Trekor Metals Ltd 6-K, filed Apr 5, 2023
Trekor Metals Ltd (TGB)
About this 6-K
Trekor Metals Ltd filed this 6-K on April 5, 2023.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of April 2023
Commission File No. 001-31965
TASEKO MINES LIMITED
(Translation of registrant's name into English)
12th Floor - 1040 West Georgia Street
Vancouver, British Columbia, V6E 4H1, Canada
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F
Form 20-F [ ] Form 40-F [X]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1) [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7) [ ]
SUBMITTED HEREWITH
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Exhibits |
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Amended and Restated Shareholder Rights Plan Agreement dated June 9, 2022 |
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Report of Voting Results of Annual General Meeting held on June 9, 2022 |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
TASEKO MINES LIMITED
Date: April 4, 2023
| /s/ Stuart McDonald | ||
| Stuart McDonald President |
FORM 51-102F3
MATERIAL CHANGE REPORT
Item 1 Name and Address of Company
Taseko Mines Limited (the "Company" or "Taseko") 15th Floor, 1040 West Georgia St. Vancouver, BC V6E 4H1
Item 2 Date of Material Change
February 22, 2023
Item 3 News Release
The news release was issued and disseminated on February 22, 2023 on the System for Electronic Document Analysis and Retrieval (www.sedar.com). A copy of the press release is attached hereto as Schedule A.
Item 4 Summary of Material Change
On February 22, 2023, Taseko announced that it has entered into a definitive agreement (the "Agreement") to acquire an additional 12.5% interest in the Gibraltar Mine from Sojitz Corporation ("Sojitz"). Under the terms of the Agreement, Taseko will acquire Sojitz's 50% interest in Cariboo, and will then hold an effective 87.5% interest in the Gibraltar Mine.
Item 5.1 Full Description of Material Change
On February 22, 2023, Taseko announced that it has entered into the Agreement to acquire an additional 12.5% interest in the Gibraltar Mine from Sojitz. The Gibraltar Mine is operated through a joint venture which is owned 75% by Taseko and 25% by Cariboo. Under the terms of the Agreement, Taseko will acquire Sojitz's 50% interest in Cariboo, and will then hold an effective 87.5% interest in the Gibraltar Mine (the "Transaction").
The acquisition price consists of a minimum of C$60 million payable over a five-year period and potential contingent payments depending on Gibraltar Mine revenues and copper prices over the next five years. An initial C$10 million will be paid to Sojitz upon closing and the remaining minimum amount will be paid in C$10 million annual instalments over the next five years.
Closing of the Transaction is subject to customary conditions, including regulatory approvals, and is expected to occur in a timely manner.
Item 5.2 Disclosure for Restructuring Transactions
Not applicable.
Item 6 Reliance on subsection 7.1(2) of National Instrument 51-102
Not applicable.
Item 7 Omitted Information
Not applicable.
Item 8 Executive Officer
The following executive officer of the Company is knowledgeable about this report and the material change disclosed herein:
Bryce Hamming Chief Financial Officer 778-373-4533
Item 9 Date of Report
March 3, 2023
SCHEDULE A TO THE MATERIAL CHANGE REPORT OF TASEKO MINES LIMITED
NEWS RELEASE DATED FEBRUARY 22, 2023
TASEKO SIGNS DEFINITIVE AGREEMENT TO ACQUIRE 12.5% INTEREST IN GIBRALTAR COPPER MINE
February 22, 2023, Vancouver, BC - Taseko Mines Limited (TSX: TKO; NYSE American: TGB; LSE: TKO) ("Taseko" or the "Company") is pleased to announce that it has entered into a definitive agreement ("Agreement") to acquire an additional 12.5% interest in the Gibraltar Mine from Sojitz Corporation ("Sojitz"). Gibraltar is operated through a joint venture which is owned 75% by Taseko and 25% by Cariboo Copper Corporation ("Cariboo"). Under the terms of the Agreement, Taseko will acquire Sojitz's 50% interest in Cariboo, and will then hold an effective 87.5% interest in the Gibraltar Mine.
The acquisition price consists of a minimum amount of C$60 million payable over a five-year period and potential contingent payments depending on Gibraltar mine revenues and copper prices over the next five years. An initial C$10 million will be paid to Sojitz upon closing and the remaining minimum amount will be paid in C$10 million annual instalments over the next five years.
Stuart McDonald, President & CEO of Taseko, stated, "This is a logical and beneficial transaction for Taseko, providing immediate 17% growth in our attributable copper production and earnings from mine operations. Gibraltar is a high-quality asset with a long mine life in an excellent jurisdiction. The transaction is immediately accretive to Taseko and the deferred payment structure allows us to focus our financial capacity on the construction of the Florence Copper project which we expect to commence later this year."
Mr. Osamu Matsuura, Executive Officer & COO of Sojitz Metals, Mineral Resources and Recycling Division, commented: "Sojitz has benefitted from its partnership with Taseko for more than a decade, and we continue to view the Gibraltar mine as a valuable long-life asset with a proven operating team. This transaction is consistent with our Division's strategy to transition towards metal recycling and other midstream processing businesses."
Closing of the transaction is subject to customary conditions, including regulatory approvals, and is expected to occur in a timely manner.
Transaction Details
Taseko will acquire Sojitz's 50% interest in Cariboo and become a party to the existing Cariboo shareholders agreement with Dowa Metals & Mining Co., Ltd (25%) and Furukawa Co. Ltd (25%). There will be no change to the offtake contracts established in 2010 and Dowa and Furukawa will continue to receive 30% of Gibraltar's copper concentrate offtake. There will be no impact to operation of the Gibraltar Joint Venture.
Under the terms of the Agreement, the initial minimum payment of C$10 million is due on closing and the remaining minimum amounts are payable annually in C$10 million instalments over the next five years, for a total of C$60 million. There is no interest payable on the minimum amounts.
The contingent payments are payable annually for five years only if the average LME copper price exceeds US$3.50 per pound in a year. The payments will be calculated by multiplying Gibraltar mine copper revenues by a price factor, which is based on a sliding scale ranging from 0.38% at US$3.50 per pound copper to a maximum of 2.13% at US$5.00 per pound copper or above. Total contingent payments
cannot exceed C$57 million over the five-year period, limiting the acquisition cost to a maximum of C$117 million.
For further information on Taseko, see the Company's website at www.tasekomines.com or contact:
Brian Bergot, Vice President, Investor Relations - 778-373-4533 or toll free 1-877-441-4533
Stuart McDonald President and CEO
No regulatory authority has approved or disapproved of the information contained in this news release.
CAUTION REGARDING FORWARD-LOOKING INFORMATION
This document contains "forward-looking statements" that were based on Taseko's expectations, estimates and projections as of the dates as of which those statements were made. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "outlook", "anticipate", "project", "target", "believe", "estimate", "expect", "intend", "should" and similar expressions.
Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the Company's actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. These included but are not limited to: ⍰ uncertainties about the future market price of copper and the other metals that we produce or may seek to produce; ⍰ uncertainties about the continuing impact of the novel coronavirus ("COVID-19") and the response of local, provincial, state, federal and international governments to the ongoing threat of COVID-19, on our operations (including our suppliers, customers, supply chains, employees and contractors) and economic conditions generally including rising inflation levels and in particular with respect to the demand for copper and other metals we produce; ⍰ inherent risks associated with mining operations, including our current mining operations at Gibraltar, and their potential impact on our ability to achieve our production estimates; ⍰ uncertainties as to our ability to control our operating costs, including inflationary cost pressures at Gibraltar without impacting our planned copper production; ⍰ the risk of inadequate insurance or inability to obtain insurance to cover material mining or operational risks; ⍰ uncertainties related to the feasibility study for Florence copper project (the "Florence Copper Project" or "Florence Copper") that provides estimates of expected or anticipated capital and operating costs, expenditures and economic returns from this mining project, including the impact of inflation on the estimated costs related to the construction of the Florence Copper Project and our other development projects; ⍰ the risk that the results from our operations of the Florence Copper production test facility ("PTF") and ongoing engineering work including updated capital and operating costs will negatively impact our estimates for current projected economics for commercial operations at Florence Copper; ⍰ uncertainties related to the accuracy of our estimates of Mineral Reserves (as defined below), Mineral Resources (as defined below), production rates and timing of production, future production and future cash and total costs of production and milling; ⍰ the risk that we may not be able to expand or replace reserves as our existing mineral reserves are mined; ⍰ the availability of, and uncertainties relating to the development of, additional financing and infrastructure necessary for the advancement of our development projects, including with respect to our ability to obtain any remaining construction financing potentially needed to move forward with commercial operations at Florence Copper; ⍰ our ability to comply with the extensive governmental regulation to which our business is subject; ⍰ uncertainties related to our ability to obtain necessary title, licenses and permits for our development projects and project delays due to third party opposition, particularly in respect to Florence Copper that requires one key regulatory permit from the U.S. Environmental Protection Agency ("EPA") in order to advance to commercial operations; ⍰ our ability to deploy strategic capital and award key contracts to assist with protecting the Florence Copper project execution plan, mitigating inflation risk and the potential impact of supply chain disruptions on our construction schedule and ensuring a smooth transition into construction once the final permit is received from the EPA; ⍰ our reliance on rail transportation and port terminals for shipping our copper concentrate production from Gibraltar; ⍰ uncertainties related to unexpected judicial or regulatory proceedings; ⍰ changes in, and the effects of, the laws, regulations and government policies affecting our exploration and development activities and mining operations and mine closure and bonding requirements; ⍰ our dependence solely on our 75% interest in Gibraltar (as defined below) for revenues and operating cashflows; ⍰ our ability to collect payments from customers, extend existing concentrate off-take agreements or enter into new agreements; ⍰ environmental issues and liabilities associated with mining including processing and stock piling ore; ⍰ labour strikes, work stoppages, or other interruptions to, or difficulties in, the employment of labour in markets in which we operate our mine, industrial accidents, equipment failure or other events or occurrences, including third party interference that interrupt the production of minerals in our mine; ⍰ environmental hazards and risks associated with climate change, including the potential for damage to infrastructure and stoppages of operations due to forest fires, flooding, drought, or other natural events in the vicinity of our operations; ⍰ litigation risks and the inherent uncertainty of litigation, including litigation to which Florence Copper could be subject to;
⍰ our actual costs of reclamation and mine closure may exceed our current estimates of these liabilities; ⍰ our ability to meet the financial reclamation security requirements for the Gibraltar mine and Florence Project; ⍰ the capital intensive nature of our business both to sustain current mining operations and to develop any new projects, including Florence Copper; ⍰ our reliance upon key management and operating personnel; ⍰ the competitive environment in which we operate; ⍰ the effects of forward selling instruments to protect against fluctuations in copper prices, foreign exchange, interest rates or input costs such as fuel; ⍰ the risk of changes in accounting policies and methods we use to report our financial condition, including uncertainties associated with critical accounting assumptions and estimates; and Management Discussion and Analysis ("MD&A"), quarterly reports and material change reports filed with and furnished to securities regulators, and those risks which are discussed under the heading "Risk Factors".
For further information on Taseko, investors should review the Company's annual Form 40-F filing with the United States Securities and Exchange Commission www.sec.gov and home jurisdiction filings that are available at www.sedar.com, including the "Risk Factors" included in our Annual Information Form.
AMENDED AND RESTATED SHAREHOLDER RIGHTS PLAN AGREEMENT
DATED AS OF
JUNE 9, 2016
AS AMENDED AND EXTENDED JUNE 9, 2022
BETWEEN
TASEKO MINES LIMITED
AND
COMPUTERSHARE INVESTOR SERVICES INC.
TABLE OF CONTENTS
AMENDED AND RESTATED SHAREHOLDER RIGHTS PLAN AGREEMENT
MEMORANDUM OF AGREEMENT, dated June 9, 2016 as amended and extended as of June 9, 2022 between Taseko Mines Limited (the "Company"), a company incorporated under the laws of British Columbia and Computershare Investor Services Inc., a corporation existing under the laws of Canada (the "Rights Agent");
WHEREAS the Board of Directors of the Company, in the exercise of its fiduciary duties to the Company, has determined that it is advisable for the Company to adopt a shareholder rights plan (the "Rights Plan") to take effect on the Effective Date (as hereinafter defined) to prevent, to the extent possible, a creeping takeover of the Company and to ensure that any offer to acquire shares of the Company is made to all shareholders and cannot be completed unless shareholders holding at least 50% of the outstanding shares (other than the offeror and related parties) are deposited or tendered in acceptance of the offer, to ensure, to the extent possible, the fair treatment of all shareholders in connection with any take-over bid for the securities of the Company, and to ensure that the Board of Directors is provided with sufficient time to evaluate unsolicited take-over bids and to explore and develop alternatives to maximize shareholder value;
AND WHEREAS in order to implement the adoption of a shareholder rights plan as established by this Agreement, the board of directors of the Company has:
(a) authorized the issuance, effective at the close of business (Vancouver time) on the Effective Date, of one Right (as hereinafter defined) in respect of each Share (as hereinafter defined) outstanding at the close of business (Vancouver time) on the Effective Date (the "Record Time");
(b) authorized the issuance of one Right in respect of each Voting Share (as hereinafter defined) of the Company issued after the Record Time and prior to the earlier of the Separation Time (as hereinafter defined) and the Expiration Time (as hereinafter defined); and
(c) authorized the issuance of Rights Certificates (as hereinafter defined) to holders of Rights pursuant to the terms and subject to the conditions set forth herein;
AND WHEREAS each Right entitles the holder thereof, after the Separation Time, to purchase securities of the Company pursuant to the terms and subject to the conditions set forth herein;
AND WHEREAS the Company desires to appoint the Rights Agent to act on behalf of the Company and the holders of Rights, and the Rights Agent is willing to so act, in connection with the issuance, transfer, exchange and replacement of Rights Certificates, the exercise of Rights and other matters referred to herein;
NOW THEREFORE, in consideration of the premises and the respective covenants and agreements set forth herein, and subject to such covenants and agreements, the parties hereby agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Certain Definitions
For purposes of this Agreement, the following terms have the meanings indicated:
(a) "1934 Exchange Act" means the Securities Exchange Act of 1934 of the United States, as amended, and the rules and regulations thereunder as now in effect or as the same may from time to time be amended, re-enacted or replaced;
(b) "Acquiring Person" shall mean any Person who is the Beneficial Owner of 20% or more of the outstanding Voting Shares; provided, however, that the term "Acquiring Person" shall not include:
(i) the Company or any Subsidiary of the Company;
(ii) any Person who becomes the Beneficial Owner of 20% or more of the outstanding Voting Shares as a result of one or any combination of:
(A) a Voting Share Reduction;
(B) Permitted Bid Acquisitions;
(C) an Exempt Acquisition;
(D) Pro Rata Acquisitions; or
(E) a Convertible Security Acquisition;
provided, however, that if a Person becomes the Beneficial Owner of 20% or more of the outstanding Voting Shares by reason of one or any combination of the operation of Paragraphs (A), (B), (C), (D) or (E) above and such Person's Beneficial Ownership of Voting Shares thereafter increases by more than 1% of the number of Voting Shares outstanding (other than pursuant to one or any combination of a Voting Share Reduction, a Permitted Bid Acquisition, an Exempt Acquisition, a Pro Rata Acquisition or a Convertible Security Acquisition), then as of the date such Person becomes the Beneficial Owner of such additional Voting Shares, such Person shall become an "Acquiring Person";
(iii) for a period of ten days after the Disqualification Date (as defined below), any Person who becomes the Beneficial Owner of 20% or more of the outstanding Voting Shares as a result of such Person becoming disqualified from relying on Clause 1.1(g)(iii)(B) because such Person is making or has announced a current intention to make a Take-over Bid, either alone or by acting jointly or in concert with any other Person. For the purposes of this definition, "Disqualification Date" means the first date of public announcement that any Person is making or intends to make a Take-over Bid;
(iv) an underwriter or member of a banking or selling group that becomes the Beneficial Owner of 20% or more of the Voting Shares in connection with a distribution of securities of the Company pursuant to an underwriting agreement with the Company; or
(v) a Person (a "Grandfathered Person") who is the Beneficial Owner of 20% or more of the outstanding Voting Shares determined as at the Record Time, provided, however, that this exception shall not be, and shall cease to be, applicable to a Grandfathered Person in the event that such Grandfathered Person shall, after the Record Time, become the Beneficial Owner of any additional Voting Shares that increases its Beneficial Ownership of Voting Shares by more than 1% of the number of Voting Shares outstanding, other than through one or any combination of a Permitted Bid Acquisition, an Exempt Acquisition, a Voting Share Reduction, a Pro Rata Acquisition or a Convertible Security Acquisition; and provided, further, that a Person shall cease to be a Grandfathered Person in the event that such Person ceases to Beneficially Own 20% or more of the then outstanding Voting Shares at any time after the Record Time;
(c) "Affiliate", when used to indicate a relationship with a specified Person, shall mean a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such specified Person;
(d) "Agreement" or "Shareholder Rights Plan Agreement" shall mean this amended and restated shareholder rights plan agreement dated June 9, 2016 and amended and extended June 9, 2022 between the Company and the Rights Agent, as amended or supplemented from time to time; "hereof", "herein", "hereto" and similar expressions mean and refer to this Agreement as a whole and not to any particular part of this Agreement;
(e) "annual cash dividend" shall mean cash dividends paid in any fiscal year of the Company to the extent that such cash dividends do not exceed, in the aggregate on a per share basis, in any fiscal year, the greatest of:
(i) 200% of the aggregate amount of cash dividends, on a per share basis, declared payable by the Company on its Shares in its immediately preceding fiscal year; and
(ii) 300% of the arithmetic mean of the aggregate amounts of the cash dividends, on a per share basis, declared payable by the Company on its Shares in its three immediately preceding fiscal years;
(f) "Associate" shall mean, when used to indicate a relationship with a specified Person, a spouse of that Person, any Person of the same or opposite sex with whom that Person is living in a conjugal relationship outside marriage, a child of that Person or a relative of that Person if that relative has the same residence as that Person;
(g) A Person shall be deemed the "Beneficial Owner" of, and to have "Beneficial Ownership" of, and to "Beneficially Own",
(i) any securities as to which such Person or any of such Person's Affiliates or Associates is the owner at law or in equity;
(ii) any securities as to which such Person or any of such Person's Affiliates or Associates has the right to become the owner at law or in equity (where such right is exercisable within a period of 60 days, whether or not on condition or on the happening of any contingency) pursuant to any agreement, arrangement, pledge or understanding, whether or not in writing, or upon the exercise of any conversion, exchange or purchase right (other than the Rights) attaching to a Convertible Security; other than pursuant to (x) customary agreements between the Company and underwriters or between underwriters and/or banking group members and/or selling group members with respect to a distribution of securities by the Company, (y) pledges of securities in the ordinary course of business), and (z) any agreement between the Company and any Person or Persons relating to a plan of arrangement, amalgamation or other statutory procedure which is subject to the approval of the holders of Voting Shares;
(iii) any securities which are Beneficially Owned within the meaning of Clauses 1.1(g)(i) or (ii) by any other Person with which such Person is acting jointly or in concert;
provided, however, that a Person shall not be deemed the "Beneficial Owner" of, or to have "Beneficial Ownership" of, or to "Beneficially Own", any security:
(A) where such security has been deposited or tendered pursuant to any Take-over Bid or where the holder of such security has agreed pursuant to a Permitted Lock-Up Agreement to deposit or tender such security pursuant to a Take-Over Bid, in each case made by such Person, made by any of such Person's Affiliates or Associates or made by any other Person acting jointly or in concert with such Person, until such deposited or tendered security has been taken up or paid for, whichever shall first occur;
(B) where such Person, any of such Person's Affiliates or Associates or any other Person referred to in Clause 1.1(g)(iii), holds such security provided that (1) the ordinary business of any such Person (the "Investment Manager") includes the management of mutual funds or investment funds for others (which others, for greater certainty, may include or be limited to one or more employee benefit plans or pension plans and/or includes the acquisition or holding of securities for a non-discretionary account of a Client (as defined below) by a dealer or broker registered under applicable securities laws to the extent required) and such security is held by the Investment Manager in the ordinary course of such business and in the performance of such Investment Manager's duties for the account of any other Person or Persons (a "Client"); or (2) such Person (the "Trust Company") is licensed to carry on the business of a trust company under applicable laws and, as such, acts as trustee or administrator or in a similar capacity in relation to the estates of deceased or incompetent Persons (each an "Estate Account") or in relation to other accounts (each an "Other Account") and holds such security in the ordinary course of such duties for such Estate Accounts or for such Other Accounts, or (3) such Person is a pension plan or fund registered under the laws of Canada or any Province thereof or the laws of the United States of America (a "Plan") or is a Person established by statute for purposes that include, and the ordinary business or activity of such Person (the "Statutory Body") includes, the management of investment funds for employee benefit plans, pension plans, insurance plans of various public bodies; or (4) such Person (the "Administrator") is the administrator or trustee of one or more Plans and holds such security for the purposes of its activities as an Administrator; provided, in any of the above cases, that the Investment Manager, the Trust Company, the Statutory Body, the Administrator or the Plan, as the case may be, is not then making and has not then announced an intention to make a Take-over Bid (other than an Offer to Acquire Voting Shares or other securities by means of a distribution by the Company or by means of ordinary market transactions (including prearranged trades) executed through the facilities of a stock exchange or organized over-the-counter market), alone or by acting jointly or in concert with any other Person;
(C) where such Person or any of such Person's Affiliates or Associates is (1) a Client of the same Investment Manager as another Person on whose account the Investment Manager holds such security, (2) an Estate Account or an Other Account of the same Trust Company as another Person on whose account the Trust Company holds such security, or (3) a Plan with the same Administrator as another Plan on whose account the Administrator holds such security;
(D) where such Person is (1) a Client of an Investment Manager and such security is owned at law or in equity by the Investment Manager, (2) an Estate Account or an Other Account of a Trust Company and such security is owned at law or in equity by the Trust Company or (3) a Plan and such security is owned at law or in equity by the Administrator of the Plan; or
(E) where such person is the registered holder of securities as a result of carrying on the business of or acting as a nominee of a securities depository.
(h) "Board of Directors" shall mean the board of directors of the Company or any duly constituted and empowered committee thereof;
(i) "Business Day" shall mean any day other than a Saturday, Sunday or a day on which banking institutions in Vancouver, British Columbia are authorized or obligated by law to close;
(j) "Business Corporations Act" shall mean the British Columbia Business Corporations Act, S.B.C. 2002, c.57, as amended, and the regulations made thereunder and any comparable or successor laws or regulations thereto;
(k) "Canadian Dollar Equivalent" of any amount which is expressed in United States dollars shall mean on any day the Canadian dollar equivalent of such amount determined by reference to the U.S.- Canadian Exchange Rate in effect on such date;
(l) "close of business" on any given date shall mean the time on such date (or, if such date is not a Business Day, the time on the next succeeding Business Day) at which the transfer office in Vancouver, B.C. of the transfer agent for the Shares (or, after the Separation Time, the principal transfer office in Vancouver, B.C. of the Rights Agent) is closed to the public in the city in which such transfer agent or rights agent has an office for the purposes of this Agreement;
(m) "Competing Permitted Bid" shall mean a Take-over Bid that:
(i) is made after a Permitted Bid or another Competing Permitted Bid has been made and prior to the expiry, termination or withdrawal of such Permitted Bid or Competing Permitted Bid;
(ii) satisfies all of the provisions of a Permitted Bid other than the condition set forth in Clause (iii) of the definition of a Permitted Bid; and
(iii) contains, and the take-up and payment for securities tendered or deposited is subject to, an irrevocable and unqualified provision that no Voting Shares will be taken up or paid for pursuant to the Take-over Bid prior to the close of business on the date that is no earlier than the date on which Voting Shares may be taken up under any Permitted Bid (determined as of the date of making the Takeover Bid, assuming no amendment or variation to the terms and satisfaction of all conditions to the completion of the Permitted Bid) that preceded the Competing Permitted Bid;
(n) "controlled": a body corporate is "controlled" by another Person or two or more Persons acting jointly or in concert if:
(i) securities entitled to vote in the election of directors carrying more than 50% of the votes for the election of directors are held, directly or indirectly, by or on behalf of the other Person or two or more Persons acting jointly or in concert; and
(ii) the votes carried by such securities are entitled, if exercised, to elect a majority of the board of directors of such body corporate;
and "controls", "controlling" and "under common control with" shall be interpreted accordingly;
(o) "Convertible Security" shall mean a security convertible, exercisable or exchangeable into a Voting Share and a "Convertible Security Acquisition" shall mean an acquisition by a Person of Voting Shares upon the exercise, conversion or exchange of a Convertible Security received by a Person pursuant to a Permitted Bid Acquisition, an Exempt Acquisition or a Pro Rata Acquisition;
(p) "Co-Rights Agents" shall have the meaning ascribed thereto in Subsection 4.1(a);
(q) "Disposition Date" shall have the meaning ascribed thereto in Subsection 5.1(d);
(r) "Dividend Reinvestment Acquisition" shall mean an acquisition of Voting Shares of any class pursuant to a Distribution Reinvestment Plan;
(s) "Dividend Reinvestment Plan" shall mean a regular dividend reinvestment or other plan of the Company made available by the Company to holders of its securities where such plan permits the holder to direct that some or all of:
(i) dividends paid in respect of shares of any class of the Company;
(ii) proceeds of redemption of shares of the Company;
(iii) interest paid on evidences of indebtedness of the Company; or
(iv) optional cash payments;
be applied to the purchase from the Company of Shares;
(t) "early warning requirements" shall have the meaning ascribed thereto under National Instrument 62-103 The Early Warning System promulgated under the Securities Act;
(u) "Effective Date" shall mean June 9, 2016;
(v) "Election to Exercise" shall have the meaning ascribed thereto in Clause 2.2(d)(ii);
(w) "Exempt Acquisition" shall mean an acquisition by a Person of Voting Shares and/or Convertible Securities (i) in respect of which the Board of Directors has waived the application of Section 3.1 pursuant to the provisions of Subsection 5.1(b), (c) or (d); (ii) pursuant to a distribution of Voting Shares and/or Convertible Securities made by the Company: (A) to the public pursuant to a prospectus, provided that such Person does not thereby become the Beneficial Owner of a greater percentage of Voting Shares so offered than the percentage of Voting Shares Beneficially Owned by such Person immediately prior to such distribution; or (B) pursuant to a private placement provided that: (x) all necessary stock exchange approvals for such private placement have been obtained and such private placement complies with the terms and conditions of such approvals; and (y) such Person does not thereby become the Beneficial Owner of Voting Shares equal in number to more than 25% of the Voting Shares outstanding immediately prior to the private placement and, in making this determination, the securities to be issued to such Person on the private placement shall be deemed to be held by such Person but shall not be included in the aggregate number of Voting Shares outstanding immediately prior to the private placement; or (iii) pursuant to an amalgamation, merger, arrangement or other statutory procedure requiring shareholder approval;
(x) "Exercise Price" shall mean, as of any date, the price at which a holder may purchase the securities issuable upon exercise of one whole Right which, until adjustment thereof in accordance with the terms hereof, shall be:
(i) until the Separation Time, an amount equal to three times the Market Price, from time to time, per Share; and
(ii) from and after the Separation Time, an amount equal to three times the Market Price, as at the Separation Time, per Share;
(y) "Expansion Factor" shall have the meaning ascribed thereto in Clause 2.3(a)(x);
(z) "Expiration Time" shall have the meaning ascribed thereto in Clause 5.15;
(aa) "Flip-in Event" shall mean a transaction in or pursuant to which any Person becomes an Acquiring Person;
(bb) "holder" shall have the meaning ascribed thereto in Section 2.8;
(cc) "Independent Shareholders" shall mean holders of Voting Shares, other than:
(i) any Acquiring Person;
(ii) any Offeror, other than a Person referred to in Clause 1.1(g)(iii)(B);
(iii) any Affiliate or Associate of such Acquiring Person or Offeror;
(iv) any Person acting jointly or in concert with such Acquiring Person or Offeror; and
(v) any employee benefit plan, deferred profit sharing plan, stock participation plan and any other similar plan or trust for the benefit of employees of the Company or a Subsidiary of the Company, unless the beneficiaries of the plan or trust direct the manner in which the Voting Shares are to be voted or direct whether the Voting Shares are to be tendered to a Take-over Bid;
(dd) "Market Price" per share of any securities on any date of determination shall mean the average of the daily closing prices per share of such securities (determined as described below) on each of the 20 consecutive Trading Days through and including the Trading Day immediately preceding such date; provided, however, that if an event of a type analogous to any of the events described in Section 2.3 hereof shall have caused the closing prices used to determine the Market Price on any Trading Days not to be fully comparable with the closing price on such date of determination or, if the date of determination is not a Trading Day, on the immediately preceding Trading Day, each such closing price so used shall be appropriately adjusted in a manner analogous to the applicable adjustment provided for in Section 2.3 hereof in order to make it fully comparable with the closing price on such date of determination or, if the date of determination is not a Trading Day, on the immediately preceding Trading Day. The closing price per share of any securities on any date shall be:
(i) the closing board lot sale price or, in case no such sale takes place on such date, the average of the closing bid and asked prices for each of such securities as reported by the principal Canadian stock exchange on which such securities are listed or admitted to trading;
(ii) if for any reason none of such prices is available on such day or the securities are not listed or admitted to trading on a Canadian stock exchange, the last sale price or, in case no such sale takes place on such date, the average of the high bid and low asked prices for each of such securities in the Canadian over-the-counter market, as quoted by any reporting system then in use; or
(iii) if for any reason none of such prices is available on such day or the securities are not listed or admitted to trading on a Canadian stock exchange or quoted by any such reporting system, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the securities selected in good faith by the Board of Directors;
provided, however, that if for any reason none of such prices is available on such day, the closing price per share of such securities on such date means the fair value per share of such securities on such date as determined by a nationally or internationally recognized investment dealer or investment banker with respect to the fair value per share of such securities. The Market Price shall be expressed in Canadian dollars and, if initially determined in respect of any day forming part of the 20 consecutive Trading Day period in question in United States dollars, such amount shall be translated into Canadian dollars on such date at the Canadian Dollar Equivalent thereof;
(ee) "Nominee" shall have the meaning ascribed thereto in Subsection 2.2(c);
(ff) "Offer to Acquire" shall include:
(i) an offer to purchase or a solicitation of an offer to sell or a public announcement of an intention to make such an offer or solicitation; and
(ii) an acceptance of an offer to sell, whether or not such offer to sell has been solicited;
or any combination thereof, and the Person accepting an offer to sell shall be deemed to be making an Offer to Acquire to the Person that made the offer to sell;
(gg) "Offeror" shall mean a Person who has made a public announcement of a current intention to make or who is making a Take-over Bid but only so long as the Take-over Bid so announced or made has not been withdrawn or terminated or has not expired;
(hh) "Permitted Bid" shall mean a Take-over Bid made by an Offeror by way of take-over bid circular which also complies with the following additional provisions:
(i) the Take-over Bid is made to all holders of Voting Shares on the books of the Company, other than the Offeror;
(ii) the Take-over Bid contains an irrevocable and unqualified provision that no Voting Shares will be taken up or paid for pursuant to the Take-over Bid unless more than 50% of the Voting Shares held by Independent Shareholders have, prior to the close of business on the date of such first take-up or payment, been deposited or tendered pursuant to the Take-over Bid and not withdrawn;
(iii) the Take-over Bid contains, and the take-up and payment for securities tendered or deposited is subject to, an irrevocable and unqualified provision that no Voting Shares will be taken up or paid for pursuant to the Take-over Bid prior to the close of business on the date which is not less than 105 days following the date of the Take-over Bid;
(iv) the Take-over Bid contains an irrevocable and unqualified provision that unless the Take-over Bid is withdrawn, Voting Shares may be deposited pursuant to such Take-over Bid at any time during the period of time between the date of the Take- over Bid and the date on which Voting Shares may be taken up and paid for and that any Voting Shares deposited pursuant to the Take-over Bid may be withdrawn until taken up and paid for; and
(v) the Take-over Bid contains an irrevocable and unqualified provision that if, on the date on which Voting Shares may be taken up and paid for, more than 50% of the Voting Shares held by Independent Shareholders shall have been deposited pursuant to the Take-over Bid and not withdrawn, the Offeror will make a public announcement of that fact and the Take-over Bid will remain open for deposits and tenders of Voting Shares for not less than ten Business Days from the date of such public announcement;
For purposes of this Agreement, (A) should a Take-over Bid which qualified as a Permitted Bid cease to be a Permitted Bid because it ceases to meet any or all of the requirements mentioned above prior to the time it expires (after giving effect to any extension) or is withdrawn, any acquisition of Voting Shares made pursuant to such Take-over Bid shall not be a Permitted Bid Acquisition and (B) the term "Permitted Bid" shall include a Competing Permitted Bid.
(ii) "Permitted Bid Acquisition" shall mean an acquisition of Voting Shares made pursuant to a Permitted Bid or a Competing Permitted Bid;
(jj) "Permitted Lock-Up Agreement" shall mean an agreement between a Person and one or more holders of Voting Shares pursuant to which such holders (each a "Locked-Up Person") agree to deposit or tender Voting Shares to a Take-Over Bid (the "Lock-Up Bid") made or to be made by such Person or any of such Person's Affiliates or Associates or any other Person with which such Person is acting jointly or in concert, provided that:
(i) the terms of such agreement are publicly disclosed and a copy of such agreement is made available to the public (including the Company) not later than the date of the Lock-Up Bid or, if the Lock-Up Bid has been made prior to the date on which such agreement is entered into, not later than the first business day following the date of such agreement;
(ii) the agreement permits a Locked-Up Person to terminate its obligation to deposit or tender Voting Shares to or not to withdraw such Voting Shares from the Lock-Up Bid, and to terminate any obligation with respect to the voting of such Voting Shares, in order to tender or deposit the Voting Shares to another Take-over Bid or to support another transaction:
(A) where the price or value of the consideration per Voting Share offered under such other Take-over Bid or transaction:
(I) is greater than the price or value of the consideration per Voting Share at which the Locked-Up Person has agreed to deposit or tender Voting Shares to the Lock-Up Bid; or
(II) exceeds by as much as or more than a specified amount (the "Specified Amount") the price or value of the consideration per Voting Share at which the Locked-Up Person has agreed to deposit or tender Voting Shares to the Lock-Up Bid, provided that such Specified Amount is not greater than 7% of the price or value of the consideration per Voting Share at which the Locked-Up Person has agreed to deposit or tender Voting Shares to the Lock-Up Bid; and
(B) if the number of Voting Shares offered to be purchased under the Lock-Up Bid is less than 100% of the Voting Shares held by Independent Shareholders, where the number of Voting Shares to be purchased under such other Take-over Bid or transaction at a price or value per Voting Share that is not less than the price or value per Voting Share offered under the Lock-Up Bid:
(I) is greater than the number of Voting Shares that the Offeror has offered to purchase under the Lock-Up Bid; or
(II) exceeds by as much as or more than a specified number (the "Specified Number") the number of Voting Shares that the Offeror has offered to purchase under the Lock-Up Bid, provided that the Specified Number is not greater than 7% of the number of Voting Shares offered to purchased under the Lock-Up Bid,
and, for greater clarity, the agreement may contain a right of first refusal or require a period of delay to give such Person an opportunity to match a higher price in another Take-over Bid or transaction or other similar limitation on a Locked-up Person's right to withdraw Voting Shares from the agreement, so long as the limitation does not preclude the exercise by the Locked-up Person of the right to withdraw Voting Shares during the period of the other Take-over Bid or transaction; and
(iii) no "break-up" fees, "top-up" fees, penalties, expenses or other amounts that exceed in aggregate the greater of:
(A) 2.5% of the price or value of the consideration payable under the Lock-Up Bid to a Locked-Up Person; and
(B) 50% of the amount by which the price or value of the consideration received by a Locked-Up Person under another Take-over Bid or transaction exceeds the price or value of the consideration that the Locked-Up Person would have received under the Lock-Up Bid,
shall be payable by such Locked-Up Person pursuant to the agreement if the Locked-Up Person fails to deposit or tender Voting Shares to the Lock-Up Bid, withdraws Voting Shares previously tendered thereto or supports another transaction;
(kk) "Person" shall include an individual, body corporate, firm, partnership, syndicate or other form of unincorporated association, trust, trustee, executor, administrator, legal personal representative, group, unincorporated organization, a government and its agencies or instrumentalities, or other entity whether or not having legal personality;
(ll) "Pro Rata Acquisition" shall mean an acquisition by a Person of Voting Shares pursuant to:
(i) a Dividend Reinvestment Acquisition;
(ii) a stock dividend, stock split or other event in respect of securities of the Company of one or more particular classes or series pursuant to which such Person becomes the Beneficial Owner of Voting Shares on the same pro rata basis as all other holders of securities of the particular class, classes or series; or
(iii) the acquisition or the exercise by the Person of rights to purchase Voting Shares issued by the Company to all holders of securities of the Company (other than holders resident in any jurisdiction where such issuance is restricted or impractical as a result of applicable law) of one or more particular classes or series pursuant to a rights offering or pursuant to a prospectus, provided that such rights are acquired directly from the Company and not from any other Person and the Person does not thereby acquire a greater percentage of such Voting Shares than the Person's percentage of Voting Shares Beneficially Owned immediately prior to such acquisition;
(mm) "Record Time" has the meaning set forth in the recitals hereto;
(nn) "Redemption Price" shall have the meaning attributed thereto in Subsection 5.1(a);
(oo) "Right" shall mean a right to purchase a Share of the Company, upon the terms and subject to the conditions set forth in this Agreement;
(pp) "Rights Certificate" shall mean a certificate representing the Rights after the Separation Time, which shall be substantially in the form attached hereto as Attachment 1;
(qq) "Rights Register" shall have the meaning ascribed thereto in Subsection 2.6(a);
(rr) "Securities Act (British Columbia)" shall mean the Securities Act, R.S.B.C. 1996 C.418, as amended, and the regulations thereunder, and any comparable or successor laws or regulations thereto;
(ss) "Separation Time" shall mean, subject to Subsection 5.1(d), the close of business on the tenth Trading Day after the earlier of:
(i) the Share Acquisition Date;
(ii) the date of the commencement of or first public announcement of the intent of any Person (other than the Company or any Subsidiary of the Company) to commence a Take-over Bid (other than a Permitted Bid or a Competing Permitted Bid); and
(iii) the date on which a Permitted Bid or Competing Permitted Bid ceases to qualify as such;
or such later time as may be determined by the Board of Directors, provided that, if any Take-over Bid referred to in clause (ii) above expires, is not made, is cancelled, terminated or otherwise withdrawn prior to the Separation Time, such Take-over Bid shall be deemed, for the purposes of this definition, never to have been commenced, made or announced and further provided that if the Board of Directors determines, pursuant to Section 5.1, to waive the application of Section 3.1 to a Flip-In Event, then the Separation Time in respect of such Flip-In Event shall be deemed never to have occurred and further provided that if the foregoing results in the Separation Time being prior to the Record Time, the Separation Time shall be the Record Time;
(tt) "Share Acquisition Date" shall mean the first date of public announcement (which, for purposes of this definition, shall include, without limitation, a report filed pursuant to early warning requirements under applicable securities laws) by the Company or an Acquiring Person of facts indicating that a Person has become an Acquiring Person;
(uu) "Shares" shall mean the common shares in the capital of the Company as presently constituted, as such shares may be subdivided, consolidated, reclassified or otherwise changed from time to time;
(vv) "Subsidiary": a Person is a Subsidiary of another Person if:
(i) it is controlled by:
(A) that other; or
(B) that other and one or more Persons each of which is controlled by that other; or
(C) two or more Persons each of which is controlled by that other; or
(ii) it is a Subsidiary of a Person that is that other's Subsidiary;
(ww) "Take-over Bid" shall mean an Offer to Acquire Voting Shares or Convertible Securities, if, assuming that the Voting Shares or Convertible Securities subject to the Offer to Acquire are acquired and are Beneficially Owned at the date of such Offer to Acquire by the Person making such Offer to Acquire, the Voting Shares Beneficially Owned by the Person making the Offer to Acquire would constitute in the aggregate 20% or more of the outstanding Voting Shares at the date of the Offer to Acquire;
(xx) "Termination Time" shall mean the time at which the right to exercise Rights shall terminate pursuant to Section 5.1(g);
(yy) "Trading Day", when used with respect to any securities, shall mean a day on which the principal Canadian stock exchange on which such securities are listed or admitted to trading is open for the transaction of business or, if the securities are not listed or admitted to trading on any Canadian stock exchange, a Business Day;
(zz) "U.S. - Canadian Exchange Rate" on any date shall mean:
(i) if on such date the Bank of Canada sets an average noon spot rate of exchange for the conversion of one United States dollar into Canadian dollars, such rate; and
(ii) in any other case, the rate for such date for the conversion of one United States dollar into Canadian dollars which is calculated in the manner which shall be determined by the Board of Directors from time to time acting in good faith;
(aaa) "Voting Share Reduction" shall mean an acquisition or redemption by the Company of Voting Shares which, by reducing the number of Voting Shares outstanding, increases the percentage of outstanding Voting Shares Beneficially Owned by any Person to 20% or more of the Voting Shares then outstanding; and
(bbb) "Voting Shares" shall mean the Shares and any other shares in the capital of the Company entitled to vote generally in the election of all directors of the Company.
1.2 Currency
All sums of money which are referred to in this Agreement are expressed in lawful money of Canada, unless otherwise specified.
1.3 Headings
The division of this Agreement into Articles, Sections, Subsections, Clauses, Paragraphs, Subparagraphs or other portions hereof and the insertion of headings, subheadings and a table of contents are for convenience of reference only and shall not affect the construction or interpretation of this Agreement.
1.4 Calculation of Number and Percentage of Beneficial Ownership of Outstanding Voting Shares
(a) For purposes of this Agreement, in determining the percentage of outstanding Voting Shares with respect to which a Person is or is deemed to be the Beneficial Owner, all unissued Voting Shares of which such person is deemed to be the Beneficial Owner shall be deemed to be outstanding.
(b) For purposes of this Agreement, the percentage of Voting Shares Beneficially Owned by any Person shall be and be deemed to be the product (expressed as a percentage) determined by the formula:
100 x A/B
where:
A = the number of votes for the election of all directors of the Company generally attaching to the Voting Shares Beneficially Owned by such Person; and
B = the number of votes for the election of all directors of the Company generally attaching to all outstanding Voting Shares.
The percentage of outstanding Voting Shares represented by any particular group of Voting Shares acquired or held by any Person shall be determined in like manner mutatis mutandis.
1.5 Acting Jointly or in Concert
For purposes of this Agreement a Person is acting jointly or in concert with every Person who is a party to an agreement, commitment, arrangement or understanding, whether formal or informal or written or unwritten, with the first Person to acquire or Offer to Acquire any Voting Shares or Convertible Securities (other than (x) customary agreements with and between underwriters and/or banking group members and/or selling group members with respect to a distribution of securities by the Company, (y) pledges of securities in the ordinary course of business, and (z) Permitted Lock-Up Agreements).
1.6 Generally Accepted Accounting Principles
Wherever in this Agreement reference is made to generally accepted accounting principles, such reference shall be deemed to be the recommendations at the relevant time of the Canadian Institute of Chartered Accountants, or any successor institute, applicable on a consolidated basis (unless otherwise specifically provided herein to be applicable on an unconsolidated basis) and which incorporates International Financial Reporting Standards as adopted by the Canadian Accounting Standards Board for periods beginning on or after January 1, 2011, as at the date on which a calculation is made or required to be made in accordance with generally accepted accounting principles. Where the character or amount of any asset or liability or item of revenue or expense is required to be determined, or any consolidation or other accounting computation is required to be made for the purpose of this Agreement or any document, such determination or calculation shall, to the extent applicable and except as otherwise specified herein or as otherwise agreed in writing by the parties, be made in accordance with such generally accepted accounting principles applied on a consistent basis.
ARTICLE 2
THE RIGHTS
2.1 Issue of Rights: Legend on Common Share Certificates
(a) One Right shall be issued on the Effective Date in respect of each Common Share outstanding at the Record Time and one Right shall be issued in respect of each Common Share issued after the Record Time and prior to the earlier of the Separation Time and the Expiration Time.
(b) Certificates representing Shares which are issued after the Record Time but prior to the earlier of the Separation Time and the Expiration Time, shall also evidence one Right for each Share represented thereby until the earlier of the Separation Time or the Expiration Time and shall have impressed on, printed on, written on or otherwise affixed to them the following legend:
Until the earlier of the Separation Time or the Expiration Time (as both terms are defined in the Shareholder Rights Agreement referred to below), this certificate also evidences and entitles the holder hereof to certain Rights as set forth in the Amended and Restated Shareholder Rights Plan Agreement dated as of June 9, 2016, as amended and extended as of June 9, 2022, as may be amended or supplemented from time to time (the "Shareholder Rights Agreement"), between Taseko Mines Limited (the "Company") and Computershare Investor Services Inc., as Rights Agent, the terms of which are incorporated herein by reference and a copy of which is on file at the principal executive offices of the Company. Under certain circumstances set out in the Shareholder Rights Agreement, the rights may be amended or redeemed, may expire or may become void (if, in certain cases they are "Beneficially Owned" by an "Acquiring Person" as such terms are defined in the Shareholder Rights Agreement, whether currently held by or on behalf of such Person or a subsequent holder) or may be evidenced by separate certificates and no longer evidenced by this certificate. The Company will mail or arrange for the mailing of a copy of the Shareholder Rights Agreement to the holder of this certificate without charge as soon as practicable after the receipt of a written request therefor.
Certificates representing Shares that are issued and outstanding at the Record Time shall also evidence one Right for each Share represented thereby notwithstanding the absence of the foregoing legend, until the earlier of the Separation Time and the Expiration Time.
2.2 Initial Exercise Price; Exercise of Rights; Detachment of Rights
(a) Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to the Expiration Time, to purchase one Share for the Exercise Price as at the Business Day immediately preceding the day of exercise of the Right (which Exercise Price and number of Shares are subject to adjustment as set forth below). Notwithstanding any other provision of this Agreement, any Rights held by the Company or any of its Subsidiaries shall be void.
(b) Until the Separation Time,
(i) the Rights shall not be exercisable and no Right may be exercised; and
(ii) each Right will be evidenced by the certificate for the associated Voting Share registered in the name of the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Voting Share.
(c) From and after the Separation Time and prior to the Expiration Time:
(i) the Rights shall be exercisable; and
(ii) the registration and transfer of Rights shall be separate from and independent of Voting Shares.
Promptly following the Separation Time, the Company will prepare or cause to be prepared and the Rights Agent will mail to each holder of record of Voting Shares as of the Separation Time and, in respect of each Convertible Security converted into Voting Shares after the Separation Time and prior to the Expiration Time, promptly after such conversion, the Company will prepare or cause to be prepared and the Rights Agent will mail to the holder so converting (other than in either case an Acquiring Person and any Transferee whose rights are or become null and void pursuant to Section 3.1(b) and, in respect of any Rights Beneficially Owned by such Acquiring Person or Transferee which are not held of record by such Acquiring Person or Transferee, the holder of record of such Rights (a "Nominee")), at such holder's address as shown by the records of the Company (the Company hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):
(x) a Rights Certificate appropriately completed, representing the number of Rights held by such holder at the Separation Time or at the time of conversion, as applicable, and having such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any law, rule or regulation or judicial or administrative order made pursuant thereto or with any rule or regulation of any self-regulatory organization, stock exchange or quotation system on which the Rights may from time to time be listed or traded, or to conform to usage; and
(y) disclosure statement describing the Rights,
provided that a Nominee shall be sent the materials provided for in (x) and (y) only in respect of all Shares held of record by it which are not Beneficially Owned by an Acquiring Person. In order for the Company to determine whether any Person is holding Shares which are Beneficially Owned by another Person, the Company may require such first Person to furnish such information and documentation as the Company deems necessary.
(d) Rights may be exercised, in whole or in part, on any Business Day after the Separation Time and prior to the Expiration Time by submitting to the Rights Agent at its office in Vancouver, Canada or any other office of the Rights Agent in cities designated from time to time for that purpose by the Company with the approval of the Rights Agent:
(i) the Rights Certificate evidencing such Rights;
(ii) an election to exercise such Rights (an "Election to Exercise") substantially in the form attached to the Rights Certificate appropriately completed and duly executed by the holder or such holder's executors or administrators or other personal representatives or such holder's or their legal attorney duly appointed by an instrument in writing in form and executed in a manner satisfactory to the Rights Agent; and
(iii) payment by certified cheque, banker's draft, money order or wire transfer payable to the order of the Rights Agent, of a sum equal to the Exercise Price multiplied by the number of Rights being exercised and a sum sufficient to cover any transfer tax or charge which may be payable in respect of any transfer involved in the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for Shares in a name other than that of the holder of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, together with a completed Election to Exercise executed in accordance with Clause 2.2(d)(ii), which does not indicate that such Right is null and void as provided by Subsection 3.1(b), and payment as set forth in Clause 2.2(d)(iii), the Rights Agent (unless otherwise instructed by the Company in the event that the Company is of the opinion that the Rights cannot be exercised in accordance with this Agreement) will thereupon as soon as practicable:
(i) requisition from the transfer agent certificates representing the number of such Shares to be purchased (the Company hereby irrevocably authorizing its transfer agent to comply with all such requisitions);
(ii) when appropriate, requisition from the Company the amount of cash to be paid in lieu of issuing fractional Shares;
(iii) after receipt of the certificates referred to in Clause 2.2(e)(i), deliver the same to or upon the order of the registered holder of such Rights Certificates, registered in such name or names as may be designated by such holder;
(iv) when appropriate, after receipt, deliver the cash referred to in Clause 2.2(e)(ii) to or to the order of the registered holder of such Rights Certificate; and
(v) remit to the Company all payments received on the exercise of Rights.
(f) In case the holder of any Rights shall exercise less than all the Rights evidenced by such holder's Rights Certificate, a new Rights Certificate evidencing the Rights remaining unexercised (subject to the provisions of Subsection 5.5(a)) will be issued by the Rights Agent to such holder or to such holder's duly authorized assigns.
(g) The Company covenants and agrees that it will:
(i) take all such action as may be necessary and within its power to ensure that all Shares delivered upon exercise of Rights shall, at the time of delivery of the certificates for such Shares (subject to payment of the Exercise Price), be duly and validly authorized, executed, issued and delivered as fully paid and non-assessable;
(ii) take all such action as may be necessary and within its power to comply with the requirements of the Business Corporations Act (British Columbia), the Securities Act (British Columbia) and the securities laws or comparable legislation of each of the provinces of Canada, and any other applicable law, rule or regulation, in connection with the issuance and delivery of the Rights Certificates and the issuance of any Shares upon exercise of Rights;
(iii) use reasonable efforts to cause all Shares issued upon exercise of Rights to be listed on the stock exchanges and markets on which such Shares were traded immediately prior to the Separation Time;
(iv) pay when due and payable, if applicable, any and all federal, provincial and municipal transfer taxes and charges (not including any income or capital taxes of the holder or exercising holder or any liability of the Company to withhold tax) which may be payable in respect of the original issuance or delivery of the Rights Certificates, or certificates for Shares to be issued upon exercise of any Rights, provided that the Company shall not be required to pay any transfer tax or charge which may be payable in respect of any transfer involved in the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for Shares in a name other than that of the holder of the Rights being transferred or exercised; and
(v) after the Separation Time, except as permitted by Sections 5.1 and 5.4, not take (or permit any Subsidiary to take) any action if at the time such action is taken it is reasonably foreseeable that such action will diminish substantially or otherwise eliminate the benefits intended to be afforded by the Rights.
2.3 Adjustments to Exercise Price; Number of Rights
The Exercise Price, the number and kind of securities subject to purchase upon exercise of each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 2.3.
(a) In the event the Company shall at any time after the Record Time and prior to the Expiration Time:
(i) declare or pay a dividend on Shares payable in Shares or Convertible Securities in respect thereof other than pursuant to any Dividend Reinvestment Plan;
(ii) subdivide or change the then outstanding Shares into a greater number of Shares;
(iii) consolidate or change the then outstanding Shares into a smaller number of Shares; or
(iv) issue any Shares (or Convertible Securities in respect thereof) in respect of, in lieu of or in exchange for existing Shares except as otherwise provided in this Section 2.3,
then the Exercise Price and the number of Rights outstanding (or, if the payment or effective date therefor shall occur after the Separation Time, the securities purchasable upon exercise of Rights) shall be adjusted as of the payment or effective date in the manner set forth below.
If the Exercise Price and number of Rights outstanding are to be adjusted:
(x) the Exercise Price in effect after such adjustment will be equal to the Exercise Price in effect immediately prior to such adjustment divided by the number of Shares (or other capital stock) (the "Expansion Factor") that a holder of one Share immediately prior to such distribution, subdivision, change, consolidation or issuance would hold thereafter as a result thereof; and
(y) each Right held prior to such adjustment will become that number of Rights equal to the Expansion Factor,
and the adjusted number of Rights will be deemed to be distributed among the Shares with respect to which the original Rights were associated (if they remain outstanding) and the Shares issued in respect of such dividend, subdivision, change, consolidation or issuance, so that each such Share (or other capital stock) will have exactly one Right associated with it.
For greater certainty, if the securities purchasable upon exercise of Rights are to be adjusted, the securities purchasable upon exercise of each Right after such adjustment will be the securities that a holder of the securities purchasable upon exercise of one Right immediately prior to such dividend, subdivision, change, consolidation or issuance would hold thereafter as a result of such dividend, subdivision, change, consolidation or issuance.
If, after the Record Time and prior to the Expiration Time, the Company shall issue any shares of capital stock other than Shares in a transaction of a type described in Clause 2.3(a)(i) or (iv), such shares of capital stock shall be treated herein as nearly equivalent to Shares as may be practicable and appropriate under the circumstances and the Company and the Rights Agent agree to amend this Agreement in order to effect such treatment.
If an event occurs which would require an adjustment under both this Section 2.3 and Section 3.1, the adjustment provided for in this Section 2.3 shall be in addition to, and shall be made prior to, any adjustment required under Section 3.1.
In the event the Company shall at any time after the Record Time and prior to the Separation Time issue any Shares otherwise than in a transaction referred to in this Subsection 2.3(a), each such Share so issued shall automatically have one new Right associated with it, which Right shall be evidenced by the certificate representing such associated Share.
(b) In the event the Company shall at any time after the Record Time and prior to the Separation Time fix a record date for the issuance of rights, options or warrants to all holders of Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Shares (or Convertible Securities in respect of Shares) at a price per Share (or, in the case of a Convertible Security, having a conversion, exchange or exercise price per share, including the price required to be paid to purchase such Convertible Security) less than the Market Price per Share on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction:
(i) the numerator of which shall be the number of Shares outstanding on such record date plus the number of Shares that the aggregate offering price of the total number of Shares so to be offered (and/or the aggregate initial conversion, exchange or exercise price of the Convertible Securities, including the price required to be paid to purchase such Convertible Securities) would purchase at such Market Price per Share; and
(ii) the denominator of which shall be the number of Shares outstanding on such record date plus the number of additional Shares to be offered for subscription or purchase (or into which the Convertible Securities so to be offered are initially convertible, exchangeable or exercisable).
In case such subscription price may be paid by delivery of consideration, part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of Rights. Such adjustment shall be made successively whenever such a record date is fixed, and in the event that such rights, options or warrants are not so issued, or if issued, are not exercised prior to the expiration thereof, the Exercise Price shall be readjusted to the Exercise Price which would then be in effect if such record date had not been fixed, or to the Exercise Price which would be in effect based upon the number of Shares (or securities convertible into, or exchangeable or exercisable for Shares) actually issued upon the exercise of such rights, options or warrants, as the case may be.
For purposes of this Agreement, the granting of the right to purchase Shares (whether from treasury or otherwise) pursuant to any Dividend Reinvestment Plan or any employee benefit plan, stock option plan or any similar plan shall be deemed not to constitute an issue of rights, options or warrants by the Company; provided, however, that, in the case of any Dividend Reinvestment Plan or share purchase plan, the right to purchase Shares is at a price per Share of not less than 90% of the current market price per share (determined as provided in such plans) of the Shares.
(c) In the event the Company shall at any time after the Record Time and prior to the Separation Time fix a record date for the making of a distribution to all holders of Shares (including any such distribution made in connection with a merger or amalgamation) of evidences of indebtedness, cash (other than an annual cash dividend or a dividend paid in Common Shares, but including any dividend payable in securities other than Common Shares), assets or rights, options or warrants (excluding rights, options or warrants expiring within 45 calendar days after such record date) to purchase Shares or Convertible Securities in respect of Shares, the Exercise Price in effect after such record date shall be equal to the Exercise Price in effect immediately prior to such record date less the fair market value (as determined in good faith by the Board of Directors) of the portion of the evidences of indebtedness, cash, assets, rights, options or warrants so to be distributed applicable to the securities purchasable upon exercise of one Right.
(d) Notwithstanding anything herein to the contrary, no adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least one per cent in the Exercise Price; provided, however, that any adjustments which by reason of this Subsection 2.3(d) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under Section 2.3 shall be made to the nearest cent or to the nearest ten-thousandth of a Share. Any adjustment required by Section 2.3 shall be made as of:
(i) the payment or effective date for the applicable dividend, subdivision, change, combination or issuance, in the case of an adjustment made pursuant to Subsection 2.3(a); or
(ii) the record date for the applicable dividend or distribution, in the case of an adjustment made pursuant to Subsection 2.3(b) or (c), subject to readjustment to reverse the same if such dividend or distribution shall not be made.
(e) In the event the Company shall at any time after the Record Time and prior to the Separation Time issue any shares (other than Shares), or rights, options or warrants to subscribe for or purchase any such shares, or securities convertible into or exchangeable for any such shares, in a transaction referred to in Clause 2.3(a)(i) or (iv) or Subsections 2.3(b) or (c), if the Board of Directors acting in good faith determines that the adjustments contemplated by Subsections 2.3(a), (b) and (c) in connection with such transaction will not appropriately protect the interests of the holders of Rights, the Board of Directors may determine what other adjustments to the Exercise Price, number of Rights and/or securities purchasable upon exercise of Rights would be appropriate and, notwithstanding Subsections 2.3(a), (b) and (c), such adjustments, rather than the adjustments contemplated by Subsections 2.3(a), (b) and (c), shall be made. Subject to Subsection 5.4(b) and (c), the Company and the Rights Agent may, with the prior approval of the holders of the Shares amend this Agreement as appropriate to provide for such adjustments.
(f) Each Right originally issued by the Company subsequent to any adjustment made to the Exercise Price hereunder shall evidence the right to purchase, at the adjusted Exercise Price, the number of Shares purchasable from time to time hereunder upon exercise of a Right immediately prior to such issue, all subject to further adjustment as provided herein.
(g) Irrespective of any adjustment or change in the Exercise Price or the number of Shares issuable upon the exercise of the Rights, the Rights Certificates theretofore and thereafter issued may continue to express the Exercise Price per Share and the number of Shares which were expressed in the initial Rights Certificates issued hereunder.
(h) In any case in which this Section 2.3 shall require that an adjustment in the Exercise Price be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event the issuance to the holder of any Right exercised after such record date the number of Shares and other securities of the Company, if any, issuable upon such exercise over and above the number of Shares and other securities of the Company, if any, issuable upon such exercise on the basis of the Exercise Price in effect prior to such adjustment; provided, however, that the Company shall deliver to such holder an appropriate instrument evidencing such holder's right to receive such additional shares (fractional or otherwise) or other securities upon the occurrence of the event requiring such adjustment.
(i) Notwithstanding anything contained in this Section 2.3 to the contrary, the Company shall be entitled to make such reductions in the Exercise Price, in addition to those adjustments expressly required by this Section 2.3, as and to the extent that in their good faith judgment the Board of Directors shall determine to be advisable, in order that any:
(i) consolidation or subdivision of Shares;
(ii) issuance (wholly or in part for cash) of Shares or securities that by their terms are convertible into or exchangeable for Shares;
(iii) stock dividends; or
(iv) issuance of rights, options or warrants referred to in this Section 2.3,
hereafter made by the Company to holders of its Shares, subject to applicable taxation laws, shall not be taxable to such shareholders or shall subject such shareholders to a lesser amount of tax.
(j) Whenever an adjustment to the Exercise Price or a change in the securities purchasable upon exercise of the Rights is made pursuant to this Section 2.3, the Company shall promptly and in any event, where such change or adjustment occurs prior to the Separation Time, not later than the Separation Time:
(i) promptly prepare a certificate setting forth such adjustment and a brief statement of the facts accounting for such adjustment; and
(ii) promptly file with the Rights Agent and with each transfer agent for the Common Shares a copy of such certificate and mail a brief summary thereof to each holder of Rights who requests a copy;
(iii) cause notice of the particulars of such adjustment or change to be given to the holders of the Rights.
Failure to file such certificate or to cause such notice to be given as aforesaid, or any defect therein, shall not affect the validity of any such adjustment or change.
2.4 Date on Which Exercise Is Effective
Each Person in whose name any certificate for Shares or other securities, if applicable, is issued upon the exercise of Rights shall for all purposes be deemed to have become the absolute holder of record of the Shares or other securities, if applicable, represented thereon, and such certificate shall be dated the date upon which the Rights Certificate evidencing such Rights was duly surrendered in accordance with Subsection 2.2(d) (together with a duly completed Election to Exercise) and payment of the Exercise Price for such Rights (and any applicable transfer taxes and other governmental charges payable by the exercising holder hereunder) was made; provided, however, that if the date of such surrender and payment is a date upon which the Share transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such Shares on, and such certificate shall be dated, the next succeeding Business Day on which the Share transfer books of the Company are open.
2.5 Execution, Authentication, Delivery and Dating of Rights Certificates
(a) The Rights Certificates shall be executed on behalf of the Company by any of its Chairman of the Board, President, Chief Executive Officer and Chief Financial Officer. The signature of any of these officers on the Rights Certificates may be manual or facsimile. Rights Certificates bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices either before or after the countersignature and delivery of such Rights Certificates.
(b) Promptly after the Company learns of the Separation Time, the Company will notify the Rights Agent of such Separation Time and will deliver Rights Certificates executed by the Company to the Rights Agent for countersignature, and the Rights Agent shall countersign (manually or by facsimile signature in a manner satisfactory to the Company) and send such Rights Certificates to the holders of the Rights pursuant to Subsection 2.2(c) hereof. No Rights Certificate shall be valid for any purpose until countersigned by the Rights Agent as aforesaid.
(c) Each Rights Certificate shall be dated the date of countersignature thereof.
2.6 Registration, Transfer and Exchange
(a) The Company will cause to be kept a register (the "Rights Register") in which, subject to such reasonable regulations as it may prescribe, the Company will provide for the registration and transfer of Rights. The Rights Agent, at its office in the City of Vancouver, is hereby appointed registrar for the Rights (the "Rights Registrar") for the purpose of maintaining the Rights Register for the Company and registering Rights and transfers of Rights as herein provided and the Rights Agent hereby accepts such appointment. In the event that the Rights Agent shall cease to be the Rights Registrar, the Rights Agent will have the right to examine the Rights Register at all reasonable times.
After the Separation Time and prior to the Expiration Time, upon surrender for registration of transfer or exchange of any Rights Certificate, and subject to the provisions of Subsection 2.6(c), the Company will execute, and the Rights Agent will countersign and deliver, in the name of the holder or the designated transferee or transferees, as required pursuant to the holder's instructions, one or more new Rights Certificates evidencing the same aggregate number of Rights as did the Rights Certificates so surrendered.
(b) All Rights issued upon any registration of transfer or exchange of Rights Certificates shall be the valid obligations of the Company, and such Rights shall be entitled to the same benefits under this Agreement as the Rights surrendered upon such registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company or the Rights Agent, as the case may be, duly executed by the holder thereof or such holder's attorney duly authorized in writing. As a condition to the issuance of any new Rights Certificate under this Section 2.6, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the reasonable fees and expenses of the Rights Agent) connected therewith.
2.7 Mutilated, Destroyed, Lost and Stolen Rights Certificates
(a) If any mutilated Rights Certificate is surrendered to the Rights Agent prior to the Expiration Time, the Company shall execute and the Rights Agent shall countersign and deliver in exchange therefor a new Rights Certificate evidencing the same number of Rights as did the Rights Certificate so surrendered.
(b) If there shall be delivered to the Company and the Rights Agent prior to the Expiration Time:
(i) evidence to their reasonable satisfaction of the destruction, loss or theft of any Rights Certificate; and
(ii) such security and indemnity as may be reasonably required by them to save each of them and any of their agents harmless,
then, in the absence of notice to the Company or the Rights Agent that such Rights Certificate has been acquired by a bona fide purchaser, the Company shall execute and upon the Company's request the Rights Agent shall countersign and deliver, in lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights Certificate evidencing the same number of Rights as did the Rights Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate under this Section 2.7, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the reasonable fees and expenses of the Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section 2.7 in lieu of any destroyed, lost or stolen Rights Certificate shall evidence the contractual obligation of the Company, whether or not the destroyed, lost or stolen Rights Certificate shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Agreement equally and proportionately with any and all other Rights duly issued hereunder.
2.8 Persons Deemed Owners of Rights
The Company, the Rights Agent and any agent of the Company or the Rights Agent may deem and treat the Person in whose name a Rights Certificate (or, prior to the Separation Time, the associated Share certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby for all purposes whatsoever. As used in this Agreement, unless the context otherwise requires, the term "holder" of any Right shall mean the registered holder of such Right (or, prior to the Separation Time, of the associated Share).
2.9 Delivery and Cancellation of Certificates
All Rights Certificates surrendered upon exercise or for redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Rights Agent, be delivered to the Rights Agent and, in any case, shall be promptly cancelled by the Rights Agent. The Company may at any time deliver to the Rights Agent for cancellation any Rights Certificates previously countersigned and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Rights Certificates so delivered shall be promptly cancelled by the Rights Agent. No Rights Certificate shall be countersigned in lieu of or in exchange for any Rights Certificates cancelled as provided in this Section 2.9, except as expressly permitted by this Agreement. The Rights Agent shall, subject to applicable laws, destroy all cancelled Rights Certificates and deliver a certificate of destruction to the Company.
2.10 Agreement of Rights Holders
Every holder of Rights, by accepting the same, consents and agrees with the Company and the Rights Agent and with every other holder of Rights:
(a) to be bound by and subject to the provisions of this Agreement, as amended from time to time in accordance with the terms hereof, in respect of all Rights held;
(b) that prior to the Separation Time, each Right will be transferable only together with, and will be transferred by a transfer of, the associated Voting Share certificate representing such Right;
(c) that after the Separation Time, the Rights Certificates will be transferable only on the Rights Register as provided herein;
(d) that prior to due presentment of a Rights Certificate (or, prior to the Separation Time, the associated Voting Share certificate) for registration of transfer, the Company, the Rights Agent and any agent of the Company or the Rights Agent may deem and treat the Person in whose name the Rights Certificate (or, prior to the Separation Time, the associated Voting Share certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on such Rights Certificate or the associated Voting Share certificate made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent shall be affected by any notice to the contrary;
(e) that such holder of Rights has waived his right to receive any fractional Rights or any fractional shares or other securities upon exercise of a Right (except as provided herein);
(f) that, subject to the provisions of Section 5.4, without the approval of any holder of Rights or Voting Shares and upon the sole authority of the Board of Directors, acting in good faith, this Agreement may be supplemented or amended from time to time pursuant to and as provided herein; and
(g) that notwithstanding anything in this Agreement to the contrary, neither the Company nor the Rights Agent shall have any liability to any holder of a Right or any other Person as a result of its inability to perform any of its obligations under this Agreement by reason of preliminary or permanent injunctions or other order, decree or ruling issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission, or any statute, rule, regulations or executive order promulgated or enacted by any governmental authority prohibiting or otherwise restraining performance of such obligation.
2.11 Rights Certificate Holder Not Deemed a Shareholder
No holder, as such, of any Rights or Rights Certificate shall be entitled to vote, receive dividends or be deemed for any purpose whatsoever the holder of any Share or any other share or security of the Company which may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or in any Rights Certificate be construed or deemed or confer upon the holder of any Right or Rights Certificate, as such, any right, title, benefit or privilege of a holder of Shares or any other shares or securities of the Company or any right to vote at any meeting of shareholders of the Company whether for the election of directors or otherwise or upon any matter submitted to holders of Shares or any other shares of the Company at any meeting thereof, or to give or withhold consent to any action of the Company, or to receive notice of any meeting or other action affecting any holder of Shares or any other shares of the Company except as expressly provided herein, or to receive dividends, distributions or subscription rights, or otherwise, until the Right or Rights evidenced by Rights Certificates shall have been duly exercised in accordance with the terms and provisions hereof.
ARTICLE 3
ADJUSTMENTS TO THE RIGHTS
3.1 Flip-in Event
(a) Subject to Subsection 3.1(b) and Section 5.1, in the event that prior to the Expiration Time a Flip-in Event shall occur, each Right shall constitute, effective at the close of business on the tenth Trading Day after the Share Acquisition Date, the right to purchase from the Company, upon exercise thereof in accordance with the terms hereof, that number of Shares having an aggregate Market Price on the date of consummation or occurrence of such Flip-in Event equal to twice the Exercise Price for an amount in cash equal to the Exercise Price (such right to be appropriately adjusted in a manner analogous to the applicable adjustment provided for in Section 2.3 in the event that after such consummation or occurrence, an event of a type analogous to any of the events described in Section 2.3 shall have occurred).
(b) Notwithstanding anything in this Agreement to the contrary, upon the occurrence of any Flip-in Event, any Rights that are or were Beneficially Owned on or after the earlier of the Separation Time or the Share Acquisition Date by:
(i) an Acquiring Person (or any Affiliate or Associate of an Acquiring Person or any other Person acting jointly or in concert with an Acquiring Person or any Affiliate or Associate of such other Person); or
(ii) a transferee or other successor in title, directly or indirectly, (a "Transferee") of Rights held by an Acquiring Person (or any Affiliate or Associate of an Acquiring Person or any other Person acting jointly or in concert with an Acquiring Person or any Affiliate or Associate of such other Person), where such Transferee becomes a transferee concurrently with or subsequent to the Acquiring Person becoming such in a transfer that the Board of Directors acting in good faith has determined is part of a plan, arrangement or scheme of an Acquiring Person (or any Affiliate or Associate of an Acquiring Person or any other Person acting jointly or in concert with an Acquiring Person or any Affiliate or Associate of such other Person), that has the purpose or effect of avoiding Clause 3.1(b)(i), shall become null and void without any further action, and any holder of such Rights (including any Transferee) shall thereafter have no right to exercise such Rights under any provision of this Agreement and further shall thereafter not have any other rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. The holder of any Rights represented by a Rights Certificate which is submitted to the Rights Agent upon exercise or for registration or transfer or exchange which does not contain the necessary certifications set forth in the Rights Certificate establishing that such Rights are not null and void under this Clause 3.1(b) shall be deemed to be an Acquiring Person for the purposes of this Clause 3.1 and such Rights shall become null and void.
(c) From and after the Separation Time, the Company shall do all such acts and things as shall be necessary and within its power to ensure compliance with the provisions of this Section 3.1, including without limitation, all such acts and things as may be required to satisfy the requirements of the British Columbia Business Corporations Act, the Securities Act and the securities laws or comparable legislation of each of the provinces of Canada in respect of the issue of Shares upon the exercise of Rights in accordance with this Agreement.
(d) Any Rights Certificate that represents Rights Beneficially Owned by a Person described in either Clause 3.1(b)(i) or (ii) or transferred to any nominee of any such Person, and any Rights Certificate issued upon transfer, exchange, replacement or adjustment of any other Rights Certificate referred to in this sentence, shall contain the following legend:
"The Rights represented by this Rights Certificate were issued to a Person who was an Acquiring Person or an Affiliate or an Associate of an Acquiring Person (as such terms are defined in the Shareholder Rights Agreement) or a Person who was acting jointly or in concert with an Acquiring Person or an Affiliate or Associate of such Person. This Rights Certificate and the Rights represented hereby are void or shall become void in the circumstances specified in Subsection 3.1(b) of the Shareholder Rights Agreement."
provided, however, that the Rights Agent shall not be under any responsibility to ascertain the existence of facts that would require the imposition of such legend but shall impose such legend only if instructed to do so by the Company in writing or if a holder fails to certify upon transfer or exchange in the space provided on the Rights Certificate that such holder is not a Person described in such legend and provided further that the fact that such legend does not appear on a certificate is not determinative of whether any Rights represented thereby are void under this Section.
ARTICLE 4
THE RIGHTS AGENT
4.1 General
(a) The Company hereby appoints the Rights Agent to act as agent for the Company and the holders of the Rights in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such co-Rights Agents ("Co-Rights Agents") as it may deem necessary or desirable subject to the approval of the Rights Agent. In the event the Company appoints one or more Co-Rights Agents, the respective duties of the Rights Agent and Co-Rights Agents shall be as the Company may determine with the approval of the Rights Agent and the Co-Rights Agent. The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred in the administration and execution of this Agreement and the exercise and performance of its duties hereunder (including the fees and disbursements of any expert or advisor retained by the Rights Agent). The Company also agrees to indemnify the Rights Agent, and its officers, directors, employees and agents for, and to hold it and them harmless against, any loss, liability or expense, incurred without gross negligence, bad faith or wilful misconduct on the part of the Rights Agent or such persons, for anything done or omitted by the Rights Agent or such persons in connection with the acceptance and administration of this Agreement, including legal costs and expenses, which right to indemnification will survive the termination of this Agreement and the resignation or removal of the Rights Agent.
(b) The Rights Agent shall be protected and shall incur no liability for or in respect of any action taken, suffered or omitted by it in connection with its administration of this Agreement in reliance upon any certificate for Common Shares, Rights Certificate, certificate for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, opinion, statement, or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper Person or Persons.
(c) The Company shall inform the Rights Agent in a reasonably timely manner of events which may materially affect the administration of this Agreement by the Rights Agent and, at any time upon request, shall provide to the Rights Agent an incumbency certificate certifying the then current officers of the Company; provided that failure to inform the Rights Agent of any such events, or any defect therein shall not affect the validity of any action taken hereunder in relation to such events.
(d) No provision contained in this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers.
(e) Notwithstanding any other provision of this Agreement, and whether such losses or damages are foreseeable or unforeseeable, the Rights Agent shall not be liable under any circumstances whatsoever for any (i) breach by any other party of securities law or other rule of any securities regulatory authority, (ii) lost profits or (iii) special, indirect, incidental, consequential, exemplary, aggravated or punitive losses or damages.
(f) Notwithstanding any other provision of this Agreement, any liability of the Rights Agent shall be limited, in the aggregate, to the amount of fees paid by the Company to the Rights Agent under this Agreement in the twelve (12) months immediately prior to the Rights Agent receiving the first notice of the claim.
4.2 Merger, Amalgamation or Consolidation or Change of Name of Rights Agent
(a) Any Company into which the Rights Agent may be merged or amalgamated or with which it may be consolidated, or any Company resulting from any merger, amalgamation, statutory arrangement or consolidation to which the Rights Agent is a party, or any Company succeeding to the shareholder or stockholder services business of the Rights Agent, will be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such Company would be eligible for appointment as a successor Rights Agent under the provisions of Section 4.4 hereof. In case at the time such successor Rights Agent succeeds to the agency created by this Agreement any of the Rights Certificates have been countersigned but not delivered, any successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Rights Certificates so countersigned; and in case at that time any of the Rights have not been countersigned, any successor Rights Agent may countersign such Rights Certificates in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such Rights Certificates will have the full force provided in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is changed and at such time any of the Rights Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Rights Certificates so countersigned; and in case at that time any of the Rights Certificates shall not have been countersigned, the Rights Agent may countersign such Rights Certificates either in its prior name or in its changed name; and in all such cases such Rights Certificates shall have the full force provided in the Rights Certificates and in this Agreement.
4.3 Duties of Rights Agent
The Rights Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, all of which the Company and the holders of certificates for Shares and the holders of Rights Certificates, by their acceptance thereof, shall be bound:
(a) the Rights Agent may retain and consult with legal counsel (who may be legal counsel for the Company) and the opinion of such counsel will be full and complete authorization and protection to the Rights Agent as to any action taken or omitted by it in good faith and in accordance with such opinion and the Rights Agent may also consult with such other experts as the Rights Agent may reasonably consider necessary or appropriate to properly carry out the duties and obligations imposed under this Agreement (at the expense of the Company) and the Rights Agent shall be entitled to act and rely in good faith on the advice of any such expert;
(b) whenever in the performance of its duties under this Agreement, the Rights Agent deems it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by a Person believed by the Rights Agent to be the Chairman of the Board, President, Chief Executive Officer or Chief Financial Officer, any Vice-President or Corporate Secretary of the Company and delivered to the Rights Agent; and such certificate will be full authorization to the Rights Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate;
(c) the Rights Agent will be liable hereunder only for its own gross negligence, bad faith or willful misconduct;
(d) the Rights Agent will not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the certificates for Shares, or the Rights Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and will be deemed to have been made by the Company only;
(e) the Rights Agent will not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due authorization, execution and delivery hereof by the Rights Agent) or in respect of the validity or execution of any certificate for a Share or Rights Certificate (except its countersignature thereof); nor will it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Rights Certificate; nor will it be responsible for any change in the exercisability of the Rights (including the Rights becoming void pursuant to Subsection 3.1(b) hereof) or any adjustment required under the provisions of Section 2.3 hereof or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights after receipt of the certificate contemplated by Section 2.3 describing any such adjustment); nor will it by any act hereunder be deemed to make any representation or warranty as to the authorization of any Shares to be issued pursuant to this Agreement or any Rights or as to whether any Shares will, when issued, be duly and validly authorized, executed, issued and delivered and fully paid and non-assessable;
(f) the Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement;
(g) the Rights Agent is hereby authorized and directed to accept instructions in writing with respect to the performance of its duties hereunder from any individual believed by the Rights Agent to be the Chairman of the Board, President, Chief Executive Officer or Chief Financial Officer, any Vice-President or Corporate Secretary of the Company, and to apply to such individuals for advice or instructions in connection with its duties, and it shall not be liable for any action taken or suffered by it in good faith in accordance with instructions of any such individual. It is understood that instructions to the Rights Agent shall, except where circumstances make it impractical or the Rights Agent otherwise agrees, be given in writing and, where not in writing, such instructions shall be confirmed in writing as soon as practicable after the giving of such instructions;
(h) the Rights Agent and any shareholder or stockholder, director, officer or employee of the Rights Agent may buy, sell or deal in Common Shares, Rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other legal entity; and
(i) the Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent will not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct, provided reasonable care was exercised in the selection and continued employment thereof.
4.4 Change of Rights Agent
The Rights Agent may resign and be discharged from its duties under this Agreement upon 60 days' notice (or such lesser notice as is acceptable to the Company) in writing mailed to the Company and to each transfer agent of Shares by registered or certified mail and to the holders of Rights in accordance with Section 5.9. The Company may remove the Rights Agent upon 30 days notice in writing, mailed to the Rights Agent and to each transfer agent of the Common Shares by registered or certified mail and to the holders of Rights in accordance with Section 5.9. If the Rights Agent should resign or be removed or otherwise become incapable of acting, the Company will appoint a successor to the Rights Agent. If the Company fails to make such appointment within a period of 30 days after such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent, then by prior written notice to the Company the resigning Rights Agent or the holder of any Rights (which holder shall, with such notice, submit such holder's Rights Certificate, if any, for inspection by the Company), may apply, at the Company's expense, to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be a Company incorporated under the laws of Canada or a province thereof authorized to carry on the business of a trust company in the Province of British Columbia. After appointment, the successor Rights Agent will be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall, upon payment in full of any outstanding amounts owing by the Company to the Rights Agent under this Agreement, deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment, the Company will file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Shares, and mail a notice thereof in writing to the holders of the Rights in accordance with Section 5.9. Failure to give any notice provided for in this Section 4.4, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of any successor Rights Agent, as the case may be.
4.5 Compliance with Money Laundering Legislation
The Rights Agent shall retain the right not to act and shall not be liable for refusing to act if, due to a lack of information or for any other reason whatsoever, the Rights Agent reasonably determines that such an act might cause it to be in non-compliance with any applicable anti-money laundering or anti-terrorist legislation, regulation or guideline. Further, should the Rights Agent reasonably determine at any time that its acting under this Agreement has resulted in it being in non-compliance with any applicable anti-money laundering or anti-terrorist legislation, regulation or guideline, then it shall have the right to resign on 10 days' written notice to the Company, provided: (i) that the Rights Agent's written notice shall describe the circumstances of such non-compliance; and (ii) that if such circumstances are rectified to the Rights Agent's satisfaction within such 10-day period, then such resignation shall not be effective.
4.6 Privacy Provision
The parties acknowledge that federal and/or provincial legislation that addresses the protection of individual's personal information (collectively, "Privacy Laws") applies to obligations and activities under this Agreement. Despite any other provision of this Agreement, neither party will take or direct any action that would contravene, or cause the other to contravene, applicable Privacy Laws. The Company will, prior to transferring or causing to be transferred personal information to the Rights Agent, obtain and retain required consents of the relevant individuals to the collection, use and disclosure of their personal information, or will have determined that such consents either have previously been given upon which the parties can rely or are not required under the Privacy Laws. The Rights Agent will use commercially reasonable efforts to ensure that its services hereunder comply with Privacy Laws.
ARTICLE 5
MISCELLANEOUS
5.1 Redemption and Waiver
(a) The Board of Directors acting in good faith may, with the prior approval of the holders of Voting Shares or of the holders of Rights given in accordance with Section 5.1(i) or (j), as the case may be, at any time prior to the occurrence of a Flip-in Event as to which the application of Section 3.1 has not been waived pursuant to the provisions of this Section 5.1, elect to redeem all but not less than all of the then outstanding Rights at a redemption price of $0.00001 per Right appropriately adjusted in a manner analogous to the applicable adjustment provided for in Section 2.3 in the event that an event of the type analogous to any of the events described in Section 2.3 shall have occurred (such redemption price being herein referred to as the "Redemption Price").
(b) The Board of Directors acting in good faith may, with the prior approval of the holders of Voting Shares given in accordance with Section 5.1(i), determine, at any time prior to the occurrence of a Flip-in Event as to which the application of Section 3.1 has not been waived pursuant to this Section 5.1, if such Flip-in Event would occur by reason of an acquisition of Voting Shares otherwise than pursuant to a Take-over Bid made by means of a take-over bid circular to all holders of record of Voting Shares and otherwise than in the circumstances set forth in Subsection 5.1(d), to waive the application of Section 3.1 to such Flip-in Event. In the event that the Board of Directors proposes such a waiver, the Board of Directors shall extend the Separation Time to a date subsequent to and not more than ten Business Days following the meeting of shareholders called to approve such waiver.
(c) The Board of Directors acting in good faith may, until the occurrence of a Flip-in Event and upon prior written notice delivered to the Rights Agent, determine to waive the application of Section 3.1 to such particular Flip-in Event, provided that the Flip-in Event would occur by reason of a Take-over Bid made by way of take-over bid circular sent to all holders of Voting Shares (which for greater certainty shall not include the circumstances described in Subsection 5.1(d)); provided that if the Board of Directors waives the application of Section 3.1 to a particular Flip-in Event pursuant to this Subsection 5.1(c), the Board of Directors shall be deemed to have waived the application of Section 3.1 to any other Flip-in Event subsequently occurring by reason of any Take-over Bid which is made by means of a take-over bid circular to all holders of Voting Shares prior to the expiry of any Take-over Bid in respect of which a waiver is, or is deemed to have been, granted under this Subsection 5.1(c).
(d) Notwithstanding the provisions of Subsections 5.1(b) and (c) hereof, the Board of Directors may waive the application of Section 3.1 in respect of the occurrence of any Flip-in Event if the Board of Directors has determined within ten Trading Days following a Stock Acquisition Date that a Person became an Acquiring Person by inadvertence and without any intention to become, or knowledge that it would become, an Acquiring Person under this Agreement, and in the event such waiver is granted by the Board of Directors, such Stock Acquisition Date shall be deemed not to have occurred. Any such waiver pursuant to this Subsection 5.1(d) must be on the condition that such Person, within 14 days after the foregoing determination by the Board of Directors or such earlier or later date as the Board of Directors may determine (the "Disposition Date"), has reduced its Beneficial Ownership of Voting Shares such that the Person is no longer an Acquiring Person. If the Person remains an Acquiring Person at the close of business on the Disposition Date, the Disposition Date shall be deemed to be the date of occurrence of a further Stock Acquisition Date and Section 3.1 shall apply thereto.
(e) The Board of Directors, shall, without further formality, be deemed to have elected to redeem the Rights at the Redemption Price on the date that a Person which has made a Permitted Bid, a Competing Permitted Bid or a Take-Over Bid in respect of which the Board of Directors has waived, or is deemed to have waived, pursuant to Subsection 5.1(c) the application of Section 3.1, takes up and pays for Voting Shares in connection with such Permitted Bid, Competing Permitted Bid or Take-over bid, as the case may be.
(f) Where a Take-over Bid that is not a Permitted Bid Acquisition is withdrawn or otherwise terminated after the Separation Time has occurred and prior to the occurrence of a Flip-in Event, the Board of Directors may elect to redeem all the outstanding Rights at the Redemption Price. Upon the Rights being redeemed pursuant to this Subsection 5.1(f), all the provisions of this Agreement shall continue to apply as if the Separation Time had not occurred and Rights Certificates representing the number of Rights held by each holder of record of Shares as of the Separation Time had not been mailed to each such holder and for all purposes of this Agreement the Separation Time shall be deemed not to have occurred.
(g) If the Board of Directors elects or is deemed to have elected to redeem the Rights, and, in circumstances in which Subsection 5.1(a) is applicable, such redemption is approved by the holders of Voting Shares or the holders of Rights in accordance with Subsection 5.1(i) or (j), as the case may be, the right to exercise the Rights, will thereupon, without further action and without notice, terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price.
(h) Within 10 Business Days after the Board of Directors elects or is deemed to elect, to redeem the Rights or if Subsection 5.1(a) is applicable within 10 Business Days after the holders of Shares of the holders of Rights have approved a redemption of Rights in accordance with Section 5.1(i) or (j), as the case may be, the Company shall give notice of redemption to the holders of the then outstanding Rights by mailing such notice to each such holder at his last address as it appears upon the registry books of the Rights Agent or, prior to the Separation Time, on the registry books of the transfer agent for the Voting Shares. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption will state the method by which the payment of the Redemption Price will be made. The Company may not redeem, acquire or purchase for value any Rights at any time in any manner other than specifically set forth in this Section 5.1 or in connection with the purchase of Shares prior to the Separation Time.
(i) If a redemption of Rights pursuant to Subsection 5.1(a) or a waiver of a Flip-in Event pursuant to Section 5.1(b) is proposed at any time prior to the Separation Time, such redemption or waiver shall be submitted for approval to the holders of Voting Shares. Such approval shall be deemed to have been given if the redemption or waiver is approved by the affirmative vote of a majority of the votes cast by Independent Shareholders represented in person or by proxy at a meeting of such holders duly held in accordance with applicable laws.
(j) If a redemption of Rights pursuant to Subsection 5.1(a) is proposed at any time after the Separation Time, such redemption shall be submitted for approval to the holders of Rights. Such approval shall be deemed to have been given if the redemption is approved by holders of Rights by a majority of the votes cast by the holders of Rights represented in person or by proxy at and entitled to vote at a meeting of such holders. For the purposes hereof, each outstanding Right (other than Rights which are Beneficially Owned by any Person referred to in clauses (i) to (v) inclusive of the definition of Independent Shareholders) shall be entitled to one vote, and the procedures for the calling, holding and conduct of the meeting shall be those, as nearly as may be, which are provided in the Company's by-laws and the British Columbia Business Corporations Act with respect to meetings of shareholders of the Company.
5.2 Expiration
No Person shall have any rights whatsoever pursuant to this Agreement or in respect of any Right after the Expiration Time, except the Rights Agent as specified in Section 4.1 of this Agreement.
5.3 Issuance of New Rights Certificates
Notwithstanding any of the provisions of this Agreement or the Rights to the contrary, the Company may, at its option, issue new Rights Certificates evidencing Rights in such form as may be approved by the Board of Directors to reflect any adjustment or change in the number or kind or class of securities purchasable upon exercise of Rights made in accordance with the provisions of this Agreement.
5.4 Supplements and Amendments
(a) The Company may make amendments to this Agreement to correct any clerical or typographical error or which are required to maintain the validity of this Agreement as a result of any change in any applicable legislation or regulations or rules thereunder. The Company may supplement, amend, vary, rescind or delete any of the provisions of this Agreement and the Rights without the approval of any holders of Rights or Voting Shares in order to make any changes which the Board of Directors acting in good faith may deem necessary or desirable. Notwithstanding anything in this Section 5.4 to the contrary, no such supplement or amendment shall be made to the provisions of Article 4 except with the written concurrence of the Rights Agent to such supplement or amendment.
(b) Subject to Subsection 5.4(a) and the prior approval of the Toronto Stock Exchange (if required), the Company may, with the prior approval of the holders of Voting Shares obtained as set forth below, at any time before the Separation Time, supplement, amend, vary, rescind or delete any of the provisions of this Agreement and the Rights (whether or not such action would materially adversely affect the interests of the holders of Rights generally). Such consent shall be deemed to have been given if the action requiring such approval is authorized by the affirmative vote of a majority of the votes cast by Independent Shareholders present or represented at and entitled to be voted at a meeting of the holders of Voting Shares duly called and held in compliance with applicable laws and the articles and by-laws of the Company.
(c) Subject to Subsection 5.4(a), the Company may, with the prior approval of the holders of Rights, at any time on or after the Separation Time, supplement, amend, vary, rescind or delete any of the provisions of this Agreement and the Rights (whether or not such action would materially adversely affect the interests of the holders of Rights generally), provided that no such amendment, variation or deletion shall be made to the provisions of Article 4 except with the written concurrence of the Rights Agent thereto.
(d) Any approval of the holders of Rights shall be deemed to have been given if the action requiring such approval is authorized by the affirmative votes of the holders of Rights present or represented at and entitled to be voted at a meeting of the holders of Rights and representing a majority of the votes cast in respect thereof. For the purposes hereof, each outstanding Right (other than Rights which are void pursuant to the provisions hereof) shall be entitled to one vote, and the procedures for the calling, holding and conduct of the meeting shall be those, as nearly as may be, which are provided in the Company's by-laws with respect to meetings of shareholders of the Company.
(e) Any amendments made by the Company to this Agreement pursuant to Subsection 5.4(a) which are required to maintain the validity of this Agreement as a result of any change in any applicable legislation or regulations or rules thereunder shall:
(i) if made before the Separation Time, be submitted to the shareholders of the Company at the next meeting of shareholders and the shareholders may, by the majority referred to in Subsection 5.4(b), confirm or reject such amendment;
(ii) if made after the Separation Time, be submitted to the holders of Rights at a meeting to be called for on a date not later than immediately following the next meeting of shareholders of the Company and the holders of Rights may, by resolution passed by the majority referred to in Subsection 5.4(d), confirm or reject such amendment.
Any such amendment shall be effective from the date of the resolution of the Board of Directors adopting such amendment, until it is confirmed or rejected or until it ceases to be effective (as described in the next sentence) and, where such amendment is confirmed, it continues in effect in the form so confirmed. If such amendment is rejected by the shareholders or the holders of Rights or is not submitted to the shareholders or holders of Rights as required, then such amendment shall cease to be effective from and after the termination of the meeting (or any adjournment of such meeting) at which it was rejected or to which it should have been but was not submitted or from and after the date of the meeting of holders of Rights that should have been but was not held, and no subsequent resolution of the Board of Directors to amend this Agreement to substantially the same effect shall be effective until confirmed by the shareholders or holders of Rights as the case may be.
5.5 Fractional Rights and Fractional Shares
(a) The Company shall not be required to issue fractions of Rights or to distribute Rights Certificates which evidence fractional Rights. After the Separation Time, in lieu of issuing fractional Rights, the Company shall pay to the holders of record of the Rights Certificates (provided the Rights represented by such Rights Certificates are not void pursuant to the provisions of Subsection 3.1(b), at the time such fractional Rights would otherwise be issuable), an amount in cash equal to the fraction of the Market Price of one whole Right that the fraction of a Right that would otherwise be issuable is of one whole Right.
(b) The Company shall not be required to issue fractions of Shares upon exercise of Rights or to distribute certificates which evidence fractional Shares. In lieu of issuing fractional Shares, the Company shall pay to the registered holders of Rights Certificates, at the time such Rights are exercised as herein provided, an amount in cash equal to the fraction of the Market Price of one Share that the fraction of a Share that would otherwise be issuable upon the exercise of such Right is of one whole Share at the date of such exercise.
5.6 Rights of Action
Subject to the terms of this Agreement, all rights of action in respect of this Agreement, other than rights of action vested solely in the Rights Agent, are vested in the respective holders of the Rights. Any holder of Rights, without the consent of the Rights Agent or of the holder of any other Rights, may, on such holder's own behalf and for such holder's own benefit and the benefit of other holders of Rights enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce such holder's right to exercise such holder's Rights, or Rights to which such holder is entitled, in the manner provided in such holder's Rights Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and will be entitled to specific performance of the obligations under, and injunctive relief against actual or threatened violations of the obligations of any Person subject to, this Agreement.
5.7 Regulatory Approvals
Any obligation of the Company or action or event contemplated by this Agreement shall be subject to the receipt of any requisite approval or consent from any governmental or regulatory authority, including without limiting the generality of the foregoing, any necessary approvals of The Toronto Stock Exchange, or any other applicable stock exchange or market.
5.8 Notice of Proposed Actions
In case the Company shall propose after the Separation Time and prior to the Expiration Time to effect the liquidation, dissolution or winding up of the Company or the sale of all or substantially all of the Company's assets, then, in each such case, the Company shall give to each holder of a Right, in accordance with Section 5.9 hereof, a notice of such proposed action, which shall specify the date on which such Flip-in Event, liquidation, dissolution, or winding up is to take place, and such notice shall be so given at least 20 Business Days prior to the date of taking of such proposed action by the Company.
5.9 Notices
(a) Notices or demands authorized or required by this Agreement to be given or made by the Rights Agent or by the holder of any Rights to or on the Company shall be sufficiently given or made if delivered, sent by registered or certified mail, postage prepaid (until another address is filed in writing with the Rights Agent), or sent by facsimile or other form of recorded electronic communication, charges prepaid and confirmed in writing, as follows:
Taseko Mines Limited
15th Floor
1040 West Georgia Street
Vancouver, BC V6E 4H1
Attention: President and CEO
Facsimile: (604) 684-6365
(b) Notices or demands authorized or required by this Agreement to be given or made by the Company or by the holder of any Rights to or on the Rights Agent shall be sufficiently given or made if delivered, sent by registered or certified mail, postage prepaid (until another address is filed in writing with the Company), or sent by facsimile or other form of recorded electronic communication, charges prepaid and confirmed in writing, as follows:
Computershare Investor Services Inc.
3rd Floor
510 Burrard Street
Vancouver, BC V6C 3B9
Attention: Manager, Client Services
Facsimile: (604) 661-9401
(c) Notices or demands authorized or required by this Agreement to be given or made by the Company or the Rights Agent to or on the holder of any Rights shall be sufficiently given or made if delivered or sent by first class mail, postage prepaid, addressed to such holder at the address of such holder as it appears upon the register of the Rights Agent or, prior to the Separation Time, on the register of the Company for its Common Shares. Any notice which is mailed or sent in the manner herein provided shall be deemed given, whether or not the holder receives the notice.
(d) Any notice given or made in accordance with this Section 5.9 shall be deemed to have been given and to have been received on the day of delivery, if so delivered, on the third Business Day (excluding each day during which there exists any general interruption of postal service due to strike, lockout or other cause) following the mailing thereof, if so mailed, and on the day of telegraphing, telecopying or sending of the same by other means of recorded electronic communication (provided such sending is during the normal business hours of the addressee on a Business Day and if not, on the first Business Day thereafter). Each of the Company and the Rights Agent may from time to time change its address for notice by notice to the other given in the manner aforesaid.
5.10 Costs of Enforcement
The Company agrees that if the Company fails to fulfil any of its obligations pursuant to this Agreement, then the Company will reimburse the holder of any Rights for the costs and expenses (including legal fees) incurred by such holder, on a solicitor and his own client basis, to enforce his rights pursuant to any Rights or this Agreement.
5.11 Successors
All the covenants and provisions of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and enure to the benefit of their respective successors and assigns hereunder.
5.12 Benefits of this Agreement
Nothing in this Agreement shall be construed to give to any Person other than the Company, the Rights Agent and the holders of the Rights any legal or equitable right, remedy or claim under this Agreement; further, this Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and the holders of the Rights.
5.13 Governing Law
This Agreement and each Right issued hereunder shall be deemed to be a contract made under the laws of the Province of British Columbia and for all purposes shall be governed by and construed in accordance with the laws of such Province applicable to contracts to be made and performed entirely within such Province.
5.14 Severability
If any term or provision hereof or the application thereof to any circumstance shall, in any jurisdiction and to any extent, be invalid or unenforceable, such term or provision shall be ineffective only as to such jurisdiction and to the extent of such invalidity or unenforceability in such jurisdiction without invalidating or rendering unenforceable or ineffective the remaining terms and provisions hereof in such jurisdiction or the application of such term or provision in any other jurisdiction or to circumstances other than those as to which it is specifically held invalid or unenforceable.
5.15 Effective Date and Confirmation
This Agreement:
(a) shall be effective and in full force and effect in accordance with its terms from and after the Effective Date, and shall constitute the entire agreement between the parties pertaining to the subject matter hereof, as of such time on the Effective Date; and
(b) shall expire and be of no further force or effect from and after the earlier of:
(i) the Termination Time, and
(ii) the time at which the annual meeting of shareholders of the Company held in 2025 terminates (the "Expiration Time").
5.16 Determinations and Actions by the Board of Directors
All actions, calculations and determinations (including all omissions with respect to the foregoing) which are done or made or approved by the Board of Directors in connection herewith, in good faith, shall not subject the Board of Directors or any director of the Company to any liability to the holders of the Rights.
5.17 Compliance with Money Laundering Legislation
The Rights Agent shall retain the right not to act and shall not be liable for refusing to act if, due to a lack of information or for any other reason whatsoever, the Rights Agent reasonably determines that such an act might cause it to be in non-compliance with any applicable anti-money laundering or anti-terrorist legislation, regulation or guideline. Further, should the Rights Agent reasonably determine at any time that its acting under this Agreement has resulted in it being in non-compliance with any applicable anti-money laundering or anti-terrorist legislation, regulation or guideline, then it shall have the right to resign on 10 days' written notice to the Company, provided: (i) that the Rights Agent's written notice shall describe the circumstances of such non-compliance; and (ii) that if such circumstances are rectified to the Rights Agent's satisfaction within such 10-day period, then such resignation shall not be effective.
5.18 Privacy Provision
The parties acknowledge that federal and/or provincial legislation that addresses the protection of individual's personal information (collectively, "Privacy Laws") may apply to obligations and activities under this Agreement. Despite any other provision of this Agreement, neither party will take or direct any action that would contravene, or cause the other to contravene, applicable Privacy Laws. The Company will, prior to transferring or causing to be transferred personal information to the Rights Agent, obtain and retain required consents of the relevant individuals to the collection, use and disclosure of their personal information, or will have determined that such consents either have previously been given upon which the parties can rely or are not required under applicable Privacy Laws.
5.19 Declaration as to Non-Canadian Holders
If in the opinion of the Board of Directors (who may rely upon the advice of counsel) any action or event contemplated by this Agreement would require compliance by the Company with the securities laws or comparable legislation of a jurisdiction outside Canada or the United States, the Board of Directors acting in good faith shall take such actions as it may deem appropriate to ensure such compliance. In no event shall the Company or the Rights Agent be required to issue or deliver Rights or securities issuable on exercise of Rights to persons who are citizens, residents or nationals of any jurisdiction other than Canada or the United States, in which such issue or delivery would be unlawful without registration of the relevant Persons or securities for such purposes.
5.20 Time of the Essence
Time shall be of the essence in this Agreement.
5.21 Execution in Counterparts
This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute one and the same instrument.
5.22 Force Majeure
No party shall be liable to the other, or held in breach of this Agreement, if prevented, hindered, or delayed in the performance or observance of any provision contained herein by reason of act of God, riots, terrorism, acts of war, epidemics, governmental action or judicial order, earthquakes, or any other similar causes (including, but not limited to, mechanical, electronic or communication interruptions, disruptions or failures). Performance times under this Agreement shall be extended for a period of time equivalent to the time lost because of any delay that is excusable under this Section.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of June 9, 2022.
TASEKO MINES LIMITED
/s/ Trevor Thomas, Corporate Secretary
Per: _______________________________________
Authorized Signatory
Name and title ___________________________________
of authorized signatory
COMPUTERSHARE INVESTOR SERVICES INC.
/s/ Dave Bains, Account Manager
Per: _______________________________________
Account Manager
/s/ Alexa Kwan, Account Manager
Per: _______________________________________
Account Manager
ATTACHMENT 1
TASEKO MINES LIMITED
SHAREHOLDER RIGHTS AGREEMENT (as defined below)
[Form of Rights Certificate]
|
Certificate No. |
Rights |
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE TRUST, AND AMENDMENT OR TERMINATION ON THE TERMS SET FORTH IN THE SHAREHOLDER RIGHTS AGREEMENT (AS DEFINED BELOW). UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN SUBSECTION 3.1(b) OF THE SHAREHOLDER RIGHTS AGREEMENT (AS DEFINED BELOW)), RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR CERTAIN RELATED PARTIES, OR TRANSFEREES OF AN ACQUIRING PERSON OR CERTAIN RELATED PARTIES, MAY BECOME VOID.
Rights Certificate
This certifies that , or registered assigns, is the registered holder of the number of Rights set forth above, each of which entitles the registered holder thereof, subject to the terms, provisions and conditions of the Amended and Restated Shareholder Rights Plan Agreement dated as of June 9, 2016, amended and extended June 9, 2022, as may be amended or supplemented from time to time (the "Shareholder Rights Agreement"), between Taseko Mines Limited, a Company incorporated under the British Columbia Business Corporations Act, (the "Company") and Computershare Investor Services Inc., a trust company incorporated under the laws of Canada (the "Rights Agent") (which term shall include any successor Rights Agent under the Shareholder Rights Agreement), to purchase from the Company at any time after the Separation Time (as such term is defined in the Shareholder Rights Agreement) and prior to the Expiration Time (as such term is defined in the Shareholder Rights Agreement), one fully paid common share of the Company (a "Share") at the Exercise Price referred to below, upon presentation and surrender of this Rights Certificate with the Form of Election to Exercise (in the form provided hereinafter) duly executed and submitted to the Rights Agent at its principal office in any of the cities of Vancouver and Toronto. Until adjustment thereof in certain events as provided in the Shareholder Rights Agreement, the Exercise Price shall be:
(a) until the Separation Time, an amount equal to three times the Market Price (as such term is defined in the Shareholder Rights Agreement), from time to time, per Share; and
(b) from and after the Separation Time, an amount equal to three times the Market Price, as at the Separation Time, per Share.
In certain circumstances described in the Shareholder Rights Agreement, each Right evidenced hereby may entitle the registered holder thereof to purchase or receive assets, debt securities or shares of the Company other than Shares, or more or less than one Share, all as provided in the Shareholder Rights Agreement.
This Rights Certificate is subject to all of the terms and provisions of the Shareholder Rights Agreement, which terms and provisions are incorporated herein by reference and made a part hereof and to which Shareholder Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Rights Agent, the Company and the holders of the Rights Certificates. Copies of the Shareholder Rights Agreement are on file at the registered office of the Company and are available upon request.
This Rights Certificate, with or without other Rights Certificates, upon surrender at any of the offices of the Rights Agent designated for such purpose, may be exchanged for another Rights Certificate or Rights Certificates of like tenor and date evidencing an aggregate number of Rights equal to the aggregate number of Rights evidenced by the Rights Certificate or Rights Certificates surrendered. If this Rights Certificate shall be exercised in part, the registered holder shall be entitled to receive, upon surrender hereof, another Rights Certificate or Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Shareholder Rights Agreement, the Rights evidenced by this Rights Certificate may be, and under certain circumstances are required to be, redeemed by the Company at a redemption price of $0.00001 per Right.
No fractional Shares will be issued upon the exercise of any Right or Rights evidenced hereby, but in lieu thereof a cash payment will be made, as provided in the Shareholder Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or receive dividends or be deemed for any purpose the holder of Shares or of any other securities which may at any time be issuable upon the exercise hereof, nor shall anything contained in the Shareholder Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the Rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting shareholders (except as provided in the Shareholder Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Rights evidenced by this Rights Certificate shall have been exercised as provided in the Shareholder Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officer of the Company and its corporate seal.
Date: ____________________________________
TASEKO MINES LIMITED
Per: _______________________________________
Authorized Signatory
Per: _______________________________________
Authorized Signatory
Countersigned:
COMPUTERSHARE INVESTOR SERVICES INC.
Per: _______________________________________
Account Manager
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED _____________________________________________ hereby sells, assigns and transfers unto ______________________________________________________________________________________________________________________________
(Please print name and address of transferee.)
the Rights represented by this Rights Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint _______,
as attorney, to transfer the within Rights on the books of the Company, with full power of substitution.
| Dated: | |||
| Signature | |||
| (Please print name of Signatory) |
Signature Guaranteed: (Signature must correspond to name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever.)
Signature must be guaranteed by a Canadian chartered bank or an eligible guarantor institution with membership in an approved signature medallion guarantee program.
CERTIFICATE
(To be completed if true.)
The undersigned party transferring Rights hereunder, hereby represents, for the benefit of all holders of Rights and Shares, that the Rights evidenced by this Rights Certificate are not, and, to the knowledge of the undersigned, have never been, Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof or a Person acting jointly or in concert with any of the foregoing. Capitalized terms shall have the meaning ascribed thereto in the Shareholder Rights Agreement.
| Signature | |||
| (Please print name of Signatory) |
(To be attached to each Rights Certificate.)
FORM OF ELECTION TO EXERCISE
(To be executed by the registered holder if such holder desires to exercise the Rights Certificate.)
TO: ________________________________________
The undersigned hereby irrevocably elects to exercise _____________________ whole Rights represented by the attached Rights Certificate to purchase the Shares or other securities, if applicable, issuable upon the exercise of such Rights and requests that certificates for such securities be issued in the name of:
| (Name) |
| (Address) |
| (City and Province) |
| Social Insurance Number or other taxpayer identification number. |
| Dated: | |||
| Signature | |||
| (Please print name of Signatory) |
If such number of Rights shall not be all the Rights evidenced by this Rights Certificate, a new Rights Certificate for the balance of such Rights shall be registered in the name of and delivered to:
| (Name) |
| (Address) |
| (City and Province) |
| Social Insurance Number or other taxpayer identification number. |
| Dated: | |||
| Signature | |||
| (Please print name of Signatory) |
Signature Guaranteed: (Signature must correspond to name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever.)
Signature must be guaranteed by a Canadian chartered bank or an eligible guarantor institution with membership in an approved signature medallion guarantee program.
CERTIFICATE
(To be completed if true.)
The undersigned party exercising Rights hereunder, hereby represents, for the benefit of all holders of Rights and Shares, that the Rights evidenced by this Rights Certificate are not, and, to the knowledge of the undersigned, have never been, Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof or a Person acting jointly or in concert with any of the foregoing. Capitalized terms shall have the meaning ascribed thereto in the Shareholder Rights Agreement.
| Signature | |||
| (Please print name of Signatory) |
(To be attached to each Rights Certificate.)
NOTICE
In the event the certification set forth above in the Forms of Assignment and Election to Exercise is not completed, the Company will deem the Beneficial Owner of the Rights evidenced by this Rights Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as defined in the Shareholder Rights Agreement). No Rights Certificates shall be issued in exchange for a Rights Certificate owned or deemed to have been owned by an Acquiring Person or an Affiliate or Associate thereof, or by a Person acting jointly or in concert with an Acquiring Person or an Affiliate or Associate thereof.
VOTING RESULTS REPORT
Pursuant to Section 11.3 of National Instrument 51-102
OF
TASEKO MINES LIMITED
(the "Company")
The Company reports that the following matters were voted upon and passed by the Shareholders of the Company at the annual general meeting of the Company held on June 9, 2022 (the "Meeting"). Attendance at the Meeting was 43,718 Shares represented and voted in person and 149,905,144 Shares represented and voted by proxy for a total of 149,948,862 voting shares represented at the Meeting, being 52.37% of the outstanding shares. Voting results on the resolutions were as follows:
1. The number of directors of the Company was set at eight (8). Shares voted in person and by proxy represented 106,664,612 votes For and 1,166,428 shares Against.
2. The following directors were elected, with the following voting results for each nominee:
| DIRECTOR | FOR | WITHHELD | |
| Anu Dhir | 102,012,811 | 5,818,229 | |
| Robert A. Dickinson | 97,190,292 | 10,640,749 | |
| Russell E. Hallbauer | 97,914,394 | 9,916,647 | |
| Kenneth Pickering | 104,676,518 | 3,154,522 | |
| Rita Maguire | 105,692,261 | 2,138,780 | |
| Stuart McDonald | 105,827,814 | 2,003,226 | |
| Peter Mitchell | 105,515,220 | 2,315,820 | |
| Ronald W. Thiessen | 103,778,052 | 4,052,988 |
3. KPMG LLP, Chartered Accountants, were appointed auditor of the Company. Shares voted in person and by proxy represented 141,466,039 votes For and 8,439,105 votes Withheld.
4. The resolution to ratify and approve the Amended and Restated Shareholder Rights Plan for continuation until the end of the Company's annual general meeting in 2025 was passed. Shares voted in person and by proxy represented 105,689,762 votes For and 2,141,278 votes Against.
5. The Say on Pay Advisory Resolution was approved. Shares voted in person and by proxy represented 100,935,306 votes For and 6,895,734 votes Against.
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There were 42,074,104 non-votes recorded (but not voted) on each resolution, except the resolution to appoint the auditor of the Company, and on the votes for each director. With respect to the resolution to appoint the auditor of the Company there were NIL non-votes recorded. Non-votes are discretionary votes given to a broker by a US beneficial holder not allowed under Canadian Securities Regulations.
NOTICE AND ACCESS NOTIFICATION TO SHAREHOLDERS
ANNUAL GENERAL MEETING OF SHAREHOLDERS
You are receiving this notification because Taseko Mines Limited (the "Company" or "Taseko") has decided to use the notice and access model for the delivery of meeting materials to its shareholders in respect of its Annual General Meeting of Shareholders to be held on Thursday, June 9, 2022 (the "Meeting"). Under notice and access provisions, instead of receiving paper copies of the Company's Notice of Annual General Meeting and Information Circular (together, the "Information Circular") shareholders are receiving this Notice and Access Notification ("notification") with information on how to access the Information Circular electronically. Digital copies of the Information Circular and the form of Proxy for the Meeting (collectively, the "Proxy Materials") will be posted online, together with a copy of this notification. Shareholders are also receiving a paper copy of the proxy or voting instruction form, as applicable, enabling them to vote by proxy in advance of the Meeting. This method of delivery is an environmentally responsible, cost-effective way to deliver Proxy Materials to the Company's shareholders.
MEETING DATE AND LOCATION
| WHEN: | 2:00 p.m. on June 9, 2022 |
WHERE: | The Hyatt Regency Hotel, 655 Burrard Street, Vancouver, BC |
SHAREHOLDERS WILL BE ASKED TO CONSIDER AND VOTE ON THE FOLLOWING MATTERS:
- SET THE NUMBER OF DIRECTORS: To set the number of directors of the Company for the ensuing year. See the section entitled Election of Directors in the Information Circular.
- ELECTION OF DIRECTORS: To elect directors of the Company for the ensuing year. See the section entitled Election of Directors in the Information Circular.
- APPOINTMENT OF AUDITOR: To appoint the auditor of the Company for the ensuing year. See the section entitled Appointment of Auditor in the Information Circular.
- SHAREHOLDER RIGHTS PLAN AGREEMENT: To consider, and if thought advisable, to pass an ordinary resolution to ratify and approve the Company's Amended and Restated Shareholder Rights Plan Agreement, as amended and extended, for continuation for a three-year period, as more particularly set out in the section entitled Particulars of Matters to be Acted upon in the Information Circular.
- ADVISORY RESOLUTION - Executive Compensation (Say on Pay): To consider, and if thought fit to approve, an advisory (non-binding) resolution on the Company's approach to executive compensation, as more particularly set out in the section entitled Particulars of Matters to be Acted upon in the Information Circular.
SHAREHOLDERS ARE REMINDED TO REVIEW THE PROXY MATERIALS, IN
PARTICULAR THE INFORMATION CIRCULAR, PRIOR TO VOTING.
WEBSITES WHERE PROXY MATERIALS ARE POSTED
The Proxy Materials can be viewed online under the Company's profile on SEDAR at www.sedar.com or on the Company's website at https://www.tasekomines.com/investors.
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HOW TO OBTAIN A PAPER COPY OF THE INFORMATION CIRCULAR
Any Shareholder may request a paper copy of the Information Circular, be mailed to them at no cost by contacting the Company at 1040 West Georgia Street, Suite 1200, Vancouver, British Columbia V6E 4H1; by telephone to the Company: 778-373-4533; by telephone toll-free: 1-877-441-4533 or by fax: 778-373-4534. A Shareholder may also use the toll-free number noted above to obtain additional information about Notice-and-Access Provisions.
To allow adequate time for a Shareholder to receive and review a paper copy of the Proxy Materials and then to submit their vote prior to 2 p.m. (Pacific Time) on Tuesday, June 7, 2022, a Shareholder requesting a paper copy of the Information Circular as described above, should ensure such request is received by the Company no later than May 26, 2022. Under Notice-and-Access Provisions, Proxy Materials must be available for viewing for up to 1 year from the date of posting and a paper copy of the materials can be requested at any time during this period. To obtain a paper copy of the Proxy Material, including, in particular, the Information Circular, after the Meeting date, please contact the Company directly.
Is Stratification used: NO
HOW DO I VOTE?
There are several convenient ways to vote your shares including online and by telephone.
| Beneficial Shareholders Shares held with a broker, bank or other intermediary. |
Registered Shareholders Shares held in own name and represented by a physical certificate. |
|
| Internet: | www.proxyvote.com | www.investorvote.com |
| Phone or Fax: | Call or fax to the number(s) listed on your voting instruction form and vote using the control number provided therein. | Phone: 1-866-732-8683 Fax: 1-866-249-7775 |
| Mail: | Return the voting instruction form in the enclosed postage paid envelope. | Return the form of proxy in the enclosed postage paid envelope. |
BOARD RECOMMENDATION
The Board of Directors of Taseko unanimously recommend that shareholders VOTE FOR each of the proposed resolutions.
NOTE OF CAUTION CONCERNING COVID-19 PANDEMIC
Taseko intends to hold the Meeting at the location stated above in this Notice. We continue to monitor development of the current coronavirus COVID-19 Pandemic ("COVID-19") and we ask shareholders to consider voting their Common Shares by Proxy rather than attend the Meeting in person. The Company will announce any changes to the Meeting format by way of news release to be filed under the Company's profile on SEDAR as well as on our Company website at www.tasekomines.com prior to the Meeting. In the event of any changes to the Meeting format due to COVID-19, the Company will not prepare or mail amended Meeting Proxy Materials.
If you have questions or require assistance with voting your Common Shares you may contact Taseko's proxy
solicitation agent:
Laurel Hill Advisory Group
North American Toll-Free Number: 1-877-452-7184
Collect Calls Outside of North America: 416-304-0211
Email: assistance@laurelhill.com
NOTICE OF ANNUAL GENERAL MEETING
OF SHAREHOLDERS
TO BE HELD ON JUNE 9, 2022
AND
INFORMATION CIRCULAR
DATED APRIL 28, 2022
These materials are important and require your immediate attention. If you have questions or
require assistance with voting your shares, you may contact Taseko's proxy solicitation agent:
Laurel Hill Advisory Group
North American Toll-Free Number: 1-877-452-7184
Outside North America: 1-416-304-0211
Email: assistance@laurelhill.com
YOUR VOTE IS IMPORTANT. PLEASE VOTE YOUR PROXY TODAY.
1040 West Georgia Street, Suite 1200
Vancouver, British Columbia, V6E 4H1
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
Take notice that the annual general meeting (the "Meeting") of shareholders (the "Shareholders" of Taseko Mines Limited (the "Company" or "Taseko") will be held at the Hyatt Regency, 655 Burrard Street, Vancouver, British Columbia on June 9, 2022 at 2:00 p.m., local time, for the following purposes:
1. to receive the consolidated financial statements of the Company for the financial year ended December 31, 2021 and the report of the auditor thereon (the "Annual Financial Statements") and the related management discussion and analysis ("MD&A");
2. to set the number of directors of the Company for the ensuing year - see Election of Directors in the accompanying Information Circular (the "Information Circular");
3. to elect directors of the Company for the ensuing year - see Election of Directors in the Information Circular;
4. to appoint the auditor of the Company for the ensuing year - see Appointment of Auditor in the Information Circular;
5. to consider, and if thought advisable, to pass an ordinary resolution to ratify and approve the Company's Amended and Restated Shareholder Rights Plan Agreement, for continuation for a three year period, as more particularly set out in the Information Circular - see Particulars of Matters to be Acted Upon - Shareholder Rights Plan Continuation and Renewal in the Information Circular; and
6. to consider an advisory (non-binding) resolution on the Company's approach to executive compensation, as more particularly set out in the section of the Information Circular entitled "Advisory Resolution on the Company's Approach to Executive Compensation (Say-on-Pay)," as more particularly set out in the Information Circular - see Particulars of Matters to be Acted Upon - Advisory Resolution on the Company's Approach to Executive Compensation (Say-on-Pay) in the Information Circular.
An Information Circular accompanies this Notice of Meeting (the "Notice"). The Information Circular contains further particulars of the matters to be considered at the Meeting. No other matters are contemplated for consideration at the Meeting. The Meeting may also consider any permitted amendment to or variations of any matter identified in this Notice, and transact such other business as may properly come before the Meeting or any adjournment thereof. Copies of the Annual Financial Statements and MDA, will be made available at the Meeting and are available on SEDAR at www.sedar.com.
NOTE OF CAUTION Concerning COVID-19 Pandemic
At the date of this Notice the Company intends to hold the Meeting at the location stated in the Notice. However, due to potential unforeseen changes in the ongoing coronavirus COVID-19 outbreak ("COVID-19"), we recommend all shareholders submit votes by sending in a properly completed and signed form of proxy (or voting instruction form) prior to the Meeting following the instructions set out in the Information Circular. The Company reserves the right to take pre-cautionary measures deemed to be appropriate, necessary or advisable in relation to the Meeting in response to changes in restrictions related to COVID-19 including by changing the Meeting date, changing the Meeting venue or the changing the way in which the Meeting is conducted (for example by webcast or other remote communication). Should any changes to the Meeting occur, the Company will announce any and all changes by way of news release filed under the Company's profile on SEDAR at www.sedar.com as well as on our Company website at www.tasekomines.com. Please check our website prior to the Meeting for the most current information. In the event of changes to the Meeting format due to COVID-19, the Company will not prepare or mail amended Proxy Materials.
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Notice-and-Access
The Company has elected to use the notice-and-access model ("Notice-and-Access Provisions") set out in National Instrument 51-102 - Continuous Disclosure Obligations and in National Instrument 54-101 - Communication with Beneficial Owners of Securities of a Reporting Issuer for the delivery of meeting materials related to this Meeting. The Notice-and-Access Provisions allow the Company to reduce the volume of materials to be physically mailed to Shareholders by posting the Information Circular and any additional annual meeting materials (the "Proxy Materials") online. Under Notice-and-Access, instead of receiving paper copies of the Information Circular, registered Shareholders will receive the Notice and Access Notification to Shareholders (the "N&A Notification") and a form of proxy (the "Proxy"). In the case of beneficial (non-registered) Shareholders, they will receive the N&A Notification and a voting instruction form ("VIF"). The form of Proxy/VIF enables Shareholders to vote. Before voting, Shareholders are reminded to review the Information Circular online by logging onto the website access page provided and following the instructions set out below. Shareholders may also choose to receive a printed copy of the Information Circular by following the procedures set out below.
Copies of the Proxy Materials and the Annual Financial Statements and MDA are posted on the Company's website at www.tasekomines.com/investors.
How to Obtain Paper Copies of the Information Circular
Any Shareholder may request a paper copy of the Information Circular be mailed to them at no cost by contacting the Company at 1040 West Georgia Street, Suite 1200, Vancouver, British Columbia, Canada, V6E 4H1; by telephone: 778-373-4533; by telephone toll-free: 1-877-441-4533 or by fax: 778-373-4534. A Shareholder may also use the toll-free number noted above to obtain additional information about Notice-and-Access Provisions.
To allow adequate time for a Shareholder to receive and review a paper copy of the Information Circular and then to submit their vote by 2 p.m. (Pacific Time) on Tuesday, June 7, 2022 (the "Proxy Deadline") a Shareholder requesting a paper copy of the Information Circular as described above, should ensure such request is received by the Company no later than May 26, 2022. Under Notice-and-Access Provisions, Proxy Materials must be available for viewing for up to 1 year from the date of posting and a paper copy of the Information Circular can be requested at any time during this period. To obtain a paper copy of the Information Circular after the Meeting date, please contact the Company.
The Company will not use a procedure known as 'stratification' in relation to its use of Notice-and-Access Provisions. Stratification occurs when a reporting issuer while using Notice-and-Access Provisions also provides a paper copy of the management proxy circular to some of its shareholders with the notice package. In relation to the Meeting, all Shareholders will receive the required documentation under Notice-and-Access Provisions, which will not include a paper copy of the Information Circular.
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While registered shareholders are entitled to attend the Meeting in person we strongly recommend that all Shareholders vote by proxy and do not attend the Meeting. Accordingly we ask that registered shareholders complete, date and sign the enclosed form of Proxy, and deliver it in accordance with the instructions set out in the form of Proxy and in the Information Circular. To be effective, the Proxy must be duly completed and signed and then deposited with the Company's registrar and transfer agent, Computershare Investor Services Inc., 100 University Avenue, 8th Floor, Toronto, Ontario, M5J 2Y1, or voted via telephone, fax or via the internet (online) as specified in the Proxy, no later than 2:00 p.m., Pacific Time, on June 7, 2022.
If you hold your Common Shares in a brokerage account, you are a non-registered shareholder ("Beneficial Shareholder"). Beneficial Shareholders who hold their Common Shares through a bank, broker or other financial intermediary should carefully follow the instructions found on the form of Proxy or VIF provided to them by their intermediary, in order to cast their vote, or in order to notify the Company if they plan to attend the Meeting.
The accompanying Information Circular contains details of matters to be considered at the Meeting. Please review the Information Circular before voting.
DATED at Vancouver, British Columbia, April 28, 2022.
BY ORDER OF THE BOARD
"Stuart McDonald"
Stuart McDonald
President and Chief Executive Officer
If you have any questions or need assistance with voting your proxy, please contact Laurel Hill
Advisory Group, the proxy solicitation agent, by telephone at: 1-877-452-7184 (North American
Toll Free) or 1-416-304-0211 (Outside North America); or by email at:
assistance@laurelhill.com
1040 West Georgia Street, Suite 1200
Vancouver, British Columbia, V6E 4H1
INFORMATION CIRCULAR
Table of contents
1040 West Georgia Street, Suite 1200
Vancouver, British Columbia, V6E 4H1
INFORMATION CIRCULAR
as at April 28, 2022 except as otherwise indicated
This Information Circular is furnished in connection with the solicitation of proxies by the management of Taseko Mines Limited (the "Company") for use at the annual general meeting (the "Meeting") of its shareholders to be held on June 9, 2022 at the time and place and for the purposes set forth in the accompanying notice of the Meeting. In this Information Circular, references to "the Company", "Taseko", "we" and "our" refer to Taseko Mines Limited. The "board of directors" or the "Board" means the board of directors of the Company. "Common Shares" means common shares without par value in the capital of the Company. "Taseko Shareholders" and "Shareholders" refer to shareholders of the Company. "Registered Shareholders" means Shareholders of the Company who hold Common Shares in their own name. "Beneficial Shareholders" means shareholders who do not hold Common Shares in their own name and "Intermediaries" refers to brokers, investment firms, clearing houses and similar entities that own securities on behalf of Beneficial Shareholders.
The Board has approved the contents and distribution of this Information Circular. All dollar amounts referred to herein are in Canadian currency unless otherwise indicated.
NOTE OF CAUTION Concerning COVID-19 Pandemic
At the date of this Notice the Company intends to hold the Meeting at the location stated in the Notice. However, due to potential unforeseen changes in the ongoing coronavirus COVID-19 outbreak ("COVID-19"), we recommend all shareholders submit votes by sending in a properly completed and signed form of proxy (or voting instruction form) prior to the Meeting following the instructions set out in the Information Circular. The Company reserves the right to take pre-cautionary measures deemed to be appropriate, necessary or advisable in relation to the Meeting in response to changes in restrictions related to COVID-19 including by changing the Meeting date, changing the Meeting venue or the changing the way in which the Meeting is conducted (for example by webcast or other remote communication). Should any changes to the Meeting occur, the Company will announce any and all changes by way of news release filed under the Company's profile on SEDAR at www.sedar.com as well as on our Company website at www.tasekomines.com. Please check our website prior to the Meeting for the most current information. In the event of changes to the Meeting format due to COVID-19, the Company will not prepare or mail amended Proxy Materials.
GENERAL PROXY INFORMATION
Solicitation of Proxies
The solicitation of proxies will be primarily by mail, but proxies may be solicited personally or by telephone by directors, officers and regular employees of the Company. The Company has also retained Laurel Hill Advisory Group ("Laurel Hill") to assist it in connection with the Company's communications with shareholders. In connection with these services, Laurel Hill will receive a fee of $35,000 plus out-of-pocket expenses. The Company will bear all costs of this solicitation. We have arranged for intermediaries to forward the notice package (defined below) to beneficial owners of the Common Shares held of record by those intermediaries and we may reimburse the intermediaries for their reasonable fees and disbursements in that regard.
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Notice-and-Access
The Company has chosen to deliver the Notice of Annual General Meeting of Shareholders and the Information Circular document (together, the "Information Circular") and form of Proxy (together, the "Proxy Materials") using Notice-and-Access provisions, which govern the delivery of proxy-related materials to Shareholders utilizing the internet. Notice-and-Access provisions are found in section 9.1.1 of National Instrument 51-102 - Continuous Disclosure Obligations ("NI 51-102"), for delivery to registered Shareholders, and in section 2.7.1 of National Instrument 54-101 - Communication with Beneficial Owners of Securities of a Reporting Issuer ("NI 54-101"), for delivery to Beneficial Shareholders (together, the "Notice-and-Access Provisions").
Notice-and-Access Provisions allow the Company to choose to deliver Proxy Materials to Shareholders by posting them on a non-SEDAR website (usually the reporting issuer's website or the website of their transfer agent), provided that the conditions of NI 51-102 and NI 54-101 are met, rather than by printing and mailing the Information Circular document. Notice-and-Access Provisions can be used to deliver materials for both general and special meetings of shareholders. The Company may still choose to continue to deliver the Information Circular by mail, and shareholders are entitled to request a paper copy of the Information Circular document be mailed to them at the Company's expense.
Use of Notice-and-Access Provisions reduces paper waste and the Company's printing and mailing costs. Under Notice-and-Access Provisions the Company must send a notice confirming internet availability (the "N&A Notification") and a form of proxy or voting instruction form (together with the N&A Notification, the "notice package") to each Registered and Beneficial Shareholder, indicating that the Proxy Materials have been posted on the Company's website and explaining how a Shareholder can access them or obtain a paper copy of the Information Circular from the Company. The Information Circular has been posted in full, together with the N&A Notification and form of Proxy, on the Company's website at www.tasekomines.com/investors and under the Company's SEDAR profile at www.sedar.com.
The Information Circular contains details of matters to be considered at the Meeting.
Please review the Information Circular before voting.
How to Obtain Paper Copies of the Information Circular
Any Shareholder may request a paper copy of the Information Circular be mailed to them at no cost by contacting the Company at 1040 West Georgia Street, Suite 1200, Vancouver, British Columbia V6E 4H1; by telephone: 778-373-4533; by telephone toll-free: 1-877-441-4533 or by fax: 778-373-4534. A Shareholder may also use the toll-free number noted above to obtain additional information about Notice-and-Access Provisions.
To allow adequate time for a Shareholder to receive and review a paper copy of the Information Circular and then to submit their vote by 2 p.m. (Pacific Time) on Tuesday, June 7, 2022 (the "Proxy Deadline"), a Shareholder requesting a paper copy of the Information Circular as described above, should ensure such request is received by the Company no later than May 26, 2022. Under Notice-and-Access Provisions the Proxy Materials must be available for viewing for up to one year from the date of posting. A paper copy of the Information Circular may be requested at any time during this period. To obtain a paper copy of the Information Circular after the Meeting date, please contact the Company.
Pursuant to Notice-and-Access Provisions, the Company has set the record date for the Meeting to be at least 40 days prior to the shareholder meeting in order to ensure there is sufficient time for the Proxy Materials to be posted on the applicable website and for the notice package to be delivered to Shareholders. The N&A Notification included with the Company's notice package: (i) provides basic information about the Meeting and the matters to be voted on, (ii) explains how a Shareholder can obtain a paper copy of the Information Circular, Annual Financial Statements and MDA, and (iii) explains the Notice-and-Access Provisions process. The notice package also includes the applicable voting document for the Meeting: a form of Proxy in the case of Registered Shareholders; or a Voting Instruction Form ("VIF") in the case of Beneficial Shareholders.
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The Company will not rely upon the use of 'stratification'. Stratification occurs when a reporting issuer using Notice-and-Access Provisions provides a paper copy of its information circular with the notice to be provided to its shareholders as described above. In relation to the Meeting, all Shareholders will have received the required documentation under Notice-and-Access Provisions and all documents required to vote in respect of all matters to be voted on at the Meeting. Shareholders will not receive a paper copy of the Information Circular from the Company, or from any intermediary, unless such Shareholder specifically requests one.
All Shareholders may call 1-877-441-4533 (toll-free) to obtain additional information relating to Notice-and-Access Provisions or to obtain a paper copy of the Information Circular, up to and including the date of the Meeting, including any adjournment of the Meeting.
Appointment of Proxyholders
Due to COVID-19 and the related restrictions on travel and public gatherings, the Company recommends that Shareholders use the procedures available to appoint a proxyholder to ensure their votes are cast and limit attendance at the Meeting. The individuals named in the form of proxy (the "Proxy") mailed to all Shareholders are directors and/or officers of the Company. If you are a Shareholder entitled to vote at the Meeting, you have the right to appoint a person or company other than the persons designated in the Proxy, who need not be a Shareholder, to attend and act for you and on your behalf at the Meeting. You may do so either by inserting the name of that other person in the blank space provided in the Proxy or by completing and delivering another suitable form of proxy. If your Common Shares are held in physical (i.e. paper) form and actually registered in your name, then you are a Registered Shareholder. However, if like most shareholders you keep your Common Shares in a brokerage account, then you are a Beneficial Shareholder and the manner for voting is different for Registered and Beneficial Shareholders, so you need to carefully read the instructions below.
Voting by Proxyholder
The persons named in the Proxy will vote or withhold from voting the Common Shares represented thereby in accordance with your instructions on any ballot that may be called for. If you specify a choice with respect to any matter to be acted upon, your Common Shares will be voted accordingly. The Proxy confers discretionary authority on the persons named therein with respect to:
(a) each matter or group of matters identified therein for which a choice is not specified,
(b) any amendment to or variation of any matter identified therein, and
(c) any other matter that properly comes before the Meeting.
In respect of a matter for which a choice is not specified in the Proxy, the persons named in the Proxy will vote the Common Shares represented by the Proxy as recommended by management of the Company. However, under NYSE American Exchange ("NYSE American") rules, a broker who has not received specific voting instructions from the Beneficial Owner may not vote the shares in its discretion on behalf of such Beneficial Owner on "non-routine" proposals, although such shares will be included in determining the presence of a quorum at the Meeting. Thus, such broker "non-votes" will not be considered votes "cast" for purposes of voting on the election of Directors or the approval of the Amended and Restated Shareholder Rights Plan. The resolution to approve the appointment of the Company's auditors, qualifies as a "routine" proposal that brokers may vote upon without having received specific voting instruction from the Beneficial Owner; any broker "non-votes" with respect to this matter will not be considered votes "cast" and therefore will have no effect on the vote with respect to the appointment of the auditors.
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Registered Shareholders
Registered Shareholders may wish to vote by proxy whether or not they are able to attend the Meeting in person. Registered Shareholders who choose to submit a proxy may do so using one of the following methods:
(a) complete, date and sign the enclosed form of proxy and return it to the Company's transfer agent, Computershare Investor Services Inc. ("Computershare"), by fax within North America at 1-866-249-7775, outside North America at (416) 263-9524, or by mail to the 8th Floor, 100 University Avenue, Toronto, Ontario, M5J 2Y1; or
(b) use a touch-tone phone to transmit voting choices to a toll free number. Registered Shareholders must follow the instructions of the voice response system and refer to the enclosed proxy form for the toll-free number and the Shareholder's 15 digit control number; or
(c) use the internet through Computershare's website at www.investorvote.com. Registered Shareholders must follow the instructions on Computershare's website and refer to the enclosed proxy form for the Shareholder's 15 digit control number.
In any case, the Registered Shareholder must ensure the Proxy is received by Computershare at least 48 hours (excluding Saturdays, Sundays and statutory holidays) before the Meeting or the adjournment thereof. At the Meeting the Chairperson may extend or waive the time limit for submission of proxies, at their discretion.
Beneficial Shareholders
The following information is of significant importance to shareholders who do not hold Common Shares in their own name. Many shareholders are "beneficial" shareholders because the Common Shares of the Company they own are not registered in their names but are instead registered in the name of the brokerage firm, bank or trust company through which they purchased their Common Shares. More particularly, a person is not a Registered Shareholder in respect of Common Shares which are held on behalf of that person but which are registered either: (a) in the name of an Intermediary that the Beneficial Shareholder deals with in respect of the Common Shares (Intermediaries include, among others, banks, trust companies, securities dealers or brokers and trustees or 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) of which the Intermediary is a participant. Beneficial Shareholders should note that the only proxies that can be recognized and acted upon at the Meeting are those deposited by Registered Shareholders (those whose names appear on the records of the Company as the registered holders of Common Shares) or as set out in the following disclosure.
If Common Shares are listed in an account statement provided to a Shareholder by a broker, then in almost all cases those Common Shares will not be registered in the Shareholder's name on the records of the Company. Such Common Shares will more likely be registered in the name of the Shareholder's broker or an Intermediary. The vast majority of such Common Shares are registered, in Canada, under the name of CDS & Co. (the registration name for The Canadian Depository for Securities Limited, which acts as nominee for many Canadian brokerage firms), and, in the United States, under the name of Cede & Co. as nominee for The Depository Trust Company (which acts as depository for many U.S. brokerage firms and custodian banks). In accordance with the requirements of NI 54-101, the Company distributes copies of the notice packages to the appropriate depository and intermediaries for onward distribution to Beneficial Shareholders. The Company does not send Proxy Materials or notice packages directly to Beneficial Shareholders. Intermediaries are required to forward the Proxy Materials or notice packages to all Beneficial Shareholders for whom they hold Common Shares unless such Beneficial Shareholders have waived the right to receive them. The Company has elected to pay for the delivery of Proxy Materials or notice packages to Objecting Beneficial Shareholders. Intermediaries often use service companies to forward the Proxy Materials to Beneficial Shareholders.
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Intermediaries are required to seek voting instructions from Beneficial Shareholders in advance of meetings of shareholders. Every intermediary has its own mailing procedures and provides its own return instructions to clients.
Beneficial Shareholders should follow the instructions of their intermediary carefully to ensure that their Common Shares are voted at the Meeting.
The form of VIF supplied to you by your broker will be similar to the Proxy provided to Registered Shareholders by the Company. However, its purpose is limited to instructing the intermediary on how to vote on behalf of the Beneficial Shareholder. Most brokers now delegate responsibility for obtaining instructions from clients to Broadridge Financial Solutions, Inc. ("Broadridge") in Canada and in the United States.
Broadridge typically mails a scannable VIF instead of a form of proxy. Beneficial Shareholders are asked to complete the VIF and return it to Broadridge by mail or facsimile. Alternatively, Beneficial Shareholders may call a toll-free number or go online to www.proxyvote.com to vote. Taseko may utilize the Broadridge QuickVoteTM service to assist Shareholders with voting their shares. Certain Beneficial Shareholders who have not objected to Taseko knowing who they are (non-objecting beneficial owners) may be contacted by Laurel Hill Advisory Group to conveniently obtain a vote directly over the phone.
The VIF will name the same persons as the Company's Proxy to represent you at the Meeting. You have the right to appoint a person (who need not be a Shareholder of the Company), different from those persons designated in the VIF, to represent you at the Meeting. To exercise this right, insert the name of the desired representative in the blank space provided in the VIF. The completed VIF must then be returned to Broadridge in accordance with the instructions set out in the VIF and this Information Circular. Once it has received all VIFs sent in, 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. If you receive a VIF from Broadridge, it must be completed and returned to Broadridge, in accordance with Broadridge's instructions, well in advance of the Meeting in order to: (a) have your Common Shares voted as per your instructions, or (b) to have any alternate representative chosen by you duly appointed to attend and vote your Common Shares at the Meeting.
Notice to Shareholders in the United States
The solicitation of proxies is not subject to the requirements of Section 14(a) of the U.S. Exchange Act by virtue of an exemption applicable to proxy solicitations by foreign private issuers as defined in Rule 3b-4 of the U.S. Exchange Act. Accordingly, this Information Circular has been prepared in accordance with applicable Canadian disclosure requirements. Residents of the United States should be aware that such requirements differ from those of the United States applicable to proxy statements under the U.S. Exchange Act.
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Any information concerning any properties and operations of the Company has been prepared in accordance with Canadian standards under applicable Canadian securities laws, and may not be comparable to similar information for United States companies.
Financial statements included or incorporated by reference herein have been prepared in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board, and are subject to auditing and auditor independence standards in Canada. Such consequences for the Company Shareholders who are resident in, or citizens of, the United States may not be described fully in this Information Circular.
The enforcement by Shareholders of civil liabilities under United States federal securities laws may be affected adversely by the fact that the Company is incorporated under the Business Corporations Act (British Columbia) (the "BCA"), as amended; that some or all of its directors and its executive officers are residents of a foreign country, and that the major assets of the Company are located outside the United States. Shareholders may not be able to sue a foreign company or its officers or directors in a foreign court for violations of United States federal securities laws. It may be difficult to compel a foreign company and its officers and directors to subject themselves to a judgment by a United States court.
Revocation of Proxies
In addition to revocation in any other manner permitted by law, a Registered Shareholder who has given a proxy may revoke it by:
(a) executing a proxy bearing a later date or by executing a valid notice of revocation, either of the foregoing to be executed by the Registered Shareholder or the Registered Shareholder's authorized attorney in writing or, if the shareholder is a corporation, under its corporate seal by an officer or attorney duly authorized, and by delivering the proxy bearing a later date to Computershare by fax within North America at 1-866-249-7775, outside North America at 1-416-263-9524, or by mail or by hand delivery at 8th Floor, 100 University Avenue, Toronto, Ontario, M5J 2Y1, at any time up to and including the last business day that precedes the day of the Meeting or, if the Meeting is adjourned, the last business day that precedes any reconvening thereof, or to the chairman of the Meeting on the day of the Meeting or any reconvening thereof, or in any other manner provided by law, or
(b) personally attending the Meeting and voting the Registered Shareholder's Common Shares, although due to COVID-19 this option is discouraged.
A revocation of a proxy will not affect a matter on which a vote is taken before the revocation.
Beneficial Shareholders who wish to change their vote must in sufficient time in advance of the Meeting, arrange for their respective Intermediaries to change their vote and, if necessary, revoke their proxy in accordance with revocation procedures set out above.
INTEREST OF CERTAIN PERSONS OR COMPANIES IN MATTERS TO BE ACTED UPON
Except as disclosed in this Information Circular, no director or executive officer of the Company, or any person who has held such a position since the beginning of the last completed financial year of the Company, nor any nominee for election as a director of the Company, nor any associate or affiliate of the foregoing persons, has any substantial or material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any binding matter to be acted on at the Meeting other than the election of directors and as may be set out herein.
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VOTING SECURITIES AND PRINCIPAL HOLDERS OF VOTING SECURITIES
The Common Shares of the Company are listed for trading on the Toronto Stock Exchange (the "TSX"), on the NYSE American (the "NYSE American") and on the London Stock Exchange (the "LSE"). The Board has fixed April 12, 2022 as the record date (the "Record Date") for determination of persons entitled to receive notice of the Meeting. Only Shareholders of record at the close of business on the Record Date who either attend the Meeting personally or complete, sign and deliver a Proxy in the manner and subject to the provisions described above will be entitled to vote or to have their Common Shares voted at the Meeting.
As of the Record Date, there were 286,301,919 Common Shares issued and outstanding, each carrying the right to one vote. No group of Shareholders has the right to elect a specified number of directors, nor is there cumulative or similar voting rights attached to the Common Shares.
The directors and executive officers of the Company do not know of any person or corporation beneficially owning, directly or indirectly, or exercising control or direction over, Common Shares carrying more than 10% of the voting rights attached to all outstanding Common of the Company as of the Record Date.
FINANCIAL STATEMENTS
The audited consolidated financial statements of the Company for the fiscal year ended December 31, 2021, the report of the auditor thereon and the annual management discussion and analysis will be placed before the Meeting. These documents have all been filed with the securities commissions or similar regulatory authorities in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador. Copies of the documents may be obtained by a Shareholder upon request without charge from Investor Relations, Taseko Mines Limited, Suite 1200 - 1040 West Georgia Street, Vancouver, British Columbia, V6E 4H1, telephone: 778-373-4533 or 1-877-441-4533. These documents have been filed and are available for review under the Company's SEDAR profile at www.sedar.com.
VOTES NECESSARY TO PASS RESOLUTIONS
A simple majority of affirmative votes cast at the Meeting is required to pass the resolutions described herein. With respect to the election of directors, the Board has determined, upon Shareholder approval, there will be eight director positions to be filled at the Meeting. If, as a result of nominations received in compliance with the Advance Notice Provisions (see "Advance Notice Provisions" below), there are more nominees for election as director than there are vacancies to fill, the eight nominees receiving the greatest number of votes will be elected. If the number of nominees for election is equal to the number of vacancies to be filled, all such nominees will be declared elected by acclamation. Subject to the majority vote policy described below, the eight nominees receiving the highest number of votes are elected, even if a director gets fewer "for" votes than "withhold" votes. Similarly, unless there is a nomination from the floor for an alternative auditor, the auditor proposed by Taseko management will be appointed.
ELECTION OF DIRECTORS
The size of the Board was last set at the Company's June 17, 2021 annual general meeting. Subsequently, pursuant to the BCA, the Board appointed a new director and, there are currently seven members of the Board. The Board has considered its size in light of the Company's goals and has determined that eight directors should be elected by the Shareholders. At the Meeting the Shareholders will be asked to approve an ordinary resolution to set the number of persons to be elected to the Board at eight.
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Of the director nominees listed below, seven are directors of Taseko, and the eighth nominee is proposed for election as a new director of the Company. All of the director nominees have agreed to stand for election. The term of office of each of the current directors will end at the conclusion of the Meeting. Unless a director's office is vacated earlier in accordance with provisions of the BCA, each director elected at the Meeting will hold office until the conclusion of the next annual general meeting of the Company or, if no director is then elected, until a successor is elected or appointed.
Majority Vote Policy
The Board has adopted a policy that if the votes "for" the election of a director nominee at a meeting of shareholders are fewer than the number voted "withhold", the nominee will submit his or her resignation promptly after the meeting for the consideration of the Nominating and Governance Committee. The Committee will make a recommendation to the Board after reviewing the matter, and the Board will then decide within 90 days after the date of the meeting of shareholders whether to accept or reject the resignation. The Board will accept the resignation absent exceptional circumstances. The Board's decision to accept or reject the resignation will be disclosed by way of a press release, a copy of which will be sent to the TSX. If the Board does not accept the resignation, the press release will fully state the reasons for the decision. The nominee will not participate in any Committee or Board deliberations whether to accept or reject the resignation. This policy does not apply in circumstances involving contested director elections.
Advance Notice Provisions
On June 6, 2013 amendments to the Company's Articles were adopted to include advance notice provisions (the "Advance Notice Provisions"). The Advance Notice Provisions provide shareholders, directors and management of the Company with a clear framework for nominating directors. Among other things, the Advance Notice Provisions fix a deadline by which holders of Common Shares must submit director nominations to the Company prior to any annual or special meeting of shareholders and sets forth the minimum information that a Shareholder must include in the notice to the Company for the notice to be in proper written form.
The Company has not received notice of a nomination in compliance with the Company's Articles, and, as such, any nominations other than nominations by or at the direction of the Board or an authorized officer of the Company will be disregarded at the Meeting.
Nominees for Election as Director
The following table sets out the names of the eight management nominees for election to the Board, the period of time during which each has been a director of the Company and the number of Common Shares of the Company beneficially owned by each, directly or indirectly, or over which each exercises control or direction. Please see Biographical Information below for all major offices and positions with the Company and any of its significant affiliates each director nominee now holds.
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| Nominee Position with the Company and Province or State and Country of Residence |
Period as a Director of the Company |
Common Shares Beneficially Owned or Controlled(1) |
| Anu Dhir(10)(11)(12) Director Ontario, Canada |
Since September 2017 | 16,500(2) |
| Robert A. Dickinson(12)(13) Director British Columbia, Canada |
Since January 1991 | 2,912,960(3) |
| Russell E. Hallbauer(13) Director British Columbia, Canada |
Since July 2005 | 3,758,666(4) |
| Rita Maguire Director Nominee Arizona, USA |
Director Nominee | 44,213(5) |
| Stuart McDonald President, CEO and a Director British Columbia, Canada |
Since September 2021 | 688,375(6) |
| Peter C. Mitchell(10)(11)(12) Director Florida, USA |
Since July, 2020 | 45,000(7) |
| Kenneth Pickering(11)(13) Director British Columbia, Canada |
Since December 2018 | 35,000(8) |
| Ronald W. Thiessen(10) Chairman of the Board and Director British Columbia, Canada |
Since October 1993 | 1,400,795(9) |
Notes:
(1) The information as to Common Shares beneficially owned or controlled is not within the knowledge of management of the Company. The share ownership information was supplied to the Company by insider reports available at www.sedi.ca as of April 12, 2022.
(2) Ms. Dhir also holds options to purchase 238,000 Common Shares and 282,450 deferred share units, details of which are disclosed in the Incentive Plan Awards table under Directors Compensation, see also "Statement of Executive Compensation"
(3) Of these Common Shares, 2,640,960 Common Shares are held indirectly by Mr. Dickinson in a RIF. Mr. Dickinson also holds options to purchase an aggregate of 138,000 Common Shares and he holds 566,450 deferred share units, details of which are disclosed in the Incentive Plan Awards table under Director Compensation, see also "Statement of Executive Compensation."
(4) Of these Common Shares 1,171,918 are held indirectly by Mr. Hallbauer, as an aggregate of 354,194 Common Shares are held by affiliates of Mr. Hallbauer and an aggregate of 817,724 Common Shares are held by companies over which Mr. Hallbauer exercises control. Mr. Hallbauer also holds, in aggregate, options to purchase 1,437,000 Common Shares and he holds 450,000 performance share units, and 26,450 deferred share units, details of which are disclosed in the Incentive Plan Awards table under NEO Compensation, see also "Statement of Executive Compensation."
(5) Ms. Maguire also holds options to purchase 156,000 Common Shares.
(6) Mr. McDonald also holds options to purchase 1,394,250 Common Shares and 717,500 performance share units, see also "Statement of Executive Compensation."
(7) Mr. Mitchell also holds options to purchase 89,333 Common Shares and 62,450 deferred share units, see also "Statement of Executive Compensation."
(8) Mr. Pickering also holds options to purchase 92,000 Common Shares and 238,450 deferred share units, details of which are disclosed in the Incentive Plan Awards table under Director Compensation, see also "Statement of Executive Compensation."
(9) Of these Common Shares, 163,600 Common Shares are held indirectly by Mr. Thiessen in an RRSP and 229,500 Common Shares are held by Mr. Thiessen, in trust, for an affiliate. Mr. Thiessen also holds options to purchase 208,000 Common Shares and he holds 781,660 deferred share units, details of which are disclosed in the Incentive Plan Awards table under Director Compensation, see also "Statement of Executive Compensation."
(10) Member of Audit and Risk Committee.
(11) Member of Compensation Committee.
(12) Member of Nominating and Governance Committee.
(13) Member of Environmental Health and Safety Committee.
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If all of the nominees for election to the Board are elected, the Board of Directors will consist of five independent directors - Anu Dhir, Robert Dickinson, Peter Mitchell, Kenneth Pickering and Ronald Thiessen - and three non-independent directors - Russell Hallbauer, Rita Maguire and Stuart McDonald.
Corporate Cease Trade Orders or Bankruptcies
Except as disclosed below, no proposed director:
(a) is, as at the date of this Information Circular, or has been, within 10 years before the date of this Information Circular, a director, chief executive office or chief financial officer of any company (including the Company), that,
(i) was subject to a cease trade order, or an order similar to a cease trade order, or an order that denied the relevant company access to any exemption under securities legislation (an "order") that was in effect 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 of any such company; or
(ii) was subject to an order 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; or
(b) is, as at the date of this Information Circular, or has been within 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
(c) has, within the 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.
As publicly disclosed at www.sedar.com, in September, 2012, Great Basin Gold Ltd. ("GBG") became bankrupt due to heavy indebtedness, mine production issues and falling gold prices. Mr. Ronald W. Thiessen and Ms. Anu Dhir were members of the board of directors of GBG in September 2012.
Penalties or Sanctions
None of the proposed directors have been subject to any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority, has entered into a settlement agreement with a securities regulatory authority or has been subject to any other penalties or sanctions imposed by a court or regulatory body that would be likely to be considered important to a reasonable securityholder making a decision about whether to vote for the proposed director.
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No Arrangements for Election
None of the director nominees proposed by management, are nominated under an arrangement or understanding between the director nominee and another person or company, except the members of the Board and management of the Company.
Biographical Information
The following information as to principal occupation, business or employment is not within the knowledge of the management of the Company and has been furnished by the respective nominees. Each nominee has held the same or a similar principal occupation with the organization indicated or a predecessor thereof for the last five years unless otherwise indicated.
Anu Dhir - Director
Ms. Anu Dhir is a co-founder and executive of ZinQ Mining, a private base metals and precious metals royalty company that focuses on the Latin America region. Ms. Dhir is also the Managing Director of Miniqs Limited, a private group primarily interested in developing resource projects. Prior to Miniqs and ZinQ Mining, Ms. Dhir was Vice President, Corporate Development and Company Secretary at Katanga Mining Limited. Ms. Dhir is currently a non-executive director of Lomiko Metals Inc. Ms. Dhir is a graduate of the General Management Program (GMP) at Harvard Business School, she has a law degree (Juris Doctor) from Quinnipiac University and a Bachelor of Arts from the University of Toronto.
Ms. Dhir is, or within the past five years, was a director of the following public companies:
| Company | Positions Held | From | To |
| Golden Star Resources | Director | February 2014 | January 2022 |
| Lomiko Metals Inc. | Director | December 2021 | Present |
| Taseko Mines Limited | Director | September 2017 | Present |
Robert A. Dickinson, B.Sc., M.Sc. - Director
Mr. Dickinson is an economic geologist who has been actively involved in mineral exploration and mine development for over 45 years and was inducted into the Canadian Mining Hall of Fame in 2012. He is Chairman of Hunter Dickinson Inc. ("HDI") and Hunter Dickinson Services Inc. ("HDSI") as well as a director and member of the management team of a number of public companies associated with HDSI. He is also President and Director of United Mineral Services Ltd., a private resources company.
Mr. Dickinson is, or was within the past five years, an officer and/or director of the following public companies:
| Company | Positions Held | From | To |
| Amarc Resources Ltd. | Director | April 1993 | Present |
| Chairman | September 2004 | Present | |
| Blackwolf Copper and Gold Ltd. | Director | November 2009 | August 2020 |
| Northcliff Resources Ltd. | Director | June 2011 | Present |
| Northern Dynasty Minerals Ltd. | Director | June 1994 | Present |
| Non-Executive Chairman | April 2004 | Present | |
| Quartz Mountain Resources Ltd. | Director | December 2003 | February 2019 |
| Chairman | November 2017 | February 2018 | |
| President and CEO | December 2017 | February 2019 | |
| Taseko Mines Limited | Director | January 1991 | Present |
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Russell E. Hallbauer, P. Eng. - Director
Mr. Hallbauer graduated from the Colorado School of Mines with a B.Sc. in Mining Engineering in 1979. He is a Registered Professional Engineer with the Association of Professional Engineers of British Columbia. He has been a member of the Canadian Institute of Mining and Metallurgy since 1975 and is a director and former chairman of the Mining Association of B.C. In 1983, he joined Teck Corporation's Bullmoose mine, advancing through Engineering and Supervisory positions to become Mine Superintendent in 1987, and in 1992, became General Manager of Quintette. In 1995, he assumed new responsibilities in Vancouver when he was appointed General Manager, Coal Operations, overseeing Teck's three operating coal mines in the Province. In 2002, he was appointed General Manager, Base Metal Joint Ventures, responsible for Teck Cominco's interests in Highland Valley Copper, Antamina in Peru, and Louvicourt in Quebec. Mr. Hallbauer is a director of HDSI (and HDI), a company providing management and administrative services to several publicly-traded companies, and focuses on directing corporate development and financing activities.
Mr. Hallbauer is, or was within the past five years, an officer and/or director of the following public companies:
| Company | Positions Held | From | To |
| Northern Dynasty Minerals Ltd. | Director | April 2008 | February 2016 |
| Taseko Mines Limited | Director | July 2005 | Present |
| CEO | July 2005 | June 2021 | |
| President | July 2005 | June 2019 |
Rita P. Maguire - Director Nominee
Rita Maguire is a practicing attorney in Phoenix, Arizona focusing her legal practice in the areas of water, environmental, mining and administrative law. Ms. Maguire represents both public and private clients in legal matters involving regulatory compliance and permitting, water management and conservation, environmental litigation, and land use planning. She has served as General Counsel for the Company's wholly owned subsidiary Florence Copper Inc. since 2014.
Ms. Maguire served as the founding President and CEO of the Arizona Center for Public Policy from 2002 until 2007, a nonpartisan public policy research center providing comprehensive and objective analysis of major policy issues in Arizona. Ms. Maguire served as Director of the Arizona Department of Water Resources from 1993 through 2001. During her tenure as Director, Ms. Maguire represented the state's interests in the Colorado River Basin, was a key figure in the development of the Arizona Water Bank Authority, and played a central role in Indian water rights negotiations in Arizona. As Deputy Chief of Staff for Governor Fife Symington from 1991 to 1993, Ms. Maguire oversaw the operation of ten Executive Branch agencies. She began her career with Conoco Inc., now Conoco-Phillips, in the International Crude Oil Trading Department at its headquarters in Houston, Texas.
Ms. Maguire holds three degrees from Arizona State University: a Juris Doctorate received in 1988, a Masters in Business Administration received in 1979, and a Bachelor of Science received in 1977. She was awarded an AV-Preeminent Rating by Martindale-Hubbell, and was awarded the Michael J. Brophy Distinguished Service Award by the Environmental Law and Natural Resources Section of the Arizona State Bar. In 2001, Ms. Maguire was awarded the Outstanding Alumnus of the Sandra Day O'Connor College of Law. Ms. Maguire is not, nor within the past five years has she been, an officer and/or director of any public companies.
Stuart McDonald, CPA, CA - President and CEO and Director
Mr. McDonald is a mining executive with over 25 years of experience in mining, corporate development, financial and management roles. He joined Taseko as Chief Financial Officer in 2013, was appointed President in June 2019, and CEO in July 2021. Prior to Taseko, he held a number of senior roles in the mining industry including CFO of Quadra FNX Mining Ltd. (and its predecessor Quadra Mining Ltd.), a mid-tier copper producer with five operating mines in Canada, Arizona, Nevada and Chile. He also held senior executive roles with Yukon Zinc Corp., and Cumberland Resources Ltd. prior to its acquisition by Agnico-Eagle Mines in 2007. Before joining the mining industry, he spent 10 years in public accounting with Deloitte & Touche and Ernst & Young. Mr. McDonald is a Chartered Professional Accountant and he holds a Bachelor of Commerce (Finance) degree from the University of British Columbia.
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Mr. McDonald is, or within the past five years was, an officer of the following public companies:
| Company | Positions Held | From | To |
| Taseko Mines Limited | Chief Financial Officer | September 2013 | June 2019 |
| Taseko Mines Limited | President | June 2019 | Present |
| Taseko Mines Limited | Chief Executive Officer | June 2021 | Present |
| Taseko Mines Limited | Director | September 2021 | Present |
Mr. Peter C. Mitchell, CPA, CA - Director
Mr. Mitchell is a Chartered Professional Accountant with over 35 years of senior financial management experience in both public and private equity sponsored companies. Most recently, he was Senior Vice President and Chief Financial Officer of Coeur Mining, Inc., a precious metals producer operating mines throughout North America. Peter joined Coeur in 2013 and was responsible for investor relations, financial planning and analysis, financial reporting, information technology, tax and compliance, in addition to serving as a key team member on the Company's acquisition and divestiture team as well as leading all capital markets activity in multiple equity and debt financings. Previously, he held executive leadership positions in finance and operations with a variety of U.S. and Canadian companies, among them Taseko Mines Limited, Vatterott Education Centers, Von Hoffmann Corporation and Crown Packaging Ltd. He is currently a member of the Board of Directors of Stabilis Solutions Inc., Montage Gold Corp. and Northcliff Resources Ltd. where he is also the Audit Committee Chair. He earned a BA in Economics from Western University and an MBA in Finance from the University of British Columbia.
Mr. Mitchell is or, within the past five years was, an officer and/or director of the following public companies:
| Company | Positions Held | From | To |
| Coeur Mining Inc. | Senior Vice President and Chief Financial Officer |
June 2013 | December 2018 |
| Northcliff Resources Ltd. | Director | June 2011 | Present |
| Montage Gold Corporation | Director | September 2019 | Present |
| Stabilis Solutions, Inc. | Director | July 2019 | Present |
| Taseko Mines Limited | Director | June 2020 | Present |
Kenneth W. Pickering, P. Eng. - Director
Mr. Pickering is a Professional Engineer and mining executive with 40 years of experience in a variety of capacities in the natural resources industry. He has led the development, construction and operation of world-class mining projects in Canada, Chile, Australia, Peru and the United States, focusing on operations, executive responsibilities and country accountabilities.
Mr. Pickering is, or was within the past five years, an officer and/or director of the following public companies:
| Company | Positions Held | From | To |
| Enaex Chile | Director | May 2011 | May 2018 |
| Endeavour Silver Corp. | Director | August 2012 | Present |
| Northern Dynasty Minerals Ltd. | Director | September 2013 | Present |
| Taseko Mines Limited | Director | December 2018 | Present |
| Teck Resources Limited | Director | March 2015 | Present |
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Ronald W. Thiessen, CPA, CA - Chairman of the Board and Director
Mr. Thiessen is a Chartered Professional Accountant with professional experience in finance, taxation, mergers, acquisitions and re-organizations. Since 1986, Mr. Thiessen has been involved in the acquisition and financing of mining and mineral exploration companies. Mr. Thiessen is a director of HDSI (and HDI), a company providing management and administrative services to several publicly-traded companies, and focuses on directing corporate development and financing activities.
Mr. Thiessen is or, within the past five years, was an officer and/or director of the following public companies:
| Company | Positions Held | From | To |
| Amarc Resources Ltd. | Director | September 1995 | February 2019 |
| Chief Executive Officer | September 2000 | February 2019 | |
| Northern Dynasty Minerals Ltd. | Director | November 1995 | Present |
| President and Chief Executive Officer | November 2001 | Present | |
| Quartz Mountain Resources Ltd. | Director | December 2011 | December 2017 |
| President and Chief Executive Officer | December 2011 | December 2017 | |
| Taseko Mines Limited | Director | October 1993 | Present |
| Board Chairman | March 2006 | Present |
Director Information Table
| INDEPENDENT DIRECTORS | ||||||||
| PLANNED COMMITTEE MEMBERSHIP |
Anu Dhir | Robert Dickinson |
Peter Mitchell |
Kenneth Pickering |
Ronald Thiessen |
Russell Hallbauer |
Stuart McDonald |
Rita Maguire |
| Audit & Risk Committee | √ | √ | √ | |||||
| Nominating & Governance Committee | √ | √ | √ | |||||
| Compensation Committee | √ | √ | √ | |||||
| Environmental, Health & Safety Committee | √ | √ | √ | |||||
| ADDITIONAL INFORMATION | ||||||||
| Director Since | 2017 | 1991 | 2020 | 2018 | 1993 | 2005 | 2021 | Nominee for 2022 AGM |
| 2021 "For" Votes (%) | 93.72 | 87.05 | 98.28 | 97.79 | 93.35 | 97.88 | N/A | N/A |
| Other Public Company Boards | 1 | 3 | 3 | 3 | 1 | Nil | Nil | Nil |
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APPOINTMENT OF AUDITOR
KPMG LLP, Chartered Accountants, of P.O. Box 10426, 777 Dunsmuir Street, Vancouver, British Columbia, V7Y 1K3 will be nominated at the Meeting for appointment as auditor of the Company, such appointment to be approved by ordinary resolution of the Shareholders. KPMG LLP has been auditor of the Company since November 19, 1999.
CORPORATE GOVERNANCE
Mandate of the Board of Directors
The Board has adopted a formal mandate as outlined in the Corporate Governance Policies and Procedures Manual (the "Governance Manual"), most recently amended by the Board on March 29, 2019, a copy of which is available on the Company's website. The Governance Manual mandates the Board to: (i) assume responsibility for the overall stewardship and development of the Company and monitor its business decisions, (ii) identify the principal risks and opportunities of the Company's business and ensure the implementation of appropriate systems to manage these risks, (iii) oversee ethical management and succession planning, including appointing, training and monitoring senior management and directors, and (iv) oversee the integrity of the Company's internal financial controls and management information systems. In addition, the Governance Manual has written charters for each of its four standing committees. Further, the Governance Manual encourages but does not require continuing education for its directors and it contains a code of ethics and policies dealing with issuance of news releases and disclosure documents, as well as share trading black-outs. The Governance Manual also provides director share ownership guidelines whereby an appropriate level of share ownership for each director represents a value which is equal to three times the base annual fees to be acquired over a period of not more than five years. A copy of the Governance Manual is available for review at the Company's website (www.tasekomines.com).
Composition of the Board of Directors
The applicable corporate governance policies require that the Board determine the status of each director as independent or not, based on each director's interest in, or other relationship with, the Company. The policies recommend that an exchange listed company's board of directors have a majority of directors who qualify as independent directors (as defined below). The Board should also examine its size with a view to determining the impact of the number of directors upon the effectiveness of the Board, and the Board should implement a system which enables an individual director to engage an outside advisor at the expense of the Company in appropriate circumstances. The Company's policies allow for retention of independent advisors for Board members when they consider it advisable.
Under securities regulations, an "independent" director is one who "has no direct or indirect material relationship" with the Company, which, in the view of the Board, could reasonably be expected to interfere with the exercise of a member's independent judgment. Generally speaking, a director is considered independent if he or she is free from any employment, business or other relationship. Other possible material relationships include, for example, having been (or having a family member who has been) within the last three years an employee or executive of the Company or having been employed by the Company's external auditor. An individual who, or whose family member, is or has been within the last three years, an executive officer of an entity, where any of the Company's current executive officers served at the same time on that entity's compensation committee, is deemed to have a material relationship, as is any individual who (or whose family members or partners) received directly or indirectly, any consulting, advisory, accounting or legal fee or investment banking compensation from the Company (other than compensation for acting as a director or as a part time chairman or vice-chairman).
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The Board is currently comprised of seven directors of whom five are determined by the Board to be "independent" directors: Ms. Dhir and Messrs. Dickinson, Mitchell, Pickering and Thiessen. The two non-independent directors are Stuart McDonald, who is also the current President and Chief Executive Officer and Russell Hallbauer who is the former Chief Executive Officer of the Company. Rita Maguire is also being put forth as a nominee for election as a director at the Meeting. Based on her position as a director of a material subsidiary of the Company, and her ongoing relationship as counsel to Florence Copper Inc., the Board has determined that Ms. Maguire will not be considered an independent director of the Company.
The Articles of the Company and Section 122(3) of the BCA permit the Board to appoint additional directors between annual meetings, to a maximum of 1/3 of the number of directors elected at the last annual general meeting. Accordingly, Stuart McDonald was appointed director of the Company by the then current Board members on September 15, 2021.
The Board has established a Nominating and Governance Committee (the "NGC") to formalize the process of ensuring the retention and recruitment of high caliber directors and proper director succession planning. The NGC currently consists of three independent directors: Anu Dhir (Chair), Robert Dickinson and Peter Mitchell. The NGC recommends to the Board the nominees for election as director at the Meeting.
The Board meetings regularly include reviews of the effectiveness of senior management. The Board is of the view that its communication policy among senior management, Board members and shareholders who make enquiries is good. The Board has also established a practice of holding private meetings of the independent directors without non-independent directors and management present following regularly scheduled Board meetings. The number of these meetings has not been recorded but it would be less than five in the financial year ended December 31, 2021. The Board expects and encourages independent directors to bring up issues and concerns that they may have.
The Board believes that adequate structures and processes are in place to facilitate the functioning of the Board with a sufficient level of independence from the Company's management. The Board is satisfied with the integrity of the Company's internal control and financial management information systems.
Committees of the Board of Directors
Corporate governance policies require that (i) the audit committee of every board of directors must be composed only of independent directors, and the role of the audit committee must be specifically defined and include the responsibility for overseeing management's system of internal controls, (ii) the audit committee have direct access to the company's external auditor, and suggest that (iii) the compensation committee and the nominating and governance committee of the board of directors of a listed company be composed of all independent directors, and that other committees, generally be composed of at least a majority of independent directors, and (iv) every board of directors expressly assume responsibility, or assign to a committee of directors responsibility, for development of the company's approach to governance issues.
As well as an Audit and Risk Committee, the Board also has a Compensation Committee, a Nominating and Governance Committee and an Environmental, Health and Safety Committee. The members of the Audit and Risk Committee are Peter Mitchell (Chair), Anu Dhir and Ronald Thiessen, all of whom are independent directors. For further information concerning the Audit and Risk Committee, please see pages 99-101 and Appendix A of the Company's Annual Information Form filed under the Company's SEDAR profile on March 31, 2022.
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Compensation Committee
The Board has established a Compensation Committee to assist the Board in carrying out its responsibilities relating to executive and director compensation, as well as the fiduciary oversight of the Company's non-executive employee compensation plans. The Compensation Committee performs all duties relating to this mandate, including the annual review and recommendation to the Board on various forms of compensation and related program considerations, including director's pay for service on the Board and on other committees. The Compensation Committee is also responsible for the grant of stock options and other equity based compensation, evaluation of the performance of Officers and the review of succession plans with the Chairman and Chief Executive Officer. The Compensation Committee also recommends to the NGC the qualifications and criteria for membership on the Compensation Committee.
The Compensation Committee is currently composed of Kenneth Pickering (Chair), Peter Mitchell and Anu Dhir, all of whom are independent directors. During the year ended December 31, 2021, the committee met four times. As a result of their education and experience, each member of the Compensation Committee has familiarity with, an understanding of, or experience in compensation-related matters for Officer and non-Officer personnel as well as the administration of equity-based compensation. Specifically:
• Mr. Pickering (Chair of the Compensation Committee) is a professional engineer and mining executive with 45 years' experience in the natural resources industry, building and operating major mining operations in Canada, Chile, Australia, Peru and the US. Mr. Pickering is currently an international mining operations and project development private consultant. Prior to this role he held a number of senior positions worldwide over a 39 year career with BHP Billiton Base Metals including President of Minera Escondida Ltda. He is a graduate of the University of British Columbia (BASc) and AMP Harvard Business School.
• Ms. Dhir has a unique combination of business, operations and legal experience in the mining, oil and gas and technology sectors, and has held directorships with a number of different public companies.
• Mr. Peter Mitchell is a Chartered Professional Accountant with over 35 years of senior financial management experience in both public and private equity sponsored companies. Most recently he was the Senior Vice President and Chief Financial Officer of Coeur Mining, Inc. in Chicago, Illinois until December 31, 2018. Previously he held executive positions in finance and operations with a variety of US and Canadian companies, among them Taseko Mines Limited, Crown Packaging Ltd. and Von Hoffmann Corporation.
See disclosure under "Election of Directors - Biographical Information" for relevant education and experience of members of the Compensation Committee.
The Compensation Committee charter is included in the Governance Manual, and is available for viewing at the Company's website at www.tasekomines.com.
Nominating and Governance Committee
The NGC charter is included in the Governance Manual and is available for viewing at the Company's website at www.tasekomines.com.
The NGC is given the responsibility of developing and making recommendations to the Board concerning the Company's approach to corporate governance. The NGC also assists members of the Board in carrying out their duties, and reviews with the Board the rules and policies applicable to governance of the Company to ensure the Company remains in full compliance with proper governance practices and that the Governance Manual is routinely updated.
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The nominating function of the NGC is to evaluate and recommend to the Board the size of the Board and certain persons as nominees for the position of director of the Company. However, the NGC does not set specific minimum qualifications for director positions. Instead, the NGC believes that nominations for election or re-election to the Board should be based on the Company's needs after taking into account the current composition of the Board. When evaluating candidates annually for nomination for election, the NGC considers each individual's skills, the overall diversity needs of the Board (skills mix, age profiles, gender, and work and life experience) and independence and time availability. The NGC seeks to achieve for the Board a balance of industry and business knowledge and experience, including expertise in the mining industry, in regulatory and public policy issues, in management and operations and in transactional situations as well as independence, financial expertise, public company experience, sound judgment and reputation.
Board Diversity
The NGC takes the view that a diverse Board offers depth of perspective and enhances Board operations. The NGC strives to identify the candidates with the ability to strengthen the Board. The NGC does not specifically define diversity, but considers diversity of experience, education, gender, and ethnicity as part of its overall annual evaluation of director nominees.
The Board appreciates that women have been under-represented on Canadian boards, and the Company believes that enhancing gender diversity will strengthen the Board. When assessing Board composition or identifying suitable candidates for appointment or election to the Board, the Company will consider candidates against objective criteria having due regard to the benefits of diversity and the needs of the Board. Currently, there is one female director on the Board. A second, highly qualified female has been put forward as a nominee for election as a director at the Meeting.
The Company has adopted an express policy specifically addressing diversity. The Company's Board Diversity Policy is contained in the Governance Manual posted on the Company's website and is available for viewing at www.tasekomines.com.
Director Term Limits
The Company has not set mandatory age or term limits for its directors or senior officers as it focuses on measurable performance rather than employing arbitrary age thresholds.
The Company's code of ethics as set out in the Governance Manual, provides a framework for undertaking ethical conduct in employment. Under its Code of Ethics, the Company will not tolerate any form of discrimination or harassment in the workplace. The Company also has whistleblower policies to monitor these issues.
The Company also has formal procedures and whistleblower policies for assessing the effectiveness of Board committees as well as the Board as a whole. This function is carried out annually by/or under supervision of the NGC and those evaluations and assessments are then provided to the Board.
Environmental, Health and Safety Committee
The Board has established an Environmental, Health and Safety Committee consisting of Kenneth Pickering (Chair), Robert A. Dickinson and Russell Hallbauer. The Environmental, Health and Safety Committee Charter is included in the Governance Manual and is available for viewing at the Company's website at www.tasekomines.com. The Environmental, Health and Safety Committee reviews and monitors environmental, health and safety issues relevant to the Company.
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Board Determines Responsibilities of Senior Officer and Board Positions
Good governance policies require the board of directors of a listed company, together with its chief executive officer, to develop position descriptions for the chair of each Board committee, for the Chairman of the Board, and for the chief executive officer, including the definition of limits to management's responsibilities. Any responsibility, which is not delegated to senior management or to a Committee of the Board remains with the full Board. The Board has approved written position descriptions for the Chairman of the Board and the Chairperson of each Board Committee.
The Board generally requires that all material transactions (including those in excess of $5 million) receive prior Board approval. In this regard, virtually all financing transactions are considered material to the Company. Any property acquisitions and significant exploration programs in excess of $5 million must also receive approval of the plenary Board or a duly authorized Board Committee. The Governance Manual includes provisions that deal with these and other related items.
Governance Policies for Board of Directors and Directors' Attendance at Meetings
Good governance policies require that (i) the board of directors of every listed company implement a process for assessing the effectiveness of the board of directors and the committees of the board and the contribution of individual directors, (ii) every company provide an orientation and education program for new directors, and (iii) the board of every listed company review the adequacy and form of compensation of directors and ensure that the compensation realistically reflects the responsibilities and risks involved in being an effective director.
As noted above, the NGC has developed a formal procedure for assessing and evaluating effectiveness of committees as well as the Board as a whole and is of the view that the Board operates in an effective and legally compliant manner. This function is carried out annually.
The following table sets forth the record of attendance of Board and committee meetings by the Directors for the fiscal year ended December 31, 2021:
| Director | Board Meetings |
Audit and Risk Committee |
Nominating and Governance Committee |
Compensation Committee |
Environmental Health and Safety Committee(2) |
| Anu Dhir | 4 of 4 | 4 of 4 | 3 of 3 | 4 of 4 | N/A |
| Robert A. Dickinson | 4 of 4 | N/A | 3 of 3 | N/A | Nil |
| Russell E. Hallbauer | 4 of 4 | N/A | N/A | N/A | Nil |
| Stuart McDonald(1) | 1 of 1 | N/A | N/A | N/A | N/A |
| Peter Mitchell | 4 of 4 | 4 of 4 | 3 of 3 | 4 of 4 | N/A |
| Kenneth Pickering | 4 of 4 | N/A | N/A | 4 of 4 | Nil |
| Ronald W. Thiessen | 4 of 4 | 4 of 4 | N/A | N/A | N/A |
Notes:
(1) Stuart McDonald was appointed as a director on September 15, 2021. One Board meeting was held thereafter.
(2) While no meetings of the Environmental, Health and Safety Committee took place, the Committee and in particular Mr. Pickering, the Chair, did actively monitor and oversee the Company's environmental, health and safety performance in 2021.
Other Directorships
See "Biographical Information" under "Election of Directors" above in this Information Circular for details of other reporting issuers of which each director is currently a director or officer.
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Orientation and Continuing Education
When new directors are appointed, they receive orientation, commensurate with their previous experience, on the Company's properties, business, technology and industry and on the responsibilities of directors. Board meetings also include presentations by the Company's management and employees to give the directors additional insight into the Company's business.
Ethical Business Conduct
The Board has adopted what it considers a "best practices" ethical conduct policy, which is included in the Governance Manual and is available on the Company's website. The Board has implemented an annual procedure whereby directors, senior officers and department heads within the Company sign off on, and certify that they have read and understand the Company's Code of Ethics and that they are unaware of any violations thereof. Each department head would ensure that the Code of Ethics is complied with within his or her department.
Shareholder Engagement
The Board believes that regular and constructive engagement between the Board and the Company's shareholders on governance matters is of primary importance. Accordingly, the Board has adopted a Policy on Engagement with Shareholders on Governance Matters reflecting the foregoing, a copy of which is attached as Appendix 12 to the Manual and is available for viewing at the Company's website at www.tasekomines.com.
Say-on-Pay Policy
As part of its shareholder engagement efforts, the Company has included provisions in its Governance Manual, a copy of which is available on the Company's website, that provide for:
• a "Say-on-Pay" advisory vote at each annual meeting. See "Particulars of Matters to be Acted Upon - Advisory Resolution on the Company's Approach to Executive Compensation (Say-on-Pay)"; and
• a Say-on-Pay Policy.
The Board believes that Shareholders should have the opportunity to not only fully understand the objectives, philosophies and principles the Board has used in its approach to executive compensation decisions but to also have an annual advisory vote on such approach to executive compensation. The purpose of the Say-on-Pay advisory vote is to provide appropriate director accountability to the Shareholders for the Board's compensation decisions. The vote will be an advisory vote and the directors will remain fully responsible for their compensation decisions and will not be relieved of those responsibilities by a positive advisory vote.
A full copy of the Company's Say-on-Pay Policy is included in Appendix 11 to the Governance Manual, on the Company's website at www.tasekomines.com.
See "Particulars of Matters to be Acted Upon" for more information on the Say-on-Pay Policy.
Environmental, Social and Governance Report
ESG Oversight
The Company's commitment to environmental, social, and governance ("ESG") principles starts at the Board level. Our Board of Directors is responsible for overseeing overall management and integration of ESG matters throughout the Company. This includes overseeing sustainability strategies and monitoring the practices of the Company relating to health and safety, the environment, community and indigenous relations, and corporate governance. The Board's goal is to ensure we operate as a sustainable business, optimizing financial returns while effectively managing risk. ESG governance, risk oversight and disclosure are regular topics of discussion at Board and Committee meetings.
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ESG is a cross-functional discipline encompassing a wide range of issues, and thus different aspects of our ESG performance fall under each of our Board Committees and management. The Board and its Committees work together with management to identify ESG issues most pertinent to the Company's business and its key stakeholders, and to help develop the policies and processes to integrate ESG into the Company's long-term strategy and risk management responsibilities.
Oversight of governance-related principles, policies and programs and compliance with the Code of Conduct is the responsibility of the Nominating and Governance Committee, which is also responsible for ensuring that the Board consists of persons with sufficiently diverse and independent backgrounds. In addition to oversight responsibility for the Company's annual financial statements and audits, the Audit and Risk Committee ensures that financial risks, compliance matters and any transactions between the Company and related parties are properly managed and addressed. The Compensation Committee oversees the goals and objectives associated with the Company's compensation programs and oversight of the annual corporate goals and objectives under incentive compensation plans. The Environmental, Health and Safety Committee is responsible for, among other things, overseeing the Company's key environmental policies and monitoring the employee health and safety policies.
Furthermore, management regularly reports to the Board on issues related to stakeholder engagement, particularly with respect to relationships with local communities and Indigenous peoples
The Company's approach to ESG reporting continues to grow and evolve in line with the needs, demands and expectations of its shareholders, regulators and stakeholders. In 2021, Taseko management conducted a comprehensive review of the Company's ESG approach and reporting methodology, evaluating both industry-wide best practices and the evolving landscape of related institutions and reporting frameworks. The findings of this comprehensive review were presented to the Board of Directors, along with a series of recommendations to guide the Company's ESG approach in 2022 and beyond. The Board of Directors adopted the following recommendations as a result of the review:
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to report Taseko's 2021 ESG/sustainability performance against the Sustainability Accounting Standards Board's (SASB) 'Disclosure Topics for Metals & Mining';
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to set and disclose long-term measurable corporate goals and targets across key ESG components; and,
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to incrementally integrate sustainability and ESG considerations into the Company's operational and business planning, by incorporating sustainability goals, targets and performance measures into our business strategy and systems.
As the Company advances toward the construction and commercial operation of its Florence Copper project in Arizona, Taseko's annual ESG report will expand to consider enterprise-wide sustainability performance. Given the unique attributes of the 'in-situ copper recovery' (ISCR) process to be employed at Florence, the Company expects substantial enhancements to its enterprise-wide performance against key environmental and social criteria.
Florence is expected to be among the world's greenest copper producers, with water, energy and carbon intensity per unit of production forecast to be 93%, 71% and 83% lower (respectively) than conventional open-pit copper mines. It is also expected to support ~800 well-paid jobs in the State of Arizona, while generating hundreds of millions of dollars in state and local taxes, among other economic and social benefits, over a 21-year mine life.
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ESG Report
On May 11, 2020, the Company announced that it had published its first Environmental, Social and Governance Report, titled "Our Contribution to Society". The report is an examination of the Company's sustainable performance, with specific details for 2017, 2018 and 2019. The Company has now published its 2021 report entitled "Sustainability, Our Low Carbon Future: Environment, Social and Governance Report, April, 2021".
The reports can be viewed and downloaded at www.tasekomines.com/our-contribution.
COMPENSATION DISCUSSION & ANALYSIS
Compensation Philosophy and Objectives
Our executive compensation program is designed to achieve the following objectives:
| 1. Attract and retain talented and highly-qualified executives with the skills and experience to effectively execute the Company's business plan. | The compensation program is structured to be competitive against mining companies of similar size and similar geographical and operational scope and complexity, to ensure that total compensation opportunity is sufficient to attract and retain qualified executives. |
| 2. Motivate superior short- and long-term corporate and individual performance. | While the total compensation opportunity provided by our program is competitive, the large percentage of each executive's compensation package that is variable (or 'at risk' - see pay mix exhibits below) ensures that actual compensation received is contingent upon the achievement of various short-term and long-term targets and milestones that are linked to the Company's operational and strategic objectives. |
| 3. Align the interests of executives with those of Shareholders | Short-term cash incentives within the compensation program are tied to objectives within the Company's strategic plan and therefore aligned with the longer-term interests of shareholders. The large percentage of each executive's compensation package that is delivered via long-term, equity-based awards - as well as our share ownership requirements - ensures that a large component of our executive's compensation is directly aligned over the medium- and longer-term with the Company's Shareholders. |
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NEO Target Pay Mix
|
|
 |
COMPENSATION GOVERNANCE AND RISK MANAGEMENT
The Compensation Committee incorporates risk management principles into its decision-making processes surrounding executive compensation and periodically conducts reviews to consider whether the Company's compensation policies encourage risk taking by the Company. In considering the risks associated with the Company's compensation policies and practices, the nature of the Company's business, and the roles of the Board in overseeing the Company's strategic direction and the Compensation Committee in overseeing the Company's executive compensation program in relation to that strategic direction, the Compensation Committee has concluded that the risks inherent in the Company's compensation policies and practices are unlikely to have a materially adverse effect on the Company. The following table summarizes our compensation governance and risk management practices with detailed descriptions following.
| What We Do |
| Benchmark to industry peers. We benchmark executive and director compensation levels against a group of mining industry peers of similar size and complexity to ensure compensation is fair and competitive with the market. |
| We target compensation near market median. The Compensation Committee targets executive compensation near the median levels of our peer group, for target levels of performance. |
| We align executive and shareholder interests. Executives and directors are required to own Common Shares of the Company to align interests with those of our shareholders. In addition to our Share Ownership Policy, a significant component (~40%) of each executive's compensation is delivered by way of long-term, equity-based incentives. Performance Share Units, which require the achievement of multiple performance hurdles prior to vesting with the executive, comprise roughly half of our executives' equity incentive awards. |
| Pay for Performance. A significant portion (70%) of our CEO's 2021 total direct compensation is at-risk (subject to short- and long-term performance conditions) while between 55% and 60% of our other executives' pay is at-risk, highlighting the correlation between pay and performance. |
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| What We Do |
| Cap the value of incentive payouts. Payouts under the Annual Performance Incentive cannot exceed 150% of target thereby mitigating the risk of excessive risk taking or unsustainable operational or financial performance to achieve windfall annual incentive awards and also ensure preservation of the Company’s capital. |
| Use informed judgement. The Compensation Committee and the Board retain discretion to adjust individual performance objectives during the year to ensure they remain aligned with the evolving priorities of the Company in light of developments during the year. Discretion may also be exercised to increase or decrease payout levels under the API program following a holistic assessment of the Company's performance, ensuring appropriate pay-for-performance alignment and providing the flexibility to make reasonable exceptions when necessary. |
| Have a compensation clawback policy. The Board can recoup incentive payments made to company executives where such incentives were awarded or earned based on results that were subsequently restated or in the case of material misconduct or substantial error. |
| Retain an independent compensation advisor. The Compensation Committee retains its own independent compensation advisor with the skills and experience to advise on all matters within the Committee's mandate and to ensure Committee members stay current with evolving market practices and stakeholder guidance. |
| Provide shareholders with a 'Say-on-Pay'. We conduct an advisory vote at each annual meeting. |
| What We Don't Do |
| x Benchmark compensation every year. While important to ensure our compensation programs remain fair and competitive with the market, benchmarking compensation annually, or in the absence of structural change may artificially escalate compensation levels. |
| x Re-price. We do not re-price or otherwise exchange equity incentives when previously-granted awards lose value. |
| x Allow hedging of Taseko securities by executives or directors. |
| x No granting of loans to executives or directors |
Hedging Policy
The Company has a restriction on executive officers and directors regarding the hedging of the Company's share price through the use of financial instruments (for example, but not limited to: prepaid variable forward contracts, equity swaps, collars, or units of exchange funds) that may hedge or offset a change in market value of company securities held, directly or indirectly, by the officer or director. To the Company's knowledge, no officer or director, directly or indirectly, employed a strategy to hedge or offset a decrease in market value of stock options granted as compensation or equity securities held during the year ended December 31, 2021.
Compensation Clawback Policy
The Board has approved a compensation clawback policy that will require employees, officers and directors to reimburse, in all appropriate cases, any bonus, short-term incentive award or amount, or long-term incentive award or amount awarded to the employee, officer or director and any non-vested equity based awards previously granted to the employee, officer or director (collectively "Incentive Compensation") if:
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(a) the amount of the Incentive Compensation was calculated based upon the achievement of certain financial results that were subsequently, during the previous three-year period, the subject of a material restatement or the correction of a material error;
(b) the employee, officer or director engaged in intentional misconduct that caused or partially caused the need for the material restatement or caused or partially caused the material error; and
(c) the amount of the Incentive Compensation that would have been awarded to the employee, officer or director, if the financial results had been properly reported and amount actually awarded would have been lower.
Executive Share Ownership Policy
The Board has approved share ownership targets for the Company's executive officers as follows:
| Participant | Target Ownership Level |
| CEO | 3 times base salary |
| Other Executive Officers upon recommendation by the CEO, as approved by the Compensation Committee |
1 times base salary |
| Other Executives, as determined by the CEO |
0.5 times base salary. |
Common Shares, and any other fully vested share awards (excluding options, share appreciation rights and similar leveraged awards) and 50% of PSUs are counted towards share ownership requirements. For purposes of this policy, Common Shares, vested share awards and PSUs held by executives are valued at the higher of value at the time of award or acquisition and current market value.
Executives must retain their Common Shares, and invest 50% of the after-tax value of PSU redemptions and option exercises in Common Shares until the target ownership level is met.
Executive officers are expected to fulfill their ownership requirements within five years of becoming subject to the share ownership policy.
External Advice
In each of fiscal 2021 and 2020, the Compensation Committee engaged Lane Caputo Compensation Inc. ("Lane Caputo") to provide independent, third party compensation advice regarding appropriate compensation levels and practices for the company's senior executive team (including the Named Executive Officers (NEOs) and directors, the review of key performance indicators and performance multipliers under the Company's API and PSU Plan and to assist and advise on succession planning activities for key senior management. The following table discloses fees paid to Lane Caputo for such services.
| Activity | 2021 | 2020 |
| Executive & Board Compensation Consulting Fees | $71,290 | $50,853 |
| All Other Fees | Nil | Nil |
| TOTAL FEES | $71,290 | $50,853 |
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Benchmarking
In order to benchmark the compensation arrangements of Taseko's executive team during its 2021 review of executive compensation, Lane Caputo developed a peer group of publicly-traded mining companies with similar operations and in similar stages of development (i.e. all with at least one producing mine and other projects in various stages of development). Special attention was paid to those companies mining base metals and who had their common shares listed on both the TSX and the NYSE American stock exchange. This peer group, (the "Compensation Peer Group"), is revisited from time to time by both Lane Caputo and the Compensation Committee to ensure continued comparability to Taseko.
The Compensation Peer Group used for the review of the Company's compensation arrangements in 2021, was comprised of the following 14 companies:
- Argonaut Gold
- Ero Copper Corp.
- Torex Gold Resources Inc.
- Aurelia Metals Ltd.
- Hudbay Minerals Inc.
- Trevali Mining Corp.
- Capstone Copper Corp.
- Imperial Metals Corp.
- Victoria Gold Corp.
- Copper Mountain Mining
- Sandfire Resources Ltd.
- Wesdome Gold Mines Ltd.
- Endeavour Silver Corp.
- Sherritt International Corp.
The following exhibit illustrates Taseko's relative positioning in respect of market capitalization, enterprise value and revenues versus the Compensation Peer Group.
| Peer Group Statistics | Annual Revenue |
Market Capitalization |
Enterprise Value |
| 25th Percentile | $286,293,658 | $529,714,503 | $509,210,648 |
| 50th Percentile | $480,649,580 | $902,285,275 | $926,262,475 |
| 75th Percentile | $770,610,273 | $1,705,031,580 | $1,638,754,215 |
| Taseko Mines Ltd. | $433,278,000 | $738,286,100 | $1,036,290,100 |
The Compensation Committee believes that these companies are appropriate for benchmarking executive compensation because Taseko competes with these companies for executive talent. However, many of these peers may not be appropriate for other purposes, such as comparing share price performance given that Taseko's Common Share price is closely tied to the price of copper while many of the above peers are tied to precious metals prices. In order to benchmark share price performance for the purposes of that component of the API that relates to Relative Total Shareholder Return ("RTSR") and the vesting of the Company's PSUs, the vesting of which is also linked to RTSR, Taseko utilizes a peer group of base metals producers against which the Company competes for investment dollars (the "Performance Peer Group") - please see "2021 Performance Share Unit Awards" below for more information regarding the Performance Peer Group.
Elements of Compensation
The philosophy and objectives of the compensation program are delivered via the following elements of compensation.
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|
Compensation |
Form of |
Purpose of Element |
Determination |
|
Base Salary |
Cash |
Forms a baseline level of compensation for role fulfillment commensurate with the experience, skills and market demand for the executive role and/or incumbent. |
Executives are paid salaries commensurate with those offered by companies in our Compensation Peer Group, with base salaries targeted at the median values of this peer group. In determining the salary levels of the executives, the Compensation Committee also considers each incumbent's experience in the role, internal relativity and individual performance. |
|
Annual Performance Incentive ("API") |
Cash |
To recognize short-term (typically annual) efforts and milestone achievement that are aligned with the long-term success of the Company. |
The executive officers of the Company have an opportunity to earn annual performance incentive compensation based on corporate and individual performance within the context of the overall performance of the Company. The API provides for cash payments when pre-determined corporate and individual objectives are met or exceeded. While the elements that comprise the corporate component of the Annual Performance Incentive are the same for each senior executive officer, the individual component contains elements that are relevant and pertain directly to the specific role and responsibilities of each senior executive officer. The range of payment under the API for individual and corporate performance in the year is from 0% - 150% of each executive's target incentive level. |
|
Share Option Plan ("Option Plan") |
Common Shares |
The Option Plan is designed to promote the long-term success of the Company by strengthening the ability of the Company to attract and retain highly competent employees and promoting greater alignment of interests between executives and Shareholders in the creation of long-term shareholder value. |
Under the Company's Option Plan, grants of Options are typically made upon the commencement of an executive's employment with the Company and on an annual basis thereafter at the discretion of the Board. Grants of options are determined by the individual's level in the Company, contribution to corporate performance and the overall competitiveness of the executive compensation package. The Board determines the exercise price of Options at the time of grant, provided that the exercise price may not be lower than the market price at the time of grant. The Board also has the discretion to determine the term of Options, which is not to exceed 5 years |
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|
Compensation |
Form of |
Purpose of Element |
Determination |
|
Performance Share Unit Plan ("PSU Plan") |
Common Shares or cash |
Designed to motivate and reward executives to excel against specific operational, financial, strategic and shareholder return targets, often on a relative basis versus relevant indices or peer groups, over successive three-year performance cycles. |
Under the PSU Plan, each PSU awarded conditionally entitles the participant to receive one (1) Common Share (or the cash equivalent) upon attaining PSU vesting criteria over a performance period (typically three years). PSUs may, or may not, vest based on performance against pre-established targets or milestones set at the beginning of each performance period. The number actually vesting will be in a range of 0-250% of the number awarded, based on the Compensation Committee's determination of actual performance against these pre-established targets and milestones. The number of PSUs, in conjunction with the number of Options awarded on an annual basis, is determined by the Compensation Committee annually, based upon the overall competitiveness of the compensation program versus peers, the number of outstanding awards on both an individual and aggregate basis and with an eye to the combined dilutive effect to Shareholders of both outstanding and planned employee equity incentive awards. |
2021 Compensation Decisions
2021 Annual Performance Incentive Plan
The following target incentive levels and weightings were used in 2021 in determining the API payments for the Company's NEOs.
Executive Officer |
2021 Target Incentive (% of Salary) |
WEIGHTINGS BY COMPONENT | |
| Corporate Goals | Individual Goals | ||
| Stuart McDonald | 100% | 80% | 20% |
| Richard Tremblay | 50% | 60% | 40% |
| Bryce Hamming | 50% | 60% | 40% |
| Robert Rotzinger | 40% | 50% | 50% |
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The following table provides an overview of the 2021 corporate goals, and performance against those goals, for the purposes of the API. As the table below shows, operational and financial goals were slightly below target, and the Florence project construction decision was deferred due to delays in receiving final project permits. However, ESG performance was at, or above target for 2021 and importantly Taseko's Total Shareholder Return in 2021 was 64%, positioning share price performance at the 71st percentile of the Performance Peer Group.
| Metric | Measurement | 2021 Goal | 2021 Actual | Weighting | Achievement (% of Target) |
| Operational | Annual copper production vs. forecast | 119 million lbs | 112 million lbs | 20% | 85% |
| Financial | All-In Sustaining costs (AISC) vs. forecast (normalized for Forex) | $2.46/lb | $2.64/lb | 20% | 75% |
| Environment, Social & Governance | Annual safety performance (MA/LTI frequency) |
3.0 | 3.06 | 10% | 100% |
| Major spills and non-compliant events | 2.0 | 0 | 10% | 150% | |
| Project Development | Positive production decision for Florence commercial facility | Q4 2021 | Deferred | 20% | 50% |
| Shareholder | Relative Total Shareholder Return(1) | 50th Percentile | 71st Percentile | 20% | 142% |
Note:
(1) Relative to Performance Peer Group.
After reviewing the actual performance for 2021 versus the corporate performance goals set at the beginning of the fiscal year, the Compensation Committee determined that a final score of 95.4% of target was attributable to the corporate component of the API calculations.
Individual Performance Goals
The following tables provide an overview of the individual performance goals for each NEO for the 2021 fiscal year. All goals had target and threshold completion dates within the 2021 calendar year, which were then used, in part, by the Compensation Committee to determine the level of achievement of each goal.
| Stuart McDonald President & Chief Executive Officer |
As CEO, Mr. McDonald is responsible for our overall executive leadership and together with the Board develops the Company's strategic plan and implements it. This includes overall responsibility for operating and growing the business while managing risk to create long-term sustainable shareholder value. | |
| Measurement | Weighting | |
|
33% | |
|
33% | |
|
33% | |
- 30 -
| Bryce Hamming Chief Financial Officer |
As CFO, Mr. Hamming is responsible for periodic financial reporting, managing working capital requirements and completing financings, managing the financial risks of the Company, financial forecasting and maintenance of internal controls. | |
| Measurement | Weighting | |
|
33.3% | |
|
33.3% | |
|
33.3% | |
| Richard Tremblay Senior Vice President, Operations |
As Senior Vice President, Operations, Mr. Tremblay is responsible for all activities related to the operation of the Company's Gibraltar Mine and Florence Copper Project, as well as engineering and technical services, and all environmental permitting initiatives for the Company's development projects. | |
| Measurement | Weighting | |
|
25% | |
|
25% | |
|
25% | |
|
25% | |
| Robert Rotzinger Vice President Capital Projects |
As Vice President Capital Projects, Mr. Rotzinger is responsible for all major future capital projects undertaken by Taseko including Florence Copper and Yellowhead. | |
| Measurement | Weighting | |
|
25% | |
|
25% | |
|
25% | |
|
25% | |
2021 Performance Share Unit Awards
The PSUs awarded to executives in 2021 vest on the third anniversary of the date of grant contingent upon Taseko's Relative Total shareholder Return (RTSR) against a peer group of base metals producers that the Company competes with for investment dollars (the "Performance Peer Group"), as follows:
| Performance Level | Performance Achieved | PSU Vesting |
| Maximum | RTSR at 90th percentile | 250% |
| Above Target | RTSR at 75th percentile | 175% |
| Target | RTSR at 50th percentile | 100% |
| Below Threshold | RTSR below 25th percentile | 0% |
Linear interpolation is applied to determine percentage PSU vesting for RTSR performance between the performance achievement levels shown in the table above.
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The Performance Peer Group is comprised of the following companies:
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Performance Graph
The following graph compares the total cumulative Shareholder return, including dividend reinvestment, for $100 invested in Common Shares of the Company on the TSX for the past five years versus the cumulative total shareholder return for the S&P Metals & Mining Select Industry Index and the S&P/TSX Global Base Metals Index.
Executive Compensation Alignment with Shareholder Value
The Company's compensation strategy is designed to pay for performance and includes the following philosophical concepts:
-
base salary levels are not dependent on share performance; they are determined by internal relativity, individual performance and peer group compensation practices;
-
the payment of annual performance incentive is based on the achievement of operational objectives that are intended to drive overall Company performance, with a portion of the API tracking annual shareholder return performance to still allow consideration of short-term shareholder value; and
- 32 -
- the number and value of stock options and PSUs awarded to our executives are based on market competitive levels for such awards. The value realized from these equity-based incentives is entirely dependent on Taseko's share price performance, creating alignment between executive compensation and Shareholder experience.
As the payment of salary and annual incentive awards are not typically linked to share price performance, we do not expect there to be a direct correlation between total shareholder return and total cash compensation (salary plus API) in a given period. The value of stock options and PSUs, however, are directly linked to total shareholder return and are designed to constitute a significant portion of our executives' total compensation.
NEO Equity-based Compensation
5-Year Reported Equity Incentive Value vs Realizable Value
As seen in the chart above, the strong performance of the Company's Common Share price in 2017, 2020 and 2021 drove the year-end realizable value (blue bars) of the equity incentives granted to the NEOs above the originally-awarded value (gold bars) at the beginning of the year. Conversely, the decline in the price of the Company's Common Shares over 2018 and 2019 resulted in the value of granted equity incentives in those years declining significantly from the reported value at time of grant. The heavy weighting of equity incentives within the NEOs' total compensation mix ensures a strong linkage between shareholders' experience and the value of the equity incentives held by the Company's NEOs.
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COMPENSATION OF NAMED EXECUTIVE OFFICERS
Named Executive Officers
In this Circular a "Named Executive Officer" ("NEO") of the Company is an officer or employee of the Company who is:
(a) the Chief Executive Officer ("CEO");
(b) the Chief Financial Officer ("CFO");
(c) one or each of the three most highly compensated executive officers, or the three most highly compensated individuals acting in a similar capacity, other than the CEO and CFO, at the end of the most recently completed financial year whose total compensation was, individually, more than $150,000 for that financial year; and
(d) each individual who would be an NEO under paragraph (c) but for the fact that the individual was neither an executive officer of the company, nor acting in a similar capacity, at December 31, 2021.
The following section sets out the compensation paid to the Company's NEOs in the last three fiscal years and summarizes executive contract provisions and related information. For the year ended December 31, 2021, our NEOs were:
• Stuart McDonald - President and CEO ("CEO")
• Bryce Hamming - Chief Financial Officer ("CFO")
• Richard Tremblay - Senior Vice President of Operations ("Senior VP Operations")
• Robert Rotzinger - Vice President, Capital Projects ("VP Capital Projects")
• Russell E. Hallbauer - Former Chief Executive Officer ("Former CEO")
• John W. McManus - Former Chief Operating Officer ("Former COO")
The Compensation Committee provides oversight of the executive compensation program on behalf of the Board. The Compensation Committee is responsible to review, on an annual basis, the compensation paid to the Company's executive officers and directors; to review performance of the Company's executive officers; to make recommendations on officer and director compensation to the Board; and to administer the Stock Option Plan and Performance Share Unit Plan. See "Committees of the Board of Directors - Compensation Committee" above for more information about the role of the Compensation Committee.
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Summary Compensation Table
The table below is a summary of the compensation received by the NEOs for the last three fiscal years ended December 31, 2021, 2020 and 2019.
| Name and principal position |
Year |
Salary | Share- based awards |
Option- based awards(1) |
Non-equity incentive plan compensation |
Pension value(2) |
All Other Compensation(3) |
Total Compensation |
|
| Annual incentive plan |
Long-term incentive plans |
||||||||
| ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ||
| Stuart McDonald(4) President & CEO |
2021 | 500,000 | 316,000 | 349,434 | 473,500 | Nil | 112,608 | Nil | 1,751,542 |
| 2020 | 425,000 | 243,000 | Nil | 393,040 | Nil | 54,000 | Nil | 1,115,040 | |
| 2019 | 406,380 | 131,625 | 233,164 | 350,200 | Nil | 54,000 | 38,599 | 1,213,968 | |
| Russell E. Hallbauer(4),(6) Former CEO |
2021 | 426,942 | Nil | Nil | Nil | Nil | 1,880,518 | Nil | 2,307,460 |
| 2020 | 681,064 | 522,000 | 306,436 | 917,218 | Nil | 343,857 | Nil | 2,770,575 | |
| 2019 | 672,656 | 263,250 | 287,331 | 874,453 | Nil | 343,857 | 70,181 | 2,511,728 | |
| Bryce Hamming(4) CFO |
2021 | 310,000 | 142,200 | 157,245 | 166,160 | Nil | 54,540 | Nil | 830,145 |
| 2020 | 285,000 | 121,500 | Nil | 131,271 | Nil | Nil | Nil | 537,771 | |
| 2019 | 200,208 | Nil | 73,323 | 87,100 | Nil | Nil | Nil | 360,631 | |
| John W. McManus(5),(7) Former COO |
2021 | 236,066 | Nil | Nil | Nil | Nil | 128,123 | 236,065 | 600,254 |
| 2020 | 472,131 | 121,500 | Nil | 423,785 | Nil | 128,123 | Nil | 1,145,539 | |
| 2019 | 458,380 | 131,625 | 214,257 | 455,629 | Nil | 128,123 | 42,108 | 1,430,122 | |
| Richard Tremblay(5) Senior VP Operations |
2021 | 333,125 | 142,200 | 157,245 | 153,571 | Nil | 162,902 | Nil | 949,043 |
| 2020 | 317,500 | 36,000 | Nil | 125,255 | Nil | 162,902 | Nil | 641,657 | |
| 2019 | 304,635 | Nil | 95,032 | 117,500 | Nil | 81,451 | Nil | 598,618 | |
| Robert Rotzinger VP Capital Projects |
2021 | 330,054 | 118,500 | 131,038 | 120,800 | Nil | 57,215 | Nil | 757,607 |
| 2020 | 322,004 | 36,000 | Nil | 136,208 | Nil | 22,350 | Nil | 516,562 | |
| 2019 | 312,625 | 39,000 | 101,666 | 143,808 | Nil | 22,350 | Nil | 619,449 | |
Notes:
(1) For compensation reporting and financial accounting purposes, the Black-Scholes option valuation model has been used to determine the fair value on the date of grant for all options granted. The Black-Scholes option valuation is determined using the expected term of the stock option (5 years), expected forfeiture rate (0%), expected volatility of the Company's common share price (67%), expected dividend yield (0%), and risk-free interest rate (0.4%).
(2) The amounts reported reflect the Company's contributions to the retirement compensation arrangement trust accounts. An equal amount is remitted to a refundable tax account for each participant held with the Canada Revenue Agency. The accumulated values are subject to graded vesting conditions dependent on the years of service with the Company, as outlined in the terms of the plan. . For Mr. Tremblay contributions are to an Insured Retirement Program.
(3) Amounts reflect the incremental value that was received by the NEOs as a result of the increase in the Company share price with respect to the Deferred API PSUs. These Deferred API PSUs were cash settled as they vested in each of the years with amounts reported representing the incremental value received. For 2020, the amount settled was lower than what was reported in the grant year due to a lower than anticipated performance factor.
(4) On June 13, 2019 Stuart McDonald was promoted to the role of President, and Russell Hallbauer, previously President and CEO, remained as CEO of the Company until June 30, 2021, when Stuart McDonald was appointed as CEO. Bryce Hamming was appointed CFO of the Company on June 13, 2019.
(5) On June 30, 2021 John McManus retired as COO of the Company and Richard Tremblay, previously Vice President Operations, was promoted to Senior Vice-President of Operations.
(6) Reported 2021 salary for Mr. Hallbauer represents $344,736 of salary and $82,206 of accrued vacation.
(7) The value of other compensation represents consulting fees paid to Mr. McManus after his retirement for advisory services related to the Company's succession plan.
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Incentive Plan Awards - Option-Based and Share-Based Awards
The following table sets out all option-based and share-based awards outstanding as at December 31, 2021, for each NEO:
| Name |
Option-based Awards | Share-Based Awards | |||||
| Number of securities underlying unexercised options (#) |
Option exercise price ($) |
Option expiration date m - d - y |
Value of unexercised in-the-money options(1) ($) |
Number of Shares or units of Shares that have not vested (#) |
Market or payout value of share-based awards that have not vested(1) ($) |
Market or payout value of vested share based awards not paid out or distributed(2) ($) |
|
| Stuart McDonald President and CEO |
10,600 | 1.25 | 01/06/2022 | 14,310 | 168,750 | 438,750 | Nil |
| 125,000 | 2.86 | 01/02/2023 | Nil | 337,500 | 877,500 | ||
| 281,250 | 0.78 | 01/10/2024 | 511,875 | 200,000 | 520,000 | ||
| 300,000 | 0.69 | 05/29/2024 | 573,000 | - | - | ||
| 400,000 | 1.58 | 02/01/2026 | 408,000 | - | - | ||
| Bryce Hamming CFO |
26,000 | 0.78 | 01/10/2024 | 47,320 | 168,750 | 438,750 | Nil |
| 100,000 | 0.69 | 05/29/2024 | 191,000 | 90,000 | 234,000 | ||
| 180,000 | 1.58 | 02/01/2026 | 183,600 | - | - | ||
| Richard Tremblay Senior VP Operations |
30,000 | 0.78 | 01/10/2024 | 54,600 | 50,000 | 130,000 | Nil |
| 25,000 | 0.69 | 05/29/2024 | 47,750 | 90,000 | 234,000 | ||
| 180,000 | 1.58 | 02/01/2026 | 183,600 | - | - | ||
| John McManus Former COO |
125,000 | 2.86 | 01/02/2023 | Nil | 168,750 | 438,750 | Nil |
| 281,250 | 0.78 | 01/10/2024 | 511,875 | 168,750 | 438,750 | ||
| 175,000 | 0.69 | 05/29/2024 | 334,250 | - | - | ||
| Robert Rotzinger VP Capital Projects |
75,000 | 2.86 | 01/02/2023 | Nil | 50,000 | 130,000 | Nil |
| 150,000 | 0.78 | 01/10/2024 | 273,000 | 50,000 | 130,000 | ||
| 100,000 | 0.69 | 05/29/2024 | 191,000 | 75,000 | 195,000 | ||
| 150,000 | 1.58 | 02/01/2026 | 153,000 | - | - | ||
Notes:
(1) Calculated based on the closing price of the Common Shares at December 31, 2021 multiplied by the number of notional Common Shares underlying such Awards. For Performance Awards, calculated based on the closing price of the Common Shares at December 31, 2021 multiplied by the number of notional Common Shares underlying such Awards assuming a payout multiplier of 1.0.
(2) All Awards are paid out upon vesting and as such there are no outstanding Awards that have vested.
Incentive Plan Awards - Value Vested or Earned During the Year
The following table sets out all incentive plan values vested (or earned) during the twelve months ended December 31, 2021, for each NEO:
| Named Executive Officer |
Option-based awards - Value vested during the year(1) ($) |
Share-based awards - Value vested during the year ($) |
Non-equity incentive plan compensation - Value earned during the year(2) ($) |
| Stuart McDonald | 348,833 | 31,875 | 473,500 |
| Bryce Hamming | 138,120 | Nil | 166,160 |
| Richard Tremblay | 155,800 | Nil | 153,571 |
| John McManus | 289,166 | 31,875 | Nil |
| Robert Rotzinger | 136,666 | 10,625 | 120,800 |
Notes:
(1) These amounts reflect the aggregate dollar value that would have been realized if all stock options that vested in 2021 were exercised on the applicable vesting date.
(2) These amounts are API awards paid for performance in 2021.
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Pension Plan Benefits
The Company has established retirement compensation arrangements to provide benefits to Messrs. McDonald, Hamming, Tremblay and Rotzinger on or after retirement as a means of facilitating a long-term commitment to the Company by each NEO, thereby ensuring a consistent senior technical team to drive the Company's projects forward.
The Taseko RCA Trusts ("RCA Trusts") are registered defined contribution pension plans under the Income Tax Act (Canada) established for the benefit of Messrs. McDonald, Hamming and Rotzinger. The assets in the RCA Trusts are invested in accordance with the individual participants' election from the investment options offered by the RCA Trusts. Upon retirement, the participant is entitled to the distribution of the accumulated value of the contributions under his RCA Trust. An Insured Retirement Program ("IRP") has been established for Mr. Tremblay to provide retirement income subject to the vesting conditions of his reward for tenure.
The following table sets forth the accumulated equity inside the defined contribution pension plans, subject to individual vesting conditions as outlined in the terms of the retirement benefit plan, for each of the NEOs:
| Name |
Accumulated value at January 1, 2021 ($) |
Compensatory(1) ($) |
Accumulated value at December 31, 2021(2) ($) |
| Russell E. Hallbauer | 3,385,238 | 1,880,518 | 5,551,378 |
| Bryce Hamming | 0 | 54,540 | 13,370 |
| Stuart McDonald | 362,849 | 112,608 | 480,610 |
| John W. McManus | 1,678,878 | 128,123 | 2,021,800 |
| Richard Tremblay | 158,599 | 162,902 | 238,113 |
| Robert Rotzinger | 185,616 | 57,215 | 265,557 |
Notes:
(1) The amounts reported for Messrs. Hallbauer, Hamming, McDonald, McManus and Rotzinger reflect the Company's contributions to the RCA Trust accounts. An equal amount is remitted to a refundable tax account for each participant held with the Canada Revenue Agency. The amount reported for Mr. Tremblay reflects the Company's contributions to the Insured Retirement Program. The accumulated values are subject to graded vesting conditions dependent on the years of service with the Company, as outlined in the terms of each plan.
(2) Year-end accumulated value can be considerably less than starting value plus compensatory deposits as year-end accumulated value reflects penalties and surrender charges for early plan withdrawal (i.e. at December 31, 2021).
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Termination and Change in Control Benefits
Written employment agreements are in place between the Company and each of the NEOs. Under the terms of these agreements, the NEOs are provided with specific payments in the event of termination as follows:
| Termination Event |
Executive Officer |
Entitlements | ||
| Base Salary | STIP | LTIP | ||
| Termination without Cause | Stuart McDonald | CEO's base salary multiplied by the CEO's Notice Period (18 months), plus a pro-rata amount of any other compensation (including bonus), vacation pay, etc. accrued for the year and payable to the executive as at the Termination Date. |
None | None |
| Bryce Hamming | NEO's base salary multiplied by the NEO's Notice Period (12 months), plus a pro-rata amount of any other compensation (including bonus), vacation pay, etc. accrued for the year and payable to the executive as at the Termination Date. |
None | None | |
| Richard Tremblay | NEO's base salary multiplied by the NEO's Notice Period (12 months), plus a pro-rata amount of any other compensation (including bonus), vacation pay, etc. accrued for the year and payable to the executive as at the Termination Date. |
None | None | |
| Robert Rotzinger | NEO's base salary multiplied by the NEO's Notice Period (12 months), plus a pro-rata amount of any other compensation (including bonus), vacation pay, etc. accrued for the year and payable to the executive as at the Termination Date. | None | None | |
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| Termination Event |
Executive Officer |
Entitlements | ||
| Base Salary | STIP | LTIP | ||
| Termination without cause or resignation within 12 months following a change of control (as defined under the employment agreements but which are considered customary) | Stuart McDonald | CEO's base salary multiplied by the CEO's Notice Period (24 months), plus a pro-rata amount of any other compensation (including bonus), vacation pay, etc. accrued for the year and payable to the executive as at the Termination Date. | The monthly equivalent of the most recently earned and paid or payable annual bonus multiplied by the respective Notice Period (24 months). | All of the CEOs' outstanding options will immediately vest and may be extended past termination of employment for up to three years but not past the expiry of the original option term. |
| Bryce Hamming | NEO's base salary multiplied by the NEO's Notice Period (24 months), plus a pro-rata amount of any other compensation (including bonus), vacation pay, etc. accrued for the year and payable to the executive as at the Termination Date. | The monthly equivalent of the most recently earned and paid or payable annual bonus multiplied by the respective Notice Period (24 months). | All of the NEOs' outstanding options will immediately vest and may be extended past termination of employment for up to two years but not past the expiry of the original option term. |
|
| Richard Tremblay | NEO's base salary multiplied by the NEO's Notice Period (12 months), plus a pro-rata amount of any other compensation (including bonus), vacation pay, etc. accrued for the year and payable to the executive as at the Termination Date. | The monthly equivalent of the most recently earned and paid or payable annual bonus multiplied by the respective Notice Period (24 months). | All of the NEOs' outstanding options will immediately vest and may be extended past termination of employment for up to two years but not past the expiry of the original option term. |
|
| Robert Rotzinger | NEO's base salary multiplied by the NEO's Notice Period (12 months), plus a pro-rata amount of any other compensation (including bonus), vacation pay, etc. accrued for the year and payable to the executive as at the Termination Date. | The monthly equivalent of the most recently earned and paid or payable annual bonus multiplied by the respective Notice Period (12 months). | All of the NEOs' outstanding options will immediately vest and may be extended past termination of employment for up to two years but not past the expiry of the original option term. | |
In addition to the foregoing, the terms of the RCA Trusts for the CEO, CFO and Vice President, Capital Projects, and the reward for tenure governing the IRP for the Senior Vice President, Operations, state that, in the event that a NEO is terminated by the Company without cause or resigns, including after a change of control, and the NEO in question is not fully vested in the RCA Trust or IRP, a NEO is entitled to receive a proportionate amount of the accumulated value of his RCA Trust or IRP depending upon both the nature of the termination or change in control and the number of years of service of the executive, as defined in the RCA Trusts or reward for tenure, respectively. Under the terms of the relevant RCA Trust agreements, in the event of a change of control the Company is required to make all remaining employee contributions under the RCA Trusts. Under the terms of the reward for tenure governing the IRP, in the event of a change of control and the executive's termination without cause or resignation, the Company is required to make a lump-sum payment equal to 12 months premiums.
The estimated incremental payments from the Company to each of the NEOs on (i) termination without cause or (ii) termination without cause or resignation within 12 months following a change of control, assuming the triggering event occurred on December 31, 2021, are as follows:
| NEO | Termination Without Cause |
Change of Control | |
| ($) | ($) | ||
| Stuart McDonald | Salary | 750,000 | 1,000,000 |
| Annual Incentive Plan(1) | N/A | 786,080 | |
| Share-based Awards | N/A | 1,836,250 | |
| Option-based Awards | N/A | 769,625 | |
| Pension Plan Benefits | N/A | 1,610,784 | |
| Bryce Hamming | Salary | 310,000 | 620,000 |
| Annual Incentive Plan(1) | N/A | 262,542 | |
| Share-based Awards | N/A | 672,750 | |
| Option-based Awards | N/A | 421,920 | |
| Pension Plan Benefits | N/A | Nil | |
| Richard Tremblay | Salary | 333,125 | 666,250 |
| Annual Incentive Plan(1) | N/A | 250,510 | |
| Share-based Awards | N/A | 364,000 | |
| Option-based Awards | N/A | 231,350 | |
| Pension Plan Benefits | N/A | Nil | |
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| NEO | Termination Without Cause |
Change of Control | |
| ($) | ($) | ||
| Robert Rotzinger | Salary | 330,054 | 330,054 |
| Annual Incentive Plan(1) | N/A | 136,208 | |
| Share-based Awards | N/A | 455,000 | |
| Option-based Awards | N/A | 307,667 | |
| Pension Plan Benefits | N/A | Nil | |
Note:
(1) Other than amounts which are fully earned and payable as at the date of termination.
Except as outlined above, there are no other contracts, agreements, plans or arrangements that provide for payments to any of the NEOs at, following or in connection with any termination (whether voluntary, involuntary or constructive), resignation, retirement, a change in control of the Company or a change in an NEO's responsibilities.
DIRECTOR COMPENSATION
The following section pertains to the compensation arrangements the Company has with the non-employee directors (i.e. all directors other than Mr. McDonald). Mr. McDonald does not receive additional compensation for serving as a director.
Philosophy and Objectives
The main objective of director compensation is to attract and retain directors with the relevant skills, knowledge and the abilities to carry out the Board's mandate and enhance the sustainable profitability and growth of the Company. Like the philosophy adopted for executive compensation, the total direct compensation provided to independent directors (which includes both fixed elements of pay (cash) plus the value of long-term compensation) is targeted to be above-market (between 50th and 75th percentile) for above average share price performance.
Alignment with Shareholders
In order to appropriately align the interests of members of the Board with those of the Company's shareholders, the Board has adopted share ownership guidelines as set out in the Company's Governance Manual, a copy of which is available on the Company's website (www.tasekomines.com). The Governance Manual provides that an appropriate level of stock ownership for each non-employee director represents a value which is equal to three times annual fees and should be acquired over a period of not more than five years.
Benchmarking
From time to time, the Compensation Committee reviews the compensation arrangements for the Company's independent directors and enacts changes to pay elements and/or strategy, as required, to better align with current market practices and good corporate governance guidelines.
Current Compensation Arrangements
For 2021, the cash elements of compensation for the Company's independent directors was as follows: an annual director's fee of $65,000, $20,000 for the Audit and Risk Committee Chairperson, $15,000 for the Compensation Committee Chairperson, $10,000 for other Committee Chairpersons and $1,500 for each board or committee meeting attended. The Chairman of the Board receives an additional retainer of $150,000 for that role.
In 2013, the Company adopted the Non-Employee Director Deferred Share Unit ("DSU") Plan (the "DSU Plan") for non-employee directors. Each non-employee director of the Company (i.e. all directors other than Mr. McDonald) is eligible to receive a combination of stock options and DSUs for director long-term incentive compensation.
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Director Compensation Table
The following table sets forth the compensation provided to the non-employee directors of the Company for the fiscal year ended December 31, 2021.
| Name of Director |
Fees earned(1) ($) |
Share-based awards(2) ($) |
Option- based awards(3) ($) |
Non-equity incentive plan compensation ($) |
Pension Value ($) |
All other compensation ($) |
Total ($) |
| Robert A. Dickinson | 74,000 | 56,880 | 13,977 | Nil | Nil | Nil | 144,857 |
| Anu Dhir(7) | 96,000 | 56,880 | 13,977 | Nil | Nil | Nil | 166,857 |
| Russell Hallbauer(8) | 37,000 | Nil | Nil | Nil | Nil | Nil | 37,000 |
| Peter C. Mitchell(6) | 104,500 | 56,880 | 101,336 | Nil | Nil | Nil | 262,716 |
| Kenneth Pickering(4)(5) | 106,500 | 56,880 | 13,977 | Nil | Nil | Nil | 177,357 |
| Ronald W. Thiessen | 228,500 | 85,320 | 21,840 | Nil | Nil | Nil | 335,660 |
Notes:
(1) Includes all fees awarded, earned, paid or payable in cash for services as a director, including annual retainer fees and chairman fees.
(2) The dollar amount based on the grant date fair value of the award for a covered financial year, received in deferred share units or an equivalent cash payment in lieu thereof.
(3) For compensation reporting and financial accounting purposes, the Black-Scholes option valuation model has been used to determine the fair value on the date of grant for all options granted. The Black-Scholes option valuation is determined using the expected term of the stock option (5 years), expected forfeiture rate (0%), expected volatility of the Company's common share price (67%), expected dividend yield (0%), and risk-free interest rate (0.4%).
(4) Environmental, Health and Safety Committee Chair.
(5) Compensation Committee Chair.
(6) Audit and Risk Committee Chair.
(7) Nominating and Governance Committee Chair.
(8) Mr. Russell Hallbauer stepped down as CEO on June 30, 2021 and remained as a director on the Board. His director fees reflect amounts earned after he stepped down as CEO.
The following table sets out all option-based awards outstanding as at December 31, 2021, for each non-employee director.
| Name | Option-based Awards | Share-based Awards | |||||
| 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(2) |
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(3) |
|
| (#) | ($) | m - d - y | ($) | (#) | ($) | ($) | |
| Robert A. | 50,000 | 1.25 | 01/06/2022 | 67,500 | 540,000 | Nil | 1,404,000 |
| Dickinson | 22,000 | 2.86 | 01/02/2023 | Nil | |||
| 44,000 | 0.78 | 01/10/2024 | 80,080 | ||||
| 44,000 | 0.72 | 01/15/2025 | 82,720 | ||||
| 16,000 | 1.58 | 02/01/2026 | 16,320 | ||||
| Anu Dhir | 122,000 | 2.86 | 01/02/2023 | Nil | 256,000 | Nil | 665,600 |
| 44,000 | 0.78 | 01/10/2024 | 80,080 | ||||
| 44,000 | 0.72 | 01/15/2025 | 82,720 | ||||
| 16,000 | 1.58 | 02/01/2026 | 16,320 | ||||
| Russell Hallbauer (5) | 300,000 | 2.86 | 01/02/2023 | Nil | Nil | Nil | Nil |
| 675,000 | 0.78 | 01/10/2024 | 1,228,500 | ||||
| 450,000 | 1.23 | 11/04/2025 | 616,500 | ||||
| Kenneth Pickering | 20,000 | 0.78 | 01/10/2024 | 36,400 | 212,000 | Nil | 551,200 |
| 44,000 | 0.72 | 01/15/2025 | 82,720 | ||||
| 16,000 | 1.58 | 02/01/2026 | 16,320 | ||||
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| Name | Option-based Awards | Share-based Awards | |||||
| 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(2) |
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(3) |
|
| (#) | ($) | m - d - y | ($) | (#) | ($) | ($) | |
| Peter C. Mitchell(4) | 77,333 | 1.58 | 02/01/2026 | 78,880 | 36,000 | Nil | 93,600 |
| Ronald W. | 33,000 | 2.86 | 01/02/2023 | Nil | 741,961 | Nil | 1,929,099 |
| Thiessen | 66,000 | 0.78 | 01/10/2024 | 120,120 | |||
| 66,000 | 0.72 | 01/15/2025 | 124,080 | ||||
| 25,000 | 1.58 | 02/01/2026 | 25,500 | ||||
Notes:
(1) Calculated based on the difference between the closing price of the Common Shares at December 31, 2021 on the TSX and the exercise price of the Options.
(2) All DSUs vest immediately upon the grant of such DSUs but cannot be redeemed until the director holding such DSUs ceases to be a director of the Company.
(3) Calculated based on the number of DSUs held at December 31, 2021 multiplied by the price per Common Share on the TSX on December 31, 2021.
(4) Mr. Peter Mitchell was appointed to the Board at the July 8, 2020 annual general meeting of shareholders of the Company and was subsequently granted options and DSUs in January of 2021.
(5) Mr. Hallbauer's option-based awards represent units granted during his tenure as CEO that remained outstanding at December 31, 2021. In January of 2022, he received options and DSUs as part of the long-term incentive compensation plan for directors.
The following table sets out all incentive plan value vested (or earned) during the year ended December 31, 2021, for each non-employee director.
| Name | Option-based awards - Value vested during the year(1) ($) |
Share- based awards - Value vested during the year ($) |
Non-equity incentive plan compensation - Value earned during the year ($) |
| Robert A. Dickinson | 29,893 | 56,880 | Nil |
| Anu Dhir | 29,893 | 56,880 | Nil |
| Russell Hallbauer (2) | 298,500 | Nil | Nil |
| Peter C. Mitchell | 6,187 | 56,880 | Nil |
| Kenneth Pickering | 64,559 | 56,880 | Nil |
| Ronald W. Thiessen | 44,893 | 85,320 | Nil |
Notes:
(1) These amounts reflect the aggregate dollar value that would have been realized if all options that vested in 2021 were exercised on the applicable vesting date.
(2) The amount reflects the value of the option-based awards vesting during the year for options granted to Mr. Hallbauer during his tenure as CEO.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
As described above, in order to provide a non-cash incentive for directors, officers, employees and other service providers whose on-going efforts are critical to the success of the Company, the Board adopted the Option Plan, as well as the PSU Plan. Both the Option Plan and the PSU Plan were last approved by the shareholders at the Company's annual general meeting held on June 17, 2021. The Company is required by TSX Policies to seek shareholder approval to ratify any material amendments to the Option Plan and approve its continuation every three years by ordinary resolution. The Option Plan is not due for ratification and approval for continuation again, until the Company's 2024 annual general meeting.
The Option Plan is designed to promote the long-term success of the Company by strengthening the ability of the Company to attract and retain highly competent employees and promote greater alignment of interests between executives and shareholders in the creation of long-term shareholder value. This alignment of interests is facilitated by the strike price of each option granted; if there is no appreciation in Taseko's Common Share price from the price at the date of grant of options, no value will accrue to the Options held by executives.
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The PSU Plan is designed to further strengthen the link between Named Executive Officer compensation to shareholder value creation. Each PSU awarded conditionally entitles the Participant (as defined in the PSU Plan) to receive one (1) Common Share (or the cash equivalent) upon attainment of the PSU vesting criteria.
The Company adopted the DSU Plan for non-employee directors, effective February 15, 2013. The DSU Plan provides for an annual grant of DSUs to each non-employee director of the Company, or an equivalent cash payment in lieu thereof, which Participants (as defined in the DSU Plan) have agreed would, in first instance, be used to assist in complying with the Company's Common Share ownership guidelines. DSUs vest immediately upon grant and are paid out in cash when a Participant ceases to be a director of the Company. The DSU Plan contemplates that all DSUs are to be paid out in cash.
Pursuant to the Option Plan, a maximum of 9.5% of the issued and outstanding Common Shares may be reserved for issuance upon exercise of Options. Options may be granted up to this limit at the discretion of the Board, or the Compensation Committee, to eligible optionees (the "Optionees"). This type of plan is called a "rolling" or an "evergreen" plan because as options are exercised, the base of outstanding issued Common Shares on which the 9.5% increment applies increases.
At the date of this Information Circular, there were Options to purchase an aggregate of 9,634,166 Common Shares outstanding, and together with 2,500,000 outstanding PSUs representing outstanding share based compensation grants totaling, upon exercise,12,134,166 Common Shares, being approximately 4.3% of the issued and outstanding Common Shares. The total number of Common Shares available for exercise of securities issued under all share based compensation arrangements at any one time may not exceed 9.5% of the total number of issued and outstanding Common Shares.
The Board is of the view that together the share-based compensation plans provide the Company with the flexibility necessary to attract and maintain services of senior executives and other employees and directors by offering competitive compensation relative to other companies in the industry.
The Compensation Committee approves base salaries, annual cash incentives and all share-based compensation including PSUs, and option grants to executive officers. The Compensation Committee also approves DSU grants to non-executive officers. Options are granted at other times of the year to individuals commencing employment with the Company. The Option exercise price is the market price at the grant date in accordance with TSX policies.
Following is a summary of the material terms of the Share Option Plan and the PSU Plan.
Share Option Plan ("Option Plan")
Pursuant to TSX policies option plans with a rolling number of shares must be approved by the shareholders every three years. The Company's current Option Plan was last approved for continuation, as amended, by shareholders of the Company on June 17, 2021. There have been no further amendments to the Plan since last approved by shareholders.
Material Terms
(a) The Option Plan provides for reservation of a number of Optioned Shares as are equal to a maximum of 9.5% of the issued and outstanding Common Shares of the Company at the time an Option is granted, less the number of Common Shares reserved for issuance pursuant to all other equity based compensation arrangements of the Company.
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(b) Persons who are directors, officers, employees, consultants to the Company or its affiliates, or who are employees of a management company providing services to the Company are eligible to receive grants of Options pursuant to the Option Plan.
(c) Options may be granted only to an individual or to a company that is owned by individuals eligible for an Option grant. If the Option is granted to a company, the company must undertake that it will not permit any transfer of its shares, nor issue further shares, to any other individual or entity as long as the Option remains in effect, without the consent of Taseko.
(d) All Options granted pursuant to the Option Plan are exercisable only by the Optionee to whom they were granted and the Options are un-assignable and non-transferable, except in the case of the death of an Optionee, any vested Option held by the deceased Optionee at the date of death will immediately become exercisable by the Optionee's lawful personal representatives, heirs or executors until the earlier of one year after the date of death of such Optionee and the date of expiration of the term otherwise applicable to such Option.
(e) Vesting of Options is determined by the Board and subject to the following:
(i) where an Optionee has left the Company's employ/office or has been advised their services are no long required or their service contract has expired, subject to other provisions set out in the Option Plan, vested Options shall expire 90 days after the date the Optionee ceases to be employed by, provide services to, or be a director or officer of, the Company, and all unvested Options shall immediately terminate without right to exercise same;
(ii) in the case of an Optionee being dismissed from employment or service for cause, such Optionee's Options, whether or not vested at the date of dismissal, will immediately terminate without right to exercise same;
(iii) in the event of a change of control occurring, all Options granted subject to vesting provisions shall be deemed to have immediately vested upon the occurrence of the change of control; and
(iv) in the event of a director not being nominated for re-election as a director of the Company, although consenting to act and being under no legal incapacity which would prevent the director from being a member of the Board, Options granted which are subject to a vesting provision shall be deemed to have vested on the date of the meeting upon which the director is not re-elected.
(f) All Options granted under the Option Plan are exercisable for a period of up to 5 years and will vest at the discretion of the Board, provided that the term of such Options may be extended in circumstances where the expiry date otherwise falls during a blackout period (defined below) as determined in accordance with the Company's policies or applicable securities legislation, and subject to:
(i) the Optionee remaining employed by or continuing to provide services to the Company or any of its subsidiaries and affiliates as well as, at the discretion of the Board, achieving certain milestones which may be defined by the Board from time to time or receiving a satisfactory performance review by the Company or its subsidiary or affiliate during the vesting period; or
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(ii) remaining as a director of the Company or any of its subsidiaries or affiliates during the vesting period.
(g) No Incentive Stock Option, an Option granted in accordance with Section 422 of the Internal Revenue Code of 1986 (United States)("ISO"), may be granted to any United States employee who owns, at the time of such grant, more than 10% of the Common Shares, unless those Options are granted at an exercise price of at least 110% of the fair market value of the Common Shares and such ISOs cannot be exercised more than five years from the date of such grant;
(h) The aggregate maximum number of Common Shares that may be issued pursuant to ISOs is 1,000,000 Common Shares;
(i) Holders of Common Shares acquired pursuant to the exercise of an ISO who sell such Common Shares on or before the later of (a) the date that is two years after the date of grant of such ISO, or (b) the date that is one year after the date of exercise of such ISO, must immediately notify the Company in writing of such disposition and may be subject to income tax withholding by the Company on compensation income;
(j) A "blackout period" is any period of time during which a participant in the Option Plan is unable to trade securities of the Company as a consequence of the implementation of a general restriction on such trading by an authorized officer or director pursuant to the Company's governance policies that authorize general and/or specific restrictions on trading by Service Providers in circumstances where there may exist undisclosed material changes or undisclosed material facts in connection with the Company's affairs. The term of an Option will expire on its Expiry Date as defined in the Option Plan unless the Expiry Date occurs during a blackout period or within five business days after the expiry of the blackout period, then the Expiry Date for that Option will be the date that is the tenth business day after the date the blackout period expires;
(k) The exercise price of the Option is established by the Board at the time the Option is granted, provided that the minimum exercise price shall not be less than the market price being the volume weighted average trading price of the Company's shares on the TSX for the five trading days preceding the date of the grant. The exercise price of ISOs must be equal to or greater than the fair market value of the Common Shares on the date of the grant of such ISOs.
(l) The Option Plan is subject to the following restrictions:
(i) Common Shares issued to Insiders as a group pursuant to Options granted under the Option Plan, when combined with all of the Company's other share compensation arrangements to Insiders, may not exceed 2% of the outstanding Common Shares in any 12 month period;
(ii) Common Shares issuable to Insiders pursuant to Options granted under the Option Plan, at any time, when combined with Common Shares issuable pursuant to all of the Company's other share compensation arrangements, may not exceed 9.5% of the outstanding Common Shares at any given time.
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(iii) Common Shares issuable to directors who are independent directors under the Option Plan, when combined with all of the Company's other share compensation arrangements currently in effect for their benefit, may not exceed 1% of the outstanding Common Shares of the Company, provided that the Common Shares issuable under the Options and other share compensation arrangements currently in effect which have been granted to any director who was non-independent at the time of grant of the Options but who subsequently became an independent director and any director who was an independent director at the time of grant of Options but subsequently became a non-independent director, shall in either such case, be excluded from the calculation of 1% of the outstanding Common Shares issuable under the Option Plan; and
(iv) the aggregate annual value of Options that may be granted to each independent director under the Option Plan and any other Equity Based Compensation arrangements established or maintained by the Company, may not exceed $100,000 as calculated by the Black-Scholes option pricing model.
(m) In addition to Board and TSX approvals, shareholder approval is required for any of the following amendments:
(i) any amendment to the percentage of Common Shares reserved and issuable under the Option Plan;
(ii) any reduction in the exercise price of an Option (other than for standard anti-dilution purposes), or any cancellation and re-issue, within three months of cancellation, of an Option to the same Optionee at a lower exercise price than the Option cancelled, provided the Optionee is not an Insider;
(iii) an extension of the term of the original expiry date of an Option unless the Optionee is an Insider;
(iv) any change to the definition of an eligible Participant under the Option Plan;
(v) any amendment which would allow the transfer or assignment of an Option except in the case of the death of an Optionee as contemplated by the Option Plan;
(vi) any amendment to eligible Participants that may permit an increase to the proposed limit on independent director participation;
(vii) any amendment to the transferability or assignability of an Option;
(viii) any amendments to the Option Plan made to the amendment terms in either section 2.9 or section 2.10 that will increase the Company's ability to amend the Option Plan without shareholder approval; and
(ix) any amendments required to be approved by shareholders under applicable law.
(n) In addition to Board and TSX approval, disinterested shareholder approval is required for any of the following amendments:
(i) any amendment which reduces the Exercise Price of an Option granted to an Insider;
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(ii) any amendment to extend the term of an Option granted to an Insider; and
(iii) amendments to increase any of the limits on the number of Options that may be granted to Insiders, beyond the limits to Insiders permitted under prevailing policies of the TSX.
(o) Subject to TSX policies, the Option Plan may be amended, without limitation, by the Board without further shareholder approval to:
(i) make amendments which are of a typographical, grammatical or clerical nature;
(ii) change the vesting provisions of an Option granted pursuant to the Option Plan;
(iii) change the termination provision of an Option granted pursuant to the Option Plan, which does not entail an extension beyond the original expiry date of such Option or to change the termination provisions of the Option Plan itself;
(iv) add a cashless exercise feature payable in cash or Common Shares;
(v) make amendments necessary as a result in changes in securities laws applicable to the Company;
(vi) make such amendments as may be required by the policies of such senior stock exchange or stock market if the Company becomes listed or quoted on a stock exchange or stock market senior to the TSX; and
(vii) it may make such amendments as reduce, and do not increase, the benefits of the Option Plan to Optionees.
A copy of the Option Plan is filed on SEDAR under the Company's profile at www.sedar.com, and a copy may be obtained by contacting the Company, 12th Floor, 1040 West Georgia Street, Vancouver, British Columbia V6E 4H1, Attention Trevor Thomas.
Performance Share Unit Plan ("PSU Plan")
Summary of the PSU Plan
Iin order to maintain its enhanced flexibility in connection with Equity Based Compensation arrangements, the Company submits an ordinary resolution to the Shareholders every three years to approve its Performance Share Unit Plan ("PSU") Plan ("PSU Plan") for continuation. A summary of the PSU Plan, as amended, last approved by the Shareholder on June 17, 2021 is set out below and a complete copy of the PSU Plan is filed on SEDAR under the Company's profile at www.sedar.com. Because the aggregate maximum number of outstanding securities in all of the Company's Equity Based Compensation plans is limited to 9.5% of issued Common Shares from time to time, the continuation of the PSU Plan does not increase the number of Common Shares reserved for Equity Based Compensation plans. The PSU Plan is also subject to the limit of 2% of outstanding Common Shares being granted to Insiders in any one year under all Equity Based Compensation plans.
Eligible Participants
The PSU Plan is administered by the Compensation Committee (the "Committee") of the Board. Employees and eligible consultants of the Company and its designated subsidiaries are eligible to participate in the PSU Plan. "Eligible consultant" means an individual, other than an Employee that (i) is engaged to provide, on a bona fide basis, consulting, technical, management or other services to the Company or a subsidiary under a written contract with the individual or a company of which the individual consultant is an employee; and (ii) in the reasonable opinion of the Company, spends or will spend a significant amount of time and attention on the affairs and business of the Company or a subsidiary. While Taseko has a large number of Employees, awards issued pursuant to the PSU Plan will generally be granted only to senior management Employees. In accordance with the terms of the PSU Plan, the Company, under the authority of the Board, approves those Employees and Eligible Consultants who are entitled to receive PSUs and the number of PSUs to be awarded to each participant. PSUs awarded to participants are credited to them by means of an entry in a notational account in their favour on the books of the Company. Each PSU awarded conditionally entitles the participant to receive one (1) Common Share (or the cash equivalent) upon attainment of the PSU vesting criteria.
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Vesting
PSUs vest upon the expiry of a time-based vesting period. The duration of the vesting period applicable to a specific PSU grant is to be determined at the time of grant by the Committee but will not exceed three years. In addition, the Committee may establish other terms or conditions with respect to the vesting of PSUs, including without limitation, provisions which make the vesting of PSUs conditional upon (i) the achievement of corporate or personal objectives, including the attainment of milestones relating to financial, operational, strategic or other objectives of the Company, (ii) the market price of the Company's Common Shares from time to time and/or the return to Shareholders, and/or (iii) any other performance criteria relating to the participant or the Company. Any such conditions shall be set out in the grant agreement, may relate to all or any portion of the PSUs in a grant, and may be graduated such that different percentages of the PSUs in a grant will vest depending on the extent of satisfaction of one or more such conditions.
The Board may, in its discretion and having regard to the best interests of the Company, subsequent to the grant date of a PSU, waive any such terms or conditions or determine that they have been satisfied. Once the PSUs in a grant vest, the participant is entitled to receive the equivalent number of Common Shares or cash equal to the Market Value (as defined below) of the equivalent number of Common Shares. The vested PSUs may be settled through the issuance of Common Shares from treasury, by the delivery of Common Shares purchased in the open market, in cash or in any combination of the foregoing (at the discretion of the Company). If settled in cash, the award amount shall be equal to the number of Common Shares in respect of which the participant is entitled, multiplied by the Market Value of a Common Share on the payout date. Market Value per Common Share as at any date is defined in the PSU Plan (if the Common Shares are listed and posted for trading on the TSX) as the arithmetic average of the closing price of the Common Shares traded on the TSX for the five (5) trading days on which a board lot was traded immediately preceding such date. The PSUs may be settled on the payout date, which shall be the third anniversary of the date of the grant or such other date as the Committee may determine at the time of the grant, which in any event shall be no later than the expiry date for such PSUs. The expiry date of PSUs will be determined by the Committee at the time of grant. All unvested, expired or previously settled PSUs are available for future grants.
Maximum Number of Common Shares Issuable
Under the current PSU Plan, the maximum number of Common Shares reserved and available for issuance from treasury is 3% of the issued and outstanding Common Shares (on a non-diluted basis) from time to time. As of April 12, 2022, this number is equal to 8,589,058 Common Shares, leaving 6,089,058Common shares 2.1% available for future grants. This type of plan share pool structure is referred to as an "evergreen" or "rolling" plan feature.
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The PSU Plan provides that the maximum number of Common Shares issuable pursuant to the PSU Plan, together with any Common Shares issuable pursuant to any other Equity Based Compensation arrangement outside the PSU Plan, will not exceed 9.5%, being 6.5% for Options and 3% for PSUs, of the total number of issued and outstanding Common Shares at any time. In addition, the maximum number of Common Shares issued to Insiders under the PSU Plan and all other Equity Based Compensation arrangements within any one year period, will not exceed 2% of the total number of issued and outstanding Common Shares taken at the beginning of the year.
The maximum number of Common Shares issuable to Insiders pursuant to the PSU Plan, together with any Common Shares issuable pursuant to any other Security Based Compensation Arrangement, at any time, shall not exceed 9.5% of the total number of outstanding Common Shares.
Performance-based Compensation
The PSU Plan also provides that awards pursuant to the PSU Plan are based on a selection by the Committee of one or more of the following factors, each of which may be adjusted as provided in the PSU Plan:
-
Financial Performance Goals: economic value added (EVA);
-
sales or revenue;
-
costs or expenses;
-
performance relative to budget;
-
net profit after tax;
-
gross profit;
-
income (including without limitation operating income, pre-tax income and income attributable to the Company);
-
cash flow (including without limitation free cash flow and cash flow from operating, investing or financing activities or any combination thereof);
-
earnings (including without limitation earnings before or after taxes, earnings before interest and taxes (EBIT), earnings before interest, taxes, depreciation and amortization (EBITDA) and earnings (whether before or after taxes), EBIT or EBITDA as a percentage of net sales;
-
net working capital;
-
margins (including one or more of gross, operating and net income margin);
-
Shareholder Performance Goals: earnings per share (EPS) (basic or diluted);
-
earnings per Common Share from continuing operations;
-
returns (including one or more of return on actual or pro forma assets, net assets, equity, investment, revenue, sales, capital and net capital employed, total shareholder return (TSR) and total business return (TBR));
-
ratios (including one or more of price-to-earnings, debt-to-assets, debt-to-net assets and ratios regarding liquidity, solvency, fiscal capacity, productivity or risk);
-
stock price;
-
value creation;
-
market capitalization;
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-
Corporate Performance Goals: safety performance;
-
environmental performance;
-
development and implementation of exploration programs;
-
advancement of governmental permitting and approval processes;
-
development and implementation of corporate social responsibility / sustainable development initiatives;
-
engagement with key stakeholders;
-
evaluation of corporate development opportunities;
-
corporate compliance and reporting;
-
implementation or completion of key corporate initiatives or projects;
-
strategic plan development and implementation;
-
workforce satisfaction;
-
employee retention; productivity metrics; and
-
career development;
(collectively, the "Performance Goals").
The Performance Goals may be applied individually, alternatively, or in any combination, either to the Company as a whole or to a subsidiary, division, business unit or line of business basis. Within the other restrictions of the PSU Plan, there is no limit on the number of PSUs that may be granted to any one person per year.
Cessation of Entitlement
Unless otherwise determined by the Company in accordance with the PSU Plan, PSUs which have not vested on a participant's termination date shall terminate and be forfeited. If a participant who is an employee ceases to be an employee as a result of termination of employment without cause, at the Company's discretion (unless otherwise provided in the applicable grant agreement), all or a portion of such participant's PSUs may be permitted to continue to vest, in accordance with their terms, during any statutory or common law severance period or any period of reasonable notice required by law or as otherwise may be determined by the Company in its sole discretion. All forfeited PSUs are available for future grants.
Transferability
PSUs are not assignable or transferable by a participant other than by operation of law, except, if and on such terms as the Company may permit, to a spouse or minor children or grandchildren or a personal holding company or family trust controlled by the participant, the sole shareholders or beneficiaries of which, as the case may be, are any combination of the participant, the participant's spouse, minor children or minor grandchildren, and after the participant's lifetime shall inure to the benefit of and be binding upon the participant's designated beneficiary, on such terms and conditions as are appropriate for such transfers to be included in the class of transferees who may rely on a Form S-8 registration statement under the U.S. Securities Act of 1933, as amended, to sell Common Shares received pursuant to the PSUs.
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PSU Plan Benefits
Benefits to be awarded or paid under the PSU Plan cannot currently be determined. Awards granted under the PSU Plan are within the discretion of the Committee, and the Committee has not determined future awards.
Company's Ability to Amend the PSU Plan
The PSU Plan provides that the Company may, without notice, at any time and from time to time, and without further Shareholder approval, amend the PSU Plan or any provisions thereof in such manner as the Company, in its sole discretion, determines appropriate:
(a) for the purposes of making formal minor or technical modifications to any of the provisions of the PSU Plan;
(b) to correct any ambiguity, defective provision, error or omission in the provisions of the PSU Plan;
(c) to change the vesting provisions of PSUs to reflect revised performance metrics or to accelerate vesting in the event that those performance criteria are achieved earlier than expected;
(d) to change the termination provisions of PSUs or the PSU Plan, which does not entail an extension beyond the original expiry date of the PSUs; or
(e) subject to TSX approval, to make the amendments to the PSU Plan to maximize tax efficiencies of the PSU grants to US Participants for US Tax Code purposes;
provided, however, that:
(1) no such amendment of the PSU Plan may be made without the consent of each affected participant if such amendment would adversely affect the rights of such affected participant(s) under the PSU Plan; and
(2) Shareholder approval shall be obtained in accordance with the requirements of the TSX for any amendment that results in:
(i) an increase in the maximum number of Common Shares issuable pursuant to the PSU Plan other than as already contemplated in the PSU Plan;
(ii) an extension of the expiry date for PSUs granted under the PSU Plan;
(iii) granting of other types of compensation through Common Share issuance;
(iv) any change to the limited assignability of PSUs, or any change to the limited categories of eligible service providers who may receive PSUs, namely Employees and Eligible Consultants;
(v) the addition of additional categories of participants, other than as contemplated by Section 13 of the PSU Plan, which refers to claims by beneficiaries of eligible participants to the PSU Plan;
(vi) changes in eligible participants that may permit the introduction or reintroduction of non-employee directors on a discretionary basis; or
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(vii) an amendment of the Board's authority to amend provisions of the PSU Plan, without shareholder approval.
Certain United States Federal Income Tax Consequences
The following is a summary of the principal U.S. federal income tax consequences generally applicable to PSUs awarded under the PSU Plan. The following description applies to PSUs that are subject to U.S. federal income tax.
The PSUs that are intended to be "qualified performance-based compensation" within the meaning of Section 162(m) of the United States Internal Revenue Code ("Code") must be (i) granted by a committee consisting of two or more outside directors and (ii) conditioned solely upon the achievement of one or more of the above performance goals. Section 162(m) of the Code requires that Shareholders must re-approve the PSU Plan at least every five years for grants to be "qualified performance-based compensation" within the meaning of Section 162(m). This will enable the Company to make grants under the PSU Plan that may qualify for the exemption from the $1 million deduction limit on compensation paid to top U.S. executives. The PSU Plan enables the Company to deduct qualifying future grants as a business expense. However, nothing prevents the Committee from granting PSUs that do not qualify for tax deductibility under Section 162(m).
The grant of PSUs should not result in taxable income to a participant at the time of grant. When PSUs are paid out, the participant will recognize ordinary income equal to the fair market value of the Common Shares and cash received in settlement of the PSUs, and the Company will be entitled at that time to a corporate income tax deduction (for U.S. federal income tax purposes) for the same amount, subject to the general rules concerning deductibility of compensation. For information on the deductibility of executive compensation, see Qualified Performance-based Compensation above. A participant's basis in any Common Shares received will equal the fair market value of the Common Shares at the time the participant recognized ordinary income. If, as is usually the case, the Common Shares are a capital asset in the participant's hands, any additional gain or loss recognized on a subsequent sale or exchange of the Common Shares will not be ordinary income, but will qualify as capital gain or loss.
Section 409A of the Code may apply to PSUs granted under the PSU Plan. For such awards subject to Section 409A, certain U.S. officers may experience a delay of up to six months in the settlement of the PSUs in Common Shares.
Securities authorized for issuance
At the Company's December 31, 2021 financial year-end, there were 284,892,291 issued Common Shares. Pursuant to the Option Plan and PSU Plan, the Company may issue up to a maximum of 9.5% of the Common Shares, being a maximum of 27,064,768 Common Shares under all share compensation arrangements.
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The following table sets out equity compensation plan information as at the Company's December 31, 2021 financial year end.
| Number of securities to be issued upon exercise of outstanding options, under equity compensation plans |
Weighted-average exercise price of outstanding options |
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
|
| Plan Category | (a) | (b) | (c)(1) |
| Share Option Plan | 8,270,266 | $1.33 | 10,247,733 |
| Performance Share Unit Plan | 2,780,000 | N/A | 5,766,769 |
| Deferred Share Unit Plan | N/A | N/A | N/A |
| Equity compensation plans not approved by securityholders | N/A | N/A | N/A |
| Total | 11,050,266 | 16,014,502 |
Notes:
(1) The maximum number of PSUs outstanding from time to time under the PSU Plan shall not exceed 3% of the number of outstanding Common Shares. The maximum number of Common Shares issuable pursuant to all Security Based Compensation Arrangements, including the Share Option Plan and the PSU Plan, at any time may not exceed 9.5% of the number of outstanding Common Shares.
(2) 8,270,266 Options was 2.9% of the issued and outstanding Common Shares at December 31, 2021, leaving 10,247,733 options available for grant under the Option Plan, being 3.6% of the issued and outstanding Common Shares at December 31, 2021.
(3) 2,780,000 PSUs was 1% of the issued and outstanding Common Shares at December 31, 2021, leaving 5,766,769 PSUs available for grant under the PSU Plan, being 2% of the issued and outstanding Common Shares at December 31, 2021.
(4) The Company's DSU Plan contemplates that all DSUs are settled in cash.
The following table sets out the annual burn rate(1) for each equity compensation plan:
| Equity Incentive Plan | For the fiscal year ended December 31, | ||
| 2021 | 2020 | 2019 | |
| The Stock Option Plan | 0.8% | 0.7% | 1.9% |
| The PSU Plan(2) | 0.2% | 0.5% | 0.4% |
| The DSU Plan(3) | N/A | N/A | N/A |
Notes:
(1) The annual burn rate is calculated as the number of securities granted under the arrangement during the applicable fiscal year divided by the weighted average number of securities outstanding for the applicable fiscal year.
(2) PSUs granted to the date of this Circular are subject to vesting and multiplier conditions that can result in the issuance of that number of Common Shares thereunder equal to between zero and 2.5 x the number of PSUs issued in the event of sub-par or exemplary relative total shareholder return, respectively. See "Elements of Compensation - Long Term Incentives" above.
(3) The Company's DSU Plan contemplates that all DSUs are settled in cash.
INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS
No directors, proposed nominees for election as directors, executive officers or their respective associates or affiliates, or other management of the Company were indebted to the Company as of the end of the most recently completed financial year or as at the date hereof.
INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS
To the knowledge of management of the Company, no informed person (a director, officer or holder of 10% or more of the Common Shares) or nominee for election as a director of the Company or any associate or affiliate of any informed person or proposed director had any interest in any transaction which has materially affected or would materially affect the Company or any of its subsidiaries during the year ended December 31, 2021, or has any interest in any material transaction in the current year other than as set out herein or in a document disclosed to the public.
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MANAGEMENT CONTRACTS
There are no management functions of the Company which are to any substantial degree performed by a person or company other than the directors or senior officers of the Company.
PARTICULARS OF MATTERS TO BE ACTED UPON
A. Shareholder Rights Plan Continuation and Renewal
The Company initially adopted a shareholder rights plan pursuant to the shareholder rights plan agreement between the Company and Computershare, as rights agent, dated May 2, 2013, which was amended and restated to give effect to the new take-over bid rules adopted by the Canadian Securities Administrators ("CSA") in May 2016. The Amended and Restated Shareholder Rights Plan dated as of June 9, 2016, as amended and extended June 13, 2019 (the "Existing Rights Plan") was last approved by the shareholders at the Company's Annual General Meeting held June 13, 2019. At the Meeting, the Company will seek Shareholder approval to ratify the continuation of the Existing Rights Plan, as amended and extended for a further three-year period.
The Shareholder Rights Plan Agreement, as amended and Extended June 9, 2022 (the "Shareholder Rights Plan") is identical to the Existing Rights Plan with the exception of non-substantive, minor housekeeping amendments to extend the term effective June 9, 2022. Unless otherwise defined below, all capitalized terms shall have the meanings specified in the Existing Rights Plan.
Proposed Continuation of Shareholder Rights Plan
Pursuant to its terms, the Shareholder Rights Plan will expire on the business day following the termination of the Meeting, unless Shareholders ratify and approve the Shareholder Rights Plan for three more years in accordance with its provisions. Pursuant to its terms, the Existing Rights Plan will expire upon the termination of the Meeting unless the Shareholder Rights Plan is ratified by Shareholders in accordance with its provisions. Management of the Company has reviewed the terms of the Existing Rights Plan for conformity with current Canadian securities laws, as well as practices of public corporations in Canada. On April 15, 2022, the Board confirmed and approved the Shareholder Rights Plan and approved the non-substantive, minor amendments to the Shareholder Rights Plan in order to update the Existing Rights Plan for extension of the term. A summary of the principal terms of the Shareholder Rights Plan is set forth below. The summary is qualified in its entirety by reference to the complete text of the Shareholder Rights Plan, a copy of which is available upon request from the Company at 1040 West Georgia Street, Suite 1200, Vancouver, British Columbia, V6E 4H1 (778-373-4533), or can be viewed together with the Meeting proxy materials under the Company's profile at www.sedar.com. A blacklined copy of the Shareholder Rights Plan, which highlights the changes made to the Existing Rights Plan, is also available on the Company's website (www.tasekomines.com).
Purpose of the Shareholder Rights Plan
The purpose of the Shareholder Rights Plan is to ensure that, in the event of a takeover bid for the Company, all Shareholders are treated fairly. Shareholder approval of the Shareholder Rights Plan for the next three years is not being proposed in response to, or in anticipation of, any pending, threatened or proposed acquisition or take-over bid that is known to management of the Company. The proposed approval and continuation of the Shareholder Rights Plan is not intended as a means to prevent a take-over of the Company, to secure the continuance of management or the Board in their respective offices, or to deter fair offers for the Common Shares.
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Term
Provided the Shareholder Rights Plan is approved at the Meeting, the Shareholder Rights Plan (unless terminated earlier) will remain in effect until termination of the annual meeting of the Shareholders in 2025 unless the term of the Shareholder Rights Plan is extended beyond such date by resolution of the Shareholders at such meeting.
Issuance of Rights
One right (a "Right") was issued by the Company pursuant to the Shareholder Rights Plan in respect of each Voting Share outstanding as of the close of business (Vancouver time) (the "Record Time") on the Effective Date, being June 9, 2016. "Voting Shares" include the Common Shares and any other shares of the Company entitled to vote generally in the election of all directors. One Right was also issued for each additional Voting Share issued after the Record Time and prior to the earlier of the Separation Time and the Expiration Time, subject to the earlier termination or expiration of the Rights as set out in the Rights Agreement.
As of the Effective Date, the only Voting Shares outstanding were the Common Shares. The issuance of the Rights is not dilutive and will not affect reported earnings or operating cash flow per share until the Rights separate from the underlying Common Shares and become exercisable or until the exercise of the Rights. The issuance of the Rights does not change the manner in which Shareholders trade their Common Shares.
Certificates and Transferability
Prior to the Separation Time, the Rights will be evidenced by a legend imprinted on certificates for Common Shares issued after the Record Time. Rights are also attached to Common Shares outstanding on the Effective Date, although share certificates issued prior to the Effective Date will not bear such a legend. Shareholders are not required to return their certificates in order to have the benefit of the Rights. Prior to the Separation Time, Rights will trade together with the Common Shares and will not be exercisable or transferable separately from the Common Shares. From and after the Separation Time, the Rights will become exercisable, will be evidenced by Rights Certificates and will be transferable separately from the Common Shares.
Separation of Rights
The Rights will become exercisable and begin to trade separately from the associated Common Shares at the "Separation Time" which is generally (subject to the ability of the Board to defer the Separation Time) the close of business on the tenth trading day after the earliest to occur of:
(a) a public announcement that a person or group of affiliated or associated persons or persons acting jointly or in concert has become an "Acquiring Person", meaning that such person or group has acquired Beneficial Ownership (as defined in the Rights Plan) of 20% or more of the outstanding Voting Shares other than as a result of: (i) a reduction in the number of Voting Shares outstanding; (ii) a "Permitted Bid" or "Competing Permitted Bid" (as defined below); (iii) acquisitions of Voting Shares in respect of which the Board has waived the application of the Rights Agreement; (iv) other specified exempt acquisitions and pro rata acquisitions in which shareholders participate on a pro rata basis; or (v) an acquisition by a person of Voting Shares upon the exercise, conversion or exchange of a security convertible, exercisable or exchangeable into a Voting Share received by a person in the circumstances described in (ii), (iii) or (iv) above;
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(b) the date of commencement of, or the first public announcement of an intention of any person (other than the Company or any of its subsidiaries) to commence a takeover bid (other than a Permitted Bid or a Competing Permitted Bid) where the Voting Shares subject to the bid owned by that person (including affiliates, associates and others acting jointly or in concert therewith) would constitute 20% of more of the outstanding Voting Shares; and
(c) the date upon which a Permitted Bid or Competing Permitted Bid ceases to qualify as such.
Promptly following the Separation Time, separate certificates evidencing rights ("Rights Certificates") will be mailed to the holders of record of the Voting Shares as of the Separation Time and the Rights Certificates alone will evidence the Rights.
Rights Exercise Privilege
After the Separation Time, each Right entitles the holder thereof to purchase one Common Share at an initial "Exercise Price" equal to three times the "Market Price" at the Separation Time. The Market Price is defined as the average of the daily closing prices per share of such securities on each of the 20 consecutive trading days through and including the trading day immediately preceding the Separation Time. Following a transaction which results in a person becoming an Acquiring Person (a "Flip-In Event"), the Rights entitle the holder thereof to receive, upon exercise, such number of Common Shares which have an aggregate Market Price (as of the date of the Flip-In Event) equal to twice the then Exercise Price of the Rights for an amount in cash equal to the Exercise Price. In such event, however, any Rights beneficially owned by an Acquiring Person (including affiliates, associates and others acting jointly or in concert therewith), or a transferee of any such person, will be null and void. A Flip-In Event does not include acquisitions approved by the Board or acquisitions pursuant to a Permitted Bid or Competing Permitted Bid.
Permitted Bid Requirements
A bidder can make a takeover bid and acquire Voting Shares without triggering a Flip-In Event under the Rights Plan if the takeover bid qualifies as a Permitted Bid.
The requirements of a "Permitted Bid" include the following:
(a) the takeover bid must be made by means of a takeover bid circular;
(b) the takeover bid is made to all holders of Voting Shares on the books of the Company, other than the offeror;
(c) no Voting Shares are taken up or paid for pursuant to the takeover bid unless more than 50% of the Voting Shares held by Independent Shareholders: (i) shall have been deposited or tendered pursuant to the take-over bid and not withdrawn; and (ii) have previously been or are taken up at the same time;
(d) the takeover bid contains an irrevocable and unqualified provision that no Voting Shares will be taken up or paid for pursuant to the takeover bid prior to the close of business on the date which is not less than 105 days following the date of the takeover bid;
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(e) the takeover bid contains an irrevocable and unqualified provision that Voting Shares may be deposited pursuant to such takeover bid at any time during the period of time between the date of the takeover bid and the date on which Voting Shares may be taken up and paid for and any Voting Shares deposited pursuant to the takeover bid may be withdrawn until taken up and paid for; and
(f) the takeover bid contains an irrevocable and unqualified provision that, if on the date on which Voting Shares may be taken up and paid for under the takeover bid, more than 50% of the Voting Shares held by Independent Shareholders have been deposited pursuant to the takeover bid and not withdrawn, the offeror will make public announcement of that fact and the takeover bid will remain open for deposits and tenders of Voting Shares for not less than 10 business days from the date of such public announcement.
The Shareholder Rights Plan also allows for a competing Permitted Bid (a "Competing Permitted Bid") to be made while a Permitted Bid is in existence. A Competing Permitted Bid must satisfy all of the requirements of a Permitted Bid and contain an irrevocable and unqualified provision that no Voting Shares will be taken up or paid for pursuant to such takeover bid prior to the close of business on the date that is no earlier than the date on which Voting Shares may be taken up under any Permitted Bid (determined as of the date of making the takeover bid, assuming no amendment or variation to the terms and satisfaction of all conditions to the completion of the Permitted Bid) that preceded the Competing Permitted Bid.
Permitted Lock-Up Agreements
A person will not become an Acquiring Person by virtue of having entered into an agreement (a "Permitted Lock-Up Agreement") with a Shareholder whereby the Shareholder agrees to deposit or tender Voting Shares to a takeover bid (the "Lock-Up Bid") made by such person, provided that the agreement meets certain requirements including:
(a) the terms of the agreement are publicly disclosed and a copy of the agreement is publicly available not later than the date of the Lock-Up Bid or, if the Lock-Up Bid has not been made prior to the date on which such agreement is entered into, not later than the first business day following the date of such agreement;
(b) the holder who has agreed to tender Voting Shares to the Lock-Up Bid made by the other party to the agreement is permitted to terminate its obligation under the agreement, and to terminate any obligation with respect to the voting of such Voting Shares, in order to tender Voting Shares to another takeover bid or to support another transaction where: (i) the offer price or value of the consideration payable under the other takeover bid or transaction is greater than the price or value of the consideration per share at which the holder has agreed to deposit or tender Voting Shares to the Lock-Up Bid, or is greater than a specified minimum which is not more than 7% higher than the price or value of the consideration per share at which the holder has agreed to deposit or tender Voting Shares under the Lock-Up Bid; and (ii) if the number of Voting Shares offered to be purchased under the Lock-Up Bid is less than all of the Voting Shares held by Shareholders (excluding Voting Shares held by the offeror), the number of Voting Shares offered to be purchased under the other takeover bid or transaction (at an offer price not lower than in the Lock-Up Bid) is greater than the number of Voting Shares offered to be purchased under the Lock-Up Bid or is greater than a specified number which is not more than 7% higher than the number of Voting Shares offered to be purchased under the Lock-Up Bid; and
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(c) no break-up fees, top-up fees, or other penalties that exceed in the aggregate the greater of 2.5% of the price or value of the consideration payable under the Lock-Up Bid and 50% of the increase in consideration resulting from another takeover bid or transaction shall be payable by the holder if the holder fails to deposit or tender Voting Shares to the Lock-Up Bid.
Waiver and Redemption
If a potential offeror does not desire to make a Permitted Bid, it can negotiate with, and obtain the prior approval of the Board to make a takeover bid by way of a takeover bid circular sent to all holders of Voting Shares on terms which the Board considers fair to all Shareholders. In such circumstances, the Board may waive the application of the Shareholder Rights Plan thereby allowing such bid to proceed without dilution to the offeror. Any waiver of the application of the Shareholder Rights Plan in respect of a particular takeover bid shall also constitute a waiver of any other takeover bid which is made by means of a takeover bid circular to all holders of Voting Shares while the initial takeover bid is outstanding. The Board may also waive the application of the Shareholder Rights Plan in respect of a particular Flip-in Event that has occurred through inadvertence, provided that the Acquiring Person that inadvertently triggered such Flip-in Event reduces its beneficial holdings to less than 20% of the outstanding Voting Shares within 14 days or such earlier or later date as may be specified by the Board. With the prior consent of the holders of Voting Shares, the Board may, prior to the occurrence of a Flip-in Event that would occur by reason of an acquisition of Voting Shares otherwise than pursuant to the foregoing, waive the application of the Shareholder Rights Plan to such Flip-in Event.
The Board may, with the prior consent of the holders of Voting Shares, at any time prior to the occurrence of a Flip-in Event, elect to redeem all but not less than all of the then outstanding Rights at a redemption price of $0.00001 per Right. Rights are deemed to be redeemed following completion of a Permitted Bid, a Competing Permitted Bid or a takeover bid in respect of which the Board has waived the application of the Rights Plan.
Protection against Dilution
The Exercise Price, the number and nature of securities which may be purchased upon the exercise of Rights and the number of Rights outstanding are subject to adjustment from time to time to prevent dilution in the event of dividends, subdivisions, consolidations, reclassifications or other changes in the outstanding Common Shares, pro rata distributions to holders of Common Shares and other circumstances where adjustments are required to appropriately protect the interests of the holders of Rights.
Exemptions for Investment Advisors
Investment advisors (for client accounts), trust companies (acting in their capacity as trustees or administrators), statutory bodies whose business includes the management of funds (for employee benefit plans, pension plans, or insurance plans of various public bodies) and administrators or trustees of registered pension plans or funds acquiring greater than 20% of the Voting Shares are exempted from triggering a Flip-in Event, provided they are not making, either alone or jointly or in concert with any other person, a takeover bid.
Duties of the Board
Continuation the term of the Shareholder Rights Plan will not in any way lessen or affect the duty of the Board to act honestly and in good faith with a view to the best interests of the Company. The Board, when a takeover bid or similar offer is made, will continue to have the duty and power to take such actions and make such recommendations to Shareholders as are considered appropriate.
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Amendment
The Company may make amendments to the Shareholder Rights Plan at any time to correct any clerical or typographical error and may make amendments which may be required to maintain the validity of the Shareholder Rights Plan due to changes in any applicable legislation, regulations or rules. The Company may, with the prior approval of Shareholders (or the holders of Rights if the Separation Time has occurred), supplement, amend, vary, rescind or delete any of the provisions of the Shareholder Rights Plan.
Vote Required and Recommendation of the Board
Shareholder approval of the Shareholder Rights Plan is required by its terms. At the Meeting, Shareholders will be asked to consider and, if thought advisable, to ratify, confirm and approve the Shareholder Rights Plan by means of an ordinary resolution (the "Shareholder Rights Plan Resolution") in substantially the following form:
"BE IT RESOLVED THAT:
1. The Amended and Restated Shareholder Rights Plan Agreement, dated as of June 9, 2016, amended and extended June 9, 2022 between the Company and Computershare Trust Company of Canada (the "Rights Plan"), as described in the Information Circular prepared for the Company's Annual General Meeting held June 9, 2022 with amendments approved by the Board on April 15, 2022, be and is hereby ratified, confirmed and approved, for a further three years and the Company is authorized to issue Rights pursuant thereto; and
2. The making on, or prior to, the date hereof of any other amendments to the Rights Plan as the Company may consider necessary or advisable to satisfy the requirements of any stock exchange or professional commentators on shareholder rights plans in order to conform the Rights Plan to versions of shareholder rights plans currently prevalent for reporting issuers in Canada, is hereby approved."
To pass, the Shareholder Rights Plan Resolution must be approved by a simple majority vote of the Common Shares voted, in person or by proxy, on the resolution.
The management proxyholders intend to vote FOR the Shareholder Rights Plan Resolution, except in relation to Common Shares held by a Shareholder who instructs otherwise.
B. Advisory Resolution on Company's Approach to Executive Compensation (Say-on-Pay)
The Board believes that Shareholders should have the opportunity to not only fully understand the objectives, philosophies and principles the Board has used in its approach to executive compensation decisions but to also have an annual advisory vote on such approach to executive compensation. The purpose of the Say-on-Pay advisory vote is to provide appropriate director accountability to the Shareholders for the Board's compensation decisions. For additional information regarding the Company's approach to executive compensation, Shareholders should review the section "Statement of Executive Compensation" in this Information Circular. A full copy of the Company's Say-on-Pay Policy is included in Appendix 11 to the Governance Manual, and is available on the Company's website at www.tasekomines.com.
Although an annual vote by shareholders on our compensation practices is not mandatory in Canada, we believe it is an essential part of good governance and enhances shareholder engagement by giving the shareholders a formal opportunity to provide their views on the disclosed objectives of the executive compensation plans and on the incentive plans themselves. While Shareholders will provide their collective advisory vote, the Board remains fully responsible for its compensation decisions and is not relieved of its responsibilities. Because the Say-on-Pay resolution is an advisory vote, the results are non-binding; however, the Board and the Compensation Committee will take the results of the vote into account when considering future compensation policies, procedures and decisions.
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The Board recognizes that Say-on-Pay is an evolving area in Canada and globally, and will review this policy annually to ensure that it is effective in achieving its objectives.
The Company's executive compensation policies and programs are based on the principle of 'pay for performance' to align the interests of the Company's executive officers with those of the Company's shareholders. Shareholders are being asked at the Meeting to consider and approve the following ordinary resolution (the "Say-on-Pay Advisory Resolution") in substantially the following form:
"BE IT RESOLVED that, on an advisory basis, and not to diminish the role and responsibilities of the Board of Directors, the Shareholders accept the Board's approach to executive compensation delivered in advance of the 2022 annual meeting of shareholders."
To pass, the Say-on-Pay Advisory Resolution must be approved by a majority vote of the Common Shares voted, in person or by proxy, on the advisory resolution.
The management proxyholders intend to vote FOR the Say-on-Pay Advisory Resolution, except in relation to Common Shares held by a Shareholder who instructs otherwise.
In the event that a significant number of Shareholders oppose the Say-on-Pay Advisory Resolution, the Board will consult with its Shareholders, particularly those who are known to have voted against it, in order to understand their concerns and will review the Company's approach to compensation in the context of those concerns.
Shareholders who have voted against the Say-on-Pay Advisory Resolution are also encouraged to contact the Board to discuss their specific concerns.
The Board will disclose to Shareholders as soon as is practicable, ideally within six months of the vote, and no later than in the management proxy circular for its next annual meeting, a summary of the significant comments relating to management compensation received from Shareholders in the engagement process and an explanation of the changes to the compensation plans made or to be made by the Board or why no changes will be made.
ADDITIONAL INFORMATION
Additional information relating to the Company is included in the Company's annual information form and in the audited financial statements for the year ended December 31, 2021, the auditor's report thereon and related management discussion and analysis, all of which are filed under the Company's profile at www.sedar.com. Copies of the Company's most current interim financial statements and related management discussion and analysis, the Share Option Plan, the Performance Share Unit Plan, the Shareholders Rights Plan and any additional information may be obtained from www.sedar.com and upon request from the Company at telephone number (778) 373-4533 or fax number (778) 373-4534.
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OTHER MATTERS
The Board is not aware of any other matters which it anticipates will come before the Meeting as of the date of mailing of this Information Circular.
The contents of this Information Circular and its distribution to shareholders have been approved by the Board.
DATED at Vancouver, British Columbia, as at April 28, 2022.
BY ORDER OF THE BOARD OF DIRECTORS
"Stuart McDonald"
|
Stuart McDonald |
QUESTIONS MAY BE DIRECTED TO THE PROXY SOLICITOR
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1-877-452-7184
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Email: assistance@laurelhill.com
