps are
industry-specific, market cap-based, and pegged to
the average amount paid by companies performing in
the top quartile of their peer groupings. Industry
classifications are established using standard
industry code (SIC) groups. Using historic data
tracked by Fairvest of the value of authorized
shares for issue at each company ranked in the top
quartile of its industry, a benchmark pay level is
established for each industry. The total cost of
the company's plan of 5.16 percent is within the
allowable cap for this company of 9.51 percent.
Fairvest prefers companies to adopt a fixed maximum
number of shares to be reserved pursuant to options
plans, rather than 'rolling' stock option plans. We
oppose this resolution, however, because it would
appear that non-employee directors participate in
options on a discretionary basis. This is a
practice which gives rise to the possibility of
self-dealing by directors in options. Directors who
are able to grant themselves options without limit
could find their independence compromised.
Shareholders should note that this plan could allow
options to be granted with a discounted exercise
price if permitted for by the TSX Venture Exchange.
The amended plan could represent dilution of up to
10.83 percent on a fully-diluted basis at any point
in time.
5 Other Business For Against Mgmt
As we cannot know the content of the issues to be
raised under this item we do not recommend
shareholders approve this resolution.
05/19/04 - A/S FNX MINING COMPANY INC 30253R101 04/12/04 375,000
(formerly Fort Knox Gold
Resources In *FNX.*
1 Elect A. Terrance MacGibbon, For For Mgmt
Terrence Podolsky, Donald M.
Ross, Robert D. Cudney, Wayne G.
Beach, James W. Ashcroft, Frank
McKenna, John Lydall, J. Duncan
Gibson as Directors
2 Ratify KPMG LLP as Auditors and For For Mgmt
Authorise Board to Fix Auditor
Remuneration.
3 Approve Issuance of Shares in One For Against Mgmt
or More Private Placements
We oppose the resolution due to the level of
dilution it presents.
05/06/04 - A Freeport-McMoRan Copper & 35671D881 03/12/04 26,500
Gold Inc. *FCX*
Meeting For Preferred Shareholders
1.1 Elect Director Robert J. Allison, For For Mgmt
Jr.
Please note that ISS does not provide vote
recommendations for any agendas representing
preferred stockholders, warrant holders or debt
holders. Therefore no analysis will be provided.
1.2 Elect Director R. Leigh Clifford For Withhold Mgmt
Please note that ISS does not provide vote
recommendations for any agendas representing
preferred stockholders, warrant holders or
debt holders. Therefore no analysis will be
provided.
1.3 Elect Director James R. Moffett For For Mgmt
Please note that ISS does not provide vote
recommendations for any agendas representing
preferred stockholders, warrant holders or
debt holders. Therefore no analysis will be
provided.
1.4 Elect Director B.M. Rankin, Jr. For For Mgmt
Please note that ISS does not provide vote
recommendations for any agendas representing
preferred stockholders, warrant holders or
debt holders. Therefore no analysis will be
provided.
1.5 Elect Director J. Taylor Wharton For For Mgmt
Please note that ISS does not provide vote
recommendations for any agendas representing
preferred stockholders, warrant holders or
debt holders. Therefore no analysis will be
provided.
05/06/04 - A Freeport-McMoRan Copper & 35671D857 03/12/04 35,000
Gold Inc. *FCX*
1 Elect Directors For Split Mgmt
1.1 Elect Director Robert J. Allison,
Jr. --- For
We recommend a vote FOR the directors with the
exception of R. Leigh Clifford. We recommend
that shareholders WITHHOLD votes from R. Leigh
Clifford for poor attendance.
1.2 Elect Director R. Leigh Clifford
--- Withhold
1.3 Elect Director James R. Moffett
--- For
1.4 Elect Director B. M. Rankin, Jr.
--- For
1.5 Elect Director J. Taylor Wharton
--- For
2 Ratify Auditors For For Mgmt
3 Approve Non-Employee Director For For Mgmt
Omnibus Stock Plan
V.
Vote Recommendation The total cost of the company's
plans of 5.38 percent is within the allowable cap
for this company of 7.35 percent. Additionally,
this plan expressly forbids repricing.
4 Halt Payments to Indonesian Against Against ShrHoldr
Military
06/15/04 - A/S Gabriel Resources Ltd. *GBU* 361970106 05/11/04 350,000
1 Fix Number of Directors For For Mgmt
2 Elect Directors For For Mgmt
3 Approve Grant Thornton LLP as For For Mgmt
Auditors and Authorize Board to
Fix Remuneration of Auditors
4 Approve Issuance of Shares in One For Against Mgmt
or More Private Placements
Given the potential for excessive dilution, we
do not recommend shareholders approve this
resolution.
05/06/04 - A/S Glamis Gold Ltd. *GLG.* 376775102 03/22/04 300,000
1 Fix Number of Directors For For Mgmt
2 Elect Directors For For Mgmt
2.1 Elect Director A. Dan Rovig ---
For
2.2 Elect Director C. Kevin McArthur
--- For
2.3 Elect Director Kenneth F.
Williamson --- For
2.4 Elect Director Jean Depatie ---
For
2.5 Elect Director A. Ian S. Davidson
--- For
2.6 Elect Director P. Randy Reifel
--- For
3 Approve Auditors and Authorize For For Mgmt
Board to Fix Remuneration of
Auditors
4 Amend Stock Option Plan For For Mgmt
Please see the section below entitled
'Multiple Plan Notes' for a further discussion
of this and other plans. Vote
Recommendation The total cost of the
Incentive Share Purchase Option Plan of 2.77
percent is within the allowable cap for this
company of 3.73 percent, as is the combined
cost of both equity compensation plans
(3.42%). Additionally, this plan expressly
forbids repricing and limits non-executive
director participation.
5 Approve Equity Incentive Plan For For Mgmt
Multiple Plan Notes: The combined shareholder
value transfer for all plans considered is
3.42 percent. The aggregate value of all the
proposals does not exceed the company's
allowable shareholder value transfer cap of
3.73 percent. Fairvest supports those plans
that provide, in aggregate, the greatest
shareholder value transfer without exceeding
the allowable cap and that do not violate
repricing guidelines. Vote
Recommendation The total cost of the
Equity Incentive Plan of 0.66 percent is
within the allowable cap for this company of
3.73 percent as is the combined cost of both
equity compensation plans (3.42%). As well
this plan includes a limit on the
participation of outside directors.
05/27/04 - S Gold Reserve Inc. (Formerly 38068N108 None 200,000
Gold Reserve Corp. ) *GRZ.*
1 Elect Rockne J. Timm, A. Douglas For For Mgmt
Belanger, James P. Geyer, James
H. Coleman, Patrick D. McChesney,
Chris D. Mikkelsen, Jean Charles
Potvin as Directors
Although these are routine appointments given that
shareholders may wish to express differing views as
to the suitability of the director nominees,
Fairvest takes the view that shareholders should
have the ability to cast ballots with respect to
individuals rather than the entire slate. If this
is possible, they will not be forced to withhold
votes for the board as a whole as their only method
of registering a negative view of an individual or
individuals. The proposed slate comprise of three
insiders and four independent outside directors.
There are no insiders on either the audit or
compensation committees.
2 Ratify PricewaterhouseCoopers LLP For For Mgmt
as Auditors
PricewaterhouseCoopers have been the company's
auditors since 1992. The company's materials
indicate that according to the auditor, the
financial statements present fairly, in all
material respects, the financial position of the
company as at December 31, 2003.
3 Approve Issuance of Shares Upon For For Mgmt
Exercise of Underwriters'
Compensation Options
In connection with a previous private placement of
$14.1 million in September 2003, underwriters are
entitled to 202,100 non-assignable options as
partial consideration for their services. The
options are exercisable until expiry on March 28,
2005 at $3.64 per compensation unit. Each
compensation unit entitles the holder to one Class
A common share and one-half of a warrant. A warrant
is exercisable at $5.25 per common share with an
expiry of March 28, 2005. Shareholders are thus
asked to approve the issuance of 303,150 shares in
this regard as the company reached its maximum
allowable shares issued by way of private placement
of 25 percent of issued shares during the September
2003 issue. If shareholders do not authorise the
issuance the company is obligated to make an
equivalent cash consideration of $456,418 (based on
Black-scholes options valuation). Alternatively,
and subject to TSX approval, the company may issue
an equivalent number of common shares based on the
weighted average trading price of the counter
during the five days prior to the meeting. Given
the minimal dilution involved of just over 1
percent and the fact that shares issued by way of
private placement remains within Fairvest's
benchmark of 30 percent we do not oppose this item.
4 Amend Stock Option Plan For Against Mgmt
Vote Recommendation The total cost of the
company's plan is compared to an allowable cap
using a compensation model. The allowable caps
are industry-specific, market cap-based, and
pegged to the average amount paid by companies
performing in the top quartile of their peer
groupings. Industry classifications are
established using standard industry code (SIC)
groups. Using historic data tracked by
Fairvest of the value of authorized shares for
issue at each company ranked in the top
quartile of its industry, a benchmark pay
level is established for each industry. The
total cost of the company's plan of 9.93
percent is well above the allowable cap for
this company of 6.39 percent. Moreover it
would appear that non-employee directors
participate in options on a discretionary
basis. This is a practice which gives rise to
the possibility of self-dealing by directors
in options. Directors who are able to grant
themselves options without limit could find
their independence compromised. Note that
potential dilution is 11.23 percent of fully
diluted shares.
5 Approval of Purchase of Class A For For Mgmt
Shares by the KSOP Plan.
The resolution seeks shareholder approval for the
issuance of 75,000 Class A shares for purchase by
its KSOP (retirement) Plan at $4.56, the stock's
closing price on February 23, 2004. Given minimal
dilution and the 20 percent premium to current
trading levels we see no reason to oppose the
issuance.
06/16/04 - A Goldcorp Inc. *G.* 380956409 04/30/04 100,000
1 Elect Directors For Split Mgmt
1.1 Elect Director D.R. Beatty --- For
We recommended withholding votes from Brian
Jones given his low attendance at board
meetings. 1.2 Elect Director R.M. Goldsack ---
For
1.3 Elect Director S.R. Horne --- For
1.4 Elect Director J.P. Hutch --- For
1.5 Elect Director B.W. Jones ---
Withhold
1.6 Elect Director R.R. McEwen --- For
1.7 Elect Director D.R.M. Quick ---
For
1.8 Elect Director M.L. Stein --- For
2 Approve KPMG LLP as Auditors and For For Mgmt
Authorize Board to Fix
Remuneration of Auditors
06/22/04 - A Great Basin Gold Ltd 390124105 05/13/04 300,000
(Formerly Pacific Sentinel
Gold Corp.) *GBG*
1 Fix Number of Directors at Ten For For Mgmt
This is a routine item.
2 Elect Directors For For Mgmt
2.1 Elect as Director Ronald W.
Thiessen --- For
The proposed slate of ten directors comprise of two
insiders, four affiliated outsiders and four
independent directors. Neither of the insiders sit
on the Audit Committee of the company and we
therefore support this slate.
2.2 Elect as Director Robert A.
Dickinson --- For
2.3 Elect as Director Jeffrey R.
Mason --- For
2.4 Elect as Director David J.
Copeland --- For
2.5 Elect as Director Scott D.
Cousens --- For
2.6 Elect as Director T. Barry
Coughlan --- For
2.7 Elect as Director David S.
Jennings --- For
2.8 Elect as Director Walter T.
Segsworth --- For
2.9 Elect as Director Robert G. Still
--- For
2.10 Elect as Director Sipho A. Nkosi
--- For
3 Approve KPMG LLP as Auditors and For For Mgmt
Authorize Board to Fix
Remuneration of Auditors
KPMG are the company's current auditors. The
company's materials indicate that according to the
auditor, the financial statements present fairly,
in all material respects, the financial position of
the company as at December 31, 2003.
4 Alter Notice of Articles For Against Mgmt
Following the replacement of the former
Company Act with the Business Corporations Act
all companies must complete a transition
application. The new rules permit the
directors additional flexibility and the
company intends to alter the articles to
change the maximum number of shares authorised
for issuance from 200 million to 'unlimited'.
Fairvest generally approves requests to
increase authorized capital to a fixed number
of shares if the total shares currently
outstanding are equal to more than 30 percent
of the shares authorized. However we do not
support resolutions for unlimited authorised
share capital as it may facilitate excessive
dilution.
5 Approve Issuance of Shares in One For Against Mgmt
or More Private Placements
Advance shareholder approval is being sought to
allow the company to issue 86,285,379 shares under
private placements over the 12 month period after
such approval is received. The rules of the TSX
currently provide that the aggregate number of
shares a listed company may issue or make subject
to issuance under share purchase warrants or other
convertible security by way of private placement
during any six-month period cannot exceed 25
percent of the number of shares outstanding on an
undiluted basis. If this limitation is to be
surpasses shareholder approval must be obtained.
Implementation of this proposal could result in the
issuance of shares equal to up to 100 percent of
the total outstanding at the time the placements
are entered into. The company notes the need for
financial flexibility as the reason for this
resolution. We cannot support the proposal due to
the excessive level of potential dilution it
represents.
6 Amend Stock Option Plan For Against Mgmt
Vote Recommendation The total cost of the
company's plan is compared to an allowable cap
using a compensation model. The allowable caps
are industry-specific, market cap-based, and
pegged to the average amount paid by companies
performing in the top quartile of their peer
groupings. Industry classifications are
established using standard industry code (SIC)
groups. Using historic data tracked by
Fairvest of the value of authorized shares for
issue at each company ranked in the top
quartile of its industry, a benchmark pay
level is established for each industry. The
total cost of the company's plans of 6.23
percent is within the allowable cap for this
company of 7.78 percent. We oppose the
amendment to increase shares reserved for
options, however, because it would appear that
non-employee directors participate in options
on a discretionary basis. This is a practice
which gives rise to the possibility of
self-dealing by directors in options.
Directors who are able to grant themselves
options without limit could find their
independence compromised. Note that potential
dilution is 10.8 percent of fully diluted
shares.
05/07/04 - A Hecla Mining Co. *HL* 422704106 03/11/04 200,000
1 Elect Directors For For Mgmt
1.1 Elect Director Ted Crumley --- For
1.2 Elect Director Charles L.
McAlpine --- For
1.3 Elect Director Jorge E. Ordonez
C. --- For
2 Amend Omnibus Stock Plan For For Mgmt
V.
Vote Recommendation The total cost of the company's
plans of 5.32 percent is within the allowable cap
for this company of 8.97 percent. In 2003, the
company granted over 25 percent of its total grants
to its top five named executives.
06/15/04 - A/S High River Gold Mines Ltd. 42979J107 05/05/04 1,000,000
*HRG*
1 Elect Alexandr Balabanov, W. For For Mgmt
Derek Bullock, Michael Chieng,
Laurence Curtis, Valery Dmitriev,
David Mosher, Vladimir Polevanov,
Mark Rachovides and Donald Whalen
as Directors
2 Approve Issuance of Shares in One For Against Mgmt
or More Private Placements
Given the potential for excessive dilution, we
do not recommend shareholders approve this
resolution.
3 Extend the Time of Expiry of For For Mgmt
Certain Warrants
4 Amend Stock Option Plan For Against Mgmt
Vote Recommendation The total cost of
the company's plans of 4.35 percent is within
the allowable cap for this company of 4.97
percent. We oppose the amendment to increase
shares reserved for options, however, because
it would appear that non-employee directors
have the ability to participate in options on
a discretionary basis. Directors who are able
to grant themselves options without limit
could find their independence compromised.
5 Approve Acquisition of Shares in For For Mgmt
OJSC Buryatzoloto
6 Appoint PricewaterhouseCoopers For For Mgmt
LLP as Auditors and Authorize
Board to Fix Remuneration of
Auditors
06/08/04 - A/S Iamgold Corporation 450913108 04/28/04 715,000
(Formerly Iamgold Intl.
Mining ) *IMG.*
1 Approve Issuance of Common Shares For For Mgmt
of IAMGold in Connection with
Business Combination with Wheaton
River Minerals Ltd.
2 Amend Articles to Increase For For Mgmt
Maximum Number of Directors from
Ten to Sixteen and Change Name to
Axiom Gold in the Event the Share
Issue Resolution(item 1) is
Passed.
3 Amend Share Incentive Plan For For Mgmt
Vote Recommendation The total cost of
the company's plans of 2.81 percent is within
the allowable cap for this company of 3.46
percent. While we generally oppose option
plans when non-executive directors are allowed
to participate in such plans due the
possibility of self-dealing, Fairvest has
received a written confirmation from IAMGOLD
that non-executive directors will not
participate in the Axiom Option Plan. We
therefore support this resolution.
4 Adopt New By-Laws For For Mgmt
5 Elect William D. Pugliese, Gordon For For Mgmt
J. Bogden, John A. Boultbee,
Derek Bullock, Donald K. Charter,
Joseph F. Conway, Mahendra Naik,
Robert A. Quartermain as
Directors and Additional Eight
Directors From Wheaton River
Minerals
6 Ratify Deloitte & Touche as For For Mgmt
Auditors and KPMG LLP if Combination is not Completed.
04/15/04 - A Inca Pacific Resources Inc. 45324A101 03/11/04 90,000
1 Appoint PricewaterhouseCoopers as For For Mgmt
Auditors
PricewaterhouseCoopers have been the company's
auditors since 2000. The circular does not provide
the audit or non-audit fees paid to the auditor
over the most recent fiscal year.
2 Authorize Board to Fix For For Mgmt
Remuneration of the Auditors
This is a routine item.
3 Fix Number of Directors at five For For Mgmt
This is a routine item.
4 Elect Anthony Floyd as Director For Withhold Mgmt
We recommend withholding votes from Anthony
Floyd because he is an insider on the Audit
Committee.
5 Elect Geoffrey Harden as Director For For Mgmt
6 Elect L. Rodriguez For For Mgmt
Mariategui-Proano as Director
7 Elect Charles G. Preble as For For Mgmt
Director
8 Elect Bryan Morris as Director For For Mgmt
9 Approve Issuance of Shares in One For Against Mgmt
or More Private Placements
This proposal could result in dilution over 20% of
the outstanding shares; as such we do not recommend
shareholders approve this resolution. Shareholders
are being asked to provide blanket approval for the
potential issuance of shares pursuant to future
private placements. The circular states that if
passed, this resolution would allow the company to
issue shares or securities convertible into shares
equal to 20% or more of the outstanding shares.
Shareholders should note that the company could
potentially issue shares pursuant to this
resolution equal to 100% of the current outstanding
shares. The shares have a 52-week high and low of
$0.24 and $0.025, respectively, and are currently
trading at $0.12 per share; as such any share
issuances could be issued at a 25 percent discount
to the fair market value as per Exchange
regulations. Fairvest prefers to see blanket
approval for future private placements to be capped
at no more than 30 percent of the outstanding
shares. Given the potential for excessive dilution,
we do not recommend shareholders approve this
resolution.
10 Other Business (Voting) For Against Mgmt
As we cannot know the content of the issues to be
raised under this item we do not recommend
shareholders approve this resolution.
06/10/04 - A Ivanhoe Mines Ltd. (Formerly 46579N103 04/21/04 490,800
Indochina Goldfields Ltd)
*IVN*
1 Amend By-Law No. 1 For For Mgmt
2 Approve Issuance of up to 50 For For Mgmt
million Equity Securities
3 Approve Increase in Number of For For Mgmt
Directors to 12
4 Elect Directors For For Mgmt
5 Appoint Deloitte & Touche, For For Mgmt
Chartered Accountants as Auditors
and Authorize Board to Fix
Remuneration of Auditors
05/20/04 - A Jiangxi Copper Y4446C100 04/20/04 4,000,000
1 Accept Report of Directors For For Mgmt
2 Accept Report of the Supervisory For For Mgmt
Committee
3 Accept Financial Statements and For For Mgmt
Auditors' Reports
4 Approve Proposal for Profit For For Mgmt
Distribution
The board is proposing a final dividend of
RMB0.012 ($0.001) per 10 shares.
5 Reappoint Deloitte Touche For For Mgmt
Tohmatsu Shanghai CPA Ltd. and
Deloitte Touche Tohmatsu as the
Company's PRC and International
Auditors and Authorize Any Two
Executive Directors to Fix Their
Remuneration and to Enter into
the Service Agreement with the
Auditors
6 Approve Issuance of Equity or For Against Mgmt
Equity-Linked Securities without
Preemptive Rights
ISS recommends voting against the issuance of
shares without preemptive rights unless the company
provides specific language and terms that there
will be (1) adequate restrictions on discounts and
(2) no authority to refresh the share issuance
amounts without prior shareholder approval. This is
in light of abuses made by a number of Hong Kong
companies that have issued shares at steep
discounts to related parties and renewed the share
issuance amount under this authority without
shareholder approval, which are permissible under
current law.
06/11/04 - A MAG SILVER CORP 55903Q104 05/05/04 25,000
1 Appoint Auditors and Authorize For For Mgmt
Board to Fix Remuneration of
Auditors
Deloitte & Touche LLP have been the company's
auditors since 2000. The circular does not provide
the audit or non-audit fees paid to the auditor
over the most recent fiscal year.
2 Elect Directors For For Mgmt
2.1 Elect Director George S. Young
--- For
The board is majority independent. There are
no insiders on the Audit Committee.
2.2 Elect Director David G.S. Pearce
--- For
2.3 Elect Director Eric H. Carlson
--- For
2.4 Elect Director R. Michael Jones
--- For
3 Approve an amendment to the For For Mgmt
provisions governing the release
of shares of the Company
currently held in escrow
Shareholders are being asked to approve an
amendment to the provisions governing the release
of shares of the company currently held in escrow.
An aggregate of 1,520,000 common shares were
deposited into escrow under the Original Escrow
Agreement. These shares are to be released from
escrow on a pro rata basis as to one-third on each
of the first three anniversaries of the completion
by the company of its Qualifying Transaction. This
was completed on April 15, 2003. A further 300,000
common shares were deposited into escrow under the
New Escrow Agreement. These shares are to be
released from escrow as to 10% on April 21, 2003
and 15% each six months thereafter so that all
shares will be released by April 21, 2006. The
reason for the difference in the escrow release
provisions is that the TSX Venture Exchange
policies changed between the dates of the two
Agreements. The company is asking that the
provisions of the Original Escrow Agreement be
amended to be the same as the provisions of the New
Escrow Agreement. As the shares will still be
released from escrow in tranches over a period of
time, Fairvest does not oppose this resolution.
05/11/04 - A/S Meridian Gold Inc. *MNG.* 589975101 03/29/04 50,000
1 Elect John A. Eckersley, Robert For For Mgmt
A. Horn, Brian J. Kennedy, Christopher R. Lattanzi,
Malcolm W. MacNaught, Gerald E. Munera, Carl L.
Renzoni as Directors
2 Ratify Auditors For For Mgmt
3 Amend Bylaws Re:Mandatory For Against Mgmt
Retirement Age
Given that Meridian has already adopted wholly
independent key committees and Fairvest prefers to
see boards engaging in self-evaluations on an
annual basis, we do not feel that the less dynamic
practice of fixing a retirement age and term
limits, is acceptable at this time for this
company.
05/27/04 - A/S METALLIC VENTURES GOLD INC 591253109 04/23/04 100,000
1 Elect Jeffrey R. Ward, Richard D. For For Mgmt
McNeely, Norman F. Findlay,
William R.C Blundell, Timothy J.
Ryan, Rand A. Lomas as Directors Although these are
routine appointments given that shareholders may
wish to express differing views as to the
suitability of the director nominees, Fairvest
takes the view that shareholders should have the
ability to cast ballots with respect to individuals
rather than the entire slate. If this is possible,
they will not be forced to withhold votes for the
board as a whole as their only method of
registering a negative view of an individual or
individuals. The proposed slate comprise of two
insiders, one affiliated outside director and three
independent directors. None of the insiders sit on
the audit or compensation committees and thus we do
not oppose this slate.
2 Ratify PricewaterhouseCoopers as For For Mgmt
Auditors and Authorise Board to
Fix Auditor Remuneration.
PricewaterhouseCoopers LLP are the company's
current auditors. The company's materials indicate
that according to the auditor, the financial
statements present fairly, in all material
respects, the financial position of the company as
at December 31, 2003.
3 Amend Articles of Amalgamation. For For Mgmt
This special resolution seeks to amend the
articles of amalgamation in order to delete
the Class A shares from its authorised
capital. The Class A shares were created and
issued prior to the company going public and
the terms of the shares provide that such
shares are converted to common shares upon
such an event. Thus no Class A shares may be
issued in accordance with their terms.
4 Amend Stock Option Plan For Against Mgmt
Vote Recommendation Shareholders are
asked to approve an extension in the number of
shares reserved under the stock option plan
from 5,000,000 to 7,500,000 shares. The
total cost of the company's plan is compared
to an allowable cap using a compensation
model. The allowable caps are
industry-specific, market cap-based, and
pegged to the average amount paid by companies
performing in the top quartile of their peer
groupings. Industry classifications are
established using standard industry code (SIC)
groups. Using historic data tracked by
Fairvest of the value of authorized shares for
issue at each company ranked in the top
quartile of its industry, a benchmark pay
level is established for each industry.
The total cost of the company's plan of
9.05 percent is well above the allowable cap for
this company of 5.71 percent. Moreover it would
appear that non-employee directors participate in
options on a discretionary basis. This is a
practice which gives rise to the possibility of
self-dealing by directors in options. Directors who
are able to grant themselves options without limit
could find their independence compromised. Note
that potential dilution is 12.1 percent of fully
diluted shares.
5 Amend Bylaws For Against Mgmt
The proposed by-law amendment seeks to lower
the quorum for shareholder meetings from 51
percent to 15 percent. The board believes that
the current quorum is too high for a public
company and could make routine matters unduly
tedious. The proposed quorum of 15 percent is
cited as the industry standard for similar
public companies. While we agree that
the existing quorum may be onerous, the
proposed quorum is well below the Fairvest
benchmark for shareholder meetings of 25
percent. We therefore oppose the amendment.
06/10/04 - A Metallica Resources Inc. 59125J104 05/05/04 90,000
*MR.*
1 Elect Craig Nelsen, Richard Hall, For For Mgmt
Fred Lightner, Oliver
Lennox-King, J. Alan Spence, Ian
Shaw as Directors
2 Approve Auditors and Authorize For For Mgmt
Board to Fix Remuneration of
Auditors
06/10/04 - A/S Minefinders Corp *MFL.* 602900102 05/03/04 200,000
1 Fix Number of Directors at Six For For Mgmt
2 Elect Directors For Split Mgmt
2.1 Elect Mark H. Bailey as a
Director --- Withhold
We therefore recommend withholding votes from
Mr. Bailey and Mr. MacNeill because they are
insiders on the board and the board functions as
the Compensation Committee.
2.2 Elect James M. Dawson as a
Director --- For
2.3 Elect H. Leo King as a Director
--- For
2.4 Elect Robert L. Leclerc as a
Director --- For
2.5 Elect Paul MacNeill as a Director
--- Withhold
2.6 Elect Anthonie Luteijn as a
Director --- For
3 Appoint BDO Dunwoody LLP as For For Mgmt
Auditor
4 Authorize Board to Fix For For Mgmt
Remuneration of the Auditors
5 Amend Stock Option Plan For Against Mgmt
Vote Recommendation The total cost of the
company's plans of 6.04 percent is above the
allowable cap for this company of 5.84
percent. In addition, it would appear that
non-employee directors have the ability to
participate in options on a discretionary
basis. Directors who are able to grant
themselves options without limit could find
their independence compromised.
6 Other Business (Voting) For Against Mgmt
As we can not know the content of these issues, we
cannot recommend that shareholders approve this
request.
05/19/04 - A Miramar Mining Corp. *MAE* 60466E100 04/14/04 650,000
1 Elect Directors For For Mgmt
2 Ratify KPMG LLP as Auditors For For Mgmt
06/29/04 - A MOSS LAKE GOLD MINES LTD 619906100 05/28/04 2,250,000
1 Elect G. Mannard, M. Pollitt, A. For Withhold Mgmt
Birkett and D. Orr as Directors Given that
shareholders may wish to express differing views as
to the suitability of the director nominees,
Fairvest takes the view that shareholders should
have the ability to cast ballots with respect to
individuals rather than the entire slate. If this
is possible, they will not be forced to withhold
votes for the board as a whole as their only method
of registering a negative view of an individual or
individuals. We recommend withholding votes from
the slate because the entire board functions as the
Compensation Committee and three of the four
nominated directors are company insiders. The board
is composed of a majority of related directors.
2 Appoint Grant Thornton LLP as For For Mgmt
Auditors and Authorize Board to
Fix Remuneration of Auditors
Grant Thornton LLP are the company's current
auditors. No audit fee information has been
provided within the company's proxy circular.
04/28/04 - A Newmont Mining Corp. 651639106 03/02/04 120,000
(Holding Company) *NEM*
1 Elect Directors For For Mgmt
1.1 Elect Director Glen A. Barton ---
For
1.2 Elect Director Vincent A. Calarco
--- For
1.3 Elect Director Michael S. Hamson
--- For
1.4 Elect Director Leo I. Higdon, Jr.
--- For
1.5 Elect Director Pierre Lassonde
--- For
1.6 Elect Director Robert J. Miller
--- For
1.7 Elect Director Wayne W. Murdy ---
For
1.8 Elect Director Robin A.
Plumbridge --- For
1.9 Elect Director John B. Prescott
--- For
1.10 Elect Director Michael K. Reilly
--- For
1.11 Elect Director Seymour Schulich
--- For
1.12 Elect Director James V. Taranik
--- For
2 Ratify Auditors For For Mgmt
3 Submit Shareholder Rights Plan Against For ShrHoldr
(Poison Pill) to Shareholder Vote ISS Conclusion: In
this case, the company's rights plan was not
approved by shareholders nor does it embody the
above features that ISS recommends. We therefore
agree with the proponent that the current pill
should be put to a shareholder vote and any new
pill be put to a shareholder vote.
05/26/04 - A/S North American Tungsten 656914108 04/14/04 900,000
Corp. (Formerly Lodex
Resources)
1 Fix Number of Directors at four For For Mgmt
This is a routine item.
2 Elect Directors For Split Mgmt
2.1 Elect Stephen Leahy as Director
--- Withhold
We recommend withholding votes from Stephen
Leahy because he is an insider on the Audit
and Executive Compensation Committees. The
board is majority independent.
2.2 Elect Christina Scott as Director
--- For
2.3 Elect Wayne Lenton as Director
--- For
2.4 Elect Allan Krasnick as Director
--- For
3 Appoint Auditors For For Mgmt
PricewaterhouseCoopers LLP, former auditors of
the company, is not being proposed as auditors
this year. The board recommends that Cinnamon
Jang Willoughby & Company be approved as the
company's independent accounting firm for the
coming year. There were no disagreements or
reportable events.
4 Approve Stock Option Plan For Against Mgmt
This item will affirm the company's ten
percent rolling stock option plan. The total
cost of the company's plan is compared to an
allowable cap using a compensation model. The
allowable caps are industry-specific, market
cap-based, and pegged to the average amount
paid by companies performing in the top
quartile of their peer groupings. Industry
classifications are established using standard
industry code (SIC) groups. Using historic
data tracked by Fairvest of the value of
authorized shares for issue at each company
ranked in the top quartile of its industry, a
benchmark pay level is established for each
industry. The total cost of the company's
plans of 8.24 percent is within the allowable
cap for this company of 10.15 percent.
Fairvest prefers companies to adopt a fixed
maximum number of shares to be reserved
pursuant to options plans, rather than
'rolling' stock option plans. We oppose the
amendment to increase shares reserved for
options, however, because it would appear that
non-employee directors participate in options
on a discretionary basis. This is a practice
which gives rise to the possibility of
self-dealing by directors in options.
Directors who are able to grant themselves
options without limit could find their
independence compromised. Shareholders should
note that this plan could allow options to be
granted with a discounted exercise price if
permitted for by the TSX Venture Exchange. The
amended plan could represent dilution of up to
10.83 percent on a fully-diluted basis at any
point in time.
5 Approve Stock Option Plan Grants For Against Mgmt
to directors and employees
Shareholders are being asked for blanket approval
for granting general authority to the directors to
grant director and employees incentive stock
options. As stated above in the analysis of the
previous agenda item, Fairvest opposes
discretionary participation in option plans by
outside directors. As such, we recommend a vote
against this resolution.
6 Approve Issuance of Shares in One For For Mgmt
or More Private Placements
Shareholders are being asked to grant blanket
approval for potential share issuances in excess of
20% of the company's issued capital. On December
11, 2003, the company applied to the British
Columbia Supreme Court for protection under the
Company's Creditors Arrangement Act. The company is
trying to reorganize and is seeking advance
shareholder approval for a potential change of
control of the company in order to relieve the
company from the time and expense involved in
calling a further meeting to obtain shareholder
approval for a change of control that would result
from a Plan of Compromise or Arrangement or any
debt or equity financing. In light of this, we do
not oppose this resolution.
7 Ratify Acts of Directors For For Mgmt
This is a routine item.
8 Other Business (Voting) For Against Mgmt
As we cannot know the content of the issues to be
raised under this item we do not recommend
shareholders approve this resolution.
06/23/04 - A/S NORTHERN DYNASTY MINERALS 66510M204 05/13/04 400,000
LTD *NDM*
1 Fix Number of Directors Between For For Mgmt
Nine and Twelve
This is a routine item.
2 Elect Directors For Split Mgmt
2.1 Elect as Director David J.
Copeland --- For
The proposed slate comprise of nine directors,
including two insiders while the remaining
directors are independent outsiders. Mr. Thiessen
President and CEO of the company sits on the audit
committee and we therefore oppose his nomination.
Fairvest believes that management and those with
strong ties to management have no place examining
and giving final approval to the financial
statements as insiders on such committees threaten
to undermine the independent oversight and conflict
of interest prevention which is the purpose of the
committees.
2.2 Elect as Director Scott D.
Cousens --- For
2.3 Elect as Director Robert A.
Dickinson --- For
2.4 Elect as Director Gordon J.
Fretwell --- For
2.5 Elect as Director Jeffrey R.
Mason --- For
2.6 Elect as Director Brian Mountford
--- For
2.7 Elect as Director Ronald W.
Thiessen --- Withhold
2.8 Elect as Director Ian Watson ---
For
2.9 Elect as Director Bruce A.
Youngman --- For
3 Approve De Visser Gray as For For Mgmt
Auditors and Authorize Board to
Fix Remuneration of Auditors
De Visser Gray are the company's current auditors.
The company's materials indicate that according to
the auditor, the financial statements present
fairly, in all material respects, the financial
position of the company as at December 31, 2003.
4 Amend Articles to Provide for For Against Mgmt
Unlimited Number of Common Shares Following the
replacement of the Company Act (British Columbia)
with the new Business Corporations Act all
companies must complete a transition application to
the BCA and alter articles to ensure compliance.
Pursuant to the new Act the companies are now
allowed to have an unlimited number of shares as
authorised capital and the company intends to alter
its articles to incorporte this provision. Fairvest
generally approves requests to increase authorized
capital to a fixed number of shares if the total
shares currently outstanding are equal to more than
30 percent of the shares authorized. However we
oppose resolutions for an unlimited authorisation
of capital as it may facilitate a high level of
dilution for existing shareholders.
5 Approve Issuance of Shares in One For Against Mgmt
or More Private Placements
Advance shareholder approval is being sought to
allow the company to issue 35,111,102 shares under
private placements over the 12 month period after
such approval is received. The rules of the TSX
currently provide that the aggregate number of
shares a listed company may issue or make subject
to issuance under share purchase warrants or other
convertible security by way of private placement
during any six-month period cannot exceed 25
percent of the number of shares outstanding on an
undiluted basis. In order to issue shares in excess
of this limit shareholder approval must be
obtained. Implementation of this proposal could
result in the issuance of shares equal to up to 100
percent of the total outstanding at the time the
placements are entered into. The company notes the
need for financial flexibility as the reason for
this resolution. We cannot support the proposal due
to the excessive level of potential dilution it
represents.
6 Amend Stock Option Plan For Against Mgmt
Vote Recommendation The total cost of the
company's plan is compared to an allowable cap
using a compensation model. The allowable caps
are industry-specific, market cap-based, and
pegged to the average amount paid by companies
performing in the top quartile of their peer
groupings. Industry classifications are
established using standard industry code (SIC)
groups. Using historic data tracked by
Fairvest of the value of authorized shares for
issue at each company ranked in the top
quartile of its industry, a benchmark pay
level is established for each industry. The
total cost of the company's plans of 10.43
percent is above the allowable cap for this
company of 5.54 percent. We also oppose the
amendment to increase shares reserved for
options, because it would appear that
non-employee directors participate in options
on a discretionary basis. This is a practice
which gives rise to the possibility of
self-dealing by directors in options.
Directors who are able to grant themselves
options without limit could find their
independence compromised. Note that potential
dilution is 14.11 percent of fully diluted
shares.
06/04/04 - A/S Northern Orion Resources Inc 665575106 04/22/04 5,505,800
*NNO.*
1 Fix Number of Directors at Five For For Mgmt
2 Elect Director David Cohen For For Mgmt
3 Elect Director Robert Cross For For Mgmt
4 Elect Director John K. Burns For For Mgmt
5 Elect Director Robert Gayton For For Mgmt
6 Elect Director Michael Beckett For For Mgmt
7 Appoint Deloitte & Touche LLP as For For Mgmt
Auditors
8 Authorize Board to Fix For For Mgmt
Remuneration of the Auditors
9 Amend Stock Option Plan Re: For Against Mgmt
Increase number of Shares Reserved Vote Recommendation
The total cost of the company's plans of 4.94
percent is within the allowable cap for this
company of 6.66 percent. We oppose the amendment to
increase shares reserved for options, however,
because it would appear that non-employee directors
have the ability to participate in options on a
discretionary basis. Directors who are able to
grant themselves options without limit could find
their independence compromised.
10 Amend Stock Option Plan Re: For Against Mgmt
Change to Rolling Plan
Fairvest generally prefers option plans that
reserve a fixed number of options rather than
rolling option plans where the number of shares
reserved under option could fluctuate drastically
depending on the number of shares outstanding.
Given that we have recommended a vote against the
proposed amended stock option plan in item # 9
above due to certain negative aspects of the plan,
we do not recommend a vote in favour of this
resolution.
11 Approve Issuance of Shares in One For Against Mgmt
or More Private Placements
Given the potential for excessive dilution, we
do not recommend shareholders approve this
resolution.
12 Amend Notice of Articles For Against Mgmt
Although unlimited authorized capital is
permitted under the BCA, the act by which the
company is now governed, Fairvest prefers to
see companies with a fixed maximum limit on
authorized capital which can be increased when
needed. As such, we oppose this amendment and
recommend a vote against this resolution for
this reason.
13 Other Business For Against Mgmt
As we can not know the content of these issues, we
cannot recommend that shareholders approve this
request.
05/14/04 - A/S Northgate Exploration, Ltd. 666416102 04/07/04 70,000
*NGX.*
1 Elect Directors For For Mgmt
2 Ratify KPMG LLP as Auditors For For Mgmt
3 Authorize Board to Fix For For Mgmt
Remuneration of the Auditors
4 Change Company Name to 'Northgate For For Mgmt
Minerals Corporation'
5 Adopt Shareholder Rights Plan For For Mgmt
(Poison Pill)
06/17/04 - A/S OREZONE RES INC 685921108 05/03/04 900,000
1 Elect Directors For For Mgmt
1.1 Elect Ronald Little as a Director
--- For
Although these are routine appointments
shareholders may wish to express differing views as
to the suitability of the director nominees,
Fairvest takes the view that shareholders should
have the ability to cast ballots with respect to
individuals rather than the entire slate. If this
is possible, they will not be forced to withhold
votes for the board as a whole as their only method
of registering a negative view of an individual or
individuals. The board is a majority independent
and there are no insiders on the Audit or
Compensation Committee.
1.2 Elect Michael Halvorson as a
Director --- For
1.3 Elect Bob Mason as a Director ---
For
1.4 Elect David Netherway as a
Director --- For
1.5 Elect Peter Allen as a Director
--- For
2 Approve PricewaterhouseCoopers For For Mgmt
LLP as Auditors and Authorize
Board to Fix Remuneration of
Auditors
Raymond Chabot Grant Thornton LLP former auditor of
the company is not being proposed as auditors this
year. The board recommends that
PricewaterhouseCoopers LLP be approved as the
company's independent accounting firm for the
coming year. There were no disagreements or
reportable events.The circular does not provide the
audit or non-audit fees paid to the auditor over
the most recent fiscal year.
3 Approve Issuance of Shares in One For Against Mgmt
or More Private Placements
Shareholders are being asked to provide blanket
approval for the potential issuance of up to
102,480,485 shares, representing potential dilution
of 100 percent of the outstanding shares. The
shares have a 52-week high and low of $1.45 and
$0.46, respectively, and are currently trading at
$1.05 per share; as such any share issuances could
be issued at a 20 percent discount to the fair
market value as per Exchange regulations. Fairvest
prefers to see blanket approval for future private
placements to be capped at no more than 30 percent
of the outstanding shares. Given the potential for
excessive dilution, we do not recommend
shareholders approve this resolution.
4 Amend Stock Option Plan For Against Mgmt
This proposal seeks shareholder approval to
amend the 1997-1998 Stock Option Plan to
reserve 2,700,000 additional shares. The total
cost of the company's plan is compared to an
allowable cap using a compensation model. The
allowable caps are industry-specific, market
cap-based, and pegged to the average amount
paid by companies performing in the top
quartile of their peer groupings. Industry
classifications are established using standard
industry code (SIC) groups. Using historic
data tracked by Fairvest of the value of
authorized shares for issue at each company
ranked in the top quartile of its industry, a
benchmark pay level is established for each
industry. The total cost of the company's
plans of 6.63 percent is above the allowable
cap for this company of 6.50 percent. We
oppose the amendment to increase shares
reserved for options, however, because it
would appear that non-employee directors
participate in options on a discretionary
basis. This is a practice which gives rise to
the possibility of self-dealing by directors
in options. Directors who are able to grant
themselves options without limit could find
their independence compromised. Shareholders
should note that this plan could allow options
to be granted with a discounted exercise price
if permitted for by the TSX Venture Exchange.
The amended plan represents dilution of 7.47
percent on a fully-diluted basis.
5 Amend Articles Re: Redesignate For For Mgmt
Class A Shares
This item is proposing two amendments to the
company's articles. The first amendment will allow
the board to increase the size of the board when
appropriate. The board is currently fixed at five
directors. The second amendment will redesignate
the company's Class A shares as common shares. The
company's authorized capital is currently comprised
of an unlimited number of Class A shares, with
approximately 102 million shares are outstanding.
The amendment will not change any of the rights,
privileges and restrictions of the company's single
class of authorized and outstanding shares. We do
not oppose these minor amendments which will
stream-line the board's activities and the
company's share capital structure.
06/17/04 - A/S OREZONE RES INC 685921108 05/03/04 560,000
1 Elect Directors For Split Mgmt
1.1 Elect Ronald Little as a Director
--- For
Although these are routine appointments
shareholders may wish to express differing views as
to the suitability of the director nominees,
Fairvest takes the view that shareholders should
have the ability to cast ballots with respect to
individuals rather than the entire slate. If this
is possible, they will not be forced to withhold
votes for the board as a whole as their only method
of registering a negative view of an individual or
individuals. The board is a majority independent
and there are no insiders on the Audit or
Compensation Committee.
1.2 Elect Michael Halvorson as a
Director ---
1.3 Elect Bob Mason as a Director ---
1.4 Elect David Netherway as a
Director ---
1.5 Elect Peter Allen as a Director
---
2 Approve PricewaterhouseCoopers For For Mgmt
LLP as Auditors and Authorize
Board to Fix Remuneration of
Auditors
Raymond Chabot Grant Thornton LLP former auditor of
the company is not being proposed as auditors this
year. The board recommends that
PricewaterhouseCoopers LLP be approved as the
company's independent accounting firm for the
coming year. There were no disagreements or
reportable events.The circular does not provide the
audit or non-audit fees paid to the auditor over
the most recent fiscal year.
3 Approve Issuance of Shares in One For Against Mgmt
or More Private Placements
Shareholders are being asked to provide blanket
approval for the potential issuance of up to
102,480,485 shares, representing potential dilution
of 100 percent of the outstanding shares. The
shares have a 52-week high and low of $1.45 and
$0.46, respectively, and are currently trading at
$1.05 per share; as such any share issuances could
be issued at a 20 percent discount to the fair
market value as per Exchange regulations. Fairvest
prefers to see blanket approval for future private
placements to be capped at no more than 30 percent
of the outstanding shares. Given the potential for
excessive dilution, we do not recommend
shareholders approve this resolution.
4 Amend Stock Option Plan For Against Mgmt
This proposal seeks shareholder approval to
amend the 1997-1998 Stock Option Plan to
reserve 2,700,000 additional shares. The total
cost of the company's plan is compared to an
allowable cap using a compensation model. The
allowable caps are industry-specific, market
cap-based, and pegged to the average amount
paid by companies performing in the top
quartile of their peer groupings. Industry
classifications are established using standard
industry code (SIC) groups. Using historic
data tracked by Fairvest of the value of
authorized shares for issue at each company
ranked in the top quartile of its industry, a
benchmark pay level is established for each
industry. The total cost of the company's
plans of 6.63 percent is above the allowable
cap for this company of 6.50 percent. We
oppose the amendment to increase shares
reserved for options, however, because it
would appear that non-employee directors
participate in options on a discretionary
basis. This is a practice which gives rise to
the possibility of self-dealing by directors
in options. Directors who are able to grant
themselves options without limit could find
their independence compromised. Shareholders
should note that this plan could allow options
to be granted with a discounted exercise price
if permitted for by the TSX Venture Exchange.
The amended plan represents dilution of 7.47
percent on a fully-diluted basis.
5 Amend Articles Re: Redesignate For For Mgmt
Class A Shares
This item is proposing two amendments to the
company's articles. The first amendment will allow
the board to increase the size of the board when
appropriate. The board is currently fixed at five
directors. The second amendment will redesignate
the company's Class A shares as common shares. The
company's authorized capital is currently comprised
of an unlimited number of Class A shares, with
approximately 102 million shares are outstanding.
The amendment will not change any of the rights,
privileges and restrictions of the company's single
class of authorized and outstanding shares. We do
not oppose these minor amendments which will
stream-line the board's activities and the
company's share capital structure.
05/05/04 - A/S Placer Dome Inc. *PDG.* 725906101 03/19/04 485,000
1 Elect Directors For For Mgmt
2 Ratify Ernst & Young LLP as For For Mgmt
Auditors
3 Adopt or Amend Shareholder Rights For For Mgmt
Plan (Poison Pill)
06/22/04 - A QGX LTD 74728B101 05/14/04 325,000
1 Elect Directors For For Mgmt
1.1 Elect as Director David Anderson
--- For
1.2 Elect as Director Alex Davidson
--- For
1.3 Elect as Director Robert Mcrae
--- For
1.4 Elect as Director Henry Reimer
--- For
1.5 Elect as Director Barry D.
Simmons --- For
1.6 Elect as Director Edward Van
Ginkel --- For
1.7 Elect as Director Mark Wayne ---
For
2 Ratify PricewaterhouseCoopers as For For Mgmt
Auditors
3 Amend Stock Option Plan For Against Mgmt
Vote Recommendation The total cost of
the company's plans of 7.67 percent is above
the allowable cap for this company of 6.49
percent. We also oppose the amendment to
increase shares reserved for options, because
it would appear that non-employee directors
participate in options on a discretionary
basis. This is a practice which gives rise to
the possibility of self-dealing by directors
in options. Directors who are able to grant
themselves options without limit could find
their independence compromised.
05/12/04 - A/S Queenstake Resources Ltd. 748314101 04/07/04 2,550,000
*QRL*
1 Elect Directors For For Mgmt
2 Approve Auditors and Authorize For For Mgmt
Board to Fix Remuneration of
Auditors
3 Amend Incentive Share Option Plan For Against Mgmt
Vote Recommendation The total cost of the
company's plans of 4.53 percent is within the
allowable cap for this company of 22.00
percent. We oppose the amendment to increase
shares reserved for options, however, because
it would appear that non-employee directors
participate in options on a discretionary
basis. This is a practice which gives rise to
the possibility of self-dealing by directors
in options. Directors who are able to grant
themselves options without limit could find
their independence compromised.
4 Ratify Stock Option Plan Grants For Against Mgmt
The conditional option grants appear to have
been granted as such, given the fact that the
company's option plan does not currently have
sufficent share available for any future
option grants. Given our against
recommendation on the resolution to increase
the size of the stock option plan, we cannot
recommend shareholders approve this resolution.
5 Adopt Shareholder Rights Plan For Against Mgmt
(Poison Pill)
The company claims that adopting the rights plan is
in the best interests of shareholders, ensuring
their fair treatment in a takeover bid. However, we
find that this plan also provides the board and
management with excessive opportunity to interpret
provisions of the plan. This plan does not allow
shareholders enough control of the process to
sufficiently safeguard their interests. The
Queenstake shareholder rights plan is not a 'new
generation' rights plan and therefore we must
recommend a vote against its approval.
04/26/04 - A Randgold Resources Ltd. 752344309 04/12/04 132,500
Meeting for Holders of ADRs
1 ORDINARY RESOLUTION - ADOPTION OF For For Mgmt
THE DIRECTORS REPORT AND ACCOUNTS
2 ORDINARY RESOLUTION - ADOPTION OF For Against Mgmt
THE REPORT OF THE REMUNERATION
COMMITTEE
Notice periods that exceed two years are now out of
line with market practice. Because this company has
now had ample time to comply with this
recommendation or at least to shorten notice
periods to two years, and the company still has
not, we recommend that shareholders oppose this
item.
3 ORDINARY RESOLUTION - RE-ELECTION For For Mgmt
OF DIRECTOR: R I ISRAEL (CHAIRMAN
OF REMUNERATION COMMITTEE)
4 ORDINARY RESOLUTION - RE-ELECTION For For Mgmt
OF DIRECTOR: P LIETARD (MEMBER OF
AUDIT AND REMUNERATION COMMITTEES)
5 RATIFY AUDITORS For For Mgmt
6 ORDINARY RESOLUTION - APPROVE THE For For Mgmt
FEES PAYABLE TO THE DIRECTORS
7 SPECIAL RESOLUTION - AUTHORISE For For Mgmt
THE SUB DIVISION OF THE COMPANY S
SHARE CAPITAL
8 SPECIAL RESOLUTION - AUTHORISE For For Mgmt
THE CANCELLATION OF US$100
MILLION SHARE PREMIUM
9 SPECIAL RESOLUTION - AUTHORISE For For Mgmt
THE PURCHASE OF SHARES FOR CASH
10 SPECIAL RESOLUTION - AUTHORISE For Against Mgmt
NEW ARTICLES OF ASSOCIATION
RELATING TO DISCLOSURE BY HOLDERS
OF COMPANY S SHARES
We disapprove of disenfranchising shareholders down
to the ridiculously low threshold of 0.25 percent
of a class. The legal disclosure threshold of 3
percent is perfectly adequate.
11 SPECIAL RESOLUTION - AMEND THE For For Mgmt
ARTICLES OF ASSOCIATION TO
FACILITATE ELECTRONIC
COMMUNICATION WITH SHAREHOLDERS
04/13/04 - S Red Back Mining Inc Q8049P102 None 1,281,138
(Formerly CHAMPION RESOURCES
INC)
1 Amend Articles By Inserting For For Mgmt
Article 5.3 After Article 5.2 Re:
In-Specie Distribution of Shares These two items
relate to the sale of the company's Australian
assets namely: the Irwin Hills Nickel Project, the
Byro Nickel Project and the Deep Well Gold Project.
The assets were sold in exchange for four million
Yilgarn Mining Ltd. shares. Holders of Red Back
shares will then receive one Yilgarn share for
every 33.7 Red Back share held. This ratio can
change depending on how many Red Back options are
exercised before the record date. The Australian
assets were sold to enable the company to focus its
resources on the Chirano Gold Project and other
extensive gold and exploration properties in Ghana.
Moroever, these Australian assets are seen to even
have less value for Red Back Mining if the merger
with Champion Resources is approved since the
latter is also focused on gold exploration and
development in Ghana.
2 Approve a Capital Reduction By For For Mgmt
Transferring Four Million Yilgam
Shares Pro Rata to the Holders of
Red Back Shares as at the Record
Date
06/21/04 - A/S Red Back Mining Inc 756297107 05/12/04 640,569
(Formerly CHAMPION RESOURCES
INC)
1 Reappoint Auditors and Authorize For For Mgmt
Board to Fix Remuneration of
Auditors
Staley, Okada, Chandler & Scott are the company's
current auditors. The circular does not provide the
audit or non-audit fees paid to the auditor over
the most recent fiscal year.
2 Elect Richard P. Clark as Director For Withhold Mgmt
We recommend withholding votes from Richard P.
Clark because he is an insider on the Audit
Committee. The board is majority independent.
3 Elect Lukas H. Lundin as Director For For Mgmt
4 Elect Ross E. Ashton as Director For For Mgmt
5 Elect Michael W. Hunt as Director For For Mgmt
6 Elect Harry N. Michael as Director For For Mgmt
7 Confirm enactment of new By-law For For Mgmt
No. 1
The company is seeking shareholder approval for its
new By-Law No. 1. The By-Law was passed by the
board on April 23, 2004. This general By-Law
addresses the corporate governance structure of the
company, with sections mandating the powers of the
board and its committees as well as the rights of
shareholders to participate in the company. It also
articulates the company's business, its policy on
borrowing power, the various roles officers of the
company will play in its management and means of
communication with shareholders. Shareholders
should note that the circular does not provide any
details as to quorum requirements, the election of
directors, or casting votes by the Chair of
meetings. Given the lack of information, we cannot
support this resolution.
8 Other Business (Voting) For Against Mgmt
As we cannot know the content of the issues to be
raised under this item we do not recommend
shareholders approve this resolution.
06/24/04 - A/S Romarco Minerals Inc. *R.* 775903206 05/18/04 2,110,000
1 Elect David C. Beling as Director For For Mgmt
The board is a majority independent.
2 Elect Diane R. Garrett as Director For For Mgmt
3 Elect Leendert G. Krol as Director For For Mgmt
4 Elect Ralf O. Langner as Director For Withhold Mgmt
We recommend withholding votes from Ralf Langner
because he is an insider on the Audit Committee.
5 Elect R.J. MacDonald as Director For For Mgmt
6 Elect Robert van Doorn as Director For For Mgmt
7 Elect Edward van Ginkel as For For Mgmt
Director
8 Ratify KPMG LLP as Auditors For For Mgmt
KPMG LLP are currently the company's auditors.
9 Authorize Board to Fix For For Mgmt
Remuneration of the Auditors
The circular does not provide the audit or
non-audit fees paid to the auditor over the
most recent fiscal year
10 Approve Issuance of Shares in One For Against Mgmt
or More Private Placements
Shareholders are being asked to provide blanket
approval for the potential issuance of up to
22,586,322 shares, representing potential dilution
of 100 percent of the outstanding shares. The
shares have a 52-week high and low of $0.43 and
$0.16, respectively, and are currently trading at
$0.27 per share; as such any share issuances could
be issued at a 25 percent discount to the fair
market value as per Exchange regulations. Fairvest
prefers to see blanket approval for future private
placements to be capped at no more than 30 percent
of the outstanding shares. Given the potential for
excessive dilution, we do not recommend
shareholders approve this resolution.
11 Approve Stock Option Plan For Against Mgmt
This proposal reserves 4,517,264 shares under
the New Stock Option Plan. The total cost of
the company's plan is compared to an allowable
cap using a compensation model. The allowable
caps are industry-specific, market cap-based,
and pegged to the average amount paid by
companies performing in the top quartile of
their peer groupings. Industry classifications
are established using standard industry code
(SIC) groups. Using historic data tracked by
Fairvest of the value of authorized shares for
issue at each company ranked in the top
quartile of its industry, a benchmark pay
level is established for each industry. The
total cost of the company's plans of 13.82
percent is above the allowable cap for this
company of 9.58 percent. We oppose the
amendment to increase shares reserved for
options, however, because it would appear that
non-employee directors participate in options
on a discretionary basis. This is a practice
which gives rise to the possibility of
self-dealing by directors in options.
Directors who are able to grant themselves
options without limit could find their
independence compromised. The amended plan
represents dilution of 16.67 percent on a
fully-diluted basis.
12 Other Business For Against Mgmt
As we cannot know the content of the issues to be
raised under this item we do not recommend
shareholders approve this resolution.
06/24/04 - A/S Romarco Minerals Inc. *R.* 775903206 05/18/04 20,000
1 Elect David C. Beling as Director For For Mgmt
The board is a majority independent.
2 Elect Diane R. Garrett as Director For For Mgmt
3 Elect Leendert G. Krol as Director For For Mgmt
4 Elect Ralf O. Langner as Director For Withhold Mgmt
We recommend withholding votes from Ralf Langner
because he is an insider on the Audit Committee.
5 Elect R.J. MacDonald as Director For For Mgmt
6 Elect Robert van Doorn as Director For For Mgmt
7 Elect Edward van Ginkel as For For Mgmt
Director
8 Ratify KPMG LLP as Auditors For For Mgmt
KPMG LLP are currently the company's auditors.
9 Authorize Board to Fix For For Mgmt
Remuneration of the Auditors
The circular does not provide the audit or
non-audit fees paid to the auditor over the
most recent fiscal year
10 Approve Issuance of Shares in One For Against Mgmt
or More Private Placements
Shareholders are being asked to provide blanket
approval for the potential issuance of up to
22,586,322 shares, representing potential dilution
of 100 percent of the outstanding shares. The
shares have a 52-week high and low of $0.43 and
$0.16, respectively, and are currently trading at
$0.27 per share; as such any share issuances could
be issued at a 25 percent discount to the fair
market value as per Exchange regulations. Fairvest
prefers to see blanket approval for future private
placements to be capped at no more than 30 percent
of the outstanding shares. Given the potential for
excessive dilution, we do not recommend
shareholders approve this resolution.
11 Approve Stock Option Plan For Against Mgmt
This proposal reserves 4,517,264 shares under
the New Stock Option Plan. The total cost of
the company's plan is compared to an allowable
cap using a compensation model. The allowable
caps are industry-specific, market cap-based,
and pegged to the average amount paid by
companies performing in the top quartile of
their peer groupings. Industry classifications
are established using standard industry code
(SIC) groups. Using historic data tracked by
Fairvest of the value of authorized shares for
issue at each company ranked in the top
quartile of its industry, a benchmark pay
level is established for each industry. The
total cost of the company's plans of 13.82
percent is above the allowable cap for this
company of 9.58 percent. We oppose the
amendment to increase shares reserved for
options, however, because it would appear that
non-employee directors participate in options
on a discretionary basis. This is a practice
which gives rise to the possibility of
self-dealing by directors in options.
Directors who are able to grant themselves
options without limit could find their
independence compromised. The amended plan
represents dilution of 16.67 percent on a
fully-diluted basis.
12 Other Business For Against Mgmt
As we cannot know the content of the issues to be
raised under this item we do not recommend
shareholders approve this resolution.
06/24/04 - A SHORE GOLD INC 824901102 05/06/04 175,000
1 Elect K. MacNeill, R. Walker, B. For For Mgmt
Menell, H. Bay, N. McMillan and
A. Hillier as Directors
2 Appoint KPMG LLP as Auditors and For For Mgmt
Authorize Board to Fix
Remuneration of Auditors
3 Approve Stock Option Plan For Against Mgmt
Vote Recommendation The total cost of the
company's plans of 6.76 percent is within the
allowable cap for this company of 6.78
percent. We oppose approval for this option
plan, however, because it would appear that
non-employee directors have the ability to
participate in options on a discretionary
basis. Directors who are able to grant
themselves options without limit could find
their independence compromised.
05/27/04 - A SINO GOLD LTD Q8505T101 05/25/04 530,000
1 Elect Nicholas Curtis as Director For For Mgmt
Nicholas Curtis is an affiliated outsider by
virtue of his being an employee of Sino Mining
International in 2000, when it spun-off Sino
Gold. Source: Sino Gold website. The board has
seven members made up of two executives, three
independent outsiders and two affiliated
outsiders.
2 Elect Xu Hanjing as Director For For Mgmt
Xu Hanjing is an executive director.
3 Elect Zhong Jianguo as Director For For Mgmt
Zhong Jianguo is classified as an affiliated
outsider, being the CFO of Sino Mining Intl.,
a substantial shareholder of the company.
4 Ratify Past Issuance of 16.8 For For Mgmt
Million Ordinary Shares of
AUD2.50 Per Share to Clients of
Southern Cross Equities Ltd and
BMO Nesbitt Burns last Dec. 2003 This item requests
shareholder approval for the past issuance of 16.8
million shares on December 2003 at an issue price
of A$2.50 ($1.88) per share. Funds raised will be
used to finance the company's Jinfeng Project in
Guizhou Province. The shares represent 13 percent
of the company's outstanding capital. This falls
within the limits established by ISS guidelines for
issuances without preemptive rights (20 percent).
Australian companies routinely seek approval of
previous share distributions. We approve of such
proposals so long as the prior issuances conform to
ISS dilution guidelines.
5 Approve Issue Of Options to None Against Mgmt
Subscribe for 100,000 Fully Paid
Ordinary Shares to Nicholas Curtis The options are
granted as incentive options which have an exercise
price of A$2.69 ($2.02) pursuant to the Sino Gold
Executive and Employee Option Plan. The exercise
price represents a 29 percent premium to the share
price of A$2.08 ($1.56) at the time of this
analysis. The options will be issued no later than
12 months after the AGM. ISS notes that the
Executive and Employee Option Plan allows that the
number of shares on the exercise of the options,
taken together will all other share and option
plans of the company, should not exceed 10 percent
of the company's share capital. Our guidelines
establish that shares available for all option
plans, when an absolute number is specified,
represent no more than 5 percent of a company's
outstanding shares. We also note that the options
lack performance criteria. Due to the lack of
performance criteria, and because the proposed
grants are pursuant to an option plan which ISS
finds unacceptable due to excessive dilution, ISS
recommends that shareholders vote against the
proposed grants in Items 5 to 10.
6 Approve Issue Of Options to None Against Mgmt
Subscribe for 100,000 Fully Paid
Ordinary Shares to Jake Klein
Refer to Item 5.
7 Approve Issue Of Options to None Against Mgmt
Subscribe for 75,000 Fully Paid
Ordinary Shares to Xu Hanjing
Refer to Item 5.
8 Approve Issue of Options to None Against Mgmt
Subscribe for 20,000 Fully Paid
Ordinary Shares to Brian Davidson
Refer to Item 5.
9 Approve Issue Of Options to None Against Mgmt
Suscribe for 20,000 Fully Paid
Ordinary Shares to Peter Cassidy
Refer to Item 5.
10 Approve Issue of Options to None Against Mgmt
Subscribe for 20,000 Fully Paid
Ordinay Shares to James Askew
Refer to Item 5.
06/28/04 - A Solitario Resources Corp. 83422R106 05/10/04 85,478
*SLR.*
1 Elect Directors For Split Mgmt
1.1 Elect Director Mark E. Jones, III
--- Withhold
We recommend a vote FOR the directors with the
exception of insider Christopher E. Herald,
affiliated outsider Mark E. Jones, III and
independent outsider Leonard Harris. We recommend
that shareholders WITHHOLD votes from Christopher
E. Herald and Mark E. Jones, III for failure to
establish independent nominating and compensation
committees and from Leonard Harris for sitting on
more than six boards.
1.2 Elect Director John Hainey --- For
1.3 Elect Director Leonard Harris ---
Withhold
1.4 Elect Director Christopher E.
Herald --- Withhold
1.5 Elect Director Daniel B. Leonard
--- For
2 Ratify Auditors For For Mgmt
06/11/04 - A/S South Atlantic Ventures Ltd. 83636R108 05/07/04 635,000
1 Appoint Auditors and Authorize For For Mgmt
Board to Fix Remuneration of
Auditors
Deloitte & Touche LLP are the company's current
auditors. The circular does not provide the audit
or non-audit fees paid to the auditor over the most
recent fiscal year.
2 Elect Lukas H. Lundin as Director For For Mgmt
The board is majority independent. There are
no insiders on the Audit Committee.
3 Elect Edward F. Posey as Director For For Mgmt
4 Elect William A. Rand as Director For For Mgmt
5 Elect Brian D. Edgar as Director For For Mgmt
6 Elect Pierre Besuchet as Director For For Mgmt
7 Elect John H. Craig as Director For For Mgmt
8 Change Company Name to Lundin For For Mgmt
Mining Corporation
Shareholders are being asked to approve a change in
the corporation's name to Lundin Mining
Corporation. The circular states that the name
change is in view of the corporation's focus in
Scandinavia and reflects the board's commitment to
the success of the corporation in light of the
proposed acquisition of the Zinkgruvan mine located
in Southern Sweden. Fairvest des not oppose this
resolution.
9 Ratify granting of Stock Options For Against Mgmt
to insiders
Disinterested shareholder approval is being sought
to approve the granting of an aggregate of 160,000
options to insiders on December 5, 2003. The total
cost of the grants is compared to an allowable cap
using a compensation model. The allowable caps are
industry-specific, market cap-based, and pegged to
the average amount paid by companies performing in
the top quartile of their peer groupings. Industry
classifications are established using standard
industry code (SIC) groups. Using historic data
tracked by Fairvest of the value of authorized
shares for issue at each company ranked in the top
quartile of its industry, a benchmark pay level is
established for each industry. The total cost of
the company's grants of 5.16 percent is within the
allowable cap for this company of 6.74 percent. We
oppose the grants, however, because it would appear
that non-employee directors participate in options
on a discretionary basis. This is a practice which
gives rise to the possibility of self-dealing by
directors in options. Directors who are able to
grant themselves options without limit could find
their independence compromised. Shareholders should
note that this plan could allow options to be
granted with a discounted exercise price if
permitted for by the TSX Venture Exchange. The
amended plan represents dilution of 6.85 percent on
a fully-diluted basis.
06/28/04 - A/S St. Andrew Goldfields Ltd. 787188408 05/13/04 516,465
*SAS.*
1 Elect Herbert Abramson, Stephen For Abstain Mgmt
Burns, Paul C. Jones, Glenn
Laing, and Warren Seyffert as
Directors
Given that shareholders may wish to express
differing views as to the suitability of the
director nominees, Fairvest takes the view that
shareholders should have the ability to cast
ballots with respect to individuals rather than the
entire slate. If this is possible, they will not be
forced to withhold votes for the board as a whole
as their only method of registering a negative view
of an individual or individuals. We recommend
withholding votes from the entire slate because
Glenn Laing is an insider on both the Audit and
Compensation Committees. The board is majority
independent.
2 Appoint Auditors and Authorize For For Mgmt
Board to Fix Remuneration of
Auditors
KPMG LLP have been the company's auditors for more
than five years. The circular does not provide the
audit or non-audit fees paid to the auditor over
the most recent fiscal year.
3 Confirm By-law No.1A as a bylaw For Against Mgmt
of the corporation
This item seeks shareholder confirmation to replace
the Company's By-laws No. 1 with the new general
By-Law No. 1A, as a housekeeping measure and to
keep up with the OBCA's initiatives which are
intended to enhance corporate governance and
shareholder communications. The By-Law was passed
by the board on July 24, 2003. The By-Law addresses
the corporate governance structure of the company,
with sections mandating the powers of the board and
its committees as well as the rights of
shareholders to participate in the company. It also
articulates the company's business, its policy on
borrowing power, the various roles officers of the
company will play in its management and provides
for electronic and telephonic means of
communication with shareholders. Shareholders
should note that the quorum at meetings of
shareholders is the lesser of the number of
shareholders or two persons present in person. The
By-Law provides for the annual election of
directors, but does not provide the Chairman with a
second or casting vote in the event of a 'tie' vote
at shareholder meetings. The chair does have a
casting vote, however, at board meetings. We
believe that a casting vote by the chair of the
board is not always in the best interests of
shareholders because it raises the potential for
inequality among directors. As well, the quorum for
meetings of shareholders is potentially quite low,
and for these two reasons, we recommend a vote
against this resolution.
06/28/04 - A/S St. Andrew Goldfields Ltd. 787188408 05/13/04 3,066,412
*SAS.*
1 Elect Herbert Abramson, Stephen For Withhold Mgmt
Burns, Paul C. Jones, Glenn
Laing, and Warren Seyffert as
Directors
Given that shareholders may wish to express
differing views as to the suitability of the
director nominees, Fairvest takes the view that
shareholders should have the ability to cast
ballots with respect to individuals rather than the
entire slate. If this is possible, they will not be
forced to withhold votes for the board as a whole
as their only method of registering a negative view
of an individual or individuals. We recommend
withholding votes from the entire slate because
Glenn Laing is an insider on both the Audit and
Compensation Committees. The board is majority
independent.
2 Appoint Auditors and Authorize For For Mgmt
Board to Fix Remuneration of
Auditors
KPMG LLP have been the company's auditors for more
than five years. The circular does not provide the
audit or non-audit fees paid to the auditor over
the most recent fiscal year.
3 Confirm By-law No.1A as a bylaw For Against Mgmt
of the corporation
This item seeks shareholder confirmation to replace
the Company's By-laws No. 1 with the new general
By-Law No. 1A, as a housekeeping measure and to
keep up with the OBCA's initiatives which are
intended to enhance corporate governance and
shareholder communications. The By-Law was passed
by the board on July 24, 2003. The By-Law addresses
the corporate governance structure of the company,
with sections mandating the powers of the board and
its committees as well as the rights of
shareholders to participate in the company. It also
articulates the company's business, its policy on
borrowing power, the various roles officers of the
company will play in its management and provides
for electronic and telephonic means of
communication with shareholders. Shareholders
should note that the quorum at meetings of
shareholders is the lesser of the number of
shareholders or two persons present in person. The
By-Law provides for the annual election of
directors, but does not provide the Chairman with a
second or casting vote in the event of a 'tie' vote
at shareholder meetings. The chair does have a
casting vote, however, at board meetings. We
believe that a casting vote by the chair of the
board is not always in the best interests of
shareholders because it raises the potential for
inequality among directors. As well, the quorum for
meetings of shareholders is potentially quite low,
and for these two reasons, we recommend a vote
against this resolution.
06/24/04 - A/S StockGroup Information 861273100 05/14/04 1,000,000
Systems, Inc. *SWEB*
1 Elect Directors For For Mgmt
2 Other Business For Against Mgmt
3 Approve Reverse Stock Split For For Mgmt
06/04/04 - A/S SUPERIOR DIAMONDS INC 868152208 04/21/04 10,000
1 Fix Number of Directors For For Mgmt
2 Elect Directors For For Mgmt
2.1 Elect Director Alan C. Moon ---
For
The board is a majority independent with one
insider, one affiliated outsider and three
independent outside nominees. There are no insiders
on the Audit or Compensation Committee.
2.2 Elect Director John G. Paterson
--- For
2.3 Elect Director K. Wayne
Livingstone --- For
2.4 Elect Director Thomas W. Beattie
--- For
2.5 Elect Director Murray A. Gordon
--- For
3 Approve Auditors and Authorize For For Mgmt
Board to Fix Remuneration of
Auditors
Deloitte & Touche LLP have been the company's
auditors since 2002. The circular does not provide
the audit or non-audit fees paid to the auditor
over the most recent fiscal year.
4 Approve Continuation of Company For For Mgmt
Under British Columbia Business
Corporation Act
This resolution will allow the company to be
continued under the newly updated British Columbia
Business Corporations Act (BCBCA) rather than the
Yukon Business Corporations Act (YBCA) under which
it is currently governed. Approval of this item
will also approve the adoption of new Articles,
which are substantially similar to the existing
by-laws under the YBCA. Shareholders may want to
note that the quorum for shareholders meetings is
just one person present in person or by proxy.
Fairvest takes the position that 25 percent of the
outstanding shares is an adequate quorum for
shareholder meetings. The two Acts have similar
shareholder rights, as the BCA no longer requires
companies to have a limited authorized capital.
Although Fairvest favours authorized capital
structures, which are limited, the BCBCA was also
updated to allow shareholders to remove directors
by ordinary resolution at a meeting between annual
shareholder meetings. Given that the company's
authorized capital was previously unlimited we do
not oppose this resolution.
06/04/04 - A/S SUPERIOR DIAMONDS INC 868152208 04/21/04 50,000
1 Fix Number of Directors For For Mgmt
2 Elect Directors For For Mgmt
2.1 Elect Director Alan C. Moon ---
For
The board is a majority independent with one
insider, one affiliated outsider and three
independent outside nominees. There are no insiders
on the Audit or Compensation Committee.
2.2 Elect Director John G. Paterson
--- For
2.3 Elect Director K. Wayne
Livingstone --- For
2.4 Elect Director Thomas W. Beattie
--- For
2.5 Elect Director Murray A. Gordon
--- For
3 Approve Auditors and Authorize For For Mgmt
Board to Fix Remuneration of
Auditors
Deloitte & Touche LLP have been the company's
auditors since 2002. The circular does not provide
the audit or non-audit fees paid to the auditor
over the most recent fiscal year.
4 Approve Continuation of Company For For Mgmt
Under British Columbia Business
Corporation Act
This resolution will allow the company to be
continued under the newly updated British Columbia
Business Corporations Act (BCBCA) rather than the
Yukon Business Corporations Act (YBCA) under which
it is currently governed. Approval of this item
will also approve the adoption of new Articles,
which are substantially similar to the existing
by-laws under the YBCA. Shareholders may want to
note that the quorum for shareholders meetings is
just one person present in person or by proxy.
Fairvest takes the position that 25 percent of the
outstanding shares is an adequate quorum for
shareholder meetings. The two Acts have similar
shareholder rights, as the BCA no longer requires
companies to have a limited authorized capital.
Although Fairvest favours authorized capital
structures, which are limited, the BCBCA was also
updated to allow shareholders to remove directors
by ordinary resolution at a meeting between annual
shareholder meetings. Given that the company's
authorized capital was previously unlimited we do
not oppose this resolution.
06/15/04 - A/S Tahera Corp. (Formerly 873786107 04/23/04 800,000
Lytton Minerals )
1 Elect Andrew Adams, Colin Benner, For For Mgmt
Robert Dickson, R. Peter Gillin,
Jonathan Goodman, Patrick Lavelle
as Directors
Although these are routine appointments
shareholders may wish to express differing views as
to the suitability of the director nominees,
Fairvest takes the view that shareholders should
have the ability to cast ballots with respect to
individuals rather than the entire slate. If this
is possible, they will not be forced to withhold
votes for the board as a whole as their only method
of registering a negative view of an individual or
individuals. The board is a majority independent
and there are no insiders on the Audit or
Compensation Committees.
2 Approve Deloitte & Touche LLP as For For Mgmt
Auditors and Authorize Board to
Fix Remuneration of Auditors
Deloitte & Touche LLP have been the company's
auditors since 1999. The circular does not provide
the audit or non-audit fees paid to the auditor
over the most recent fiscal year.
3 Change Company Name to Tahera For For Mgmt
Diamond Corporation
The company is proposing to change its name in
order to reflect the focus of the corporation on
the diamond sector.
4 Allow Board to Appoint Additional For For Mgmt
Directors Between Annual Meetings This amendment will
allow the board to appoint additional directors
between annual meetings of shareholders as allowed
under the CBCA. As such number of directors so
appointed may not exceed one-third of the number of
directors elected by shareholders at the last AGM
and must be re-elected at the next AGM, we do not
oppose this resolution.
5 Approve Restricted Share Plan For Against Mgmt
This item will create a new Restricted Share
plan, reserving 5 million shares for issuance.
The total cost of the company's plan is
compared to an allowable cap using a
compensation model. The allowable caps are
industry-specific, market cap-based, and
pegged to the average amount paid by companies
performing in the top quartile of their peer
groupings. Industry classifications are
established using standard industry code (SIC)
groups. Using historic data tracked by
Fairvest of the value of authorized shares for
issue at each company ranked in the top
quartile of its industry, a benchmark pay
level is established for each industry. The
total cost of the company's Restricted Share
Plan of 0.95 percent is within the allowable
cap for this company of 6.55 percent. Please
see the section below entitled 'Multiple Plan
Notes' for a further discussion of this and
other plans. We oppose the amendment to
increase shares reserved for options, however,
because it would appear that non-employee
directors participate in options on a
discretionary basis. This is a practice which
gives rise to the possibility of self-dealing
by directors in options. Directors who are
able to grant themselves options without limit
could find their independence compromised. The
Restricted Share Plan represents dilution of
1.04 percent on a fully-diluted basis.
6 Approve 2004 Stock Option Plan For Against Mgmt
This item will create a new 2004 Stock Option
Plan (15 million shares will be reserved) to
supercede the existing 1999 Stock Option Plan.
The total cost of the company's plan is
compared to an allowable cap using a
compensation model. The allowable caps are
industry-specific, market cap-based, and
pegged to the average amount paid by companies
performing in the top quartile of their peer
groupings. Industry classifications are
established using standard industry code (SIC)
groups. Using historic data tracked by
Fairvest of the value of authorized shares for
issue at each company ranked in the top
quartile of its industry, a benchmark pay
level is established for each industry. The
combined shareholder value transfer for all
equity-based plans considered is 8.11 percent,
which exceed the company's allowable
shareholder value transfer cap of 6.55
percent. However, Fairvest will support those
plans that provide, in aggregate, the greatest
shareholder value transfer without exceeding
the allowable cap and that do not violate
repricing guidelines. The total cost of the
company's stock option plans of 7.17 percent
is above the allowable cap for this company of
6.55 percent. We oppose the amendment to
increase shares reserved for options, as well,
because it would appear that non-employee
directors participate in options on a
discretionary basis. This is a practice which
gives rise to the possibility of self-dealing
by directors in options. Directors who are
able to grant themselves options without limit
could find their independence compromised.
Shareholders should note that this plan could
allow options to be granted with a discounted
exercise price if permitted for by the TSX
Venture Exchange. Option-driven dilution
represents 8.74 percent on a fully-diluted
basis.
7 Approve Reduction in Stated For For Mgmt
Capital
The board proposes to reduce the stated capital by
$43,339,869. This would allow the elimination of
the total deficit of the same amount. This proposal
would also reduce the paid-up capital of the common
shares. This is a routine accounting request, which
we do not oppose.
05/20/04 - A Tiffany & Co. *TIF* 886547108 03/25/04 22,500
1 Elect Directors For For Mgmt
1.1 Elect Director Michael J.
Kowalski --- For
We recommend a vote FOR the directors.
1.2 Elect Director Rose Marie Bravo
--- For
1.3 Elect Director William R. Chaney
--- For
1.4 Elect Director Samuel L. Hayes
III --- For
1.5 Elect Director Abby F. Kohnstamm
--- For
1.6 Elect Director Charles K. Marquis
--- For
1.7 Elect Director J. Thomas Presby
--- For
1.8 Elect Director James E. Quinn ---
For
1.9 Elect Director William A. Shutzer
--- For
2 Ratify Auditors For For Mgmt
05/20/04 - A Trend Mining Co 89486R106 04/20/04 100,000
1 Elect Directors For Split Mgmt
1.1 Elect Director Jeffrey M.
Christian --- For
We recommend a vote FOR the directors with the
exception of insiders John P. Ryan and Kurt J.
Hoffman. We recommend that shareholders WITHHOLD
votes from John P. Ryan and Kurt J. Hoffman for
failure to establish independent audit,
compensation and nominating committees.
1.2 Elect Director Bobby E. Cooper
--- For
1.3 Elect Director Kurt J. Hoffman
--- Withhold
1.4 Elect Director John P. Ryan ---
Withhold
1.5 Elect Director J. Michael
Sharratt --- For
1.6 Elect Director Ishiung J. Wu ---
For
06/17/04 - A/S WESTERN PROSPECTOR GROUP LTD 959262106 05/13/04 900,000
1 Authorize Board to Fix For For Mgmt
Remuneration of the Auditors
The circular does not provide the audit or
non-audit fees paid to the auditor over the
most recent fiscal year.
2 Appoint Auditors For For Mgmt
PricewaterhouseCoopers LLP have been the
company's auditors since 1999.
3 Elect John S. Brock as Director For Withhold Mgmt
We recommend withholding votes from John S.
Brock because he is an insider on the Audit
Committee. The board is not majority independent.
4 Elect R.E. Gordon Davis as For For Mgmt
Director
5 Elect Wayne J. Roberts as Director For For Mgmt
6 Elect David R. Reid as Director For For Mgmt
7 Elect Kenneth B. De Graaf as For For Mgmt
Director
8 Approve Stock Option Plan For Against Mgmt
Shareholders are being asked to approve an
amendment to the company's stock option plan
that would, if passed, increase the number of
shares available for issuance pursuant to the
plan from 2,166,854 common shares to 3,463,877
common shares. Shareholders should note that
part of this resolution seeks approval for the
grant of 330,000 options to a director and an
employee that exceeds the current maximum
(before this resolution passes). As well, it
is noteworthy that part of this resolution
asks shareholders to approve the grant of
options to insiders, within a 12 month period,
a number of options exceeding 10% of the issue
common shares. Fairvest feels that such grants
are excessive. The total cost of the company's
plan is compared to an allowable cap using a
compensation model. The allowable caps are
industry-specific, market cap-based, and
pegged to the average amount paid by companies
performing in the top quartile of their peer
groupings. Industry classifications are
established using standard industry code (SIC)
groups. Using historic data tracked by
Fairvest of the value of authorized shares for
issue at each company ranked in the top
quartile of its industry, a benchmark pay
level is established for each industry. The
total cost of the company's plans of 13.95
percent is above the allowable cap for this
company of 10.11 percent. We also oppose the
amendment to increase shares reserved for
options, however, because it would appear that
non-employee directors participate in options
on a discretionary basis. This is a practice
which gives rise to the possibility of
self-dealing by directors in options.
Directors who are able to grant themselves
options without limit could find their
independence compromised. Shareholders should
note that this plan could allow options to be
granted with a discounted exercise price if
permitted for by the TSX Venture Exchange. The
amended plan represents dilution of 17.56
percent on a fully-diluted basis.
9 Amend Terms of Outstanding Options For Against Mgmt
Shareholders are being asked to approve the
repricing of options previously granted to
insiders. An aggregate of 1,175,000 options
granted at exercise prices of $0.22 and $0.23
would be repriced to $0.10. The company's
shares are currently trading at $0.27, thus
the options in question are no longer
underwater. Additionally, we do not approve of
the repricing of options. If insiders are able
to have exercise prices reset following a fall
in share price, the incentive purpose of the
plan is undermined. We believe that the use of
options as incentive means that insiders must
bear the same risks as shareholders in holding
these options. By making them an almost
risk-free proposition, the incentive purpose
of the plan is diluted and shareholders pay
the price.
06/24/04 - A/S Yamana Gold Inc. *YRI* 98462Y100 05/21/04 350,000
1 Elect Peter Marrone, Victor H. For Withhold Mgmt
Bradley, James Askew, Patrick J.
Mars, Juvenal Mesquita Filho,
Antenor F. Silva Jr. and Lance
Tigert as Directors
Given that shareholders may wish to express
differing views as to the suitability of the
director nominees, Fairvest takes the position that
shareholders should have the ability to cast
ballots with respect to individuals rather than the
entire slate. If this is possible, they will not be
forced to withhold votes for the board as a whole
as their only method of registering a negative view
of an individual or individuals. We recommend
withholding votes from the entire slate because
there is an insider on the Compensation Committee.
2 Ratify Deloitte & Touche LLP as For For Mgmt
Auditors
3 Approve Share Subscription For For Mgmt
Arrangements
4 Amend Stock Option Plan For Against Mgmt
Vote Recommendation The total cost of the
company's plans of 4.90 percent is within the
allowable cap for this company of 5.87
percent. We oppose the amendment to increase
shares reserved for options, however, because
it would appear that non-employee directors
participate in options on a discretionary
basis. This is a practice which gives rise to
the possibility of self-dealing by directors
in options. Directors who are able to grant
themselves options without limit could find
their independence compromised.
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
U.S. GLOBAL INVESTORS FUNDS
By: /s/Frank E. Holmes
------------------
Frank E. Holmes
President, Chief Executive Officer
Date: August 31, 2004