SCHEDULE 14A
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[X] Soliciting Material Pursuant toss. 240.14a-12
ECHO BAY MINES LTD.
(Name of Registrant as Specified in its Charter)
-----------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[.] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transactions:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Echo Bay Mines Ltd. ("Echo Bay" or the "Company") was incorporated in
Canada in 1964. Its principal executive office is located at Suite 1210, 10180
- 101 Street, Edmonton, Alberta, T5J 3S4, Canada and its telephone number is
780-496-9002. The Company is principally engaged in gold mining and related
activities.
INFORMATION CONCERNING THE DIRECTORS
AND EXECUTIVE OFFICERS OF ECHO BAY
The following table sets forth the name and present principal occupation
or employment of each director and executive officer of Echo Bay. Unless
otherwise indicated, the positions identified below are held with the Company.
The business address of each such person is c/o Echo Bay Mines Ltd., Suite
1210, 10180 - 101 Street, Edmonton, Alberta, T5J 3S4, Canada and the telephone
number of such person is 780-496-9002.
Name Present Office with the Company or other
Principal Occupation
John Norman Abell Director
Ron Binns Director and Vice President, Finance and Chief
Financial Officer Newmont Mining Corporation of
Canada Limited
Lois-Ann L. Brodrick Vice President and Secretary
Peter Clarke Director and Consultant to the metals and mining
industries
David Harquail Director and Senior Vice President
Newmont Mining Corporation of Canada Limited
Robert Leigh Leclerc Chairman of the Board of Directors and Chief
Executive Officer
Jerry L. J. McCrank Vice President, Operations
John Frederick McOuat Director and Chairman
Watts, Griffis and McOuat Limited
David A. Ottewell Controller
Tom S. Q. Yip Vice President, Finance and Chief Financial
Officer
INTERESTS OF NAMED INDIVIDUALS
Security Ownership of Management
The following table shows equity securities of the Company beneficially
owned by all directors and executive officers:
Options Options
Amount and Nature Exercisable as Unexercisable as
of Beneficial of 6/10/02 and of 6/10/02 and
Title of Beneficial Ownership as within 60 Days for 60 Days
Class Owner of 6/10/02 thereafter thereafter
Common John Norman Abell 15,000 29,100 -
Common Ron Binns - - -
Common Lois-Ann L. Brodrick - 73,900 45,233
Common Peter Clarke 5,000 59,000 30,000
Common David Harquail - - -
Common Robert Leigh Leclerc 10,000 700,083 190,027
Common Jerry L. J. McCrank 5,000 108,911 50,292
Common John F. McOuat 2,791 22,600 -
Common David Ottewell - 15,252 10,000
Common Tom S. Q. Yip 300 100,230 46,147
Common Directors and Executive
Officers as a Group 1,147,267(1)(2)(3)
(1) Represents 0.21 percent of the outstanding common shares of the Company.
(2) Includes 1,109,176 common shares which directors and officers have the
right to acquire within 60 days of June 10, 2002.
(3) No individual director or officer owns common shares of the Company
representing 1.0 percent or more of the number of outstanding shares.
Messrs. Binns and Harquail are officers of Newmont Mining Corporation of
Canada Limited ("Newmont") which, as of April 5, 2002, owns 48.8 percent
of the Company's common shares (this percentage does not reflect the
public offering of 39,100,000 units (each unit consisting of one common
share and one common share purchase warrant) which closed May, 2002).
Share Incentive Plan
The Company has adopted a share incentive plan which provides for the
grant to officers and employees of options to purchase common shares. The
Compensation Committee may, in its sole discretion, accelerate the time at
which any option may be exercised in whole or in part. Such discretion may be
exercised in any circumstances deemed appropriate by the Committee including,
without limitation, the threat (actual or perceived) of a take-over bid for
voting control of the Company. If there is a take-over bid (including, in
connection with the proposed transaction among Kinross Gold Corporation
("Kinross"), TVX Gold Inc. ("TVX") and Echo Bay to combine their respective
businesses) for the Company and the Committee does not accelerate the time at
which any option may be exercised, then all options will become exercisable no
later than the time the acquisitor becomes entitled to take up and pay for the
common shares of the Company acquired pursuant to the bid.
Director Equity Plan
The Company has adopted a director equity plan which provides for the
grant of options to purchase common shares to non-employee directors. The
Company stopped granting options under this plan and all options previously
granted under the plan will be vested as of June 11, 2002.
Employment Contracts and Termination of Employment and Change-in-Control
Agreements
Mr. Leclerc and the Company have entered into an employment contract
which is for an indefinite term and provides for certain lump sum payments if
the Company terminates Mr. Leclerc's employment on less than two years'
written notice or demotes him and he voluntarily resigns. If a change of
control of the Company is followed by a termination of Mr. Leclerc's
employment under specified
circumstances, Mr. Leclerc shall be paid a cash payment equal to three times
the total of his annual base salary plus bonus under the executive cash
incentive plan and shall receive two years of continued health coverage. If
these payments and any other benefits provided to Mr. Leclerc would be subject
to any excise tax imposed by section 4999 of the United States Internal
Revenue Code or any interest or penalties with respect to such excise tax
(such excise tax, together with any such interest or penalties, are
collectively referred to as the "Excise Tax"), then Mr. Leclerc shall be
entitled to receive an additional payment (an "Excise Tax Restoration
Payment") in an amount that shall fund the payment of any Excise Tax on the
total payments and benefits received by Mr. Leclerc following a change of
control as well as all income taxes imposed on the Excise Tax Restoration
Payment, any Excise Tax imposed on the Excise Tax Restoration Payment and any
interest or penalties imposed with respect to taxes on the Excise Tax
Restoration Payment or any Excise Tax. The specified circumstances referred to
in the sentence before last include (i) the Company's termination of Mr.
Leclerc's employment within one year of a change of control or (ii) a
voluntary resignation by Mr. Leclerc for "good reason" within one year of a
change of control. The expression "good reason" is defined to include any one
of four acts of employer constructive dismissal: the assignment of lower level
status or responsibility, a reduction in base salary, a requirement to
relocate, or a change in employee participation in or benefits under the
Company's benefit plans. Additionally, in the final 30 days of the one-year
period referred to above, Mr. Leclerc may resign for any reason, or no reason
at all, and be entitled forthwith to the cash payment calculated as specified
above.
Each of the other named executive officers has entered into an employment
contract for an indefinite term. The contracts provide for certain lump sum
payments if the Company terminates the individual's employment on less than
one year's written notice or the individual is demoted and voluntarily
resigns. In all other respects, including with respect to the change of
control and Excise Tax Restoration Payment provisions, the employment
contracts for Ms. Brodrick and Messrs. McCrank and Yip are identical to Mr.
Leclerc's contract. Mr. Ottewell's contract provides for a lower payout
structure than the others, does not afford the right to resign in the final 30
days of the one-year period referred to above, and does not contain an
obligation on the part of the Company to make an Excise Tax Restoration
Payment.
OTHER SHAREHOLDER INFORMATION
Security Ownership of Certain Beneficial Owners
Based upon information available to the Company as of April 5, 2002, the
following shareholders were the beneficial owners of more that five percent of
the common shares:
Name and Address of Beneficial Owner Amount and Nature of Beneficial Percent of
Title of Class Beneficial Owner Beneficial Ownership(1) Class
Common Newmont Mining Corporation of Canada Limited 244,993,890 48.8 percent
Suite 1900, 20 Eglinton Avenue West
Toronto, Ontario M4R 1K8
Common Kinross Gold Corporation 57,126,674 11.4 percent
52nd Floor, Scotia Place
40 King Street West
Toronto, Ontario M5H 3Y2
Common Goldman Sachs & Co. 35,595,703 7.1 percent
85 Broad Street
New York, NY 10004
(1) The share numbers and related percentage ownership figures do not reflect
the public offering of 39,100,000 units (each unit consisting of one
common share and one common share purchase warrant) which closed May,
2002.
Relationship with Newmont
Two members of the Echo Bay Board of Directors, Messrs. Binns and
Harquail, are officers of Newmont. As of April 5, 2002, Newmont owns 48.8
percent of Echo Bay's outstanding common shares.
Kinross, TVX and Echo Bay expect to enter into a formal agreement to
effect the combination of their respective businesses. It is expected that the
consummation of the combination will be conditioned on the concurrent closing
of TVX's proposed acquisition of Newmont's 49.9 percent interest in TVX
Newmont Americas.
It is expected that concurrent with the signing of a formal agreement to
effect the combination, Newmont and Echo Bay will enter into a Lock-Up
Agreement (the "Newmont Lock-Up Agreement") whereby Newmont would agreed to
vote its Echo Bay common shares in favor of the participation of Echo Bay in
the combination involving Kinross, TVX and Echo Bay.
Relationship with Kinross
As of April 5, 2002, Kinross owns 11.4 percent of Echo Bay's outstanding
common shares. It is expected that concurrent with the signing of a formal
agreement to effect the combination, Kinross and Echo Bay will enter into a
Lock-Up Agreement (the "Kinross Lock-Up Agreement") whereby Kinross would
agree to vote its Echo Bay common shares in favor of the participation of Echo
Bay in the combination involving Kinross, TVX and Echo Bay.
CAUTIONARY STATEMENT
Investors and security holders are urged to read the proxy statement regarding
the business combination transaction referred to in the foregoing information,
when it becomes available, because it will contain important information. The
proxy statement will be filed with the SEC by Echo Bay. Investors and security
holders may obtain a free copy of this proxy statement (when it is available)
and other documents filed by Echo Bay with the SEC at the SEC's website at
www.sec.gov. The proxy statement (when it is available) and these other
documents may also be obtained for free from Echo Bay by directing a request
to Lois-Ann L. Brodrick, Vice President and Secretary, 780-496-9704,
lbrodrick@echobaymines.ca.
CERTAIN INFORMATION CONCERNING PARTICIPANTS
This filing contains a detailed list of names, affiliations and interests of
Echo Bay participants in the solicitation of proxies of stockholders to
approve the proposed business combination involving Kinross, TVX and Echo Bay.
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
The text of this filing contains forward-looking statements within the meaning
of the "safe harbor" provisions of the Private Securities Litigation Reform
Act of 1995. These statements are based on management 's current expectations
and beliefs and are subject to a number of factors and uncertainties that
could cause actual results to differ materially from those described in the
forward-looking statements. These statements are not guarantees of future
performance, involve certain risks, uncertainties, and assumptions that are
difficult to predict, and are based upon assumptions as to future events that
may not prove accurate. Therefore, actual outcomes and results may differ
materially from what is expressed herein.
In any forward-looking statement in which Echo Bay expresses an expectation or
belief as to future results, such expectation or belief is expressed in good
faith and believed to have a reasonable basis, but there can be no assurance
that the statement or expectation or belief will result or be achieved or
accomplished.