Current, Quarterly or Annual Report by a Foreign Issuer — Form 6-K — SEA’34
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2: EX-99.1 Miscellaneous Exhibit HTML 6K
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6: EX-99.5 Miscellaneous Exhibit HTML 6K
7: EX-99.6 Miscellaneous Exhibit HTML 209K
This Information Circular is furnished in connection with the
solicitation of proxies by the management of Canagold Resources
Ltd. (formerly, Canarc Resource Corp.) (“Cangold” or
the “Company”) for use at the annual general meeting
(the “Meeting”) of its shareholders to be held on
June 21, 2021 at the time and place and for the purposes set
forth in the Notice of Meeting.
It is
expected that the solicitation will be primarily by mail. Proxies
may also be solicited personally or by telephone by directors,
officers or employees of Canagold at nominal cost. Canagold may
also retain the services of a proxy solicitation agent. The cost of
any solicitation will be borne by Canagold.
CAUTION CONCERNING COVID-19 PANDEMIC
As at
the date of this Information Circular, it is the intention of the
Company to hold the Meeting at the location stated in the
accompanying Notice of Meeting. We are continuously monitoring the
development of the current coronavirus disease (“COVID-19”) pandemic. In light of
the rapidly evolving public health guidelines related to COVID-19,
we ask shareholders to consider voting their common shares by proxy
and not attend the Meeting in person. Those shareholders wishing to attend the
Meeting in person must contact the Company by email at
philip@canagoldresources.com
at least 48 hours prior to the date
of the Meeting for further instructions. Shareholders should
carefully consider and follow the instructions of the federal
Public Health Agency of Canada available at: https://www.canada.ca/en/public-health/services/diseases/2019-novel-coronavirus-infection/guidance-documents.html.
We ask that shareholders also review and follow the instructions of
any regional health authorities of the Province of British
Columbia, including the Vancouver Coastal Health Authority, the
Fraser Health Authority and any other health authority holding
jurisdiction over the areas you must travel through to attend the
Meeting. Please do not attend the Meeting in person if you are
experiencing any cold or flu-like symptoms, or if you or someone
with whom you have been in close contact has travelled to/from
outside of Canada within the 14 days immediately prior to the
Meeting. The Company reserves the right to deny access to persons
who exhibit cold or flu-like symptoms, or who have, or have been in
close contact with someone who has, travelled to/from outside of
Canada within the 14 days immediately prior to the Meeting. All
shareholders are strongly encouraged to vote by submitting their
completed form of proxy (or voting instruction from) prior to the
Meeting by one of the means described in the Information Circular.
If public health guidelines regarding physical distancing in
British Columbia have changed by the Meeting date of June 21,2021 that require an alternative format for the Meeting, the
Company will issue a news release advising of permitted Meeting
attendance in accordance with such updated guidelines. The Company
reserves the right to take any additional pre-cautionary measures
deemed to be appropriate in relation to the Meeting in response to
further developments in the COVID-19 pandemic.
C:
APPOINTMENT OF PROXYHOLDER
A duly
completed form of proxy will constitute the person(s) named in the
enclosed form of proxy as the proxyholder for the shareholder (the
“Registered
Shareholder”). The persons whose names are printed in
the enclosed form of proxy for the Meeting are officers or
directors of Canagold (the “Management
Proxyholders”).
A Registered Shareholder has the right to appoint a person other
than a Management Proxyholder to represent the Registered
Shareholder at the Meeting by striking out the names of the
Management Proxyholders and by inserting the desired person's name
in the blank space provided or by executing a proxy in a form
similar to the enclosed form. A proxyholder need not be a
Registered Shareholder.
The
persons named in the accompanying Form of Proxy are nominees of
Canagold’s management. A
shareholder desiring to appoint some other person (who need not be
a shareholder) to represent him at the Meeting may do so either
by:
(a)
STRIKING OUT THE
PRINTED NAMES AND INSERTING THE DESIRED PERSON'S NAME IN THE BLANK
SPACE PROVIDED IN THE FORM OF PROXY; OR
(b)
BY COMPLETING
ANOTHER PROPER FORM OF PROXY.
To be
valid, a form of proxy must be dated and signed by the Registered
Shareholder or by the Registered Shareholder’s attorney
authorized in writing. In the case of a corporation, the form of
proxy must be signed by a duly authorized officer of or attorney
for the corporation.
The
completed form of proxy, together with the power of attorney or
other authority, if any, under which the proxy was signed or a
notarially certified copy of the power of attorney or other
authority, must be delivered to Computershare Investor Services
Inc.(“Computershare”), Proxy Department,
100 University Avenue, 8th Floor, Toronto,
Ontario M5J 2Y1 or by fax: within North America: 1-866-249-7775,
outside North America: 1-416-263-9524, or by following the
procedure for telephone or internet voting provided in the
accompanying form of proxy, no later than forty eight (48) hours
(excluding Saturdays, Sundays and holidays) prior to the time of
the Meeting, or any adjournment(s) or postponement(s)
thereof.
REVOCATION OF PROXIES
A
Registered Shareholder who has given a proxy may revoke it by an
instrument in writing that is signed by the Registered Shareholder,
the Registered Shareholder’s attorney authorized in writing
or, where the Registered Shareholder is a corporation, a duly
authorized officer or attorney of the corporation and delivered to
the office of Computershare, Proxy Department, 100 University
Avenue, 8th Floor, Toronto,
Ontario M5J 2Y1 by mail or by fax: within North America:
1-866-249-7775, outside North America: 1-416-263-9524, at any time
up to and including the last business day preceding the day of the
Meeting, or any adjournment(s) or postponement(s) thereof, or to
the Chairman at the Meeting or any adjournment(s) or
postponement(s) thereof, or in any other manner provided by
law.
2
VOTING OF PROXIES
If the
instructions as to voting indicated in the proxy are certain, the
common shares (the “Common
Shares”) of the Company represented by the proxy will
be voted on any poll and where a choice with respect to any matter
to be acted upon has been specified in the proxy, the Common Share
will be voted or withheld from voting on any poll in accordance
with the specifications so made. IF
A CHOICE IS NOT SO SPECIFIED, IT IS INTENDED THAT THE PERSON
DESIGNATED BY MANAGEMENT IN THE ACCOMPANYING FORM OF PROXY WILL
VOTE THE COMMON SHARES REPRESENTED BY THE PROXY IN FAVOUR OF EACH
MATTER IDENTIFIED ON THE FORM OF PROXY AND FOR THE NOMINEES OF
MANAGEMENT FOR DIRECTORS AND APPPINTMENT OF
AUDITOR.
The
form of proxy accompanying this Information Circular confers
discretionary authority upon the named proxyholder with respect to
amendments or variations to the matters identified in the
accompanying Notice of Meeting and with respect to any other
matters which may properly come before the Meeting. As of the date
of this Information Circular, the management of Canagold knows of
no such amendment or variation or matters to come before the
Meeting other than those referred to in the accompanying Notice of
Meeting.
NON-REGISTERED HOLDERS
Only Registered Shareholders or duly appointed proxyholders are
permitted to vote at the Meeting. Most shareholders of Canagold are
“non-registered” shareholders because the Common Shares
they own are not registered in their own names but are instead
registered in the name of the brokerage firm, bank or trust company
through which they purchased the Common Shares. More
particularly, a person is not a Registered Shareholder in respect
of Common Shares which are held on behalf of that person (the
“Non-Registered
Holder”) but which are registered either: (a) in the
name of an intermediary (an “Intermediary”) that the
Non-Registered Holder deals with in respect of the Common Shares
(Intermediaries include, among others, banks, trust companies,
securities dealers or brokers and trustees of administrators of
self-administered RRSPs, RRIFs, RESPs and similar plans); or (b) in
the name of a clearing agency (such as The Canadian Depository for
Securities Limited (“CDS”)), of which the Intermediary
is a participant.
The
majority of Intermediaries now delegate responsibility for
obtaining instructions from clients to Broadridge Financial
Solutions, Inc. (“Broadridge”). Broadridge typically
prepares a machine-readable voting instruction form, mails those
forms to the Non-Registered Holder and asks the Non-Registered
Holder to return the forms to Broadridge, or otherwise communicate
voting instructions to Broadridge (by way of the internet or
telephone, for example). Broadridge then tabulates the results of
all instructions received and provides appropriate instructions
respecting the voting of Common Shares to be represented at the
Meeting. A Non-Registered Holder
who receives a voting instruction form cannot use that form to vote
Shares directly at the Meeting. The voting instruction form must be
returned to Broadridge (or instructions respecting the voting of
the Shares must be communicated to Broadridge) well in advance of
the Meeting in order to have the Shares voted. All
references to shareholders in this Information Circular and the
accompanying form of proxy and Notice of Meeting are to
shareholders of record unless specifically stated
otherwise.
Non-Registered
Holders who have not objected to their Intermediary disclosing
certain ownership information about themselves to Canagold are
referred to as “NOBOs”. Those Non-Registered Holders
who have objected to their Intermediary disclosing ownership
information about themselves to Canagold are referred to as
“OBOs”.
Meeting
Materials sent to Non-Registered Holders who have not waived the
right to receive Meeting Materials are accompanied by a request for
voting instructions (a “VIF”). This form is used instead
of a proxy. By returning the VIF in accordance with the
instructions noted on it a Non-Registered Holder is able to
instruct the Registered Shareholder how to vote on behalf of the
Non-Registered Shareholder. VIFs, whether provided by Canagold or
by an Intermediary, should be completed and returned in accordance
with the specific instructions noted on the VIF.
3
In
either case, the purpose of this procedure is to permit
Non-Registered Holders to direct the voting of the Common Shares
which they beneficially own. Should a Non-Registered Holder who
receives a VIF wish to attend the Meeting or have someone else
attend on his/her/its behalf, the Non-Registered Holder may request
a legal proxy as set forth in the VIF, which will grant the
Non-Registered Holder or his/her nominee the right to attend and
vote at the Meeting. Non-Registered
Holders should carefully follow the instructions set out in the VIF
including those regarding when and where the VIF is to be
delivered.
The
Company is taking advantage of NI 54-101 – Communication with Beneficial Owners of Securities of a
Reporting Issuer which
permits the Company to deliver proxy-related materials directly to
its NOBOs. As a result, NOBOs can expect to receive a scannable VIF
from the Company’s transfer agent, Computershare. The VIF is
to be completed and returned to Computershare in the envelope
provided or by facsimile, or a NOBO has the option to submit their
proxy vote either by telephone or via the internet in the manner
described in the VIF. Computershare tabulates the results of the
VIFs received from NOBOs and will provide appropriate instructions
at the Meeting with respect to the Common Shares represented by
those VIFs.
The
Company’s OBOs can expect to be contacted by Broadridge or
their brokers or their broker’s agents as set out above. The
Company will not pay for Intermediaries to deliver the Notice of
Meeting, Information Circular and VIF to OBOs, and OBOs will not
receive the Meeting materials unless their Intermediary assumes the
cost of the delivery.
These
securityholder materials are being sent to both registered and
non-registered owners of the securities. If you are a
non-registered owner, and the Company or its transfer agent has
sent these materials directly to you, your name and address and
information about your holdings of securities, have been obtained
in accordance with applicable securities regulatory requirements
from the Intermediary holding on your behalf.
By
choosing to send these materials to you directly, the Company (and
not the intermediary holding on your behalf) has assumed
responsibility for (i) delivering these materials to you; and
(ii) executing your proper voting instructions. Please return
your voting instructions as specified in the request for voting
instructions.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The
board of directors (the “Board”) of Canagold fixed May 12,2021 as the record date (the “Record Date”) for the
determination of the shareholders entitled to vote at the Meeting.
Only the holders of Common Shares of record at the close of
business on the Record Date who either attend the Meeting
personally or complete, sign and deliver a form of proxy in the
manner and subject to the provisions described above will be
entitled to vote at the Meeting and the holders of Common Shares
are entitled to one vote for each Common Share held.
Canagold
is authorized to issue an unlimited number of Common Shares without
par value, of which 70,466,123 Common Shares are issued and
outstanding as of the Record Date.
Effective
December 8, 2020, the Company consolidated its Common Share capital
on the basis of five pre-consolidation Common Shares for one
post-consolidation Common Share. All Common Share amounts in this
Information Circular have been adjusted to reflect the share
consolidation.
4
To the
best of the knowledge of the directors and executive officers of
Canagold, there are no persons or companies beneficially owning,
directly or indirectly, or exercising control or direction over
Common Shares carrying 10% or more of the voting rights attached to
all outstanding Common Shares of Canagold as at May 12, 2021,
other than as set out below:
Name
Number of Shares Held
Percentage of Shares Held
2176423
Ontario Ltd.(1)
7,140,371
10.13%
(1)
2176423 Ontario
Ltd., is a company controlled by Mr. Eric Sprott.
INTEREST OF CERTAIN PERSONS OR COMPANIES
IN
MATTERS TO BE ACTED UPON
Other
than as disclosed elsewhere herein, none of the following persons
has any material interest, direct or indirect, by way of beneficial
ownership of securities or otherwise, in any matter to be acted
upon at the Meeting:
(a)
any director or
executive officer of Canagold at any time since the commencement of
Canagold’s last completed financial year;
(b)
any proposed
nominee for election as a director of the Company; and
(c)
any associate or
affiliate of any of the foregoing persons.
APPOINTMENT AND REMUNERATION OF AUDITOR
The
management of the Company will nominate Smythe LLP, Chartered
Professional Accountants, of#1700 – 475 Howe Street,
Vancouver, British Columbia, V6C 3B9 to be re-appointed as auditor
of the Company to hold office until the close of the next Annual
General Meeting of shareholders. It is proposed that the
remuneration to be paid to the auditor be fixed by the
directors.
ELECTION OF DIRECTORS
Advance Notice Policy
The
Company adopted an advance notice policy (the “Advance Notice Policy”) on June25, 2013, which Advance Notice Policy was attached as Schedule
“A” to the Company’s 2014 Management Information
Circular. The Advance Notice Policy was adopted by the Board and
ratified, confirmed and approved by the Company’s
shareholders at the Company’s Annual General Meeting held on
June 26, 2014. The Advance Notice Policy remains in full force and
effect and is available for viewing on SEDAR at www.sedar.ca.
Any additional director nominations for the Meeting must be
received by the Company in compliance with the Advance Notice
Policy no later than the close of business on May 21, 2021. If
no such nominations are received by the Company prior to such date,
management’s nominees for election as directors set forth
below shall be the only nominees eligible to stand for election at
the Meeting.
5
The
Board presently consists of five directors. It is intended to elect
five directors for the ensuing year. Shareholders will therefore be
asked to approve an ordinary resolution to fix the number of
directors at five. The term of office of each of the present
directors expires at the Meeting.
The
persons named in the following table are proposed by management for
election as directors of the Company. Each director elected will
hold office until the next Annual General Meeting or until his
successor is duly elected or appointed, unless his office is
earlier vacated in accordance with the Articles of the Company or
he becomes disqualified to act as a director. In the absence of
instructions to the contrary, the enclosed Proxy will be voted for
the nominees listed herein.
MANAGEMENT
DOES NOT CONTEMPLATE THAT ANY OF THE NOMINEES WILL BE UNABLE TO
SERVE AS A DIRECTOR. THE COMPANY HAS NOT RECEIVED NOTICE OF, AND
MANAGEMENT IS NOT AWARE OF ANY PROPOSED NOMINEE IN ADDITION TO, THE
NAMED NOMINEES.
The
following information concerning the respective nominees has been
furnished by each of them:
Name, Current Position with the Company, Province/State and Country
of Residence
Present Principal Occupation, Business or Employment and, if not an
Elected Director, Principal Occupation, Business or Employment
During the Past Five Years(1)
Number of Common Shares Beneficially Owned, Directly or Indirectly
or over which Direction or Control is Exercised(2)
Bradford J. Cooke(6)(7)Chairman and
DirectorBritish Columbia, Canada
Chairman
and Director of Canagold since January 22, 1987 and Chief Executive
Officer from June 29, 2018 to October 17, 2018; and Chief Executive
Officer and Director of Endeavour Silver Corp. since July 25,2002.
since
January 22, 1987
5,259,916
Scott EldridgeChief Executive Officer and DirectorBritish
Columbia, Canada
Chief
Executive Officer of Canagold since October 17, 2018; Chief
Executive Officer of Artic Star Exploration Corp. from June 26,2017 to October 23, 2018 and a Director since June 26, 2017; Chief
Financial Officer of Amarillo Gold Corp. from October 8, 2014 to
November 4, 2017; and President and Chief Executive Officer of
Euroscandic Inc. from October 2008 to October 2017.
Martin Burian(3)(5)(7)DirectorBritish
Columbia, Canada
Managing
Director of RCI Capital Group since January 2018; Chief Financial
Officer (part time) of Heffel Fine Art Auction House since April
2016; Chief Financial Officer of ML Gold Ltd. (formerly, Cap-Ex
Iron Ore Ltd.) from July 2013 to May 2017; Director and Chief
Financial Officer of Tinkerine Studio Ltd. form February 2014 to
February 2016; and Managing Director of Investment Banking for
Haywood Securities Inc. from November 2010 to May
2013.
Andrew Bowering(3)(4)(5)DirectorBritish
Columbia, Canada
Director
(since April 2019), CEO (from April 2019 to June 2020) and
Executive Vice President (since June 2020) of Prime Mining Corp;
President and CEO (since 1992) of Bowering Projects, a mineral
exploration and consulting firm; President (until 2020) of Sunrise
Drilling Ltd., a North American-based mineral exploration drilling
company.
Unless otherwise
stated above, each of the above-named nominees has held the
principal occupation or employment indicated for at least five
years. The information as to principal occupation, business or
employment and Common Shares beneficially owned or controlled is
not within the knowledge of the management of the Company and has
been furnished by the respective nominees.
(2)
Securities
beneficially owned by directors are based on information furnished
to the Company by the nominees.
(3)
Member of Audit
Committee.
(4)
Member of
Compensation Committee.
(5)
Member of
Nomination Committee.
(6)
Technical
Committee.
(7)
Investment
Committee
Shareholders
can vote for all of the proposed nominees for directors of the
Company, vote for some of the proposed nominees and withhold for
others, or withhold for all of the proposed nominees. Unless otherwise instructed, the named
proxyholders will vote FOR the election of each of the proposed
nominees set forth above as directors of the
Company.
Corporate Cease Trade Orders or Bankruptcies
No proposed director of the Company is, as at the date of this
Information Circular, or was within 10 years before the date of
this Information Circular, a director, chief executive officer or
chief financial officer of any company (including the Company),
that:
(a)
was
subject to a cease trade order, an order similar to a cease trade
order or an order that denied the relevant company access to any
exemption under securities legislation, for a period of more than
30 consecutive days, that was issued while the proposed director
was acting in the capacity as director, chief executive officer or
chief financial officer; or
(b)
was
subject to a cease trade order, an order similar to a cease trade
order or an order that denied the relevant company access to any
exemption under securities legislation, for a period of more than
30 consecutive days, that was issued after the proposed director
ceased to be a director, chief executive officer or chief financial
officer and which resulted from an event that occurred while that
person was acting in the capacity as director, chief executive
officer or chief financial officer.
is,
as at the date of this Information Circular, or has been within the
10 years before the date of this Information Circular, a director
or executive officer of any company (including the Company) that,
while that person was acting in that capacity, or within a year of
that person ceasing to act in that capacity, became bankrupt, made
a proposal under any legislation relating to bankruptcy or
insolvency or was subject to or instituted any proceedings,
arrangement or compromise with creditors or had a receiver,
receiver manager or trustee appointed to hold its assets;
or
(b)
has,
within 10 years before the date of this Information Circular,
become bankrupt, made a proposal under any legislation relating to
bankruptcy or insolvency, or become subject to or instituted any
proceedings, arrangement or compromise with creditors, or had a
receiver, receiver manager or trustee appointed to hold the assets
of the proposed director.
No proposed director of the Company has been subject
to:
(a)
any
penalties or sanctions imposed by a court relating to securities
legislation or by a securities regulatory authority or has entered
into a settlement agreement with a securities regulatory authority;
or
(b)
any
other penalties or sanctions imposed by a court or regulatory body
that would likely be considered important to a reasonable
securityholder in deciding whether to vote for a proposed
director.
Majority Voting Policy
The Board adopted a majority voting policy for the election of
directors in uncontested elections. Under this policy, if a nominee
does not receive the affirmative vote of at least the majority of
votes cast, the director will be expected to promptly tender a
resignation for consideration by the Nomination Committee and the
Board. The Nomination Committee shall consider the resignation and
recommend to the Board the action to be taken with respect to such
offered resignation, which may include: accepting the resignation,
maintaining the director but addressing what the Nomination
Committee believes to be the underlying cause of the withheld
votes, resolving that the director will not be re-nominated in the
future for election, or rejecting the resignation and explaining
the basis for such determination.
The Nomination Committee in making its recommendation, and the
Board in making its decision, may consider any factors or other
information they consider appropriate and relevant. Any director
who tenders his resignation pursuant to the majority voting policy
may not participate in the recommendation of the Nomination
Committee or the decision of the Board with respect to his
resignation. The Board will act on the recommendation of the
Nomination Committee within 90 days after the shareholder meeting
at which the election of directors occurred. Following the
Board’s decision, the Company will promptly issue a press
release disclosing the Board’s determination (and, if
applicable, the reasons for rejecting the
resignation).
If the Board accepts any tendered resignation in accordance with
the majority voting policy, then the Board may (i) proceed to fill
the vacancy through the appointment of a new director, or (ii)
determine not to fill the vacancy and instead decrease the size of
the Board. If a director’s resignation is not accepted by the
Board, such director will continue to serve until the next annual
meeting and until his successor is duly elected, or his earlier
resignation or removal; alternatively, the director shall otherwise
serve for such shorter time and under such other conditions as
determined by the Board, considering all of the relevant facts and
circumstances.
8
STATEMENT OF EXECUTIVE COMPENSATION
Executive Compensation
Set out
below are particulars of compensation paid to the following persons
(the “Named Executive
Officers” or “NEOs”):
each of the three
most highly compensated executive officers, or the three most
highly compensated individuals acting in a similar capacity, other
than the CEO and CFO, at the end of the most recently completed
financial year whose total compensation was, individually, more
than $150,000, as determined in accordance with
subsection 1.3(6) of Form 51-102F6 Statement of Executive Compensation,
for that financial year; and
(d)
each individual who
would be a NEO under paragraph (c) but for the fact that the
individual was neither an executive officer of the Company, nor
acting in a similar capacity, at the end of that financial
year.
The
following disclosure sets out the compensation that the Board
intended to pay, make payable, award, grant give or otherwise
provide to each NEO and director for the financial year ended
December 31, 2020.
Compensation Discussion and Analysis
During
the financial year ended December 31, 2012, the Company established
a Compensation Committee comprised of two independent directors.
The current Compensation Committee is comprised of
Deepak Malhotra (Chairman) and Andrew Bowering, both of
whom are independent directors within the meaning of National
Instrument 52-110 Audit
Committee and have direct experience in dealing with
compensation matters.
Deepak
Malhotra holds a PhD in mineral economics and is a metallurgical
engineer and mineral economist with over 40 years of experience. He
has a wealth of knowledge and experience in metallurgical research,
process development for new mineral properties, plant
troubleshooting, plant audits, detailed engineering and overall
business management. He has worked for over 50 gold projects
throughout the world. Mr. Malhorta is President of Pro Solv
Consulting LLC and President of Resource Development Inc., a mining
consulting services company. He is currently a director of Cardero
Resource Corp. and Blackrock Gold Corp.
Andrew
Bowering holds a Bachelor’s degree in Economics and Political
Science from the University of British Columbia. He is a venture
capitalist with over 30 years knowledge and experience in mineral
exploration and development. He is currently a Director and
Executive Vice President of Prime Mining Corp. Mr. Bowering has
been founder and/or operator of companies listed on the TSX Venture
Exchange, Toronto Stock Exchange and American Stock Exchange,
including Caldera Environmental, Pinnacle Mines, ATW Gold, Cap-Ex
Iron Ore, Millennial Lithium, and American Lithium
Corp.
9
The
Board is of the view that the members of the Compensation Committee
collectively have the knowledge, skills, experience and background
to make decisions on the suitability of the Company’s
compensation policies and practices.
The
Board is responsible for establishing and monitoring the
Company’s long range plans and
programs for attracting, retaining, developing and motivating
employees. The Board reviews recommendations for the appointment of
persons to senior executive positions, considers terms of
employment including succession planning and matters of
compensation.
The Company’s compensation policies and programs are designed
to be competitive with similar mining exploration companies at a
similar stage of development as the Company and to recognize and
reward executive performance consistent with the success of the
Company’s business. The significant objectives, elements and
formula for compensation to be awarded to, earned by, paid to, or
payable to NEOs for the year ended December 31, 2020, were
to:
(i)
attract
and retain experienced and talented executive officers;
and
(ii)
encourage
value creation by executive officers.
The
compensation program is designed to reward performance by the NEO
in respect of their duties and responsibilities; to reward the
attainment of the goals set for the NEO in conjunction with the
strategic plan of the Company and to reward extraordinary
performance beyond the goals set for the NEO.
The
significant elements of compensation awarded by the Company to the
NEOs are cash salary, stock options and/or annual
bonuses.
Cash Salary:
The
NEOs are paid a salary in order to ensure that the compensation
package offered by the Company is in line with that offered by
other companies in our industry, and as an immediate means of
rewarding the NEO for efforts expended on behalf of the Company.
The salary to be paid to a particular NEO is determined by
publications of mining industry surveys and/or other available
information from the mining and exploration industry. Payment of a
cash salary fits within the objective of the compensation program
since it rewards the NEO for performance of his or her duties and
responsibilities. The payment of such salary may impact on other
elements of the compensation package to a particular
NEO.
The
Compensation Committee reviews the compensation of senior officers
and management, and provides recommendations to the Board for
discussion and approvals, without any formal objectives, criteria
and analysis due to the current size of the Company and the current
stage of its mineral projects.
Annual bonus: stock options, etc:
The CEO
reviews any proposed bonuses and stock option grants with the
President, which are then submitted to the Board for review and
approval. Annual bonus, if any, and stock options are not based on
objective and formal measures, such as share price and E/P ratios,
due to the current size of the Company and the current stage of its
mineral properties. For a description of the Company’s Stock
Option Plan, see “Securities
Authorized for Issuance under Equity Compensation
Plans”.
Following the year ended December 31, 2020, the Company did not
take any action or make any decisions or policies that could affect
a reasonable person’s understanding of any NEO’s
compensation for the most recently completed financial year, except
as disclosed in this Information Circular.
The NEO’s were not given specific performance goals for the
fiscal year ended December 31, 2020.
10
Performance Graph
The
graph below compares the yearly percentage change in the cumulative
total shareholder return on the Common Shares against the
cumulative total shareholder return of the Toronto Stock Exchange
S&P/TSX Composite Total Return Index Value for the period
commencing December 31, 2015 and ending December 31,2020.
Chart 1 Comparison of Total Shareholder Return on Common
Shares
of the
Company and the Toronto Stock Exchange Indice
(based
on Canadian Funds)
The
graphs assume that the initial value of the investment on the stock
exchange in the Company’s common shares and in the indice was
$100 on the initial date.
The
share price of the Company has exceeded the performance of the
S&P/TSX Composite Total Return Index Value over the five-year
period ended December 31, 2020. This is primarily due to changes in
global metals prices and financial market conditions. The Board
does not believe that the difference in performance of the Common
Shares in relation to the indice is reflective of
management’s performance, and accordingly, the total
compensation of the NEO’s is not based upon how the Company
performs in comparison to the S&P/TSX Composite Total Return
Index Value.
Option Based Awards
As
stated elsewhere herein, the Company has in place a 2017 Employee
Incentive Stock Option Plan (the “Plan”). The Plan was established
to provide incentive to qualified parties to increase their
proprietary interest in the Company and thereby encourage their
continuing association with the Company. The Plan is administered
by the Compensation Committee. The Plan provides that options will
be issued pursuant to option agreements to directors, officers,
employees or consultants of the Company or a subsidiary of the
Company. All options expire on a date not later than ten (10) years
after the issuance of such option. Previous grants of option-based
awards are taken into account when considering new grants of
options. Subject to the requirements of the policies of the TSX
(the “Exchange”)
and the prior receipt of any necessary regulatory approval, the
Board may, in its absolute discretion, amend or modify the Plan or
any outstanding option granted under the Plan, as to the provisions
set out in the Plan.
11
The process by which the Board grants option-based awards to
executive officers is:
●
Options
are generally granted to corporate executives in the first half of
each year as part of the annual compensation review. Any special
compensation is typically granted in the form of options. Options
may be granted at other times of the year to individuals commencing
employment with the Company. The price per share at which shares
may be purchased upon the exercise of an Option will not be lower
than the last recorded sale of a board lot of shares on the
Exchange during the trading day immediately preceding the date of
granting of the Option or, if there was no such sale, the hi/low
average trading price on the Exchange for the Shares for the five
trading days immediately preceding the date on which the Option is
granted.
●
The
Board approves base salaries, annual cash incentives and stock
options at the same time as it completes the annual compensation
review of executive officers. Options may be granted at other times
of the year to individuals commencing employment with the
Company.
Compensation Risk Assessment and Mitigation
The
Board and the Compensation Committee have considered the
implications of the risks associated with the Company’s
compensation policies and practices. The Board and the Compensation
Committee are responsible for setting and overseeing the
Company’s compensation policies and practices. The Board and
Compensation Committee do not provide specific monitoring and
oversight of compensation policies and practices of the Company but
do review, consider and adjust these matters annually. The Company
does not use any specific practices to identify and mitigate
compensation policies that could encourage a Named Executive
Officer or individual at a principal business unit or division to
take inappropriate or excessive risks. These matters are dealt with
on a case-by-case basis. The Company currently believes that none
of its policies encourage its NEOs to take such risks. The Company
has not identified any risks arising from its compensation policies
and practices that are reasonably likely to have a material adverse
effect on the Company.
There
are no restrictions on NEOs or directors regarding the purchase of
financial instruments, including prepaid variable forward
contracts, equity swaps, collars or units of exchange funds that
are designed to hedge or offset a decrease in market value of
equity securities granted as compensation or held, directly or
indirectly, by the NEO or director. For the financial year ended
December 31, 2020, no NEO or director, directly or indirectly,
employed a strategy to hedge or offset a decrease in market value
of equity securities granted as compensation or held.
12
Summary Compensation Table
The
compensation paid to the NEOs during the financial years ended
December 31, 2020, 2019 and 2018 is as set out below and expressed
in Canadian dollars:
Non-equity incentive plan compensation(3)($)
Name and principal position
Year
Salary(1)($)
Share-based awards($)
Option-based awards(2)($)
Annual incentive plans(3)
Long-term incentive plans(4)
Pension value(5)($)
All other compensation(6)($)
Total compensation(7)($)
Scott Eldridge(8)CEO and
Director
2020
2019
2018
$174,844
$168,699
$43,738
Nil
Nil
Nil
$21,400
$19,369
$45,306
$72,000
$43,000
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
$2,000
$268,244
$231,067
$91,044
Philip YeeCFO, Vice-President, Finance and
Secretary
2020
2019
2018
$119,401
$120,381
$117,097
Nil
Nil
Nil
$8,270
$7,748
$12,335
$21,769
$13,000
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
$149,440
$141,129
$129,432
Notes:
(1)
Includes the dollar
value of cash and non-cash base salary earned during a financial
year covered.
(2)
The amount
represents the fair value, on the date of grant and on each vesting
date, as applicable, of awards made under Canagold’s Stock
Option Plan. The grant date fair value has been calculated using
the Black Scholes Option Pricing Model in accordance with
IFRS.
(3)
These amounts
include annual non-equity incentive plan compensation, such as
severance, bonuses and discretionary amounts for the years ended
December 31.
(4)
N/A.
(5)
N/A.
(6)
These amounts cover
all compensation other than amounts already set out in the table
for the years ended December 31 and include directors fees, as
applicable, or other stipends related to Board committee fees, if
any.
(7)
These amounts
include dollar value of total compensation for the covered year.
This is the sum of all amounts reported in columns with footnotes 1
to 6 above for each director and officer.
(8)
Mr. Scott Eldridge
was nominated to the Board of Directors effective June 29, 2018 and
was appointed Chief Executive Office effective October 17,2018.
13
Incentive Plan Awards
Outstanding Share-based Awards and Option-based Awards
The
following table sets out all share-based awards and option-based
awards outstanding as at December 31, 2020, for each
NEO:
Option-based Awards
Share-based Awards
Name
Number of securities underlying unexercised options(#)
Option exercise price($)
Option expiration date
Value of unexercised in-the-money options (1)($)
Number of shares or units of shares that have not
vested(#)
Market or payout value of share-based awards that have not
vested($)
Market or payout value of vested share-based awards not paid out or
distributed ($)
The value of
unexercised “in-the-money options” at the financial
year-end is the difference between the option exercise price and
the market value of the Common Shares on the Exchange on December31, 2020.
(2)
These stock options
are subject to vesting provisions in which 25% of the options vest
immediately on the grant date and 25% vest every six months
thereafter.
(3)
These stock options
are subject to vesting provisions in which 20% of the options vest
immediately on the grant date and 20% vest every six months
thereafter.
14
Employment Agreements
Messrs.
Scott Eldridge and Philip Yee have entered into employment
agreements with the Company. Particulars of their Employment
Agreements are set out herein under the heading “Termination and Change of Control
Benefits”.
Incentive Plan Awards – Value Vested or Earned During the
Year
The
following table sets out all incentive plan awards (value vested or
earned) during the year ended December 31, 2020, for each
NEO:
Option-based awards (1)($)
Share-based awards
Name
No. of Securities Underlying Options Vested
Value vested during the year
($)
No. of Shares or Units of Shares Vested
Value vested during the year(2)($)
Non-equity incentive plan compensation – Value earned during
the year($)
Scott EldridgeCEO and Director
216,000
$21,400
N/A
N/A
Nil
Philip YeeCFO, Vice-President, Finance and
Secretary
58,000
$8,270
N/A
N/A
Nil
Notes:
(1)
Aggregate dollar
value that would have been realized if the options under the
option-based award had been exercised on the vesting
date.
(2)
Aggregate dollar
value realized upon vesting of share-based awards.
Pension Plan Benefits
The
Company does not provide pension plan benefits for its directors,
officers or employees.
Termination and Change in Control Benefits
The
Company entered into employment agreements which include change of
control provisions with each of Scott Eldridge and Philip Yee,
which agreements have been approved by the Board. The change of
control provisions recognize the critical nature of these positions
and the individuals involved and the requirement to protect the
individuals from disruption to their employment in the event of a
change of control of the Company. The change of control provisions
are designed to treat the individuals in a manner consistent with
industry standards for executives in similar
positions.
If a
change of control of the Company had occurred on December 31, 2020,
the total cost to the Company of related payment to the NEOs is
estimated at approximately CAD$447,300. Estimated payments to
individual NEOs are described below assuming mentioned events have
occurred on December 31, 2020.
15
Scott Eldridge, CEO
On
October 15, 2018, an Employment Agreement between the Company and
Mr. Scott Eldridge was signed in respect of Mr. Eldridge’s
capacity as CEO for the Company (the “Eldridge Employment Agreement”).
The Eldridge Employment Agreement provided for a base remuneration
of CAD$160,000 per annum plus a bonus based upon the achievement of
performance targets as determined by the Compensation Committee of
the Company. The Eldridge Employment Agreement is for a period of
one year, with automatic renewal on its anniversary date for an
additional one year term and contains provisions regarding base
salary, short-term incentives, eligibility for benefits and
security based compensation. The Eldridge Employment Agreement also
contains confidentiality provisions of indefinite application. The
Eldridge Employment Agreement provides that, upon termination
without cause, Mr. Eldridge is entitled to receive approximately
CAD$232,000 based on an amount equal to his estimated annual salary
at the time of termination, plus the amount of the previous
year’s annual bonus on a pro rata basis and any outstanding
stock options will remain in good standing for 30 days. The
Eldridge Employment Agreement provides that upon voluntary
resignation, Mr. Eldridge is required to provide the Company with
60 days’ written notice and to assist the Company, and on a
best efforts basis, with finding a replacement acceptable to the
Board. In the event of a resignation or termination within 6 months
of a change in control, Mr. Eldridge is entitled to receive
approximately CAD$232,000 based on an amount equal to his monthly
salary to a maximum of 12 months at the time of termination, plus
the amount which equals the amount of any annual bonus paid to
Mr. Eldridge within the 12 month period prior to the time of
termination. The Eldridge Employment Agreement also contains
non-competition and non-solicitation clauses effective during the
term of employment. In April 2021, the Eldridge Employment
Agreement was amended for a base remuneration of
CAD$210,000.
Philip Yee, CFO, Vice-President, Finance
Philip
Yee initially had an employment services arrangement (the
“Prior
Agreement”) whereby Philip Yee provided the Company
with services as CFO of the Company, all in consideration and upon
the terms as agreed to. Effective January 1, 2012, as amended June26, 2014 and February 9, 2017, the parties entered into an
Executive Employment Agreement (the “Yee Contract”) which replaced and
superseded the Prior Agreement and confirmed Mr. Yee’s
appointment as the CFO and Vice-President, Finance of the Company
and that his services and skills may be provided to other companies
that share office space with the Company including but not limited
to Caza Gold Corp., Aztec Metals Corp. or other companies located
on the premises, or their subsidiaries (the “Other Entities”), and that his
salary may, in part, be paid by one of those Other Entities. The
Yee Contract is for a period of one year, with automatic renewal on
its anniversary date for an additional one year term and contains
provisions regarding base salary, short-term incentives,
eligibility for benefits and security based compensation. The Yee
Contract also contains confidentiality provisions of indefinite
application. The Yee Contract provides that, upon termination
without cause, Mr. Yee is entitled to receive approximately
CAD$118,550 based on an amount equal to his estimated annual salary
at the time of termination, plus the amount of the previous
year’s annual bonus and any outstanding stock options will
remain in good standing for 30 days. The Yee Contract provides that
upon voluntary resignation, Mr. Yee is required to provide the
Company with 90 days’ written notice and to assist the
Company, and on a best efforts basis, with finding a replacement
acceptable to the Board. In the event of a resignation or
termination within 6 months of a change in control, Mr. Yee is
entitled to receive approximately CAD$215,300 based on an amount
equal to twice his estimated annual salary at the time of
termination, plus the amount which equals two times the amount of
any annual bonus paid to Mr. Yee within the 12 month period prior
to the time of termination. The Yee Contract also contains
non-competition and non-solicitation clauses effective during the
term of employment. In April 2021, the Yee Contract was amended for
a base remuneration of CAD$100,000.
Director Compensation
Director Compensation Table
The
Company ceased paying director’s fees as of June 30, 2014.
Effective July 2, 2014, directors who are members of committees or
serve as chairman on committees of the Board will be paid for each
meeting of a committee that they attend. Each committee chairman
earned $1,000 per quarter for each committee meeting attended and
each committee member earned $500 per quarter for each committee
meeting attended. In March 2018, the Compensation Committee
approved quarterly stipends to Board members in which the Chairman
shall receive CAD$2,500 per quarter and each Director shall receive
CAD$1,000 per quarter, excluding a director who is an executive
officer. In March 2019, the Compensation Committee re-approved
Board and Committee fees for 2019. In March 2020, the Compensation
Committee approved that no Board stipends and no Board Committee
fees will be payable for 2020 given the negative global economic
impacts from the COVID-19 pandemic, which was reinstated in June
2020 whereby each non-executive Board member will receive a stipend
of CAD $2,000 per quarter.
16
The
compensation provided to the directors for the Company’s most
recently completed financial year ended December 31, 2020 is set
out in the table below:
Name(1)
Fees earned(2)($)
Share-based Awards($)
Option-based awards(3)($)
Non-equity incentive plan compensation($)(4)
Pension value($)
All other compensation(5)($)
Total($)
Bradford J. CookChairman and Director
Nil
Nil
$21,400
Nil
Nil
$4,000
$25,400
Martin BurianDirector
Nil
Nil
$11,680
Nil
Nil
$4,000
$15,680
Deepak MalhotraDirector
Nil
Nil
$11,680
Nil
Nil
$4,000
$15,680
Andrew Bowering(6)Director
Nil
Nil
Nil
Nil
Nil
$2,000
$2,000
Kai Hoffmann(7)Former
Director
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Notes:
(1)
Does not include
disclosure for a director who is also an NEO unless compensation
has not previously been fully disclosed herein.
(2)
Includes all fees
awarded, earned, paid or payable in cash for services as a
director, including annual retainer fees, committee, chair and
meeting fees.
(3)
The amount
represents the fair value, on the date of grant, of awards made
under the Plan. The grant date fair value has been calculated using
the Black Scholes Option Pricing Model in accordance with
International Financial Reporting Standards.
(4)
This amount
includes annual non-equity incentive plan compensation, such as
severance, bonuses and discretionary amounts for the year ended
December 31, 2020.
(5)
Includes all
compensation paid, payable, awarded, granted, given or otherwise
provided, directly or indirectly.
The value of
unexercised “in-the-money options” at the financial
year-end is the difference between the option exercise price and
the market value of the Common Shares on the Exchange on December31, 2020.
(2)
The stock options
are subject to vesting provisions in which 25% of the options vest
immediately on the grant date and 25% vest every six months
thereafter.
(3)
These stock options
are subject to vesting provisions in which 20% of the options vest
immediately on the grant date and 20% vest every six months
thereafter.
The
following table sets out all incentive plan awards (value vested or
earned) during the year ended December 31, 2020, for each director
of the Company:
Option-based awards
Share-based awards
Name
No. of Securities Underlying Options Vested
Value vested during the year(1)($)
No. of Shares or Units of Shares Vested
Valuevested during the year(2)($)
Non-equity incentive plan compensation – Value earned during
the year($)
Bradford J. CookeDirector
168,000
$21,400
N/A
N/A
Nil
Martin BurianDirector
80,000
$11,680
N/A
N/A
Nil
Deepak MalhotraDirector
80,000
$11,680
N/A
N/A
Nil
Andrew Bowering(3)Director
20,000
$0
N/A
N/A
Nil
Kai Hoffmann(4)Director
48,000
$0
N/A
N/A
Nil
Notes:
(1)
Aggregate dollar
value that would have been realized if the options under the
option-based award had been exercised on the vesting
date.
(2)
Aggregate dollar
value realized upon vesting of share-based awards.
Mr. Hoffmann
resigned as a director of the Company on July 11, 2020 and all
outstanding stock options held by Mr. Hoffmann during the year
ended December 31, 2020 were forfeited in accordance with the
terms of the Plan.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION
PLANS
The
only equity compensation plan which the Company currently has in
place is the Plan which was created by the Company in May, 2006 and
initially approved by the shareholders of the Company at the
Company’s Annual and Special Meetings held on June 29, 2006
and June 25, 2013 and most recently at the Company’s Annual
and Special Meeting held on June 2, 2017.
The
Plan was established to provide incentive to qualified parties to
increase their proprietary interest in the Company and thereby
encourage their continuing association with the Company. The Plan
is administered by the Compensation Committee. The Plan provides
that options will be issued to directors, officers, employees and
consultants of the Company or a subsidiary of the Company. The Plan
provides that the number of common shares issuable under the Plan,
together with all of the Company’s other previously
established or proposed share compensation arrangements, may not
exceed 8,852,339 Common Shares, being 19.99% of the Company’s
issued and outstanding share capital as of April 26, 2017, adjusted
to reflect the 5:1 share consolidation that was effective on
December 8, 2020.
19
The
objective of the Plan is to provide for and encourage ownership of
common shares of the Company by its directors, officers, key
employees, and consultants and those of any subsidiary companies so
that such persons may increase their stake in the Company and
benefit from increases in the value of the common shares. The Plan
is designed to be competitive with the benefit programs of other
companies in the natural resource industry. It is the view of
management that the Plan is a significant incentive for the
directors, officers, key employees, and consultants to continue and
to increase their efforts in promoting the Company's operations to
the mutual benefit of both the Company and such
individuals.
As at
May 12, 2021, incentive stock options to purchase up to a
total of 2,890,000 Common Shares are outstanding (4.10% of the
Company’s current issued and outstanding share capital of
70,466,123). As at May 12, 2021, there were 5,962,339, stock
options available for granting under the Plan.
Some of
the more material attributes of the Company’s Plan are as
follows:
●
The Plan complies
with the rules set forth for such plans by the Exchange and
provides for the issuance of Options to directors, executive
officers, employees, and consultants of the Company and its
subsidiaries to purchase common shares of the Company. The Options
are issued at the discretion of the Compensation Committee made up
of the independent members of the Board;
●
The number of
shares reserved for issuance pursuant to Options granted to
insiders under the Plan may not exceed 10% of the number of Common
Shares outstanding at the time of the grant (unless disinterested
shareholder approval has been received);
●
The issuance to
insiders, within any 12 month period, of Common Shares pursuant to
the Plan may not exceed 10% of the number of Common Shares
outstanding at the time of the grant (unless disinterested
shareholder approval has been received);
●
In no event shall
the aggregate number of shares reserved for issuance pursuant to
Options granted to any one Optionee exceed 5% of the Outstanding
Issued (unless disinterested shareholder approval has been
received);
●
The price per share
(the “Market Price”) at which shares may be purchased
upon the exercise of an Option will not be lower than the last
recorded sale of a board lot of shares on the Exchange during the
trading day immediately preceding the date of granting of the
Option or, if there was no such sale, the hi/low average trading
price on the Exchange for the Shares for the five trading days
immediately preceding the date on which the Option is
granted;
●
The Company
presently does not have a share purchase plan, however, under the
Plan, an Optionee may, as has been previously determined by the
Board on a case by case basis, have the right (the
“Right”) when entitled to exercise an Option, to
terminate such Option in whole or in part by notice in writing to
the Company and in lieu of receiving Common Shares pursuant to the
exercise of the Option, shall receive instead and at no cost to the
participant that number of Common Shares, disregarding fractions,
which, when multiplied by the Market Price on the day immediately
prior to the exercise of the Right, have a total value equal to the
product of that number of Common Shares subject to the Option times
the difference between the Market Price on the day immediately
prior to the exercise of the Right and the Option exercise
price;
●
Options granted may
have a vesting period as required by the Board on a case by case
basis;
●
Options may be
exercisable during a period not exceeding ten years, or such lesser
period as may be determined by the Board;
●
An Option granted
to a person who is a Director, Employee, Consultant or Executive
Officer shall normally terminate no longer than 30 days after such
person ceases to be in at least one of those categories. However,
the Committee may also set termination periods as they deem
appropriate, subject to all applicable laws and Exchange policies.
Any Option or portions of Options of terminated individuals not so
exercised will terminate and will again be available for future
Options under the Plan. A change of employment will not be
considered a termination so long as the Optionee continues to be
employed by the Company or its subsidiaries;
●
An Option may not
be assigned or transferred. During the lifetime of an Optionee, the
Option may be exercised only by the Optionee;
●
In the event of the
death of an Optionee, Options held by such Optionee may be
exercised until the earlier of 60 days of the grant of probate or
similar documents and one year from the date of death, after which
the Options terminate;
●
The Plan requires
shareholder approval for any amendment
to increase the fixed number of shares issuable under the
Plan;
●
Disinterested
shareholder approval shall be required for the reduction in the
exercise price per share of Options previously granted to
Insiders;
●
Pursuant to the
Plan, Options shall be granted pursuant to an Option agreement in a
form that complies with the rules and policies of the Exchange,
which provides, in addition to other matters, that all Options
granted shall be non-assignable and no financial assistance will be
provided with respect to the exercise of Options; and
●
The Board may
alter, suspend or discontinue the Plan as it deems appropriate,
subject to obtaining shareholder approval to any increase in the
aggregate number of shares subject to option under the Plan or a
price reduction of an Option held by insiders.
20
The
following table sets out equity compensation plan information as at
the end of the financial year ended December 31, 2020:
Equity Compensation Plan Information
Plan Category
Number of securities to be issued upon exercise of outstanding
options, warrants and rights
(a)
Weighted-average exercise price of outstanding options, warrants
and rights
(b)
Number of securities remaining available for future issuance under
equity compensation plans (excluding securities reflected in column
(a))
(c)
Equity compensation plans approved by Securityholders
3,210,000
$0.42
5,642,339
Equity compensation plans not approved by
Securityholders
Nil
Nil
Nil
Total
3,210,000
$0.42
5,642,339
The
following table sets out the annual burn rate of the
Company’s only equity compensation plan, the Plan for the
prior three financial years:
For the Financial Year Ended December 31
Number of Options Granted
Weighted-average Common Shares Outstanding
Percentage
2020
840,000
52,298,078
1.61%
2019
750,000
45,775,307
1.64%
2018
850,000
43,692,071
1.95%
Audit Committee
The
Company’s audit committee is currently comprised of three
independent directors, Martin Burian, Deepak Malhotra and Andrew
Bowering. All members of the Audit Committee are financially
literate. The Company considers “financial literacy” to
be the ability to read and understand a company’s fundamental
financial statements, including a company’s balance sheet,
income statement and a cash flow statement.
21
The
Audit Committee assists the Board in its oversight functions as
they relate to the integrity of the Company’s financial
statements and accounting processes, and the independent
auditors’ qualifications and independence. In this regard the
Audit Committee has primary responsibility for the Company’s
financial reporting, accounting systems and internal controls. The
Audit Committee has the following duties and responsibilities: (a)
assisting the Board in fulfilling its responsibilities relating to
the Company’s accounting and reporting practices; (b)
reviewing the audited financial statements of the Company and
recommending whether such statements should be approved by the
Board; (c) reviewing and approving unaudited interim financial
statements of the Company; (d) reviewing and approving the
Company’s MD&A and any press releases related to the
annual and interim financial statements or any MD&A before the
Company discloses this information; (e) recommending to the Board
the firm of independent auditors to be nominated for appointment by
shareholders at each annual general meeting of the Company and,
where appropriate, the removal of the Company’s independent
auditors; (f) recommending to the Board the compensation to be paid
to the independent auditors; (g) reviewing the audit engagement and
scope of audits to be conducted by the Company’s independent
auditors; (h) monitoring and evaluating the independence and
performance of the Company’s independent auditors; (i)
overseeing the work of the Company’s independent auditors,
including the resolution of disagreements between management and
the independent auditors regarding financial reporting; (j)
pre-approving all non-audit services to be provided to the Company
by its independent auditors prior to the commencement of such
services; (k) in consultation with management and the independent
auditors, reviewing the integrity, adequacy and timeliness of the
Company’s financial reporting and internal control structure;
(l) monitoring the Company’s compliance with legal and
regulatory requirements related to financial reporting and
disclosure; (m) discussing with management and the independent
auditor the adequacy and effectiveness of the Company’s
financial accounting systems and internal control procedures; (n)
reviewing and approving the appointment of the Company’s
chief financial officer and key financial executives; (o)
establishing procedures for the receipt, retention, confidentiality
and treatment of complaints received by the Company regarding
accounting, internal accounting controls or auditing matters and
the confidential, anonymous submission by employees of the Company
of concerns regarding questionable accounting or auditing matters;
(p) annually reviewing and reassessing the adequacy of the duties
and responsibilities of the Audit Committee set out in the
Board’s formal written mandate; and (q) any other matters
that the Audit Committee feels are important to its mandate or that
the Board chooses to delegate to it. The Audit Committee is
empowered to instruct and retain independent counsel or other
advisors, set the pay and compensation for any such advisors and
communicate directly with the independent auditors, as it
determines necessary to carry out its duties, at the expense of the
Company. The Audit Committee also has oversight responsibility for
the Company’s internal audit group and function, and reviews
and assesses internal audit findings. Additional information
relating to the Audit Committee is contained in the Company’s
Annual Information Form for the year ended December 31, 2020 as
filed on SEDAR on March 31, 2021 (see www.sedar.com).
Statement of Corporate Governance Practices
The
Canadian Securities Administrators have adopted National Instrument
58-101, Disclosure of Corporate
Governance Practices (“NI 58-101”) which requires issuers
to disclose, on an annual basis, their corporate governance
practices in accordance with NI 58-101. Corporate governance
disclosure by the Company is set out below.
The Board of Directors
The
Board currently consists of five directors, of which three of the
directors (Martin Burian, Deepak Malhotra and Andrew Bowering) are
currently “independent” in the context of the Policy.
Bradford J. Cooke is not considered independent as he was the
Interim CEO of the Company from June 29, 2018 to October 17,2018 and is a part-time executive Chairman. Scott Edridge is not
considered independent as he is the current CEO of the Company.
Accordingly, a majority of the Board is independent.
22
Certain
directors of the Company are presently directors of other issuers
that are reporting issuers (or the equivalent) in any jurisdiction
including foreign jurisdictions, as follows:
Arctic
Star Exploration Corp.Ritual Superfoods Inc.African Gold Group,
Inc.
Andrew
Bowering
Cerro
Mining Corp.Apollo Gold & Silver Corp.American Lithium
Corp.Prime Mining Corp.Optimum Ventures Ltd.High Point Exploration
Inc.
The
independent directors do not hold regularly scheduled meetings at
which non-independent directors and members of management are not
in attendance. However, during the course of a directors’
meeting, if a matter is more effectively dealt with without the
presence of members of management, the independent directors ask
members of management to leave the meeting, and the independent
directors then meet in
camera.
Bradford J. Cooke is the Chair of the Board. Martin Burian, an
independent director, was appointed the Lead Director of the
Board with the mandate to ensure that the Board’s
Agenda will enable it to successfully carry out its duties and to
do so without interference from the Chairman of the Board that
could result from potential conflicts.
The
Board has not adopted a written code for the directors, officers
and employees.
23
Board Mandate
The
Company does not have a written Board Mandate. The Board is
responsible for supervising management in carrying on the business
and affairs of the Company. Directors are required to act and
exercise their powers with reasonable prudence in the best
interests of the Company. The Board agrees with and confirms its
responsibility for overseeing management's performance in the
following particular areas:
identification and
management of the principal risks associated with the business of
the Company;
●
planning for
succession of management;
●
the Company's
policies regarding communications with its shareholders and others;
and
●
the integrity of
the internal controls and management information systems of the
Company.
In
carrying out its mandate, the Board relies primarily on management
to provide it with regular detailed reports on the operations of
the Company and its financial position. The Board reviews and
assesses these reports and other information provided to it at
meetings of the full Board and of its committees. The Chief
Executive Officer reports to the Board regularly, giving the Board
direct access to information in his areas of responsibility. Other
management personnel regularly attend Board meetings to provide
information and answer questions. Directors also consult from time
to time with management and have, on occasion, visited the
properties of the Company. The reports and information provided to
the Board include details concerning the monitoring and management
of the risks associated with the Company's activities, such as
compliance with safety standards and legal requirements,
environmental issues and the financial position and liquidity of
the Company. At least annually, the Board reviews management's
report on its business and strategic plan and any changes with
respect to risk management and succession planning.
Position Descriptions
The
Board has not yet developed written position descriptions for the
Chairman, the chairman of any Board committees, the CEO, the
President or the CFO. The Board is of the view that given the size
of the Company, the relatively frequent discussions between Board
members, the CEO, the President and the CFO and the experience of
the individual members of the Board, the responsibilities of such
individuals are known and understood without position descriptions
being reduced to writing. The Board will evaluate this position
from time to time, and if written position descriptions appear to
be justified, they will be prepared.
Orientation and Continuing Education
The
Board does not have a formal policy relating to the orientation of
new directors and continuing education for directors. The
appointment of a new director is a relatively infrequent event in
the Company’s affairs, and each situation is addressed on its
merits on a case-by-case basis. The Company has a relatively
restricted scope of operations, and most candidates for Board
positions will likely have past experience in the mining business;
they will likely be familiar therefore with the operations of a
resource company of the size and complexity of the Company. The
Board, with the assistance of counsel, keeps itself apprised of
changes in the duties and responsibilities of directors and deals
with material changes of those duties and responsibilities as and
when the circumstances warrant. The Board will evaluate these
positions, and if changes appear to be justified, formal policies
will be developed and followed.
Ethical Business Conduct
The
Company has adopted a whistle blower policy, which is set out in
its Charter of the Audit Committee which is available for viewing
on SEDAR in the Company’s AIF as filed on SEDAR on March 30,2021 under the Company’s profile.
24
Nomination of Directors
The
Board has a Nomination Committee currently comprised of
Martin Burian (Chair) and Andrew Bowering, both
independent directors. The Nomination Committee doesn’t have
a formal policy for identifying new candidates for Board
nomination. The function of the Nomination Committee is to identify
individuals qualified to become Board members and to select, or to
recommend that the Board select the director nominees for the next
annual meeting of shareholders, to
oversee the selection and composition of committees of the Board,
and to oversee management continuity planning processes. If and
when the Board determines that its size should be increased or if a
director needs to be replaced, the Nomination Committee determines
the independence of the candidate, his or her experience in the
mining business and compatibility with the other directors.
Proposals are put forth to the Board and management and considered
and discussed. If a candidate looks promising, due diligence is
conducted on the candidate and if the results are satisfactory, the
candidate is invited to join the Board.
Compensation
Taking
into account the Company’s present status as an
exploration-stage enterprise, the Board reviews the adequacy and
form of compensation provided to Directors on a periodic basis to
ensure that the compensation is commensurate with the
responsibilities and risks undertaken by an effective
director.
Report on Executive Compensation
The
Company’s compensation program is based on a
pay-for-performance philosophy. The compensation program is
designed to encourage, compensate and reward employees on the basis
of individual and corporate performance, both in the short and the
long term. Base salaries are set at levels which are competitive
with the base salaries paid by companies within the mining industry
having comparable capitalization to that of the Company, thereby
enabling the Company to compete for and retain executives critical
to the Company’s long term success. Incentive compensation is
directly tied to corporate and individual performance. Share
ownership opportunities are provided to align the interests of
executive officers with the longer-term interests of
shareholders.
Compensation
for each of the named executive officers, as well as for executive
officers as a whole consists of a base salary, along with annual
incentive compensation in the form of an annual bonus, if any, and
a longer-term incentive in the form of stock options. As an
executive officer’s level of responsibility increases, a
greater percentage of total compensation is based on performance
(as opposed to base salary and standard employee benefits) and the
mix of total compensation shifts towards stock options, thereby
increasing the mutuality of interest between executive officers and
shareholders.
The
Board meets as required, but at least quarterly. The Board reviews
management compensation policies and benefits, monitors management
succession planning and conducts an annual review of the overall
condition and quality of the Company's human resources. In
addition, the Committee has the specific mandate to review and
approve executive compensation. In carrying out this mandate, the
Committee assesses on an annual basis the performance of the CEO
against established objectives and reviews performance reports
submitted for other executive officers.
Base Salary
The
Board approves ranges for base salaries for employees at all levels
of the Company based on reviews of market data from peer groups and
industry in general. The level of base salary for each employee
within a specified range is determined by the level of past
performance, as well as by the level of responsibility and the
importance of the position to the Company.
The
Company’s CEO prepares recommendations for the Board with
respect to the base salary to be paid to the CEO and other senior
executive officers. The CEO’s recommendations for base
salaries for the senior executive officers, including the CEO, the
President and the CFO, are then submitted for approval by
Compensation Committee to the Board.
25
Bonus
The
Board annually evaluates performance and may allocate an amount for
payment of bonuses to executive officers and senior management. The
aggregate amount for bonuses to be paid will vary with the degree
to which targeted corporate performance was achieved for the year.
The individual performance factor allows the Company effectively to
recognize and reward those individuals whose efforts have assisted
the Company to attain its corporate performance
objective.
The CEO
prepares recommendations to the Compensation Committee for approval
by the Board with respect to any bonuses to be paid to the
executive officers and to senior management.
Stock Options
The
Plan is administered by the Compensation Committee. The Plan is
designed to give each option holder an interest in preserving and
maximizing shareholder value in the longer term, to enable the
Company to attract and retain individuals with experience and
ability and to reward individuals for current performance and
expected future performance. The Board considers stock option
grants when reviewing executive officer compensation packages as a
whole. See “Securities
Authorized for Issuance under Equity Compensation
Plans” for a description of the Plan.
Directors’ and Officers’ Liability
Insurance
The
Company has an insurance policy for itself and its directors and
officers against liability incurred by them in the performance of
their duties as directors and officers of the Company. In 2020, the
Company renewed its policy coverage of CAD$10 million of liability
for a term of one year for an annual premium of
CAD$35,000.
Other Board Committees
Aside
from the Audit Committee which has previously been established, the
Board has established committees for Compensation and Nomination in
2011, Investment in 2017 and Technical in 2018 comprised of the
following Board members and their respective mandates:
Committee
Members
Mandate
Nomination
Martin
Burian (Chairman)
Andrew
Bowering
The
function of the Nomination Committee is to identify individuals
qualified to become board members and to select, or to recommend
that the Board select the director nominees for the next annual
meeting of stockholders, to
oversee the selection and composition of committees of the Board,
and to oversee management continuity planning
processes.
Compensation
Deepak
Malhotra (Chairman)
Andrew
Bowering
The
Compensation Committee shall advise and make recommendations to the
Board in its oversight role with respect to the Company’s
strategy, policies and programs on the compensation and development
of senior management and directors. See “Compensation Discussion and
Analysis” for further details about the Compensation
Committee.
Technical
Deepak
Malhotra (Chairman)
Bradford
Cooke
The
Technical Committee is to provide technical expertise and advice to
the Board with respect to strategies, opportunities, challenges,
proposals, programs and budgets for mineral property acquisition,
exploration, development and disposition.
Investment
Martin
Burian (Chairman)
Bradford
Cooke
The
Investment Committee shall oversee and instruct the management with
respect to the strategic investment of up to CAD$1,000,000 of the
Company’s funds to purchase the securities of other entities
for investment purposes.
26
The
Board also has a Disclosure Committee comprised of the following
management persons and its mandate:
Members
Mandate
Chief
Executive Officer or President, and
A
Disclosure Committee oversees corporate disclosure practices and
ensures implementation and adherence to the Company’s
disclosure policy. The Disclosure Committee's responsibilities
include:
● maintaining an
awareness and understanding of governing disclosure rules and
guidelines, including any new or pending developments;
● developing and
implementing procedures to regularly review public
disclosures;
● update and correct
corporate disclosure information, including information on the
Internet website;
● bringing the
disclosure policy to the attention of directors, management and
staff;
● monitoring
compliance with the disclosure policy and undertaking reviews of
any violations, including assessment and implementation of
appropriate consequences and remedial actions;
● reviewing
the disclosure policy and updating as necessary and appropriate to
ensure compliance with prevailing rules and guidelines;
and
● ascertaining
whether corporate developments constitute material information and,
if so, ensuring compliance with the procedures outlined in the
disclosure policy.
Vice-President
or Manager of Investor Relations, if any
Assessments
The
Board has no formal process for the assessment of the effectiveness
and contribution of the individual directors. Each director has
extensive public company experience and is familiar with what is
required of him. Frequency of attendance at Board and committee
meetings and the quality of participation in such meetings are two
of the criteria by which the performance of a director will be
assessed.
27
Board Retirement Policy and Renewal
The Company does not have any term limits, retirement policies or
similar mechanisms in place for forcing the renewal or replacement
of its directors. Each director serves for a one year term and
stands for re-election by shareholders at the Company’s
annual general meeting each year. The Board does not have a limit
on the number of consecutive terms for which a director may sit.
The Board believes that Board renewal can happen naturally without
imposing arbitrary age or term limits. In addition, the Board
believes that effective corporate decision-making is enhanced
through the continuity, experience and knowledge that come from
permitting longer-term service on a Board.
Policies Regarding the Representation of Women on the
Board
The Company has not adopted a written policy relating to the
identification and nomination of women directors. The Company is an
equal opportunity employer and believes that supporting a diverse
workplace is a business essential that helps the Company and its
Board attract and retain the brightest and most talented
individuals in the industry. The Company believes that this
diversity philosophy is well entrenched and accepted by all of its
employees, including its Board, executive officers and employees
generally. The Company does not believe that a written policy is
necessary to further advance the Company’s commitment to a
diverse workplace.
Consideration of the Representation of Women in the Director
Identification and Selection Process
The Board supports the principle of boardroom diversity. The
Nomination Committee considers diversity (including, among other
important qualifications, gender, age, geography and nationality)
when reviewing qualified candidates for recommendation for election
to the Board. The Board’s aim is to have a broad range of
approaches, backgrounds, skills and experience represented on the
Board and to make appointments on merit and against objective
criteria, including diversity. When the Nomination Committee
engages in the nomination process, searches for potential nominees
are conducted so as to put forward a diverse range of candidates,
including women candidates.
Consideration Given to the Representation of Women in Executive
Officer Appointments
When identifying candidates for executive officer positions, the
Company takes a similar approach, considering, among other factors,
professional competencies, industry or other relevant experience,
education, leadership style and experience, merit and personal
attributes, including gender diversity, to build a strong executive
team.
Targets Regarding the Representation of Women on the Board and in
Executive Officer Positions
The Board has not set specific targets as to the number of women
board members, nor has the Board set specific targets as to the
number of executive officers who are women. The Company’s
selection process is based on merit, having regard to the various
skills, abilities, qualifications and competencies needed for the
particular position, of which diversity is one of several important
factors that are considered.
Number of Women on the Board and in Executive Officer
Positions
As of the date of this Information Circular, 0% (0 out of 5) of the
Company’s Director nominees are women, and 0% (0 out of 4) of
the Company’s executive team are women.
INDEBTEDNESS TO COMPANY OF DIRECTORS AND EXECUTIVE
OFFICERS
None of
the directors, executive officers, employees, former executive
officers, directors and employees of Canagold or any of its
subsidiaries, proposed nominees for election or associates of such
persons is or has been indebted to Canagold (other than routine
indebtedness) in excess of $50,000 at any time for any reason
whatsoever, including the purchase of securities of Canagold or any
of its subsidiaries.
28
INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS
Key
management includes directors (executive and non-executive) and
senior management. The compensation paid or payable to key
management for employee services is disclosed in the table
below.
Except
as may be disclosed elsewhere herein, general and administrative
costs during 2020, 2019 and 2018 include:
Notes:
(1)
Includes key
management compensation which is included in employee and director
remuneration, mineral property interests, and corporate
development.
(2)
The companies
include Endeavour, AzMin and AzMet.
The
above transactions were incurred in the normal course of business
and are recorded at the exchange amount, being the amount agreed
upon by the related parties.
Canagold
shares common office facilities, employee and administrative
support, and office sundry amongst companies with certain common
director(s), and such allocations to Canagold are on a full cost
recovery basis. Any balances due to related parties are payable on
demand.
There
are no management functions of Canagold which are to any
substantial degree performed by a person other than a director or
executive officer of Canagold.
29
OTHER MATTERS
It is
not known that any other matters will come before the Meeting other
than as set forth above and in the Notice of Meeting accompanying
this Information Circular, but if such should occur the persons
named in the accompanying Form of Proxy intend to vote on them in
accordance with their best judgement, exercising discretionary
authority with respect to amendments or variations of matters
identified in the Notice of Meeting and other matters which may
properly come before the Meeting or any adjournment(s) or
postponement(s) thereof.
FINANCIAL STATEMENTS, DIRECTORS’ REPORT, MANAGEMENT’S
DISCUSSION AND ANALYSIS & ADDITIONAL INFORMATION
Additional
information relating to the Canagold is available on SEDAR at
www.sedar.com.
A securityholder may contact Canagold at 810 – 625 Howe
Street, Vancouver, BC V6C 2T6, telephone: 604.685.9700 or fax:
604.685.9744 to request copies of Canagold’s financial
statements and Management’s Discussion and Analysis
(“MD&A”).
Financial information is provided in Canagold’s comparative
financial statements and MD&A for its most recently completed
financial year ended December 31, 2020.
BOARD APPROVAL
The
contents of this Information Circular and the sending thereof to
shareholders entitled to receive notice of the Meeting, to each
director, to the auditors of Canagold and to the appropriate
governmental agencies, have been approved in substance by the
directors of Canagold pursuant to resolutions passed as of
May 12, 2021.
CERTIFICATE
The
foregoing contains no untrue statement of a material fact and does
not omit to state a material fact that is required to be stated or
that is necessary to make a statement not misleading in the light
of the circumstances in which it was made.
DATED
as of the 12th day of May, 2021.
BY
ORDER OF THE BOARD
Canagold
Resources Ltd.
“Scott
Eldridge”
Scott
Eldridge, Chief Executive Officer
30
Dates Referenced Herein and Documents Incorporated by Reference
