UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
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240.14a-l
1(c) or §
240.14a-12
Idaho
General Mines, Inc.
(Name
of
Registrant as Specified In Its Charter)
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Idaho
General Mines, Inc.
10
North Post Street, Suite 610
Spokane,
Washington 99201
Notice
of Annual Meeting of Shareholders
To
be Held on December 13, 2006
Dear
Shareholder:
We
are
pleased to invite you to attend our Annual Meeting of Shareholders of Idaho
General Mines, Inc. (the “Company”), which will be held at 2:00 pm, local
Spokane time on December 13, 2006, at the law offices of Preston Gates &
Ellis LLP, 618 West Riverside Avenue, Suite 300, Spokane, Washington 99201.
The
meeting will be held to:
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Elect
nine members to the Board of Directors to serve until the next annual
meeting of shareholders and until their respective successors are
elected
and qualified;
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Approve
the Idaho General Mines, Inc. 2006 Equity Incentive Plan;
and
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Transact
such other business as may properly come before the meeting or any
adjournment thereof.
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Only
shareholders of record on the books of the Company at the close of business
on
November 1, 2006, the record date fixed by the Board of Directors, are entitled
to notice of and to vote at the Annual Meeting and at any postponements or
adjournments thereof.
It
is
important that your shares be represented at the meeting whether or not you
are
personally able to attend. We therefore urge you to complete, date and sign
the
accompanying proxy and mail it in the enclosed postage-paid envelope as promptly
as possible. Your proxy is revocable, either in writing or by voting in person
at the Annual Meeting, at any time prior to its exercise. Thank you for your
timely response.
We
look
forward to seeing you at the Annual Meeting on December 13, 2006.
Sincerely,
/s/
Robert L. Russell
Robert
L.
Russell
President
and Chairman
Idaho
General Mines, Inc.
10
North Post Street, Suite 610
Spokane,
Washington 99201
PROXY
STATEMENT
Relating
to
Annual
Meeting of Shareholders
To
be held on December 13, 2006
INTRODUCTION
This
proxy statement is being furnished by the Board of Directors of Idaho General
Mines, Inc. (the “Company”) to holders of shares of the Company’s $0.001 par
value common stock in connection with the solicitation by the Board of Directors
of proxies to be voted at the Annual Meeting of Shareholders of the Company
to
be held on December 13, 2006 at 2:00 pm, local Spokane time, at the law offices
of Preston Gates & Ellis LLP, 618 West Riverside Avenue, Suite 300, Spokane,
Washington 99201, and any postponements or adjournments thereof, for purposes
set forth in the accompanying Notice of Annual Meeting of Shareholders. This
proxy statement and the accompanying proxy card are first being mailed to the
shareholders on or about November 8, 2006.
A
proxy
card is enclosed for your use.
You
are requested on behalf of the Board of Directors to sign, date, and return
the
proxy card in the accompanying envelope,
which
is postage-paid if mailed in the United States. Your execution of the enclosed
proxy will not affect your right as a shareholder to attend the Annual Meeting
and to vote in person. Any shareholder giving a proxy has the right to revoke
it
at any time by either (i) providing a later-dated proxy to the Company prior
to
the Annual Meeting or presenting it at the Annual Meeting, (ii) providing a
written revocation that is received by the Secretary of the Company prior to
the
Annual Meeting, or (iii) attending at the Annual Meeting and voting in
person.
PURPOSE
OF THE ANNUAL MEETING
At
the
Annual Meeting, shareholders entitled to vote will be asked to consider and
take
action on the following matters:
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election
of nine directors to the Company’s Board of Directors, each to serve until
the next annual meeting of shareholders and until their respective
successors are elected and qualified;
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to
approve the Company’s 2006 Equity Incentive Plan; and
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to
transact such other business as may properly come before the meeting
or
any adjournment thereof.
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1
As
your vote is important, it is requested that you complete and sign the enclosed
proxy card and mail it promptly in the postage paid return envelope provided.
Shares
cannot be voted at the meeting unless the owner is present to vote or is
represented by proxy.
VOTING
AT ANNUAL MEETING
Record
Date; Quorum.
The
Board of Directors of the Company has fixed the close of business on November
1,
2006 as the record date for the purpose of determining shareholders of the
Company entitled to notice of and to vote at the Annual Meeting. At the close
of
business on that date, the Company had 41,481,102 issued and outstanding shares
of common stock. A majority of such shares will constitute a quorum for the
transaction of business at the Annual Meeting. Proxies that are submitted but
are not voted for or against (whether by abstentions, broker non-votes, or
otherwise) will be treated as present for all matters considered at the meeting,
and will be counted for purposes of a quorum.
Solicitation
of Proxies.
The
accompanying proxy is solicited on behalf of the Board of Directors of the
Company and the entire cost of solicitation will be borne by the Company.
Following the original mailing of the proxies and soliciting materials,
directors, officers and employees of the Company may, but do not presently
intend to, solicit proxies by mail, telephone, telegraph, or personal
interviews. The Company may request brokers, custodians, nominees, and other
record holders to forward copies of the proxies and soliciting materials to
persons for whom they hold shares of the Company and to request authority for
the exercise of proxies. In such cases the Company will reimburse such holders
for their reasonable expenses. The Company may utilize the services of a proxy
solicitation firm.
Revocation
of Proxy. Any
proxy
delivered in the accompanying form may be revoked by the person executing the
proxy by:
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providing
written notice to that effect to the Secretary of the Company at
any time
before the authority thereby granted is
exercised;
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providing
a duly executed proxy bearing a later date at the Annual Meeting
or to the
Company prior to the Annual Meeting; or
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attending
the Annual Meeting and voting in
person.
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How
Proxies will be Voted.
Assuming
a quorum is present, proxies received by the Board of Directors in the
accompanying form will be voted at the Annual Meeting as specified therein
by
the person giving the proxy. All shares represented by valid proxy will be
voted
at the discretion of the proxy holders on any other matters that may properly
come before the meeting. However, the Board of Directors does not know of any
matters to be considered at the meeting other than those specified in the Notice
of Annual Meeting.
Required
Votes. With
respect to the election of directors, the nine candidates receiving the highest
number of votes will be elected. With respect to the approval of the Company’s
2006 Equity Incentive Plan, the affirmative vote of a majority of the votes
cast
is required.
Effect
of Abstentions and Broker Non-Votes. Abstentions
occur when shareholders abstain from voting for the nominees for director or
abstain from voting on other proposals. Brokers and other intermediaries,
holding shares in street name for their customers, are generally required to
vote the shares in the manner directed by their customers. If their customers
do
not give any direction, brokers may vote the shares on routine matters, such
as
the election of directors, but not on non-routine matters. The absence of a
vote
on a non-routine matter is referred to as a broker non-vote. Any shares
represented at the Annual Meeting but not voted (whether by abstention, broker
non-vote or otherwise) will have no impact in the election of
2
directors,
except to the extent that the failure to vote for an individual results in
another individual receiving a larger proportion of votes. Any shares
represented at the Annual Meeting but not voted (whether by abstention, broker
non-vote or otherwise) with respect to the proposal to approve the Company’s
2006 Equity Incentive Plan will have the no effect on a vote for such
proposal.
Voting
Power.
Shareholders of the common stock of the Company are entitled to one vote for
each share held. There is no cumulative voting for directors.
PROPOSAL
1: ELECTION OF DIRECTORS
The
Company’s directors are to be elected at each annual meeting of shareholders. At
this Annual Meeting, nine directors are to be elected to serve until the next
annual meeting of shareholders and until their successors are elected and
qualify. The nominees for election as directors at this Annual Meeting set
forth
in the table below are all recommended by the Board of Directors of the
Company.
In
the
event that any of the nominees for director should become unable to serve if
elected, it is intended that shares represented by proxies which are executed
and returned will be voted for such substitute nominee(s) as may be recommended
by the Company’s existing Board of Directors.
The
nine
nominees receiving the highest number of votes cast at the Annual Meeting will
be elected as the Company’s directors to serve until the next annual meeting of
shareholders or until their successors are elected and qualified.
THE
BOARD RECOMMENDS A VOTE “FOR” THE NINE NOMINEES
DIRECTORS
AND EXECUTIVE OFFICERS
The
following table provides the names, positions, ages and principal occupations
of
our directors, each of whom is a nominee for director at the Annual Meeting,
and
our executive officers:
|
Name
and Position with Our
Company
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Age
|
Director/Officer
Since
|
Principal
Occupation
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Robert
L. Russell
Director,
President and Chief
Executive
Officer
(Nominee)
|
72
|
Director
January 1967 to present; President and Chief Executive Officer, April
1984
to present
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President
and Chief Executive Officer of our company
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John
B. Benjamin (1)(2)
Director
(Nominee)
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76
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Director
since February 1974
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Retired
mining professional
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Gene
W. Pierson (2)
Director
(Nominee)
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68
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Director
since March 2002
|
Mining
consultant
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3
|
Norman
A. Radford (1)(2)(3)
Director
(Nominee)
|
73
|
Director
since 2002
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Manager
of Silver Capital Arts, a retail jewelry and gem store
|
|
R.
David Russell
Director
(Nominee)
|
49
|
Director
since 2002
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President
and Chief Executive Officer of Apollo Gold Corporation, a TSX/AMEX
listed
gold mining company
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Richard
F. Nanna (2)(3)
Director
(Nominee)
|
56
|
Director
since November 2003
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Vice
President Exploration for Apollo Gold Corporation, a TSX/AMEX listed
gold
mining company
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|
R.
Llee Chapman (1)(3)
Director
(Nominee)
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49
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Director
since August 2004
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Principal
of R. Llee Chapman Consulting and an employee of Ascendant Copper
Corporation
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Roy
A Pickren, Jr.
Director
(Nominee)
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70
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Director
since August 2006
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President
and Chief Executive Officer of Crescent Technology Inc.
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Ricardo
M. Campoy
Director
(Nominee)
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56
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Director
since August 2006
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International
natural resources banker
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Robert
L. Dumont
Executive
Vice President—
Business
Strategies and
Development
|
50
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Officer
since January 2005
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Executive
Vice President—Business Strategies and Development of
our company
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Henry
A. Miller
Chief
Financial Officer,
Executive
Vice-President
Finance
and Senior Counsel
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55
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Officer
since April 2006
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Chief
Financial Officer, Executive Vice-President Finance and Senior Counsel
of
our company
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Michael
K. Branstetter
Secretary,
Treasurer and Legal
Counsel
|
53
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Officer
since November 1992
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Attorney
with the firm of Hull & Branstetter Chartered
|
(1)
Member of Audit and Finance Committee.
(2)
Member of Nominating Committee.
(3)
Member of Compensation Committee.
We
have
no knowledge of any arrangements, including any pledge by any person of our
securities, the operation of which may at a subsequent date result in a change
in our control. We are not, to the best of our knowledge, directly or indirectly
owned or controlled by another corporation or foreign government.
The
term
of office of the directors is for one year and until their successors are
elected. Officers are appointed annually by the Board of Directors and
serve at the pleasure of the Board.
Robert
L. Russell,
a
professional engineer, has been a director of our company since 1967 and our
President and Treasurer from 1979 to 1980 and our President and Chief Executive
Officer since 1984. Mr. Russell held positions with Exxon Minerals from 1976
to
1984 and Freeport-McMoRan Copper & Gold,
4
Inc.
where he served as Vice President of Mining from 1988 to 1995. Mr. Russell
was Executive Vice President and General Manager of Freeport’s Indonesian
operations, responsible for the overall operations, including 8,000 employees,
and the construction of $1.5 billion of capital facilities. From 1995 to 1998,
Mr. Russell was employed by Zambia Consolidated Copper Mines, most recently
as
General Manager of the Nchanga Division. In that position, Mr. Russell was
responsible for all functions of two operating mines and several metallurgical
facilities. Mr. Russell is a director of Mines Management, Inc.
John
B. Benjamin has
been
a director of our company since 1974. Mr. Benjamin has been retired since
1989. Prior to that time, Mr. Benjamin was employed from 1987 to 1989 by
Dames & Moore, a Denver, Colorado based engineering company as a field
sampling and air/water monitoring coordinator assistant for The Bunker Hill
Superfund Remedial Investigation and Feasibility Study. Before joining
Dames & Moore, Mr. Benjamin was employed by the Bunker Hill Company for
approximately 27 years.
Gene
W. Pierson,
a
mining engineer, has been a director of our company since 2002. Mr. Pierson
graduated from the University of Texas, El Paso, with a Bachelor of Science
degree in mining engineering, geology option, June 1962. Since 1999, Mr.
Pierson has been a self-employed consultant for mining companies in mineral
economics and management. From 1981 to 1999, Mr. Pierson was employed by
Hecla Mining Company as a senior analyst performing research and analytical
work
with management, engineering, metallurgical, geology, accounting and financial
staff. Mr. Pierson is a member of the Society of Mining Engineers and the
Mineral Economics & Management Society.
Norman
A. Radford,
a
mining engineer, has been a director of our company since 2002. Mr.
Radford graduated from the University of Idaho with a Bachelor of Science
degree. From 1982 to 1985, Mr. Radford was employed by Coeur d’Alene Mines
Corporation as a consulting geologist providing full time consulting services
to
the chairman of the board. From 1965 to 1982, Mr. Radford was employed by
The Bunker Hill Company as a senior mine geologist. Mr. Radford is a
registered professional geologist and a member of the American Institute of
Mining Engineers. Mr. Radford has been semi-retired since 1985 and has run
a jewelry store since that year.
R.
David Russell has
been
the President & CEO/director of the Canadian gold company Apollo Gold
Corporation (“Apollo Gold”) since 2002, which is listed on the TSX and on AMEX
and has been a director of our company since 2002. In 1999, Mr. Russell
founded Nevoro Gold Corporation which was subsequently merged with Apollo Gold.
From 1994 to 1999, Mr. Russell was Vice President and Chief Operating
Officer for Getchell Gold Corporation (“Getchell”), a Nevada gold producer.
Mr. Russell oversaw the Getchell open pit as well as the development of
two underground mechanized gold mines and a complex pressure oxidation mill
for
gold ore processing. Prior to Getchell, Mr. Russell was General Manager,
US operations, for LAC Minerals Ltd. and after their acquisition, Barrick Gold
Corporation (collectively, “LAC/Barrick”). His responsibilities included
operations at various mines in the western US including the Bullfrog mine in
Nevada, the Richmond Hill Mine located near Lead, South Dakota, the Ortiz
Project near Santa Fe, New Mexico, and the Coliseum reclamation project in
California. Prior to LAC/Barrick, Mr. Russell was manager of underground
mining for the Independence Mining Company Inc. in Nevada, project manager
for
Hecla Mining Company in Idaho, manager of the Lincoln Project in California
for
our company/Meridian Gold Inc. / US energy and mine manager for ASARCO LLC
in
Idaho and Colorado. Mr. Russell is a BS Mining Engineering graduate from
Montana Tech. Mr. Russell is the son of our President and Chief Executive
Officer, Robert L Russell.
Richard
F. Nanna
is Vice
President Exploration for Apollo Gold and has been a director of our company
since 2003. Mr. Nanna is responsible for managing all aspects of
exploration and geology for the two major operating gold mines of Apollo Gold
as
well as all exploration for new properties. Mr. Nanna was Vice President
of Exploration in Nevada for Getchell from 1994 to 1999, where he was
responsible for discovering over 18 million ounces of gold. This property
is being further developed by Placer Dome
5
Inc.
Mr. Nanna attended the University of Akron, Ohio from 1972 to 1978, where
he received bachelor and masters of science degrees in geology. Mr. Nanna
has been an instructor in undergraduate geological studies at that institution.
Mr. Nanna is experienced in working with investment bankers and has
experience in the areas of acquisition, valuation, and sales of mineral
properties for the various companies for which he has worked.
R.
Llee Chapman
is a
seasoned financial executive with 24 years of experience with some of the
world’s largest natural resource and engineering companies and has been a
director of our company since 2004. Mr. Chapman served as Vice President
and Chief Financial Officer for Apollo Gold from 2002 until March 2005.
Mr. Chapman is a certified public accountant licensed in two states, a
former Elko County Commissioner and Chairman, and current President of the
Northwest Mining Association. Mr. Chapman has been an independent mining
consultant since March 2005 and is currently employed by Ascendant Copper
Corporation.
Roy
A. Pickren, Jr.
has
been
a director of our Company since August 2006. Mr. Pickren has
served since 1993 as the President and Chief Executive Officer of Crescent
Technology Inc., a company that provides experienced professionals in
international environmental, safety, engineering, and analytical laboratory
services. From 1959 to 1993, Mr. Pickren worked for Freeport-McMoRan Inc.
and its affiliates in various positions, including Vice President and Senior
Technical Deputy, Office of the Chairman; Senior Vice President; Industrial
Manager; and Chemical Engineer.
Ricardo
M. Campoy has
been
a director of our Company since August 2006. Mr.
Campoy has worked as an international natural resources banker for twenty-six
years, having served in executive finance positions at various firms, including
as Head of Mining & Metals of WestLB AG and as Member/Senior Advisor of
McFarland Dewey & Co., LLC. Prior to Mr. Campoy’s work in finance, he
was employed as a mining engineer. Mr. Campoy is currently in private practice
as a financial and corporate advisor to the natural resources
industry.
Robert
L. Dumont is
our
Executive Vice President—Business Strategies and Development. From January 2005
until April 2006, he served as our Vice President of Business Development and
acting Chief Financial Officer. Prior to joining our company, Mr. Dumont
was the managing partner of Atmos Management Group which specializes in
strategic and financial business management. Mr. Dumont’s primary function
was the strategic financial management of select companies for controlling
stakeholders. From 1996 to 1998, Mr. Dumont was the managing partner of Dumont
Partners, a private investment partnership, based in Greenwich, Connecticut.
From 1992 to 1996, Mr. Dumont was an equity portfolio manager for Morgens,
Waterfall, Vintiadis & Company, Inc., a private investment partnership,
based in New York, New York. From 1988 to 1992, Mr. Dumont was head of
strategic investments for Whitehead Associates, a private investment group
focused on public and private investments, based in Greenwich, Connecticut.
Prior to Whitehead Associates, Mr. Dumont was employed as senior equity
portfolio manager for The Selzer Group, New York, New York, a merchant banking
firm. Prior to The Selzer Group, Mr. Dumont was a mineral economics
analyst for Chase Manhattan Bank, N.A., New York, New York. Mr. Dumont
holds a bachelor of science degree in mining engineering from the University
of
Idaho and has completed post graduate studies in Accounting, Finance, and
Economics.
Henry
A. Miller
is our
Chief Financial Officer, Executive Vice-President Finance and Senior Counsel.
From 1999 to 2006, Mr. Miller was associated with Enhanced Capital
Partners, LLC, a national investment firm specializing in state-specific
investments in small and emerging companies with its private investment funds
in
Alabama, Colorado, Louisiana, New York, Texas, and Washington, D.C. Mr. Miller,
a cofounder and principal, currently serves on the Board of Directors of
Enhanced Capital Partners, LLC and served as the Chief Financial Officer. In
addition, Mr. Miller managed three Louisiana investment funds. Since July 2003,
Mr. Miller has been of counsel to the law firm of Middleberg, Riddle
6
&
Gianna. From 1985 through 2003, Mr. Miller was associated with Freeport-McMoRan
natural resource companies serving in various management capacities including
Vice President and General Counsel of Freeport-McMoRan Copper & Gold Inc.,
and Vice President, Taxes for Freeport-McMoRan Copper & Gold Inc., McMoRan
Oil & Gas Company and Freeport-McMoRan Inc. Mr. Miller holds an AB degree
from the University of North Carolina, Chapel Hill, and received a J.D. from
Emory University and an LL.M. (Tax) from New York University.
Michael
K. Branstetter
is our
Secretary and Treasurer, and acts as our corporate counsel. Mr.
Branstetter is the principal of Hull & Branstetter Chartered, a law firm in
Idaho.
The
Board of Directors, Board Committees and Director
Independence
During
the year ended December 31, 2005, there were five meetings of the Board of
Directors. Each of the incumbent directors who were on the Board of Directors
during 2005 attended at least 75% of the total number of meetings of the Board
of Directors and the total number of meetings held by the committees of the
Board of Directors on which he served. Although the Company does not have a
policy requiring members of the Board of Directors to attend the Company’s
annual meeting of shareholders, all of our then-sitting directors attended
our
annual meeting of shareholders held on December 29, 2005.
Our
Board
of Directors has three standing committees: Audit and Finance Committee,
Compensation Committee, and Nominating Committee. Each committee is described
more fully below.
Shareholders
may communicate with the Board of Directors by sending an email or a letter
to
Idaho General Mines, Inc. Board of Directors, c/o Corporate Secretary,
10
N.
Post Street, Suite 610, Spokane, WA 99201, info@idahogeneralmines.com.
The
Corporate Secretary will receive the correspondence and forward it to the
Chairman of the applicable Board of Directors Committee or to any individual
director or directors to whom the communication is directed.
Audit
and Finance Committee. Our
Audit
and Finance Committee members are: R. Llee Chapman, Chairman, Norman A. Radford
and John Benjamin, all being independent directors in accordance with the
listing standards of the American Stock Exchange (“AMEX”). The Audit and Finance
Committee held three meetings in 2005. The Audit and Finance Committee
recommends a firm of independent certified public accountants to audit the
annual financial statements; discusses and approves in advance the scope of
the
audit with the auditors; reviews with the independent auditors their
independence, the financial statements, and their audit report; reviews
management’s administration of the system of internal accounting controls; and
reviews our procedures relating to business ethics. Our Board of Directors
has approved a written Audit and Finance Committee charter, a copy of which
is
attached to this proxy statement as Appendix
A.
Mr. Chapman is deemed the committee’s financial expert.
Compensation
Committee.
Our
Compensation Committee is composed of R. Llee Chapman, Chairman, Richard F.
Nanna and Norman A. Radford. The Compensation Committee held three meetings
in
2005. The primary purposes of the Compensation Committee are: (i) to
assist the Board in discharging its responsibilities in respect of compensation
of our executive officers, including setting salary and annual bonus levels
for
our senior executive officers as well as overseeing the senior staff bonus
plans, subject to the approval of the Board; (ii) to produce an annual report
for inclusion in our proxy statement on executive compensation; (iii) to provide
recommendations to the Board in connection with directors’ compensation; and
(iv) to provide recommendations to the Board in connection with succession
planning for our senior management.
Nominating
Committee. Our Nominating Committee members are: John B. Benjamin,
Richard F. Nanna, Gene W. Pierson, and Norman A. Radford. The Nominating
Committee held two meetings in 2005. The responsibilities of the Nominating
Committee include (i) developing policies on the size and
7
composition
of the Board for election or re-election and reviewing and developing the
Board’s criteria for selecting new directors, including standards for director
independence and competence; (ii) reviewing possible candidates for Board
membership consistent with the Board’s criteria for selecting new directors;
(iii) conducting a performance evaluation of the individual directors and of
the
Board as a whole on an annual basis; (iv) annually recommending a slate of
nominees to the Board with respect to nominations for the Board at the annual
meeting of our shareholders; (v) making recommendations to the Board relating
to
the composition of Board committees; (vi) advising the Board on committee member
qualifications, committee member appointments and removals, committee structure
and operations (including authority to delegate to subcommittees), and committee
reporting to the Board; and (vii) maintaining an orientation program for new
directors and a continuing education program for all directors.
The
Nominating Committee is governed by the Nominating Committee Charter, which
is
appended to this proxy statement as Appendix
B
and is
available in print to any shareholder who requests it. The functions of the
Nominating Committee are described in the Nominating Committee Charter and
include, among other things, identifying individuals qualified to become members
of the Board and selecting or recommending to the Board the nominees to stand
for election as directors.
Our
shareholders may recommend director nominees, and the Nominating Committee
will
consider nominees recommended by shareholders. To date, we have not received
any
recommendations from our shareholders requesting that the Board or any of its
committees consider a nominee for inclusion among the Board’s slate of nominees
in this proxy statement. A shareholder wishing to submit a director nominee
recommendation should comply with the provisions of our bylaws and the
provisions set forth in this proxy statement under the heading “Shareholder
Proposals and Recommendations for Director Nominees for the 2007 Annual
Meeting.” We anticipate that nominees recommended by shareholders will be
evaluated in the same manner as nominees recommended by anyone else, although
the Nominating Committee may prefer nominees who are personally known to the
existing directors and whose reputations are highly regarded. The Nominating
Committee will consider all relevant qualifications as well as the needs of
the
company in terms of compliance with SEC rules.
While
the
selection of qualified directors is a complex, subjective process that requires
consideration of many intangible factors, the Nominating Committee and the
Board
takes into account the following criteria, among others, in considering
directors and candidates for the Board:
· judgment,
experience, skills and personal character of the
candidate; and
· the
needs
of the Board.
The
Nominating Committee conducts a process of making a preliminary assessment
of
each proposed nominee based upon the resume and biographical information, an
indication of the individual’s willingness to serve and other background
information. This information is evaluated against the criteria set forth above
and our specific needs at that time. Based upon a preliminary assessment of
the
candidate(s), those who appear best suited to meet our needs may be invited
to
participate in a series of interviews, which are used as a further means of
evaluating potential candidates. On the basis of information learned during
this
process, the Nominating Committee determines which nominee(s) to recommend
to
the Board to submit for election at the next annual meeting. The Nominating
Committee uses the same process for evaluating all nominees, regardless of
the
original source of the nomination.
Independent
Directors. Of
the
nine persons who make up our Board of Directors, the Board has determined
that
Messrs. Benjamin, Pierson, Radford, Nanna, Chapman, Pickren, and Campoy are
independent directors under the listing standards of
AMEX.
8
AUDIT
COMMITTEE REPORT
The
members of the Audit and Finance Committee have been appointed by the Board
of
Directors. The Audit and Finance Committee is governed by a charter that has
been approved and adopted by the Board of Directors and which will be reviewed
and reassessed annually by the Audit and Finance Committee. The Audit and
Finance Committee is comprised of three independent directors.
The
Board
of Directors has charged the Audit and Finance Committee with a number of
responsibilities, including review of the adequacy of the Corporation’s
financial reporting, accounting systems, and internal controls. The
Corporation’s independent auditors report directly and are ultimately
accountable to the Audit and Finance Committee.
Management
is responsible for the preparation and integrity of the Company’s financial
statements. The independent registered public accounting firm is responsible
for
performing an independent audit of the Company’s consolidated financial
statements in accordance with generally accepted auditing standards and for
issuing a report thereon. The Committee has independently met and held
discussions with management and the independent registered public accounting
firm.
In
the
discharge of its responsibilities, the Audit and Finance Committee has reviewed
and discussed with management and the independent auditors the Corporation’s
audited financial statements for fiscal year 2005. In addition, the Committee
has discussed with the independent auditors matters such as the quality (in
addition to acceptability), clarity, consistency, and completeness of the
Corporation’s financial reporting, as required by Statement on Auditing
Standards No. 61, Communication
with Audit Committees,
as
amended by Statement on Auditing Standards No. 90, Audit
Committee Communications.
The
Audit
and Finance Committee has received from the independent auditors written
disclosures and a letter concerning the independent auditors’ independence from
the Corporation, as required by Independence Standards Board Standard
No. 1, Independence
Discussions with Audit Committees.
The
Audit and Finance Committee also received from the independent auditors a letter
indicating there were no material issues raised by the independent auditors’
most recent internal quality control review, or by any inquiry or investigation
by governmental or professional authorities within the preceding five years.
These disclosures have been reviewed by the Committee and discussed with the
independent auditors.
Based
on
these reviews and discussions, the Audit and Finance Committee recommended
to
the Board that the audited financial statements be included in the Corporation’s
2005 Annual Report on Form 10-KSB for filing with the Securities and
Exchange Commission.
|
October
24, 2006
|
AUDIT
AND FINANCE COMMITTEE
|
|
|
R.
Llee Chapman
|
|
|
Norman
A. Radford
|
|
|
John
B. Benjamin
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Except
as
set forth below, there have been no transactions or series of transactions,
or
proposed transactions during the last two years to which the Company is a
party
in which any director, executive officer or beneficial owner of five percent
or
more of the Company’s common stock had an interest.
During
2005, we paid approximately $21,000 to Mantis Corp. for consulting services.
Mantis Corp is owned by Andy Russell, son of Robert L. Russell. In
addition, we paid approximately $10,000 to Surradial Corporation for website
design and related matters.
9
Surradial
is owned by Robert L. Russell’s son, Chuck Russell. Robert L Russell is
our President and Chief Executive Officer, as well as
director.
We
paid
professional service fees of $41,182 and $16,386 during the years ended December
31, 2005 and 2004, respectively, for legal and other fees to Michael
Branstetter, our legal counsel and also our Secretary and
Treasurer.
During
the year ended December 31, 2005, we paid $6,000 to Mary K. Russell as
compensation for services as Assistant Secretary and Assistant Treasurer, and
during the year ended December 31, 2004, Mary K. Russell was paid no cash
compensation but was granted options to purchase 150,000 shares. Mary K. Russell
is the wife of Robert L. Russell.
We
paid
consultant fees of $49,060
during
the year ended December 31, 2004 to Matthew F. Russell, the son of Robert L.
Russell, for services provided to the Company. These services included
start up business work to obtain OTC Bulletin Board listing for our Common
Stock. Matthew F. Russell subsequently became a Vice President of our
Company, but is no longer associated with the Company. During the years ended
December 31, 2005 and 2004, we paid salary and other cash compensation in the
amount of $74,763 and $37,214, respectively, to Matthew F. Russell and during
such periods he received options to purchase 300,000 shares and 625,000 shares,
respectively.
During
2004 and 2005, R. David Russell, the son of Robert L. Russell, served on our
Board of Directors and received cash compensation and stock options for such
service as described below in “Compensation of Directors.”
EXECUTIVE
COMPENSATION
The
following table discloses compensation paid to or awarded to our Chief Executive
Officer (the “Named Executive Officer”) for the three most recently completed
fiscal years ended December 31, 2003, 2004 and 2005 for services rendered to
us.
As of the end of our most recently completed fiscal year ended December
31, 2005, we had no other officers that earned total annual salary and bonus
in
excess of $100,000.
Summary
Compensation Table
|
Name
and
Principal
Position
|
|
Annual
Compensation
|
Long
Term Compensation
|
|
||||
|
Year
Ended
Dec.
31,
|
Salary
($)
|
Bonus
($)
|
Other
Annual
Compen-
sation
($)
|
Awards
|
Payouts
|
|
||
|
Securities
Under
Options/
SARs
Granted
(#)
|
Restricted
Shares or Restricted
Share
Units
($)
|
LTIP
Payouts
($)
|
All
other Compensation
($)
|
|||||
|
Robert
L. Russell
President
and Chief Executive Officer(1)
|
2005
|
$60,000
|
—
|
—
|
—
|
—
|
—
|
—
|
|
2004
|
30,000
|
—
|
—
|
750,000
|
—
|
—
|
—
|
|
|
2003
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|
1)
Mr. Russell’s annual salary was raised to $180,000 as of January 1, 2006,
as a result of meeting corporate funding goals as set forth in his employment
agreement. His annual salary was subsequently raised to $225,000 on March 14,
2006.
Long-Term
Incentive Plan Awards during the Most Recently Completed Financial
Year
We
did
not have any long-term incentive plans during the most recently completed
financial year, other than our stock option plan.
10
Option
Grants during the Most Recently Completed Financial Year
There
were no stock options granted to the Named Executive Officer during fiscal
year
ended December 31,
2005.
Aggregated
Option Exercises in Last Financial Year and Financial Year-End Option/SAR
Values
|
Name
|
Securities
acquired
on exercise
(#)
|
Aggregate
value
realized
($)
|
Unexercised
options at
December
31, 2005 (#)
|
Value
of unexercised in-the-
money
options at
December
31, 2005 ($)
|
||
|
Exercisable
|
Unexercisable
|
Exercisable
|
Unexercisable
|
|||
|
Robert
L. Russell
|
441,944
|
630,000
|
170,000
|
250,000
|
195,000
|
287,500
|
Employment
Contracts
We
entered into an employment agreement with Mr. Robert L. Russell on March 31,
2005 pursuant to which Mr. Russell serves as our President and Chief Executive
Officer. The employment agreement is for a three year term. Under
the agreement, we agreed to pay Mr. Russell a base salary of $180,000 per annum,
reviewable annually, and a performance bonus based on certain performance
criteria. The base salary became effective on January 1, 2006 as a result
of meeting certain corporate funding goals. In addition, Mr. Russell is
entitled to participate in our Stock Option Plan and group insurance benefits.
Mr. Russell is also entitled to 20 days paid vacation per year, as well as
traveling and other expenses. Mr. Russell may terminate his employment
upon two months’ written notice. We may terminate the employment agreement
without notice or payment in lieu thereof for cause at any time.
Additionally, we may terminate Mr. Russell’s employment without cause upon
majority vote of our Board of Directors and upon payment to Mr. Russell of
an
amount equal to 36 months’ salary plus an amount equal to 100% of the greater of
any target bonus or bonus actually earned for each year in the 24-month period
and any other compensation Mr. Russell is entitled to receive. In the case
of termination without cause, Mr. Russell will also be entitled to receive
health insurance benefits for 24 months following the date of termination,
and
all outstanding options held by Mr. Russell will vest upon termination.
Termination of employment upon a change of control, as defined in the
employment agreement, is deemed to be a termination without cause. Upon
the occurrence of a change of control Mr. Russell is entitled to receive
additional equity in our company equal to the equity he holds prior to the
change of control (including
any options or warrants held by Mr. Russell).
On
March
31, 2005, we entered into written employment agreements with Robert L. Dumont,
our then Executive Vice President—Business Strategies and Development and acting
Chief Financial Officer. On April 21, 2006 we entered into an employment
agreement with Henry A. Miller pursuant to which Mr. Miller serves as our Chief
Financial Officer, Executive Vice-President Finance and Senior Counsel. Each
of
these employment contracts runs for a term of three years. In connection with
the hiring of Mr. Miller, effective April 21, 2006, Mr. Dumont no longer served
as our acting Chief Financial Officer, but instead serves as our Executive
Vice
President—Business Strategies and Investor Relations.
Compensation
of Directors
For
service during 2005, all directors receive $1,500 cash compensation per quarter
and directors who act as committee chairs receive an additional $250 cash
compensation per quarter. Prior to 2005, the directors received
non-qualified stock options and a share grant of 5,000 shares per Board meeting
attended in person or by phone. From the end of 2004 until April 5, 2006,
we did not issue any stock options or shares to any of our directors. On April
5, 2006, each director received an award of 50,000 non-qualified stock options.
Mr. Robert L. Russell is our only director who is also an employee. In
11
October
2006, the Board approved an increase in the cash compensation for Directors
who
act as committee chairs (excepting certain operational committees) to $2,500
per
quarter.
Options
to Purchase our Securities
The
table
below sets forth certain information with respect to our equity compensation
plans as of December 31, 2005:
|
|
Number
of
securities
to be
issued
upon
exercise
of
outstanding
options
|
Weighted
average excise price of outstanding
options
|
Number
of
securities
remaining
available
for future issuance under
equity
compensation
plans
|
||
|
Equity
compensation plans not approved by security holders
|
-
|
$
-
|
|
||
|
Equity
compensation plans approved by security holders:
|
|
|
|
||
|
2003
Stock Option Plan
|
1,840,000
|
0.47
|
205,000
|
||
|
Other
equity compensation
|
2,200,000
|
0.41
|
n/a
|
||
|
Total
|
4,040,000
|
$
0.43
|
205,000
|
VOTING
SECURITIES AND PRINCIPAL HOLDERS
The
following table sets forth information as November 3, 2006 regarding the
ownership of our common stock by:
|
·
|
each
person who is known by us to own more than 5% of our shares of common
stock;
|
|
·
|
each
of our named executive officers and directors; and
|
|
·
|
all
of our executive officers and directors as a
group.
|
The
number of shares beneficially owned and the percentage of shares beneficially
owned are based on 41,481,102
shares
of common stock outstanding as of November 3, 2006.
For
the
purposes of the information provided below, beneficial ownership is determined
in accordance with the rules of the SEC, and for each person includes shares
that person has the right to acquire within 60 days following November 3,
2006 subject to options, warrants or similar instruments. Except as indicated
in
the footnotes to these tables, and as affected by applicable community property
laws, all persons listed have sole voting and investment power for all shares
shown as beneficially owned by them.
|
Name(1)
|
Number
of
Shares
|
Percent
of Voting Stock
|
|
Robert
L. Russell (2)
|
2,776,287
|
6.6%
|
|
John
B. Benjamin (3)
|
328,000
|
*
|
|
Gene
W. Pierson (4)
|
286,000
|
*
|
|
Norman
A. Radford (5)
|
278,975
|
*
|
|
R.
David Russell (6)
|
1,230,070
|
3.0%
|
12
|
R.
David Russell (6)
|
1,230,070
|
3.0%
|
|
Richard
F. Nanna (7)
|
518,003
|
1.2%
|
|
R.
Llee Chapman (8)
|
424,000
|
1.0%
|
|
Roy
A Pickren, Jr. (9)
|
40,000
|
*
|
|
Ricardo
M. Campoy (10)
|
47,500
|
*
|
|
CCM
Master Qualified Fund, Ltd
Coghill
Capital Management, LLC
Clint
D. Coghill (11)
|
12,518,300
|
27.4%
|
|
Directors
and executive officers as a group (11 persons) (12)
|
7,207,585
|
16.3%
|
*
Less
than 1%.
|
(1)
|
The
address for our directors and officers is 10 North Post Street, Suite
610,
Spokane, WA 99201.
|
|
(2)
|
Includes:
(a) 670,000 shares issuable upon the exercise of vested options and
(b)
479,343 shares indirectly held by Robert Russell. This does not include
any shares issuable upon a Change of Control pursuant to Robert Russell’s
employment agreement.
|
|
(3)
|
Includes
220,000 shares issuable upon the exercise of vested options and 15,000
shares issuable upon the exercise of a
warrant.
|
|
(4)
|
Includes
220,000 shares issuable upon the exercise of vested
options.
|
|
(5)
|
Includes
210,000 shares issuable upon the exercise of vested
options.
|
|
(6)
|
Includes
270,000 shares issuable upon the exercise of vested
options.
|
|
(7)
|
Includes
220,000 shares issuable upon the exercise of vested
options.
|
|
(8)
|
Includes
270,000 shares issuable upon the exercise of vested
options.
|
|
(9)
|
Includes
40,000 shares issuable upon the exercise of vested
options.
|
|
(10)
|
Includes
40,000 shares issuable upon the exercise of vested options and 2,500
shares held indirectly by Mr. Campoy’s
son.
|
|
(11)
|
Based
on a Schedule 13D filed with the SEC on October 31, 2006. Includes
4,250,000 shares issuable upon the exercise of warrants. The address
for these persons is 1 N. Wacker Dr. Ste. 4350, Chicago, IL 60606.
Such persons disclaim beneficial ownership of the securities except
to the extent of their pecuniary interest
therein.
|
|
(12)
|
Includes
2,360,000 shares issuable upon the exercise of vested options and
400,000
shares issuable upon the exercise of
warrants.
|
Independent
Accountant
Williams
& Webster, P.S. (“Williams & Webster”) was selected by our Board as the
Company’s independent accountant for the fiscal year ending December 31, 2006.
Representatives of Williams & Webster will be present at the Annual Meeting,
will have an opportunity to make statements if they so desire, and will be
available to respond to appropriate questions.
Audit
Fees
The
aggregate fees billed for professional services rendered by the Company’s
principal accountant for the audit of the Company’s annual financial statements
for the fiscal years ended December 31, 2005 and 2004 were $20,962.25 and
$20,403.75, respectively.
13
Audit-Related
Fees
There
were no fees billed in the last two fiscal years for assurance and related
services by the principal accountant that are reasonably related to the
performance of the audit or review of the Company’s financial statements except
as set forth in the preceding paragraph.
Tax
Fees
There
were no fees billed in the last two fiscal years for professional services
rendered by the principal accountant for tax compliance, tax advice and tax
planning.
All
Other Fees
The
Company incurred no fees from the principal accountant during the last two
fiscal years for products and services other than as set forth above.
Policy
on Audit and Finance Committee Pre-Approval of Audit and Non-Audit Services
of
Independent Auditors
The
Audit
and Finance Committee is responsible for appointing, setting compensation and
overseeing the work of the independent auditors. The Audit and Finance Committee
has established a policy regarding pre-approval of all audit and non-audit
services provided by the independent auditors. On an ongoing basis, management
communicates specific projects and categories of services for which advance
approval of the Audit and Finance Committee is requested. The Audit and Finance
Committee reviews these requests and advises management if the Audit and Finance
Committee approves the engagement of the independent auditors for specific
projects. On a periodic basis, management reports to the Audit and Finance
Committee regarding the actual spending for such projects and services compared
to the approved amounts. The Audit and Finance Committee may also delegate
the
ability to pre-approve audit and permitted non-audit services to a subcommittee
consisting of one or more Audit and Finance Committee members, provided that
any
such pre-approvals are reported on at a subsequent Audit and Finance Committee
meeting. All of the audit-related fees, tax fees and all other fees paid to
Williams & Webster by the Company for the fiscal years 2004 and 2005 were
approved by the Audit and Finance Committee.
PROPOSAL
2: APPROVAL OF THE IDAHO GENERAL MINES, INC.
2006
EQUITY INCENTIVE PLAN
Background.
Our
Board of Directors adopted the 2006 Equity Incentive Plan (the “2006 Plan”) on
October 24, 2006. Unless sooner terminated by the Board of Directors, the 2006
Plan will terminate on the day before the tenth anniversary of the date that
the
plan was approved by our shareholders. The 2006 Plan is attached to this proxy
statement as Appendix C.
Eligibility
and Types of Awards. The 2006 Plan provides for the grant of incentive
stock options, nonqualified stock options, restricted stock awards, restricted
stock units and stock appreciation rights, which may be granted to our employees
(including officers), directors and consultants. Each award is subject to an
agreement between the Company and the recipient of the grant reflecting the
terms and conditions of the award. As of October 24, 2006, approximately nine
employees of the Company and approximately nine directors are eligible to
receive awards. Certain consultants to the Company are also eligible to receive
awards under the 2006 Plan.
14
Share
Reserve.
The
aggregate number of shares of common stock that may be issued pursuant to awards
granted under the 2006 Plan will not exceed three million five hundred thousand
(3,500,000) plus the number of shares that are ungranted and those that are
subject to reversion under the Idaho General Mines, Inc. 2003 Stock Plan (the
“2003 Plan”). Shares under the 2003 Plan that become eligible for awards under
the 2006 Plan may not be granted again under the 2003 Plan.
The
following types of awards issued under the 2006 Plan may again become available
for the grant of new awards under the 2006 Plan: option, stock appreciation
right, restricted stock grant or restricted stock unit grant issued under the
2006 Plan that is forfeited or repurchased by us prior to it becoming fully
vested; shares withheld for taxes; shares tendered to us to pay the exercise
price of an option; and shares subject to awards issued under the 2006 Plan
that
have expired or otherwise terminated without having been exercised in full.
Administration.
The
Board of Directors has delegated authority to administer the 2006 Plan to the
Compensation Committee. Subject to the terms of the 2006 Plan, the plan
administrator, which is the Compensation Committee, determines recipients,
grant
dates, the numbers and types of stock awards to be granted and the terms and
conditions of the stock awards, including the period of their exercisability
and
vesting. Subject to the limitations set forth below, the plan administrator
will
also determine the exercise price of options granted, the purchase price for
restricted stock and restricted stock units, and, if applicable, the strike
price for stock appreciation rights.
New
Plan Benefits.
As of
the date of this proxy statement, no awards have been made under the 2006 Plan.
The amount of awards to be made under the 2006 Plan is not presently
determinable.
Stock
Options.
Nonqualified stock options and incentive stock options are granted pursuant
to
stock option agreements. The plan administrator determines the exercise price
for stock options. Subject to the limitations set forth below regarding persons
owning more than ten percent of our stock or of any of our affiliates ("ten
percent shareholders"), the exercise price for nonqualified stock options and
incentive stock options will be at least 100% of the fair market value of the
shares of common stock underlying the option on the date such option is granted.
Incentive stock options will not be exercisable after the expiration of ten
years from the date of grant. For ten percent shareholders, the exercise price
for incentive stock options will be at least 110% of the fair market value
of
the shares of common stock underlying an incentive stock option on the date
such
incentive stock option is granted and such incentive stock option will not
be
exercisable after the expiration of five years from the date of grant. The
plan
administrator determines the vesting period and term of stock options granted
under the 2006 Plan.
Unless
the terms of an optionee's stock option agreement provide otherwise, if an
optionee's service relationship with us, or any of our affiliates, ceases due
to
disability or death or the optionee dies within a specified period after
termination of service, the optionee, or his or her beneficiary, may exercise
any vested options for a period of 12 months in the event of disability or
18 months in the event of death, after the date such service relationship
ends or after death, as applicable. If an optionee's relationship with us,
or
any of our affiliates, ceases for any reason other than disability or death,
the
optionee may exercise any vested
options for a period of three months from cessation of service, unless the
terms
of the stock option agreement provide for earlier or later termination. In
no
event, however, may an option be exercised after the expiration of its term,
as
set forth in the stock option agreement.
Acceptable
consideration for the purchase of common stock issued upon the exercise of
a
stock option will either be cash, common stock owned by the optionee that
has
been held by the optionee for at least six months, a deferred payment
arrangement, a cashless exercise or other legal consideration approved by
15
the
plan
administrator. The plan administrator may grant stock options with provisions
entitling the optionee to a further option, referred to as a re-load option,
in
the event the optionee exercises the option evidenced by the option agreement,
in whole or in part, by surrendering other shares of our common stock.
Generally,
an optionee may not transfer a nonqualified stock option other than by will
or
the laws of descent and distribution unless the nonqualified stock option
agreement provides otherwise. Optionees may not transfer incentive stock options
except by will or by the laws of descent and distribution and incentive stock
options are exercisable during the lifetime of the optionee only by the
optionee. Optionees may designate a beneficiary who may exercise the option
following the optionee's death.
Stock
Appreciation Rights.
Stock
appreciation rights entitle a participant to receive a payment equal in value
to
the difference between the fair market value of a share of common stock on
the
date of exercise of the stock appreciation right over the grant price of the
stock appreciation right. Stock appreciation rights are granted pursuant to
stock award agreements. The plan administrator may grant stock appreciation
rights in connection with stock options or in a stand-alone grant. The plan
administrator determines the term and grant price for a stock appreciation
right. A stock appreciation right granted under the 2006 Plan vests at the
rate
specified in the stock award agreement. With respect to stock appreciation
rights that are granted in connection with stock options, such stock
appreciation rights shall be exercisable only to the extent that the related
stock option is exercisable and such stock appreciation rights shall expire
no
later than the date on which the related stock options expire. If a recipient's
relationship with us, or any of our affiliates, ceases for any reason, any
unvested stock appreciation rights will be forfeited and any vested stock
appreciation rights will be automatically redeemed.
Capitalization
Adjustments.
In the
event of a dividend or other distribution (whether in the form of cash, shares
of common stock, other securities, or other property), recapitalization, stock
split, reorganization, merger, consolidation, exchange of our common stock
or
our other securities, or other change in our corporate structure, the plan
administrator will appropriately adjust the number of shares that may be
delivered under the 2006 Plan and the number and price of the shares covered
by
each outstanding stock award.
Changes
in Control. In the event of a change in control (as defined in the 2006
Plan), all outstanding options and other awards under the 2006 Plan may be
assumed, continued or substituted for by any surviving or acquiring entity.
If
the surviving or acquiring entity elects not to assume, continue or substitute
for such awards, the vesting of such awards held by award holders whose service
with us or any of our affiliates has not terminated will be accelerated and
such
awards will be fully vested and exercisable immediately prior to the
consummation of such transaction, and the stock awards shall automatically
terminate upon consummation of such transaction if not exercised prior to such
event.
16
Amendment
and Termination.
The plan
administrator may amend (subject to shareholder approval as required by
applicable law), suspend or terminate the 2006 Plan at any time.
Federal
Income Tax Consequences.
The
federal income tax consequences of awards under the 2006
Plan
to
the
Company and the Company’s employees, officers, directors, and consultants are
complex and subject to change. The following discussion is only a summary of
the
general rules applicable to the 2006
Plan.
Under
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”),
enacted as part of the American Jobs Creation Act of 2004, recipients of certain
equity compensation awards (including certain types of stock appreciation rights
and restricted stock units) may be subject to a burdensome taxation regime.
If
Section 409A of the Code were to apply to awards under the 2006
Plan,
the
affected participants may be required to recognize ordinary income for tax
purposes earlier than the times otherwise applicable as described in the
discussion below and to pay substantial penalties. The Company does not intend
to issue any awards that would be subject to Section 409A of the Code until
the
new rules have been revised or clarified. Furthermore, the Board and the
Committee generally have the authority to amend the 2006
Plan
as
they
deem necessary to comply with applicable laws, including Section 409A of the
Code. Therefore, the following discussion does not specifically address the
potential impact of Section 409A of the Code on the various awards.
Stock
Options.
Options
granted under the 2006
Plan
may
be
either incentive stock options or nonqualified stock options. Incentive stock
options are options which are designated as such by the Company and which meet
certain requirements under Section 422 of the Code and the regulations
thereunder. Any option which does not satisfy these requirements will be treated
as a nonqualified stock option.
Incentive
Stock Options.
If
an
option granted under the 2006
Plan
qualifies
as an incentive stock option, the optionee will not recognize any income upon
either the grant or the exercise of the option, and the Company will not be
entitled to a deduction for federal tax purposes. Upon a sale of the shares,
the
tax treatment to the optionee and the Company will depend primarily upon whether
the optionee has met certain holding period requirements at the time he or
she
sells the shares. In addition, as discussed below, the exercise of an incentive
stock option may subject the optionee to alternative minimum tax liability.
If
an
optionee exercises an incentive stock option and does not dispose of the shares
received within two years after the date the option was granted or within one
year after the transfer of the shares to him or her, any gain realized upon
ultimate disposition of the shares will be characterized as long-term capital
gain and, in such case, the Company will not be entitled to a federal tax
deduction.
If
the
optionee disposes of the shares either within two years after the date the
option is granted or within one year after the transfer of the shares to him
or
her, the disposition will be treated as a disqualifying disposition and an
amount equal to the lesser of (1) the fair market value of the shares on the
date of exercise minus the exercise price, or (2) the amount realized on the
disposition minus the exercise price, will be taxed as ordinary income to the
optionee in the taxable year in which the disposition occurs. (However, in
the
case of gifts, sales to related parties, and certain other transactions, the
full difference between the fair market value of the stock and the purchase
price will be treated as compensation income). The excess, if any, of the amount
realized upon disposition over the fair market value at the
17
time
of
the exercise of the option will be treated as long-term capital gain if the
shares have been held for more than one year following the exercise of the
option.
The
2006
Plan alternatively allows for the exercise of an incentive stock option using
shares previously acquired upon the exercise of stock options or through
open-market purchases. Using shares acquired by exercising an incentive stock
option to pay the option price of another option (whether or not it is an
incentive stock option) will be considered a disposition of the shares for
federal tax purposes. However, except as described below, an optionee will
recognize no income upon such stock-for-stock exercise. To the extent an
optionee acquires an equivalent number of shares, the optionee’s basis in the
shares the optionee acquires upon exercise will be equal to the optionee’s basis
in the surrendered shares increased by any income the optionee recognized on
the
deemed sale. The optionee’s basis in any additional shares acquired upon such
exercise will be zero, and a disqualifying disposition of the acquired shares
within the one- or two-year holding period described above will apply first
as a
disqualifying disposition of the shares with the lowest basis. Furthermore,
if
an optionee exercises an incentive stock option by tendering already owned
shares that the optionee acquired by exercise of another incentive stock option
and for which the incentive stock option holding period described above has
not
been satisfied at the time of exercise, the IRS will treat the transaction
as a
disqualifying disposition of those previously-acquired shares. The optionee
will
recognize compensation income and will be subject to other basis allocation
and
holding period requirements if the optionee makes a disqualifying
disposition.
The
exercise of an incentive stock option may subject an optionee to alternative
minimum tax liability. The excess of the fair market value of the shares at
the
time an incentive stock option is exercised over the purchase price of the
shares is included in income for purposes of the alternative minimum tax even
though it is not included in taxable income for purposes of determining the
regular tax liability of an employee. Consequently, an optionee may be obligated
to pay alternative minimum tax in the year he or she exercises an incentive
stock option.
In
general, the Company will not be entitled to a federal income tax deduction
upon
the grant, exercise, or termination of an incentive stock option. However,
in
the event an optionee sells or otherwise disposes of the stock received on
the
exercise of an incentive stock option in a disqualifying disposition, the
Company will be entitled to a deduction for federal income tax purposes in
an
amount equal to the ordinary income, if any, recognized by the optionee upon
disposition of the shares, provided that the deduction is not otherwise
disallowed under the Code.
Nonqualified
Stock Options.
Nonqualified
stock options granted under the 2006
Plan
do
not
qualify as “incentive stock options” and will not qualify for any special tax
benefits to the optionee. An optionee generally will not recognize any taxable
income at the time he or she is granted a nonqualified option. However, upon
exercise, the optionee will recognize ordinary income for federal tax purposes
measured by the excess of the then fair market value of the shares over the
exercise price. The income realized by the optionee will be subject to income
and other employee withholding taxes.
The
optionee’s basis for determining gain or loss upon the subsequent disposition of
shares acquired upon the exercise of a nonqualified stock option will be the
amount paid for such shares plus any ordinary income recognized as a result
of
the exercise of such option. Upon disposition of any shares acquired pursuant
to
the exercise of a nonqualified stock option, the difference between the sale
price and the optionee’s basis in the shares will be treated as a capital gain
or loss and generally will be characterized as long-term capital gain or loss
if
the shares have been held for more than one year at the time of their
disposition.
18
The
2006
Plan also allows for the exercise of a nonqualified stock option using shares
previously acquired upon the exercise of stock options or through open-market
purchases. Upon such exchange, an optionee will not recognize any taxable income
with respect to shares of common stock received upon the exercise of
nonqualified stock options that are equal in number to the shares delivered
in
payment of the exercise price. For federal income tax purposes, these newly
acquired shares will have the same basis and capital gain holding period as
the
delivered shares.
Any
additional shares received upon exercise of nonqualified stock options will,
in
general, have to be reported as ordinary income for the year of exercise in
an
amount equal to the fair market value on the exercise date. These additional
shares will have a tax basis equal to such fair market value and a capital
gain
holding period measured (in general) from the exercise date.
In
general, the Company will not be entitled to a federal income tax deduction
upon
the grant or termination of a nonqualified stock option or a sale or disposition
of the shares acquired upon the exercise of a nonqualified stock option.
However, upon the exercise of a nonqualified stock option, the Company will
be
entitled to a deduction for federal income tax purposes equal to the amount
of
ordinary income that an optionee is required to recognize as a result of the
exercise, provided that the deduction is not otherwise disallowed under the
Code.
Restricted
Stock and Restricted Stock Units.
Generally,
the holder of restricted stock will recognize ordinary compensation income
at
the time the stock becomes vested. The amount of ordinary compensation income
recognized will be equal to the excess, if any, of the fair market value of
the
stock on the date it becomes vested over any amount paid by the holder in
exchange for stock.
In
the
case of restricted stock units, the holder will recognize ordinary compensation
income at the time the stock is received equal to the excess of value of the
stock on the date of receipt over any amount paid by the holder in exchange
for
stock. If the holder of a restricted stock unit receives the cash equivalent
of
the stock issuable under the restricted stock unit in lieu of actually receiving
the stock, the recipient will recognize ordinary compensation income at the
time
of the receipt of such cash in the amount of the cash received. In the case
of
both restricted stock and restricted stock units, the income recognized by
the
holder will generally be subject to U.S. income tax withholding and employment
taxes. Depending
on their terms, certain types of restricted stock units may be subject to the
application of Section 409A of the Code, discussed above. The Company does
not
intend to issue restricted stock units having features that could render them
subject to the application of Section 409A of the Code until the new rules
are
revised or clarified.
In
the
year that the recipient of a stock award recognizes ordinary taxable income
in
respect of restricted stock or a restricted stock unit, the Company will be
entitled to a deduction for federal income tax purposes equal to the amount
of
ordinary income that the recipient is required to recognize, provided that
the
deduction is not otherwise disallowed under the Code.
Stock
Appreciation Rights.
The
Company may grant either stand-alone SARs or tandem SARs under the 2006 Plan.
Generally, the recipient of a SAR will not recognize any taxable income at
the
time the SAR is granted.
With
respect to stand-alone SARs, if the holder receives the appreciation inherent
in
the SARs in cash, the cash will be taxable as ordinary compensation income
to
the employee at the time that it is received. If the holder receives the
appreciation inherent in the stand-alone SARs in stock, the holder will
recognize
19
ordinary
compensation income equal to the excess of the fair market value of the stock
on
the day it is received over any amounts paid by the holder for the stock.
With
respect to tandem SARs, if a holder elects to surrender the underlying option
in
exchange for cash or stock equal to the appreciation inherent in the underlying
option, the tax consequences to the holder will be the same as discussed above
relating to stand-alone SARs. If the holder elects to exercise the underlying
the option, the holder will be taxed at the time of exercise as if he or she
had
exercised a nonqualified stock option (discussed above), i.e., the holder will
recognize ordinary income for U.S. federal income tax purposes measured by
the
excess of the then fair market value of the shares of stock over the exercise
price.
The
income recognized by the holder of a stand-alone SAR or tandem SAR will
generally be subject to U.S. income tax withholding and employment
taxes.
In
general, the Company will not be entitled to a federal income tax deduction
upon
the grant or termination of stand-alone SARs or tandem SARs. However, upon
the
exercise of either a stand-alone SAR or a tandem SAR, the Company will be
entitled to a deduction for federal income tax purposes equal to the amount
of
ordinary income that the employee is required to recognize as a result of the
exercise, provided that the deduction is not otherwise disallowed under the
Code.
THE
BOARD RECOMMENDS A VOTE “FOR” PROPOSAL 2
ADDITIONAL
SHAREHOLDER INFORMATION
Shareholder
Proposals and Recommendations for Director Nominees for the 2007 Annual
Meeting
The
Company will review shareholder proposals intended to be included in the
Company’s proxy material for the 2007 Annual Meeting of Shareholders which are
received by the Company at its principal executive offices no later than January
8, 2007. Such proposals must be submitted in writing. The Company will comply
with SEC rules with respect to any proposal that meets its
requirements.
A
shareholder, or group of shareholders, that beneficially owned more than 5%
of
the Company’s common stock for at least one year as of January 8, 2007 may
recommend a nominee to the Nominating Committee of our Board of Directors.
Any
such written recommendation must be received by the Company no later than
January 8, 2007, identify the candidate and the shareholder or shareholder
group
that has made the recommendation, and state that the shareholder or shareholder
group has held the common stock for at least one year.
Shareholder
proposals and recommendations for director nominees should be sent to Idaho
General Mines, Inc. Board of Directors, c/o Corporate Secretary, 10
N.
Post Street, Suite 610, Spokane, WA 99201.
Annual
Report
The
Company’s Annual Report on Form 10-KSB for the year ended December 31, 2005, as
amended, is being mailed to all shareholders with this proxy statement. Our
Annual Report is part of the proxy solicitation materials for the Annual
Meeting. Any shareholder that does not receive a copy of our Annual Report
may
obtain one by writing to the Corporate Secretary at the address above. The
Company’s Form 10-KSB may also be accessed at SEC’s website at www.sec.gov.
20
Other
Business
As
of the
date of this proxy statement, the Board of Directors is not aware of any matters
that will be presented for action at the Annual Meeting other than those
described above. However, if other business is properly brought before the
Annual Meeting, the proxies will be voted on those matters at the discretion
of
the proxy holders.
|
By
Order of the Board of Directors,
|
|
| /s/ Robert L. Russell | |
|
Robert
L. Russell, President and Chairman
|
|
|
Spokane,
Washington
|
|
|
November
8, 2006
|
21
Appendix
A
IDAHO
GENERAL MINES INC.
AUDIT
AND FINANCE COMMITTEE CHARTER
Adopted
by the Company’s Board of Directors on October 28,
2004
OVERALL
PURPOSE / OBJECTIVES
There
shall be a Committee of the Board of Directors (the “Board”) of Idaho General
Mines Inc. (the “Corporation”), to be known as the Audit and Finance Committee
(the “Committee”) whose membership, authority and responsibilities shall be as
set out in this amended and restated audit Committee charter. The committee
will
provide independent review and oversight of the Corporation’s financial
reporting process, the system of internal control and management of financial
risks, and the audit process, including the selection, oversight and
compensation of the Corporation’s external auditors. The Committee will also
assist the Board in fulfilling its responsibilities in reviewing the
Corporation’s process for monitoring compliance with laws and regulations and
its own code of business conduct. In performing its duties, the Committee will
maintain effective working relationships with the Board of directors,
management, and the external auditors and monitor the independence of those
auditors. The Committee will also be responsible for reviewing the Corporation’s
financial strategies, its financing plans and its use of the equity and debt
markets.
To
perform his or her role effectively, each Committee member will obtain an
understanding of the responsibilities of Committee membership as well as the
Corporation’s business, operations and risks.
AUTHORITY
The
Board
authorizes the Committee, within the scope of its responsibilities, to seek
any
information it requires from any employee and from external parties, to retain
outside legal or professional counsel and other experts and to ensure the
attendance of the Corporation’s officers at meetings as
appropriate.
MEMBERSHIP
1. The
Committee shall have at least three (3) members at all times, each of whom
must
be a member of the Board and must be independent as required by applicable
law
and applicable stock exchange listing rules (the “Listing Rules”). A member of
the Committee shall be considered independent if:
(a) he
or
she, other than in his or her Capacity as a member of the Committee, Board
or
any other committee of the Board, does not accept, directly or indirectly,
any
consulting, advisory or other compensatory fee from the Corporation. The
indirect acceptance of a consulting, advisory or other compensatory fee shall
include acceptance of the fee by a spouse, minor child or stepchild, or child
or
stepchild sharing a home with the Committee member, or by an entity in which
such member is a partner, member or principal or occupies a similar position
and
which provides accounting, consulting, legal, investment banking, financial
or
other advisory services or any similar services to the Corporation;
(b) is
not
currently employed, and has not been employed in the past three years, by the
Corporation or any of its affiliates;
A-1
(c) is
not an
“affiliated person” of the Corporation or any of its subsidiaries as defined by
rules of the Securities and Exchange Commission (the “SEC”), including rules
promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and applicable stock exchange listing rules (the “Listing Rules”);
and
(d) he
or she
meets all other requirements for independence imposed by law and the Listing
Rules from time to time and any requirements imposed by any Canadian body having
jurisdiction over the Corporation.
2. All
members of the Committee shall have a practical knowledge of finance and
accounting and be able to read and understand fundamental financial statements
from the time of their respective appointments to the Committee. In addition,
members may be required to participate in continuing education if required
by
applicable law or the Listing Rules.
3. At
least
one member of the Committee shall be a “financial expert” as defined by
Item 401(h) of Regulation S-K, unless otherwise determined by the
Board, and at least one member shall meet the financial sophistication standards
under the Listing Rules.
4. Each
member of the Committee shall be appointed by the Board and shall serve until
the earlier to occur of the date on which he or she shall be replaced by the
Board, resigns from the Committee, or resigns from the Board.
MEETINGS
1. The
Committee shall meet as frequently as required, but no less than four times
annually and at least quarterly. The Board shall name a chairperson of the
Committee, who shall prepare and/or approve an agenda in advance of each meeting
and shall preside over meetings of the Committee. In the absence of the
chairperson, the Committee shall select a chairperson for that meeting. A
majority of the members of the Committee shall constitute a quorum and the
act
of a majority of the members present at a meeting where a quorum is present
shall be the act of the Committee. The Committee may also act by unanimous
written consent of its members. The Committee shall maintain minutes or other
records of meetings and activities of the Committee.
2. The
Committee shall, through its chairperson, report regularly to the Board
following the meetings of the Committee, addressing such matters as the quality
of the Corporation’s financial statements, the Corporation’s compliance with
legal or regulatory requirements, the performance and independence of the
outside auditors, the performance of any internal audit function and other
matters related to the Committee’s functions and responsibilities.
3. The
Committee shall at least annually meet separately with each of the Corporation’s
management, the Corporation’s chief financial officer and the Corporation’s
outside auditors in separate executive sessions to discuss any matters that
the
Committee or each of these groups believes should be discussed
privately.
ROLES
AND RESPONSIBILITIES
1. The
Committee’s principal responsibility is one of oversight. The Corporation’s
management is responsible for preparing the Corporation’s financial statements,
and the Corporation’s outside auditors are responsible for auditing and/or
reviewing those financial statements. In carrying out these oversight
responsibilities, the Committee is not providing any expert or special assurance
as to the Corporation’s financial statements or any professional certification
as to the outside auditors’ work.
A-2
2. The
designation or identification of a member of the Committee as an “audit
committee financial expert” does not impose on such person any duties,
obligations, or liability that are greater than the duties, obligations, and
liability imposed on such person as a member of the Committee and Board of
Directors in the absence of such designation or identification; and
(ii) the designation or identification of a member of the Committee as an
“audit committee financial expert” does not affect the duties, obligations, or
liability of any other member of the Committee or Board of
Directors.
3. The
Committee’s specific responsibilities and powers are as set forth
below.
General
Duties and Responsibilities
|
·
|
Periodically
review with management and the outside auditors the applicable law
and the
Listing Rules relating to the qualifications, activities, responsibilities
and duties of audit committees and compliance therewith, and also
take, or
recommend that the Board take, appropriate action to comply with
such law
and rules.
|
|
·
|
Review
and evaluate, at least annually, the adequacy of this charter and
make
recommendations for changes to the Board.
|
|
·
|
Establish
procedures for: (a) the receipt, retention and treatment of
complaints received by the Corporation regarding accounting, internal
accounting controls or auditing matters; and (b) the confidential,
anonymous submission by employees of the Corporation of concerns
regarding
questionable accounting or auditing
matters.
|
|
·
|
Retain,
at the Corporation’s expense, independent counsel, accountants or others
for such purposes as the Committee, in its sole discretion, determines
to
be appropriate to carry out its
responsibilities.
|
|
·
|
Prepare
annual reports of the Committee for inclusion in the proxy statements
for
the Corporation’s annual meetings.
|
|
·
|
Investigate
any matter brought to its attention related to financial, accounting
and
audit matters and have full access to all books, records, facilities
and
personnel of the Corporation.
|
|
·
|
Undertake
such additional responsibilities as from time to time may be delegated
to
it by the Board, required by the Corporation’s articles or bylaws or
required bylaw or Listing Rules.
|
Auditor
Independence
|
·
|
Be
directly responsible for the appointment, compensation, retention,
termination, and oversight, subject to the requirements of Canadian
law,
of the work of any outside auditor engaged by the Corporation for
the
purpose of preparing or issuing an audit report or performing other
audit,
review or attest services. The outside auditors shall report directly
to
the Committee.
|
|
·
|
Be
vested with all responsibilities and authority required by Rule 10A-3
under the Exchange Act.
|
|
·
|
Pre-approve
all engagement letters and fees for all auditing services (including
providing comfort letters in connection with securities underwritings)
and
non-audit services performed by the outside auditors, subject to
any
exception under Section 10A of the Exchange Act and any rules
promulgated thereunder. Pre-approval authority may be delegated to
a
Committee member or a subcommittee, and any such member or subcommittee
shall report any decisions to the full Committee at its
next
|
A-3
scheduled
meeting. The Committee shall not approve an engagement of outside auditors
to
render non-audit services that are prohibited by law or the Listing
Rules.
|
·
|
Obtain
from the outside auditors assurance that they have complied with
Section 10A, as amended, of the Exchange Act and the rules
promulgated thereunder.
|
|
·
|
Review
with the outside auditors, at least annually, the auditors` internal
quality control procedures and any material issues raised by the
most
recent internal quality peer review of the outside
auditors.
|
Internal
Control
|
·
|
Review
annually the adequacy and quality of the Corporation’s financial and
accounting staffing, the need for and scope of internal audit reviews,
and
the plan, budget and the designations of responsibilities for any
internal
audit.
|
|
·
|
Review
the performance and material findings of internal audit
reviews.
|
|
·
|
Review
annually with the outside auditors any significant matters regarding
the
Corporation’s internal controls and procedures over financial reporting
that have come to their attention during the conduct of their annual
audit, and review whether internal control recommendations made by
the
auditors have been implemented by
management.
|
|
·
|
Review
major risk exposures (whether financial, operating or otherwise)
and the
guidelines and policies that management has put in place to govern
the
process of monitoring, controlling and reporting such
exposures.
|
|
·
|
Review
and evaluate at least annually the Corporation’s policies and procedures
for maintaining and investing cash funds and for hedging (metals,
foreign
currency, etc.)
|
|
·
|
Review
annually management’s report on internal controls and the auditor’s
attestation regarding management’s assessment of internal controls, when
and as required by Section 404 of the Sarbanes-Oxley
Act.
|
|
·
|
Evaluate
whether management is setting the appropriate tone at the top by
communicating the importance of internal controls and ensuring that
all
supervisory and accounting employees understand their roles and
responsibilities with respect to internal
controls.
|
Annual
and Interim Financial Statements
|
·
|
Review,
evaluate and discuss with the outside auditors and management the
Corporation’s audited annual financial statements and other information
that is to be included in the Corporation’s annual report on
Form 10-K, including the disclosures under “Management’s Discussion
and Analysis of Financial Condition and Results of Operations”, and the
results of the outside auditors’ audit of the Corporation’s annual
financial statement, including the accompanying footnotes and the
outside
auditors’ opinion, and determine whether to recommend to the Board that
the financial statements be included in the Corporation’s annual report on
Form 10-K for filing with the SEC.
|
|
·
|
Review,
evaluate and discuss the nature and extent of any significant changes
in
Canadian and U.S. accounting principles or the application of accounting
principles.
|
A-4
|
·
|
Require
the outside auditors to review the Corporation’s interim financial
statements, and review and discuss with the outside auditors and
management the Corporation’s interim financial statements and other
information to be included in the Corporation’s quarterly reports on
Form 10-Q, including the disclosures under “Management’s Discussion
and Analysis of Financial Condition and Results of Operations”, prior to
filing such reports with the SEC.
|
|
·
|
Review
and discuss with the Corporation’s management and outside auditors
significant accounting and reporting principles, practices and procedures
applied in preparing the financial statements and any major changes
to the
Corporation’s accounting or reporting principles, practices or procedures,
including those required or proposed by professional or regulatory
pronouncements and actions, as brought to its attention by management
and/or the outside auditors.
|
|
·
|
Review
and discuss all critical accounting policies identified to the Committee
by management and the outside auditors.
|
|
·
|
Review
significant accounting and reporting issues, including recent regulatory
announcements and rule changes and Canadian and U.S. GAAP matters
identified to the Committee by management and the Corporation’s outside
auditors, and understand their impact on the financial
statements.
|
|
·
|
Discuss
alternative treatments of financial information under generally accepted
accounting principles, the ramifications of each treatment and the
method
preferred by the Corporation’s outside
auditors.
|
|
·
|
Review
the results of any material difficulties, differences or disputes
with
management encountered by the outside auditors during the course
of the
audit or reviews and be responsible for overseeing the resolution
of such
difficulties, differences and disputes.
|
|
·
|
Review
the matters required to be discussed by Statement on Auditing Standards
No. 61, as amended (Communications with Audit Committees), relating
to the conduct of the audit.
|
|
·
|
Receive
from the outside auditors, review and discuss formal written statement
delineating all relationships between the outside auditors and the
Corporation, consistent with the Independence Standards Board, Standard
No. 1, regarding relationships and services, which may impact the
objectivity and independence of the outside auditors, and other applicable
standards. The statement shall include a description of all services
provided by the outside auditors and the related fees. The Committee
shall
actively discuss any disclosed relationships or services that may
impact
the objectivity and independence of the outside
auditors.
|
|
·
|
Review
the scope, plan and procedures to be used on the annual audit and
receive
confirmation from the outside auditors that no limitations have been
placed on the scope or nature of their audit scope, plan or
procedures.
|
Related
Party Transactions
|
·
|
Review
any transaction involving the Corporation and a related party at
least
once a year or upon any significant change in the transaction or
relationship. For these purposes, a “related party transaction” includes
any transaction required to be disclosed pursuant to Item 404 of
Regulation S-K.
|
A-5
Earnings
Press Releases
|
·
|
Review
and discuss with management and the outside auditors prior to release
all
earnings press releases of the Corporation, as well as financial
information and earnings guidance, if any, provided by the Corporation
to
analysts and rating agencies.
|
Compliance
with Law And Regulations
|
·
|
Meet
at least annually with management to review compliance with laws
and
regulations (including insider reporting) in all operating jurisdictions,
the effectiveness of the Corporation’s systems for monitoring compliance
with laws and regulations and the results of the investigation and
follow-up (including disciplinary action) on any fraudulent acts
or
accounting regularities.
|
|
·
|
Periodically
obtain updates from management regarding compliance
matters.
|
Compliance
with Corporate Business Conduct or Ethics Policies
|
·
|
Review
with management, the outside auditors and legal counsel, as the Committee
deems appropriate, actions taken to ensure compliance with any code
of
ethics or conduct for the Corporation established by the
Board.
|
|
·
|
Review
at least annually the Corporation’s Business Conduct Policy and any other
code of ethics adopted to comply with Section 406 of the
Sarbanes-Oxley Act
|
|
·
|
Evaluate
whether management is setting the appropriate tone at the top by
communicating the importance of the Corporation’s ethics and conduct
codes.
|
A-6
Appendix
B
NOMINATING
COMMITTEE CHARTER
Adopted
by the Company’s Board of Directors on October 28,
2004
Purpose
Committee
Membership
The
Committee shall consist of no fewer than three members. Each member of the
Committee shall meet the independence requirements of U.S. securities laws
and
the American Stock Exchange. The members and chair of the Committee shall be
appointed and removed by the Board.
The
Committee shall meet at least twice each year. Additional meetings may occur
as
the Committee or its chair deems advisable. The Nominating Committee is governed
by the rules regarding meetings (including meetings by conference telephone
or
similar communications equipment), action without meetings, notice, waiver
of
notice, and quorum and voting requirements as are applicable to the Board.
The
Committee is authorized and empowered to adopt its own rules of procedure not
inconsistent with: (a) any provision of this Charter; (b) any
provision of the Articles and Bylaws of the Corporation; (c) the Business
Corporations Act; or (d) other applicable laws.
The
Committee shall keep adequate minutes of all its proceedings, and will report
its actions to the next meeting of the Board. Committee members will be
furnished with copies of the minutes of each meeting and any action taken by
unanimous consent.
Committee
Authority and Responsibilities
1. The
Committee shall seek individuals qualified to become board members, including
evaluating persons suggested by share owners or others. The Committee shall
determine each proposed nominee’s qualifications for service on the Board and
conduct appropriate inquiries into the backgrounds and qualifications of
possible nominees. Each nominee should be a person of integrity and be committed
to devoting the time and attention necessary to fulfill his or her duties to
the
Company. The Committee will evaluate the independence of directors and potential
directors, as well as his or her business experience, or specialized skills
or
experience. Diversity of background and experience, including diversity of
race,
ethnicity, international background, gender and age, are also important factors
in evaluating candidates for Board membership. The Committee shall consider
issues involving possible conflicts of interest of directors or potential
directors.
2. The
Committee shall recommend to the Board the director nominees for the next annual
meeting of shareholders. The Committee shall evaluate the performance of each
director before recommending to the Board his or her nomination for an
additional term as director.
3. The
Committee shall evaluate and recommend to the Board when new members should
be
added to the Board. When a vacancy occurs on the Board by reason of
disqualification, resignation, retirement,
B-1
death
or
an increase in the size of the Board, the Committee shall recommend a
replacement member to the Board.
4. The
Committee shall have the authority to retain and terminate any search firm
to be
used to identify director candidates and shall have authority to approve the
search firm’s fees and other retention terms. The Committee shall also have
authority to obtain advice and assistance from internal or external legal,
accounting or other advisors.
5. The
Committee shall annually review the composition of each Board committee and
present recommendations for committee memberships to the Board as
needed.
6. The
Committee may form and delegate authority to subcommittees when
appropriate.
7. The
Committee shall periodically review and reassess the adequacy of this Charter
and recommend any proposed changes to the Board for approval.
8. The
Committee shall annually review its own performance.
B-2
Appendix
C
Idaho
General Mines, Inc.
2006
Equity Incentive Plan
1. Purposes.
(a) General
Purpose.
The
Company, by means of the Plan, seeks to retain the services of Eligible
Recipients, to secure and retain the services of new members of this group
and
to provide incentives for such persons to exert maximum efforts for the success
of the Company and, if applicable, any of the Company’s parents and
subsidiaries.
(b) Available
Stock Awards.
The
purpose of the Plan is to provide a means by which Eligible Recipients may
be
given an opportunity to benefit from increases in value of the Common Stock
through the granting of the following Stock Awards: (i) Incentive Stock Options,
(ii) Nonstatutory Stock Options, (iii) Restricted Stock grants, (iv) Restricted
Stock Unit grants and (v) Stock Appreciation Rights.
2. Definitions.
“Affiliate”
means
any Parent or Subsidiary of the Company, whether now or hereafter
existing.
“Board”
means
the Board of Directors of the Company.
“Change
in Control”
means
(i) the consummation of a merger or consolidation of the Company with or into
another entity or any other corporate reorganization, if more than 50% of the
combined voting power of the continuing or surviving entity’s securities
outstanding immediately after such merger, consolidation or other reorganization
is owned by persons who were not shareholders of the Company immediately prior
to such merger, consolidation or other reorganization; or (ii) the sale,
transfer or other disposition of all or substantially all of the Company’s
assets. A transaction shall not constitute a Change in Control if its primary
purpose is to change the state of the Company’s incorporation or to create a
holding company that will be owned in substantially the same proportions by
the
persons who held the Company’s securities immediately before such
transaction.
“Code”
means
the Internal Revenue Code of 1986, as amended.
“Committee”
means a
committee of two or more members of the Board appointed by the Board in
accordance with Section 3(c) of the Plan.
“Common
Stock”
means
the common stock of the Company.
“Company”
means
Idaho General Mines, Inc., an Idaho corporation.
“Consultant”
means
any person, including an advisor, (i) engaged by the Company or an Affiliate
to
render consulting or advisory services and who is compensated for such services,
including members of any advisory board constituted by the Company, or (ii)
who
is a member of the Board of Directors of an Affiliate. However, the term
“Consultant” shall not include either Directors who are not compensated by the
Company for their services as Directors or Directors who are merely paid a
director’s fee by the Company for their services as Directors.
“Continuous
Service”
means,
with respect to Employees, service with the Company or an Affiliate that is
not
interrupted or terminated. With respect to Directors or Consultants, Continuous
Service means service with the Company, or a Parent or Subsidiary of the
Company, whether as a
C-1
Director
or Consultant, that is not interrupted or terminated. The Board or the chief
executive officer of the Company, in that party’s sole discretion, may determine
whether Continuous Service shall be considered interrupted in the case of any
leave of absence approved by that party, including sick leave, military leave
or
any other personal leave.
“Covered
Employee”
means
the chief executive officer and the four other highest compensated officers
of
the Company for whom total compensation is required to be reported to
shareholders under the Exchange Act, as determined for purposes of Section
162(m) of the Code and the regulations promulgated thereunder.
“Director”
means a
member of the Board of Directors of the Company.
“Disability”
means
the permanent and total disability of a person within the meaning of Section
22(e)(3) of the Code.
“Eligible
Recipient”
means
any
Employee, Director or Consultant of the Company or any Employee, Director or
Consultant of a Parent or Subsidiary of the Company.
“Employee”
means
any person employed by the Company or an Affiliate. Mere service as a Director
or payment of a director’s fee by the Company or an Affiliate shall not be
sufficient to constitute “employment” by the Company or an
Affiliate.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended.
“Fair
Market Value”
means,
as of any date, the value of the Common Stock determined as
follows:
(i) If
the
Common Stock is listed on any established stock exchange or traded on the Nasdaq
National Market or the Nasdaq SmallCap Market, the Fair Market Value of a share
of Common Stock shall be the closing sale price for such stock (or the closing
bid, if no sale was reported) as quoted on such exchange or market (or the
exchange or market with the greatest volume of trading in the Common Stock)
on
the day of determination, as reported in The
Wall Street Journal or
such
other source as the Board (or the Committee if applicable) deems
reliable.
(ii) In
the
absence of such markets for the Common Stock, the Fair Market Value shall be
determined in good faith by the Board (or the Committee if applicable) using
a
reasonable valuation method.
“FAS
123”
shall
mean Statement of Financial Accounting Standard 123, “Accounting for Stock-based
Compensation,” as promulgated by the Financial Accounting Standards
Board.
“Former
Plan”
shall
mean the Idaho General Mines, Inc. 2003 Stock Plan.
“Former
Plan Shares”
has the
meaning set forth in Section 4(b) of the Plan.
“Incentive
Stock Option”
means an
Option intended to qualify as an incentive stock option within the meaning
of
Section 422 of the Code and the regulations promulgated
thereunder.
“Independent
Director” means
an
independent director as defined in Section 121 of the American Stock Exchange
Company Guide, or any successor rule, as in effect from time to
time.
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“Non-Employee
Director” means
a
Director who either (i) is not a current Employee or Officer of the Company
or
its parent or a subsidiary, does not receive compensation (directly or
indirectly) from the Company or its parent or a subsidiary for services rendered
as a consultant or in any capacity other than as a Director (except for an
amount as to which disclosure would not be required under Item 404(a) of
Regulation S-K), does not possess an interest in any other transaction as to
which disclosure would be required under Item 404(a) of Regulation S-K and
is
not engaged in a business relationship as to which disclosure would be required
under Item 404(b) of Regulation S-K, or (ii) is otherwise considered a
“non-employee director” for purposes of Rule 16b-3.
“Nonstatutory
Stock Option”
means an
Option not intended to qualify as an Incentive Stock Option.
“Officer”
means a
person who is an officer of the Company within the meaning of Section 16 of
the Exchange Act and the rules and regulations promulgated
thereunder.
“Option”
means a
stock option granted pursuant to Section 6 of the Plan.
“Option
Agreement”
means a
written agreement between the Company and an Optionholder evidencing the terms
and conditions of an individual Option grant. Each Option Agreement shall be
subject to the terms and conditions of the Plan.
“Optionholder”
means a
person to whom an Option is granted pursuant to the Plan or, if applicable,
such
other person who holds an outstanding Option.
“Outside
Director”
means a
Director who either (i) is not a current employee of the Company or an
“affiliated corporation” (within the meaning of Treasury Regulations promulgated
under Section 162(m) of the Code), is not a former employee of the Company
or an
“affiliated corporation” receiving compensation for prior services (other than
benefits under a tax qualified pension plan), was not an officer of the Company
or an “affiliated corporation” at any time and is not currently receiving direct
or indirect remuneration from the Company or an “affiliated corporation” for
services in any capacity other than as a Director, or (ii) is otherwise
considered an “outside director” for purposes of Section 162(m) of the
Code.
“Parent” means
a
“parent corporation,” whether now or hereafter existing, as defined in Section
424(e) of the Code.
“Participant”
means a
person to whom a Stock Award is granted pursuant to the Plan or, if applicable,
such other person who holds an outstanding Stock Award.
“Performance
Criteria”
shall
have the meaning set forth in Section 7(b)(iii) of the Plan.
“Plan”
means
this 2006 Equity Incentive Plan, as amended from time to time.
“Regulation
S-K”
means
Regulation S-K promulgated pursuant to the Securities Act, as in effect from
time to time.
“Re-Load
Option” has
the
meaning set forth in Section 6(m) of the Plan.
“Repurchase
Blackout Period”
means
six months from the date the Common Stock relating to a Stock Award is issued
to
the Participant or, in the case of a Stock Award with vesting restrictions,
six
months from the vesting date or, in any case, such longer or shorter period
of
time as required to avoid a variable charge to earnings for financial accounting
purposes.
C-3
“Restricted
Stock”
shall
mean a grant of shares of Common Stock pursuant to Section 7(b) of the
Plan.
“Restricted
Stock Units”
shall
mean a grant of the right to receive shares of Common Stock in the future or
their cash equivalent (or both) pursuant to Section 7(b) of the
Plan.
“Rule
16b-3”
means
Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3,
as
in effect from time to time.
“Securities
Act”
means
the Securities Act of 1933, as amended.
“Stand-Alone
Stock Appreciation Right”
has the
meaning set forth in Section 7(c) of the Plan.
“Stock
Appreciation Right”
means
the right to receive appreciation in the Common Stock pursuant to the provisions
of Section 7(c) of the Plan.
“Stock
Award”
means
any right granted under the Plan, including an Option, a stock bonus, a Stock
Appreciation Right, a Restricted Stock grant and a Restricted Stock Unit
grant.
“Stock
Award Agreement”
means a
written agreement between the Company and a holder of a Stock Award evidencing
the terms and conditions of an individual Stock Award grant. Each Stock Award
Agreement shall be subject to the terms and conditions of the Plan.
“Subsidiary” means
(1)
in the case of an Incentive Stock Option, a “subsidiary corporation,” whether
now or hereafter existing, as defined in Section 424(f) of the Code, and (2)
in
the case of any other Stock Award, in addition to a subsidiary corporation
as
defined in clause (1), (A) a limited liability company, partnership or other
entity in which the Company controls 50% or more of the voting power or equity
interests, or (B) an entity with respect to which the Company possesses the
power, directly or indirectly, to direct or cause the direction of the
management and policies, whether through the Company’s ownership of voting
securities, by contract or otherwise;
provided that no entity shall be a “subsidiary” if such entity would not
constitute, together with the Company, a “service provider” pursuant to
applicable guidance under Section 409A of the Code.
“Tandem
Stock Appreciation Right”
has the
meaning set forth in Section 7(c) of the Plan.
“Ten
Percent Shareholder”
means a
person who owns (or is deemed to own pursuant to Section 424(d) of the Code)
stock comprising more than 10% of the total combined voting power of all classes
of stock of the Company or of any of its Affiliates.
3. Administration.
(a) Administration
by Board.
The
Board shall administer the Plan unless and until the Board delegates
administration to a Committee, as provided in Section 3(c). Whether or not
the
Board has delegated administration, the Board shall have the final power to
determine all questions of policy and expediency that may arise in the
administration of the Plan.
(b) Powers
of Board.
The
Board (or the Committee) shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
C-4
(i) To
determine from time to time which of the persons eligible under the Plan shall
be granted Stock Awards; when and how each Stock Award shall be granted; what
type or combination of types of Stock Award shall be granted; the provisions
of
each Stock Award granted (which need not be identical), including the time
or
times when a person shall be permitted to receive Common Stock pursuant to
a
Stock Award; and the number of shares of Common Stock with respect to which
a
Stock Award shall be granted to each such person.
(ii) To
construe and interpret the Plan and Stock Awards granted under it, and to
establish, amend and revoke rules and regulations for its administration. The
Board, in the exercise of this power, may correct any defect, omission or
inconsistency in the Plan or in any Stock Award Agreement, in a manner and
to
the extent it shall deem necessary or expedient to make the Plan fully
effective.
(iii) To
amend
the Plan or a Stock Award as provided in Section 13.
(iv) Generally,
to exercise such powers and to perform such acts as the Board deems necessary
or
expedient to promote the best interests of the Company that are not in conflict
with the provisions of the Plan.
(c) Delegation
to Committee. The
Board
may delegate administration of the Plan to a Committee of two or more members
of
the Board, each of whom must qualify as a Non-Employee Director, Outside
Director, and Independent Director. If administration is delegated to such
a
Committee, the Committee shall have, in connection with the administration
of
the Plan, the powers theretofore possessed by the Board, including the power
to
delegate to a subcommittee any of the administrative powers the Committee is
authorized to exercise (and references in this Plan to the Board shall
thereafter be deemed to be to the Committee or subcommittee, as appropriate),
subject, however, to such resolutions, not inconsistent with the provisions
of
the Plan, as may be adopted from time to time by the Board. Notwithstanding
the
foregoing, only a Committee may grant Stock Awards to (i) senior executives
of
the Company who are subject to Section 16 of the Exchange Act, (ii) Covered
Employees, or (iii) the chief executive officer or any other executive officer.
The Board may abolish the Committee, or any subcommittee, at any time and revest
in the Board the administration of the Plan.
Any
awards under the Plan that are intended to fit within the performance-based
awards exception to Section 162(m) must be granted by the Committee, which
must
consist of at least two or more members of the Board, each of whom must qualify
as a Non-Employee Director, Outside Director, and Independent
Director.
(d)
Effect of Board’s Decision.
All
determinations, interpretations and constructions made by the Board or the
Committee in good faith shall not be subject to review by any person and shall
be final, binding and conclusive on all persons.
4. Shares
Subject to the Plan.
(a) Share
Reserve. Subject
to the provisions of Section 12 relating to adjustments upon changes in Common
Stock, the Common Stock that may be issued pursuant to Stock Awards shall not
exceed in the aggregate 3,500,000 shares of Common Stock plus the number of
Former Plan Shares. The number of shares of Common Stock that may be issued
pursuant to Incentive Stock Options shall be limited to the above maximum number
of shares issuable under the Plan.
C-5
(b) Reversion
of Shares and Availability of Shares to the Share Reserve.
If any
Stock Award granted under the Plan or under the Former Plan shall for any reason
expire or otherwise terminate, in whole or in part, without having been
exercised in full, or if any shares of Common Stock issued to a Participant
pursuant to a Stock Award granted under the Plan or under the Former Plan are
forfeited back to or repurchased by the Company, including, but not limited
to,
any repurchase or forfeiture caused by the failure to meet a contingency or
condition required for the vesting or exercise of such
shares, then the shares of Common Stock not acquired under such Stock Award
(the
“Former
Plan Shares”),
shall
become available for issuance under the Plan. Former Plan Shares shall include
reserved shares of Common Stock that are not subject to a grant under the Former
Plan. The
number of shares of Common Stock underlying a Stock Award not issued as a result
of any of the following actions shall again be available for issuance under
the
Plan: (i) a payout of a Stand-Alone Stock Appreciation Right, or a
performance-based award of Restricted Stock or Restricted Stock Units in the
form of cash; (ii) a cancellation, termination, expiration, forfeiture, or
lapse
for any reason (with the exception of the termination of a Tandem Stock
Appreciation Right upon exercise of the related Options, or the termination
of a
related Option upon exercise of the corresponding Tandem Stock Appreciation
Right) of any Stock Award; or (iii) payment of the Option exercise price and/or
payment of any taxes arising upon exercise of the Option by withholding shares
of Common Stock which otherwise would be acquired on exercise or issued upon
such payout.
(c) Source
of Shares.
The
shares of Common Stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.
5. Eligibility.
(a) Eligibility
for Specific Stock Awards.
Incentive Stock Options may be granted only to Employees. Stock Awards other
than Incentive Stock Options may be granted to Eligible Recipients.
(b) Ten
Percent Shareholders.
A Ten
Percent Shareholder shall not be granted an Incentive Stock Option unless the
exercise price of such Option is at least 110% of the Fair Market Value of
the
Common Stock at the date of grant and the Option is not exercisable after the
expiration of five years from the date of grant.
(c) Consultants.
A
Consultant shall not be eligible for the grant of a Stock Award if, at the
time
of grant, a Form S-8 Registration Statement under the Securities Act
(“Form
S-8”)
is not
available to register either the offer or the sale of the Company’s securities
to such Consultant because of the nature of the services that the Consultant
is
providing to the Company, or because the Consultant is not a natural person,
or
as otherwise provided by the rules governing the use of Form S-8, unless the
Company determines both (i) that such grant (A) shall be registered in another
manner under the Securities Act (e.g., on a Form S-3 Registration Statement)
or
(B) does not require registration under the Securities Act in order to comply
with the requirements of the Securities Act, if applicable, and (ii) that such
grant complies with the securities laws of all other relevant
jurisdictions. Form
S-8
generally is available to consultants and advisors only if (i) they are natural
persons, (ii) they provide bona fide services to the issuer, its parents, its
majority-owned subsidiaries or majority-owned subsidiaries of the issuer’s
parent, and (iii) the services are not in connection with the offer or sale
of
securities in a capital-raising transaction, and do not directly or indirectly
promote or maintain a market for the issuer’s securities.
(d) Foreign
Participants.
Notwithstanding any provision of the Plan to the contrary, in order to comply
with the laws in other countries in which the Company and its subsidiaries
operate or have Employees, Directors or Consultants, the Board, in its sole
discretion, shall have the power and authority to: (i) determine which
subsidiaries shall be covered by the Plan; (ii) determine which
C-6
Employees,
Directors or Consultants outside the United States are eligible to participate
in the Plan; (iii) modify the terms and conditions of any Stock Award granted
to
Employees, Directors or Consultants outside the United States to comply with
applicable foreign laws; (iv) establish subplans and modify exercise procedures
and other terms and procedures, to the extent such actions may be necessary
or
advisable (any such subplans and/or modifications shall be attached to this
subplan as appendices); provided, however, that no such subplans and/or
modifications shall increase the number of shares reserved for the Plan as
set
forth in Section 4 of the Plan; and (v) take any action, before or after a
Stock
Award is made, that it deems advisable to obtain approval or comply with any
applicable foreign laws.
6. Option
Provisions.
Each
Option shall be in such form and shall contain such terms and conditions as
the
Board shall deem appropriate. All Options shall be separately designated
Incentive Stock Options or Nonstatutory Stock Options at the time of grant,
and,
if certificates are issued, a separate certificate or certificates will be
issued for shares of Common Stock purchased on exercise of each type of Option.
The provisions of separate Options need not be identical, but each Option shall
include (through incorporation of provisions hereof by reference in the Option
Agreement or otherwise) the substance of each of the following
provisions:
(a) Term.
Subject
to the provisions of Section 5(b) regarding Ten Percent Shareholders, no Option
shall be exercisable after the expiration of ten years from the date it was
granted.
(b) Exercise
Price of an Incentive Stock Option.
Subject
to the provisions of Section 5(b) regarding Ten Percent Shareholders, the
exercise price of each Incentive Stock Option shall be not less than 100% of
the
Fair Market Value of the Common Stock subject to the Option on the date the
Option is granted. Notwithstanding the foregoing, an Incentive Stock Option
may
be granted with an exercise price lower than that set forth in the preceding
sentence if such Option is granted pursuant to an assumption or substitution
for
another option in a manner satisfying the provisions of Section 424(a) of the
Code.
(c) Exercise
Price of a Nonstatutory Stock Option. The
exercise price of Nonstatutory Stock Options shall be
not
less than 100% of the Fair Market Value of the Common Stock subject to the
Option on the date the Option is granted.
(d) Consideration.
The
purchase price of Common Stock acquired pursuant to an Option shall be paid,
to
the extent permitted by applicable statutes and regulations, either (i) in
cash
at the time the Option is exercised, or (ii) at the discretion of the Board
at
the time of the grant of the Option (or subsequently in the case of a
Nonstatutory Stock Option) (A) by delivery to the Company of other Common Stock,
(B) according to a deferred payment or other similar arrangement with the
Optionholder, (C) pursuant to a cashless exercise program implemented by the
Company in connection with the Plan, or (D) in any other form of legal
consideration that may be acceptable to the Board. Unless otherwise specifically
provided in the Option Agreement, the purchase price of Common Stock acquired
pursuant to an Option that is paid by delivery to the Company of other Common
Stock acquired, directly or indirectly from the Company, shall be paid only
by
shares of the Common Stock of the Company that have been held for more than
six
months (or such longer or shorter period of time required to avoid a charge
to
earnings for financial accounting purposes).
In
the
case of any deferred payment arrangement, interest shall be compounded at least
annually and shall be charged at the minimum rate of interest necessary to
avoid
the treatment as interest, under any applicable provisions of the Code, of
any
amounts other than amounts stated to be interest under the deferred payment
arrangement.
C-7
(e) Transferability
of an Incentive Stock Option.
An
Incentive Stock Option shall not be transferable except by will or by the laws
of descent and distribution and shall be exercisable during the lifetime of
the
Optionholder only by the Optionholder. Notwithstanding the foregoing, the
Optionholder may, by delivering written notice to the Company, in a form
satisfactory to the Company, designate a third party who, in the event of the
death of the Optionholder, shall thereafter be entitled to exercise the
Option.
(f) Transferability
of a Nonstatutory Stock Option.
A
Nonstatutory Stock Option shall be transferable only to the extent provided
in
the Option Agreement (subject to applicable securities laws). Notwithstanding
the foregoing, the Optionholder may, by delivering written notice to the
Company, in a form satisfactory to the Company, designate a third party who,
in
the event of the death of the Optionholder, shall thereafter be entitled to
exercise the Option.
(g) Vesting
Generally.
The
total number of shares of Common Stock subject to an Option may, but need not,
vest and therefore become exercisable in periodic installments that may, but
need not, be equal. The Option may be subject to such other terms and conditions
on the time or times when it may be exercised (which may be based on performance
or other criteria) as the Board may deem appropriate. The vesting provisions
of
individual Options may vary. The provisions of this Section 6(g) are subject
to
any Option provisions governing the minimum number of shares of Common Stock
as
to which an Option may be exercised.
(h) Termination
of Continuous Service.
In the
event an Optionholder’s Continuous Service terminates (other than upon the
Optionholder’s death or Disability), the Optionholder may exercise his or her
Option (to the extent that the Optionholder was entitled to exercise such Option
as of the date of termination) but only within such period of time ending on
the
earlier of (i) the date three months following the termination of the
Optionholder’s Continuous Service (or, except with respect to Incentive Stock
Options, such longer or shorter period specified in the Option Agreement),
or
(ii) the expiration of the term of the Option as set forth in the Option
Agreement. If, after termination, the Optionholder does not exercise his or
her
Option within the time specified in the Option Agreement, the Option shall
terminate.
(i) Extension
of Termination Date.
Except
with respect to Incentive Stock Options, an Optionholder’s Option Agreement may
also provide that if the exercise of the Option following the termination of
the
Optionholder’s Continuous Service (other than upon the Optionholder’s death or
Disability) would be prohibited at any time solely because the issuance of
shares of Common Stock would violate the registration requirements under the
Securities Act, then the Option shall terminate on the earlier of (i) the
expiration of the term of the Option set forth in Section 6(a), or (ii) the
expiration of a period of thirty days after the termination of the
Optionholder’s Continuous Service during which the exercise of the Option would
not be in violation of such registration requirements.
(j) Disability
of Optionholder.
In the
event that an Optionholder’s Continuous Service terminates as a result of the
Optionholder’s Disability, the Optionholder may exercise his or her Option (to
the extent that the Optionholder was entitled to exercise such Option as of
the
date of termination), but only within such period of time ending on the earlier
of (i) the date 12 months following such termination (or, except with respect
to
Incentive Stock Options, such longer or shorter period specified in the Option
Agreement) or (ii) the expiration of the term of the Option as set forth in
the
Option Agreement. If, after termination, the Optionholder does not exercise
his
or her Option within the time specified herein, the Option shall
terminate.
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(k) Death
of Optionholder.
In the
event (i) an Optionholder’s Continuous Service terminates as a result of the
Optionholder’s death or (ii) the Optionholder dies within the period (if any)
specified in the Option Agreement after the termination of the Optionholder’s
Continuous Service for a reason other than death, then the Option may be
exercised (to the extent the Optionholder was entitled to exercise such Option
as of the date of death) by the Optionholder’s estate, by a person who acquired
the right to exercise the Option by bequest or inheritance or by a person
designated to exercise the option upon the Optionholder’s death pursuant to
Section 6(e) or 6(f), but only within the period ending on the earlier of (A)
the date 18 months following the date of death (or, except with respect to
Incentive Stock Options, such longer or shorter period specified in the Option
Agreement) or (B) the expiration of the term of such Option as set forth in
the
Option Agreement. If, after death, the Option is not exercised within the time
specified herein, the Option shall terminate.
(l) Early
Exercise.
The
Option may, but need not, include a provision whereby the Optionholder may
elect
at any time before the Optionholder’s Continuous Service terminates to exercise
the Option as to any part or all of the shares of Common Stock subject to the
Option prior to the full vesting of the Option. The early purchase of any
unvested shares of Common Stock will be pursuant to an early exercise provision
in the Option Agreement which may provide for a repurchase option in favor
of
the Company and other restrictions the Board determines to be appropriate.
Any
repurchase option so provided for will be subject to the repurchase provisions
set forth in Section 11(h) herein.
(m) Substitution
of Stock Appreciation Rights for Options.
If the
Company is required to or elects to expense the cost of Options pursuant to
FAS
123 (or a successor or other standard), the Board shall have the sole discretion
to substitute without receiving Participants’ permission, Stock Appreciation
Rights paid only in stock for outstanding Options; provided, the terms of the
substituted Stock Appreciation Rights are substantially the same as the terms
of
the Options, the number of shares underlying the number of Stock Appreciation
Rights equals the number of shares underlying the Options and the difference
between the Fair Market Value of the underlying shares of Common Stock and
the
grant price of the Stock Appreciation Rights is equivalent to the difference
between the Fair Market Value of the underlying shares of Common Stock and
the
exercise price of the Options.
(n) Re-Load
Options.
(i) Without
in any way limiting the authority of the Board to make or not to make grants of
Options hereunder, the Board shall have the authority (but not an obligation)
to
include as part of any Option Agreement a provision entitling the Optionholder
to a further Option (a “Re-Load
Option”)
in the
event the Optionholder exercises the Option evidenced by the Option Agreement,
in whole or in part, by surrendering other shares of Common Stock in accordance
with this Plan and the terms and conditions of the Option Agreement. Unless
otherwise specifically provided in the Option Agreement, the Optionholder shall
not surrender shares of Common Stock acquired, directly or indirectly from
the
Company, unless such shares have been held for more than six months (or such
longer or shorter period of time required to avoid a charge to earnings for
financial accounting purposes).
(ii) Any
such
Re-Load Option shall (i) provide for a number of shares of Common Stock equal
to
the number of shares of Common Stock surrendered as part or all of the exercise
price of such Option, (ii) have an expiration date which is the same as the
expiration date of the Option the exercise of which gave rise to such Re-Load
Option, and (iii) have an exercise price which is equal to 100% of the Fair
Market Value of the Common Stock subject to the Re-Load Option on the date
of
exercise of the original Option. Notwithstanding the foregoing, a Re-Load Option
shall be subject to the same exercise price and term provisions heretofore
described for Options under the Plan.
C-9
Any
such
Re-Load Option may be an Incentive Stock Option or a Nonstatutory Stock Option,
as the Board may designate at the time of the grant of the original Option;
provided, however, that the designation of any Re-Load Option as an Incentive
Stock Option shall be subject to the $100,000 annual limitation on the
exercisability of Incentive Stock Options described in Section 11(d) of the
Plan
and in Section 422(d) of the Code. There shall be no Re-Load Options on a
Re-Load Option. Any such Re-Load Option shall be subject to the availability
of
sufficient shares of Common Stock under Section 4(a) and shall be subject to
such other terms and conditions as the Board may determine that are not
inconsistent with the express provisions of the Plan regarding the terms of
Options.
7. Provisions
of Stock Awards other than Options.
(a) Restricted
Stock and Restricted Stock Units.
(i) Designation.
Restricted Stock or Restricted Stock Units may be granted under the Plan. After
the Board determines that it will offer Restricted Stock or Restricted Stock
Units, it will advise the Participant in writing or electronically, by means
of
a Stock Award Agreement, of the terms, conditions and restrictions, including
vesting, if any, related to the offer, including the number of shares of Common
Stock that the Participant shall be entitled to receive or purchase, the price
to be paid, if any, and, if applicable, the time within which the Participant
must accept the offer. The offer shall be accepted by execution of a Stock
Award
Agreement or as otherwise directed by the Board. The term of each award of
Restricted Stock or Restricted Stock Units shall be at the discretion of the
Board.
(ii) Restrictions.
Subject
to Section 8(b)(iii), the Board may impose such conditions or restrictions
on
the Restricted Stock or Restricted Stock Units granted pursuant to the Plan
as
it may determine advisable, including the achievement of specific performance
goals, time based restrictions on vesting, or others. If the Board established
performance goals, the Board shall determine whether a Participant has satisfied
the performance goals.
(iii) Performance
Criteria.
Restricted Stock and Restricted Stock Units granted pursuant to the Plan that
are intended to qualify as “performance based compensation” under Section 162(m)
of the Code shall be subject to the attainment of performance goals relating
to
the Performance Criteria selected by the Board and specified at the time such
Restricted Stock and Restricted Stock Units are granted. For purposes of this
Plan, “Performance
Criteria”
means
one or more of the following (as selected by the Board and as such list to
be
amended or supplemented from time to time by the Plan Administrator): (1) cash
flow; (2) earnings per share; (3) earnings before interest, taxes, and
amortization; (4) return on equity; (5) total shareholder return; (6) share
price performance; (7) return on capital; (8) return on assets or net assets;
(9) revenue; (10) revenue growth; (11) earnings growth; (12) operating income;
(13) operating profit; (14) profit margin; (15) return on operating revenue;
(16) return on invested capital; (17) market price; (18) brand recognition;
(19)
customer satisfaction; (20) operating efficiency; or (21) productivity. Any
of
these Performance Criteria may be used to measure the performance of the Company
as a whole or any business unit or division of the Company.
(iv) Transferability.
Restricted Stock and Restricted Stock Units shall be transferable by the
Participant only upon such terms and conditions as are set forth in the Stock
Award Agreement, as the Board shall determine in its
discretion.
C-10
(v) Vesting.
Unless
the Board determines otherwise, the Stock Award Agreement shall provide for
the
forfeiture of the non-vested shares of Common Stock underlying Restricted Stock
or the termination of unvested Restricted Stock Units upon termination of a
Participant’s Continuous Service. To the extent that the Participant purchased
the shares of Common Stock granted under any such Restricted Stock award and
any
such shares of Common Stock remain non-vested at the time of termination of
a
Participant’s Continuous Service, the termination of Participant’s Continuous
Service shall cause an immediate sale of such non-vested shares of Common Stock
to the Company at the original price per share of Common Stock paid by the
Participant.
(b) Stock
Appreciation Rights.
Grants
of Stock Appreciation Rights shall be pursuant to a Stock Award Agreement,
which
shall be in such form and shall contain such terms and conditions, as the Board
shall deem appropriate. The Board may grant Stock Appreciation Rights in
connection with all or any part of an Option (“Tandem
Stock Appreciation Rights”)
to a
Participant or in a stand-alone grant (“Stand-Alone
Stock Appreciation Rights”).
The
terms and conditions of a Stock Appreciation Right shall include (through
incorporation of the provisions hereof by reference in the Stock Award Agreement
or otherwise) the substance of each of the following provisions:
(i) Calculation
of Appreciation.
Each
Stock Appreciation Right will be denominated in shares of Common Stock
equivalents. The appreciation distribution payable on the exercise of a Stock
Appreciation Right will be not greater than an amount equal to the excess of
(A)
the aggregate Fair Market Value (on the date of the exercise of the Stock
Appreciation Right) of a number of shares of Common Stock equal to the number
of
shares of Common Stock equivalents in which the Participant is vested under
such
Stock Appreciation Right and with respect to which the Participant is exercising
the Stock Appreciation Right on such date, over (B) an amount that will be
determined by the Board at the time of grant of the Stock Appreciation Right
(which amount shall not be less than the Fair Market Value of such shares of
common stock at the time of grant of the Stock Appreciation
Rights).
(ii) Vesting.
At the
time of the grant of a Stock Appreciation Right, the Board may impose such
restrictions or conditions to the vesting of such Stock Appreciation Right
as it
deems appropriate.
(iii) Exercise.
To
exercise any outstanding Stock Appreciation Right, the Participant must provide
written notice of exercise to the Company in compliance with the provisions
of
the Stock Award Agreement evidencing such Stock Appreciation Right.
(iv) Payment.
The
appreciation distribution in respect of a Stock Appreciation Right may be paid
in Common Stock, in cash, or any combination of the two, as the Board deems
appropriate.
(v) Termination
of Continuous Service.
If a
Participant’s Continuous Service terminates for any reason, any unvested Stock
Appreciation Rights shall be forfeited and any vested Stock Appreciation Rights
shall be automatically redeemed.
(vi) Transferability.
Stock Appreciation Rights shall be transferable by the Participant only upon
such terms and conditions as are set forth in the Stock Award Agreement, as
the
Board shall determine in its discretion.
C-11
(vii) Tandem
Stock Appreciation Rights.
A
Tandem Stock Appreciation Right shall be exercisable only to the extent that
the
related Option is exercisable and a Tandem Stock Appreciation Right shall expire
no later than the date on which the related Option expires.
8. Covenants
of the Company.
(a) Availability
of Shares.
During
the terms of the Stock Awards, the Company shall keep available at all times
the
number of shares of Common Stock required to satisfy such Stock
Awards.
(b) Securities
Law Compliance.
The
Company shall seek to obtain from each regulatory commission or agency having
jurisdiction over the Plan such authority as may be required to grant Stock
Awards and to issue and sell shares of Common Stock upon exercise of the Stock
Awards; provided, however, that this undertaking shall not require the Company
to register under the Securities Act the Plan, any Stock Award or any Common
Stock issued or issuable pursuant to any such Stock Award. If, after reasonable
efforts, the Company is unable to obtain from any such regulatory commission
or
agency the authority which counsel for the Company deems necessary for the
lawful issuance and sale of Common Stock under the Plan, the Company shall
be
relieved from any liability for failure to issue and sell Common Stock upon
exercise of such Stock Awards unless and until such authority is
obtained.
9. Use
of Proceeds from Stock.
Proceeds
from the sale of Common Stock pursuant to Stock Awards shall constitute general
funds of the Company.
10.
Effective
Date of Plan.
The
Plan
shall become effective as determined by the Board, but no Stock Award shall
be
exercised (or, in the case of a stock bonus, shall be granted) unless and until
the Plan has been approved by the shareholders of the Company, which approval
shall be within twelve months before or after the date the Plan is adopted
by
the Board.
11. Miscellaneous.
(a) Acceleration
of Exercisability and Vesting.
The
Board shall have the power to accelerate the time at which a Stock Award may
first be exercised or the time during which a Stock Award or any part thereof
will vest in accordance with the Plan, notwithstanding the provisions in the
Stock Award stating the time at which it may first be exercised or the time
during which it will vest.
(b) Shareholder
Rights.
No
Participant shall be deemed to be the holder of, or to have any of the rights
of
a holder with respect to, any shares of Common Stock subject to such Stock
Award
unless and until such Participant has satisfied all requirements for exercise
of
the Stock Award pursuant to its terms.
(c) No
Employment or other Service Rights.
Nothing
in the Plan or any instrument executed or Stock Award granted pursuant thereto
shall confer upon any Participant any right to continue to serve the Company
or
an Affiliate in the capacity in effect at the time the Stock Award was granted
or shall affect the right of the Company or an Affiliate to terminate (i) the
employment of an Employee with or without notice and with or without cause,
(ii)
the service of a Consultant pursuant to the terms of such Consultant’s agreement
with the Company or an Affiliate, or (iii) the service of a Director pursuant
to
the Bylaws of the Company or an Affiliate, and any applicable provisions of
the
corporate law of the state in which the Company or the Affiliate is
incorporated, as the case may be.
C-12
(d) Incentive
Stock Option $100,000 Limitation.
To the
extent that the aggregate Fair Market Value (determined at the time of grant)
of
Common Stock with respect to which Incentive Stock Options are exercisable
for
the first time by any Optionholder during any calendar year (under all plans
of
the Company and its Affiliates) exceeds $100,000, the Options or portions
thereof which exceed such limit (according to the order in which they were
granted) shall be treated as Nonstatutory Stock Options.
(e) Maximum
Award Amounts.
In no
event shall a Participant receive a Stock Award or Stock Awards during any
one
calendar year covering in the aggregate more than 1,000,000 shares
of
Common Stock.
(f) Investment
Assurances.
The
Company may require a Participant, as a condition of exercising or acquiring
Common Stock under any Stock Award (i) to give written assurances satisfactory
to the Company as to the Participant’s knowledge and experience in financial and
business matters and/or to employ a purchaser representative reasonably
satisfactory to the Company who is knowledgeable and experienced in financial
and business matters and that he or she is capable of evaluating, alone or
together with the purchaser representative, the merits and risks of exercising
the Stock Award, and (ii) to give written assurances satisfactory to the Company
stating that the Participant is acquiring Common Stock subject to the Stock
Award for the Participant’s own account and not with any present intention of
selling or otherwise distributing the Common Stock. The foregoing requirements,
and any assurances given pursuant to such requirements, shall be inoperative
if
(1) the issuance of the shares of Common Stock upon the exercise or acquisition
of Common Stock under the Stock Award has been registered under a then currently
effective registration statement under the Securities Act, or (2) as to any
particular requirement, a determination is made by counsel for the Company
that
such requirement need not be met in the circumstances under the then applicable
securities laws. The Company may, upon advice of counsel to the Company, place
legends on stock certificates issued under the Plan as such counsel deems
necessary or appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer of the Common
Stock.
(g) Withholding
Obligations.
To the
extent provided by the terms of a Stock Award Agreement, the Participant may
satisfy any federal, state or local tax withholding obligation relating to
the
exercise or acquisition of Common Stock under a Stock Award by any of the
following means (in addition to the Company’s right to withhold from any
compensation paid to the Participant by the Company) or by a combination of
such
means: (i) tendering a cash payment, (ii) authorizing the Company to withhold
shares of Common Stock from the shares of Common Stock otherwise issuable to
the
Participant as a result of the exercise or acquisition of Common Stock under
the
Stock Award, provided, however, that no shares of Common Stock are withheld
with
a value exceeding the minimum amount of tax required to be withheld by law,
or
(iii) delivering to the Company owned and unencumbered shares of Common
Stock.
(h) Repurchase
Provisions.
The
Company shall exercise any repurchase option specified in the Stock Award by
giving the holder of the Stock Award written notice of intent to exercise the
repurchase option. Payment may be cash or cancellation of purchase money
indebtedness for the Common Stock. The terms of any repurchase option shall
be
specified in the Stock Award and may be either at Fair Market Value at the
time
of repurchase or at not less than the original purchase price.
(i) Plan
Unfunded. The
Plan
shall be unfunded. Except for the Board’s reservation of a sufficient number of
authorized shares to the extent required by law to meet the requirements
of the
Plan, the Company shall not be required to establish any special or separate
fund or to make any other segregation of assets to assure payment of any
Stock
Award under the Plan.
C-13
12. Adjustments
upon Changes in Stock.
(a)
Capitalization Adjustments.
In the
event that any dividend or other distribution (whether in the form of cash,
shares of the Common Stock, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, exchange of Common
Stock or other securities of the Company, or other change in the corporate
structure of the Company affecting the Common Stock occurs, the Board, in order
to prevent diminution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, shall appropriately adjust the
number and class of Common Stock that may be delivered under the Plan and/or
the
number, class, and price of Common Stock covered by each outstanding Stock
Award;
provided however that no such adjustment shall be made to any Stock Award to
the
extent that it would, in the view of the Company, cause such Stock Award to
be
subject to Section 409A of the Code. The Board shall provide holders of
Restricted Stock Units a dividend equivalent right, pursuant to a separate
arrangement between the Company and any such holder, in the form of additional
shares of Common Stock or units, with respect to the unvested shares of Common
Stock or unvested units the Participant shall be entitled to receive or
purchase.
(b)
Dissolution or Liquidation.
In the
event of the proposed dissolution or liquidation of the Company, the Board
will
notify each Participant as soon as practicable prior to the effective date
of
such proposed transaction. To the extent it has not been previously exercised,
a
Stock Award will terminate immediately prior to the consummation of such
proposed action.
(c)
Change in Control. In
the
event of Change in Control, then, to the extent permitted by applicable law:
(1)
any surviving corporation may assume any Stock Awards outstanding under the
Plan
or may substitute similar stock awards (including an award to acquire the same
consideration paid to the shareholders in the transaction described in this
Section 12(c)) for those outstanding under the Plan, or (2) in the event any
surviving corporation does not assume or continue such Stock Awards, or to
substitute similar stock awards for those outstanding under the Plan in
accordance with the preceding clause, then the time during which such Stock
Awards may be exercised automatically will be accelerated and become fully
vested and exercisable immediately prior to the consummation of such
transaction, and the Stock Awards shall automatically terminate upon
consummation of such transaction if not exercised prior to such
event.
(d)
No Limitations.
The
grant of Stock Awards will in no way affect the Company’s right to adjust,
reclassify, reorganize or otherwise change its capital or business structure
or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.
13.
Amendment
of the Plan and Stock Awards.
(a)
Amendment
of Plan.
The
Board at any time, and from time to time, may amend the Plan. However, except
as
provided in Section 12 relating to adjustments upon changes in Common Stock,
no
amendment shall be effective unless approved by the shareholders of the Company
to the extent shareholder approval is necessary to satisfy the applicable
requirements of Section 422 or 162(m) of the Code and the Treasury Regulations
thereunder, Rule 16b-3 or any Nasdaq or securities exchange listing
requirements. For purposes of clarity, any increase in the number of shares
reserved for issuance hereunder in accordance with the provisions of Section
4(a) hereof shall not be deemed to be an amendment to the Plan ;
provided that any such adjustment that would increase the number of
C-14
shares
of
Common Stock that may be issued pursuant to Incentive Stock Options (other
than
an increase merely reflecting a change in the number of outstanding shares,
such
as a stock dividend or stock split), shall constitute an amendment to the Plan
requiring shareholder approval.
(b)
Contemplated
Amendments.
It is
expressly contemplated that the Board may amend the Plan in any respect the
Board deems necessary or advisable to provide eligible Employees with the
maximum benefits provided or to be provided under the provisions of the Code
and
the regulations promulgated thereunder relating to Incentive Stock Options
and/or to bring the Plan and/or Incentive Stock Options granted under it into
compliance therewith.
(c)
No Impairment of Rights.
Rights
under any Stock Award granted before amendment of the Plan shall not be impaired
by any amendment of the Plan unless (i) the Company requests the consent of
the
Participant and (ii) the Participant consents in writing.
(d)
Amendment of Stock Awards.
The
Board at any time, and from time to time, may amend the terms of any one or
more
Stock Awards; provided, however, that the rights under any Stock Award shall
not
be impaired by any such amendment unless (i) the Company requests the consent
of
the Participant and (ii) the Participant consents in writing.
14.
Termination
or
Suspension of the Plan.
(a) Plan
Term.
The
Board may suspend or terminate the Plan at any time. Unless sooner terminated,
the Plan shall terminate on the day before the tenth anniversary of the date
the
Plan is adopted by the Board or approved by the shareholders of the Company,
whichever is later. No Stock Awards may be granted under the Plan while the
Plan
is suspended or after it is terminated.
(b) No
Impairment of Rights.
Suspension or termination of the Plan shall not impair rights and obligations
under any Stock Award granted while the Plan is in effect except with the
written consent of the Participant.
15.
Choice
of
Law.
The
law
of the State of Washington shall govern all questions concerning the
construction, validity and interpretation of this Plan, without regard to such
state’s conflict of laws rules.
C-15
|
ý PLEASE
MARK VOTES
AS
IN
THIS EXAMPLE
|
REVOCABLE
PROXY
IDAHO
GENERAL MINES, INC.
|
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For
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With-
hold
|
For
All
Except
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|
The
undersigned hereby appoints Robert L. Russell, Henry A. Miller
and Robert
L. Dumont, or either of them, as proxies, each with the power
to appoint
his substitute, and hereby authorizes them to represent and vote,
as
designated below, all of the shares of Common Stock of Idaho
General
Mines, Inc. held on record by the undersigned on November 1,
2006 at the
2006 Annual Meeting of Shareholders to be held on December 13,
2006, or
any adjournment thereof. |
1.
Election of directors (except as marked to the contrary
below):
Robert
L. Russell
John B. Benjamin Gene W. Pierson Norman A. Radford R. David Russell Richard F. Nanna R. Llee Chapman Roy A. Pickren, Jr. Ricardo M. Campoy |
o
|
o
|
o
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INSTRUCTION:
To withhold authority to vote for any individual -nominee, mark
“For All
Except” and write that nominee’s name in the space provided
below.
|
||||
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For
|
Against
|
Abstain
|
|||
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2. Approval
of the Idaho General Mines, Inc. 2006 Equity Incentive
Plan
|
o
|
o
|
o
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||
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In
their discretion, the proxies are authorized to vote upon such
other
business as may properly come before the meeting.
This
proxy, when properly executed, will be voted in the manner directed
herein
by the undersigned shareholder. If no direction is made, this
proxy will
be voted for each proposal.
Please
sign exactly as name appears below. When
shares are held by joint tenants, both should sign. When signing
as
attorney, as executor, administrator, trustee, or guardian, please
give
full title as such. If a corporation, please sign in full corporate
name
by President or other authorized officer. If a partnership, please
sign in
partnership name by authorized
person.
|
|||||
|
Please
be sure to sign and date
this Proxy in the box below |
Date | ||
|
Stockholder
sign above
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Co-holder
(if any) sign
above)
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||
^
Detach above card, sign, date and mail in postage paid envelope
provided. ^
IDAHO
GENERAL MINES, INC.
10
North Post Street, Suite 610
Spokane,
Washington 99201
|
PLEASE
MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE |
IF
YOUR
ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED BELOW
AND
RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.