Attached files
file | filename |
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EX-31.4 - APOLLO GOLD CORP | v182873_ex31-4.htm |
EX-31.3 - APOLLO GOLD CORP | v182873_ex31-3.htm |
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
10-K/A
(Amendment
No. 1)
(Mark
one)
R
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the fiscal year ended December 31, 2009
|
|
or
|
|
£
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For
the transition period from ____ to
____
|
Commission
File Number: 001-31593
Apollo
Gold Corporation
(Exact
name of registrant as specified in its charter)
Yukon
Territory
|
Not
Applicable
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer
Identification
No.)
|
5655
S. Yosemite Street, Suite 200
Greenwood
Village, Colorado 80111-3220
(Address
of Principal Executive Offices Including Zip Code)
Registrant’s
telephone number, including area code: (720) 886-9656
Securities
registered pursuant to Section 12(b) of the Act:
Title of Each Class
|
Name of Each Exchange on Which
Registered
|
|
Common
Shares, no par value
|
NYSE
Amex
|
|
Toronto
Stock Exchange
|
Securities registered pursuant to
Section 12(g) of the Act: None
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.Yes £No R
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.Yes £No R
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes R No
£
Indicate
by a check mark whether the registrant has submitted electronically and posted
on its corporate Website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such filed). Yes £ No
£
Indicate
by a check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405 of this chapter) is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. R
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definition of “large accelerated filer”, “accelerated
filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check
one):
Large
accelerated filer £ Accelerated
filer R
Non-accelerated
filer £
(do not check if a smaller reporting
company) Smaller
Reporting Company £
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act). Yes £No R
As of
June 30, 2009, the aggregate market value of the registrant’s voting common
stock held by non-affiliates of the registrant was $95,828,992 based upon the
closing sale price of the common stock as reported by the NYSE Amex on that
date.
As of
April 27, 2010, the registrant had 337,973,660 common shares, no par value per
share, outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE
None.
APOLLO
GOLD CORPORATION
AMENDMENT
NO. 1 TO ANNUAL REPORT ON FORM 10-K
FOR
FISCAL YEAR ENDED DECEMBER 31, 2009
TABLE
OF CONTENTS
Form
10-K
Item
No.
|
Name
of Item
|
Page
|
||
PART
III
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||||
Item
10.
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Directors,
Executive Officers and Corporate Governance
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2
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Item
11.
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Executive
Compensation
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10
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Item
12.
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Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
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25
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||
Item
13.
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Certain
Relationships and Related Transactions, and Director
Independence
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28
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||
Item
14.
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Principal
Accounting Fees and Services
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31
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||
PART
IV
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||||
Item
15.
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Exhibits,
Financial Statement Schedules
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32
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EXPLANATORY
NOTE
Apollo
Gold Corporation (“Apollo”) is filing this Amendment No. 1 to its Annual Report
on Form 10-K for the fiscal year ended December 31, 2009, as originally filed
with the Securities and Exchange Commission (the “SEC”) on March 17, 2010 (the
“Original Filing”), in connection with Apollo’s preliminary proxy statement
filed with the SEC on April 26, 2010. Apollo is filing this Amendment
No. 1 solely to set forth information required by Items 10, 11, 12, 13 and 14 of
Part III of Form 10-K because a definitive proxy statement containing such
information will not be filed within 120 days after the end of the fiscal year
covered by the Original Filing. Also, in accordance with Rule 12b-15
of the Securities Exchange Act of 1934, new certifications as of April 29, 2010
by the principal executive officer and principal financial officer of Apollo are
attached hereto as Exhibits 31.3 and 31.4.
Except as
described above, this Amendment No. 1 does not attempt to modify or update any
other disclosures set forth in the Original Filing. Accordingly, the
remainder of Apollo’s Form 10-K remains unchanged and is not reproduced in this
Form 10-K/A. This Form 10-K/A continues to speak as of the date of
the Original Filing, and, unless otherwise indicated herein, does not reflect
information obtained after that filing. Therefore, in connection with
reading this Form 10-K/A, you should also read all other filings that Apollo has
made with the SEC since the date of the Original Filing.
PART
III
ITEM
10. DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors
The
following table and the notes thereto state the names of all directors of
Apollo, all other positions or offices each director has with Apollo, their
principal occupations or employment, the year in which they became directors of
Apollo and the approximate number of common shares of Apollo beneficially owned,
or controlled or directed, directly or indirectly, by each of them, as of April
29, 2010.
Name
and Municipality of
Residence
|
Present
Principal
Occupation
|
Year
First
Became
Director
|
Apollo
common shares
Beneficially
Owned, or
Controlled
or Directed
Directly
or Indirectly(1)
|
Age
|
|||||
Robert
W. Babensee(2)(3)(5)
Etobicoke,
Ontario
|
Retired
Partner of BDO Dunwoody LLP
|
2005
|
70,000
|
69
|
|||||
G.
Michael Hobart(5)
Toronto,
Ontario
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Partner,
Fogler, Rubinoff LLP, a law firm
|
2002
|
55,545
|
51
|
|||||
Marvin
K. Kaiser(2)(4)
Mayfield,
Kentucky
|
Retired
Business Executive
|
2006
|
25,000
|
68
|
|||||
David
W. Peat(2)(3)
Fernandina
Beach, Florida
|
Financial
Consultant
|
2006
|
25,000
|
57
|
|||||
R.
David Russell(4)
Aurora,
Colorado
|
President
and Chief Executive Officer of Apollo
|
2002
|
1,736,100(6)
|
53
|
|||||
Charles
E. Stott(3)(4)
Evergreen,
Colorado
|
Independent
Mining Consultant
|
2002
|
165,800(7)
|
76
|
|||||
W.S.
(Steve) Vaughan(5)
Toronto,
Ontario
|
Partner,
Heenan Blaikie LLP, a law firm
|
2002
|
Nil
|
72
|
(1)
|
Information
regarding common shares held of Apollo does not include shares issuable
upon the exercise of options, warrants or other convertible securities of
Apollo.
|
(2)
|
A
current member of the Audit
Committee.
|
(3)
|
A
current member of the Compensation
Committee.
|
(4)
|
A
current member of the Technical
Committee.
|
(5)
|
A
current member of the Nominating
Committee.
|
(6)
|
Includes
100 common shares of Apollo that are held indirectly by Mr. Russell for
the benefit of his minor child.
|
(7)
|
Juanita
Stott, Mr. Stott’s wife, is the registered holder of an additional 153,800
common shares of Apollo.
|
The
principal occupation for the past five years for each of the directors is set
forth below.
Robert W.
Babensee. Mr.
Babensee was as a partner of the Canadian accounting firm BDO Dunwoody LLP from
1984 to 2004, where he practiced as an assurance specialist. From February 2005
until July 2006, Mr. Babensee was the chief financial officer of Golden China
Resources Corporation, a former publicly listed natural resources company with
operations in Asia. Mr. Babensee has been a member of the Institute of Chartered
Accountants of Ontario since 1968. Mr. Babensee also serves as a director of
Caledonia Mining Corporation, a publicly listed natural resources
company. In determining Mr. Babensee’s qualifications to serve on
Apollo’s board of directors, Apollo’s Nominating Committee has considered, among
other things, his experience and expertise in finance, accounting and
management, particularly in the mining industry.
2
G. Michael
Hobart. Mr.
Hobart is a partner at the Toronto, Ontario office of Fogler, Rubinoff LLP, a
law firm, where he has practiced corporate and securities law since September
2002. Prior thereto he was a partner of Aylesworth Thompson Phelan O’Brien LLP,
a law firm, from 1998 to 2002. He earned a B.A. at McGill University
(1982) and a LL.B. at the University of New Brunswick (1985). He has
held directorships and senior officer positions with several junior mineral
exploration companies in Canada. Mr. Hobart was called to the Ontario Bar in
1987 and is a member of the Canadian Bar Association. Mr. Hobart also
serves as assistant secretary of Apollo. Mr. Hobart also recently served as
secretary of Aquiline Resources Inc. (a former TSX-listed company recently
acquired by Pan American Silver Corp.) and Polaris Geothermal Inc. (a former
TSX-listed company which recently merged with Ram Power, Corp.). In
determining Mr. Hobart’s qualifications to serve on Apollo’s board of directors,
Apollo’s Nominating Committee has considered, among other things, his experience
and expertise in corporate legal matters, particularly in the mining
industry.
Marvin K. Kaiser. Mr. Kaiser was the
executive vice president and chief administrative officer of The Doe Run
Company, an international natural resource company focused on the mining,
smelting, recycling and fabrication of metals, from December 1993 to February
2006. Prior thereto, he was the chief financial officer of Amax Gold Inc., a
publicly listed gold mining company, from 1989 to 1993. Mr. Kaiser served as a
director of NewWest Gold Corporation from 2006 to 2007, Constellation Copper
Corporation during 2008 and El Capitan Precious Metals Inc. from 2008 to
2009. Mr. Kaiser currently serves as a director of Gryphon Gold
Corporation and Uranium Resources Corporation which are publicly listed natural
resources companies. He has served on the School of Accountancy Advisory Board
at Southern Illinois University since 1988 and serves as a director of the
Southern Illinois University Foundation. Mr. Kaiser earned a
bachelor’s degree in accounting from Southern Illinois University. In
determining Mr. Kaiser’s qualifications to serve on Apollo’s board of directors,
Apollo’s Nominating Committee has considered, among other things, his experience
and expertise in finance, accounting and management, commercial metals
transactions and in the mining industry.
David W. Peat. Mr. Peat was the vice
president and chief financial officer of Frontera Copper Corporation, a publicly
listed mining company with a mine in Mexico, from June 2006 through February
2009. From 2002 through 2004, Mr. Peat served as vice president and global
controller for Newmont Mining Corporation, a publicly listed gold mining
company. From 1999 through 2002, Mr. Peat served as vice president, finance, and
chief financial officer for Homestake Mining Company, a former gold mining
company. Mr. Peat has been a member of the Institute of Chartered Accountants of
Ontario since 1978. Mr. Peat earned a Bachelor of Commerce, honors business
administration degree and a B.A. in economics in 1975. In determining
Mr. Peat’s qualifications to serve on Apollo’s board of directors, Apollo’s
Nominating Committee has considered, among other things, his experience and
expertise in finance, accounting and management and in the mining
industry.
R. David Russell. Mr. Russell has been
Apollo’s president and chief executive officer since June 2002. Mr. Russell was
a founder of Nevoro Gold Corporation in January 2002, the predecessor of Apollo,
and served as its president from February 2002 through June 2002. Mr. Russell
was an independent mining consultant from 1999 to 2002. Mr. Russell also serves
as a director of General Moly, Inc. and chairman
of the board of directors of Pure Nickel Inc., both publicly listed
natural resources companies. Mr. Russell served as a director of
Calais Resources, Inc. from 2005 to 2009. Mr. Russell received his bachelor’s
degree in mining engineering degree from Montana Tech. In determining
Mr. Russell’s qualifications to serve on Apollo’s board of directors, Apollo’s
Nominating Committee has considered, among other things, his experience and
expertise in mineral exploration, development, production and management,
corporate transactions and financings, and his role as president and chief
executive officer of Apollo.
3
Charles E. Stott. Mr. Stott has been an
independent mining consultant since 1995 with T.P. McNulty and Associates, which
provides consulting services to the mineral, metal and chemical industries. He
has also served as a member of the board of directors of Hazen Research, Inc., a
privately held industrial research firm, since 2002 and of Western Troy Capital
Resources Inc., a publicly listed mineral resources company, since 2008. Mr.
Stott was a director of the former Getchell Gold Corporation from 1996 to 1999.
He was president and chief executive officer of the former Gold Capital
Corporation from 1994 to 1995, of the former Horizon Resources Corporation from
1990 to 1993, and of the former Amax Gold Inc. from 1986 to 1989. All were
publicly listed natural resource companies. Mr. Stott holds a mining engineering
degree from the Colorado School of Mines and a J.D. degree from the Hastings
College of Law, University of California. In determining Mr. Stott’s
qualifications to serve on Apollo’s board of directors, Apollo’s Nominating
Committee has considered, among other things, his experience and expertise in
the mining industry, including exploration, development, production and
management.
W.S. (Steve)
Vaughan. Steve
Vaughan is a partner in the business law group with Heenan Blaikie LLP, a law
firm based in Toronto, focusing on the natural resources industry, particularly
mining. From 2002 until February 2007, Mr. Vaughan was a partner of McMillan
Binch Mendelsohn. Prior thereto he was a partner of Aird & Berlis LLP, a law
firm, from 1974 until February 2002. He has worked in or been closely associated
with all facets of the mineral exploration, mine finance and securities
industries since 1955. Mr. Vaughan is a director and member of the Securities
Committee of the Prospectors and Developers Association of Canada. Mr. Vaughan
also serves as a director of Algoma Central Corporation, Copper Mesa Mining
Corporation, Consolidated Tanager Limited, Ginguro Exploration, Inc., Platte
River Gold Inc., Pure Nickel, Inc., Solomon Resources Limited and Western Troy
Capital Resources Inc. Mr. Vaughan was called to the Ontario Bar in
1967 and is a member of the Canadian Bar Association. In determining
Mr. Vaughan’s qualifications to serve on Apollo’s board of directors, Apollo’s
Nominating Committee has considered, among other things, his experience and
expertise in finance, banking, corporate governance and legal matters,
particularly in the mining industry.
Executive
Officers
Set forth
below is certain information concerning the executive officers of
Apollo.
Name
|
Age
|
Title(s)
|
||
R.
David Russell
|
53
|
President
and Chief Executive Officer
|
||
Melvyn
Williams
|
61
|
Senior
Vice President — Finance and Corporate Development and Chief Financial
Officer
|
||
Richard
F. Nanna
|
61
|
Senior
Vice President — Exploration
|
||
Timothy
G. Smith
|
53
|
Vice
President — U.S. and Canadian Operations
|
||
Brent
E. Timmons
|
40
|
Vice
President & Controller
|
R. David
Russell. Mr. Russell is a director of Apollo and has served as
Apollo’s president and chief executive officer since June 2002. Mr. Russell was
a founder of Nevoro Gold Corporation in January 2002, the predecessor of Apollo
Gold Corporation, and served as its president from February 2002 through June
2002. Mr. Russell was an independent mining consultant from 1999 to 2002. Mr.
Russell also serves as a director of General Moly, Inc. and chairman of the
board of directors of Pure Nickel, Inc. Mr. Russell received his
mining engineering degree from Montana Tech at the University of
Montana.
Melvyn
Williams. Mr. Williams has served as Apollo’s chief financial
officer since January 2005 and as the senior vice president — finance and
corporate development since March 2004. From November 2003 through January 2004,
Mr. Williams served as chief financial officer of Atlantico Gold, a private
Brazilian mining company which held the Amapari gold project. From 2000 to
November 2003, he served as chief financial officer of TVX Gold Inc., a gold
mining company with five operating mines. Mr. Williams also serves as a director
of Andina Minerals, Inc. Mr. Williams is a chartered certified
accountant and received an Master’s of Business Administration from Cranfield
(UK) in 1988.
Richard F.
Nanna. Mr.
Nanna has served as Apollo’s senior vice president — exploration since June
2002. Mr. Nanna was a founder of Nevoro Gold Corporation in January 2002, the
predecessor of Apollo Gold Corporation, and served as its vice president —
exploration from February 2002 through June 2002. From 1999 to 2002, Mr. Nanna
worked as an independent consultant. Mr. Nanna also serves as a director of
General Moly, Inc. and Azteca Gold Corp. Mr. Nanna received a
Master’s Degree in Geology from Akron University in Ohio.
4
Timothy G. Smith. Mr.
Smith has served as Apollo’s vice president – U.S. and Canadian operations since
November 2008 and was previously vice president and general manager of Montana
Tunnels Mining, Inc., formerly a wholly owned subsidiary of Apollo, from
February 2004. Prior to joining Apollo, Mr. Smith worked for Cominco
Ltd. (before its merger with Teck Corp.) as operating manager at the Red Dog
Mine from 1996 through 2003. Mr. Smith holds a Bachelor of Engineering —
Metallurgical, from McGill University and is a Professional Engineer registered
in British Columbia.
Brent E.
Timmons. Mr. Timmons joined
Apollo in April 2005 in the position of senior accountant and has been vice
president and controller since March 2007. Prior to joining Apollo, Mr. Timmons
worked for Enterprise Rent-A-Car for six years and prior to that worked as a
Certified Public Accountant performing audit services in the private and
governmental sectors. Mr. Timmons holds a Master of Accountancy from
Brigham Young University and is a certified public accountant.
Employment
Agreements
Apollo
has employment agreements with the following executive officers: R. David
Russell, Apollo’s president and chief executive officer, Melvyn Williams,
Apollo’s senior vice president — finance and corporate development and chief
financial officer, Richard F. Nanna, Apollo’s senior vice president —
exploration, Timothy G. Smith, Apollo’s vice president — U.S. and Canadian
operations, and Brent E. Timmons, Apollo’s vice president and
controller. Apollo’s Compensation Committee believes that the
employment agreements and the severance provided for therein are an important
part of overall compensation for Apollo’s executive officers. The Compensation
Committee believes that these agreements will help to secure the continued
employment and dedication of these executive officers, notwithstanding any
concern that they might have at such time regarding their own continued
employment, prior to or following a change in control. Apollo’s Compensation
Committee also believes that these agreements are important as a recruitment and
retention device, as all or
nearly all of the companies with which Apollo competes for executive talent have
similar agreements in place for their senior employees. To determine the terms
of the change in control provisions, the Compensation Committee analyzed the
terms of the similar arrangements. These factors lead to the amounts and the
triggering events provided for under the agreements.
R. David Russell.
Apollo assumed the terms and conditions of an employment agreement dated as of
April 1, 2002 between Mr. Russell and Nevoro Gold Corporation, Apollo’s
predecessor. Mr. Russell’s employment agreement was amended on
January 23, 2006 and March 18, 2009 and provides that:
|
·
|
Mr.
Russell receives a minimum annual base salary of $380,000 and a
discretionary annual cash bonus based on Apollo’s performance. As at April 29,
2010 Mr. Russell’s annual salary was
$380,000;
|
|
·
|
Mr.
Russell is entitled to receive an automobile allowance of $15,000 per
annum and an allowance for social/sports club membership of $5,000 per
annum; and
|
|
·
|
In
the event of the termination of his employment without cause or upon a
change of control of Apollo (defined as the occurrence, within a single
transaction or series of related transactions occurring within the same
12-month period, of a change in the identity of persons who individually
or collectively hold rights to elect, or to approve the election of, a
majority of the members of Apollo’s board of directors, including, without
limitation, transactions consisting of one or more sales or other
transfers of assets or equity securities, mergers, consolidations,
amalgamations, reorganizations, or any similar transactions), (i) Mr.
Russell will be entitled to receive severance equal to 36 months of his
base salary, 50% of the bonus entitlement for the 36 month period (such
bonus entitlement is based on a percentage of annual base salary of up to
100%), and any other compensation to which he would otherwise have been
entitled during such 36 month period and (ii) any options granted to Mr.
Russell shall immediately vest.
|
5
On March
31, 2010, Apollo, 1526735 Alberta ULC, an unlimited liability company existing
under the laws of the Province of Alberta and wholly owned by Apollo, and Linear
Gold Corp. (“Linear”) entered into an Arrangement Agreement (the “Arrangement
Agreement”) pursuant to which it is expected that the businesses of Apollo and
Linear would be combined by way of a court-approved plan of arrangement (the
“Arrangement”) pursuant to the provisions of the Business Corporations Act
(Alberta).
Upon the
successful completion of the Arrangement, Mr. Russell shall resign from the
position of president and chief executive officer of Apollo. Apollo
and Linear have agreed that Mr. Russell shall receive all termination and other
amounts owing under his employment agreement as if he had been terminated
without cause, which amounts shall not exceed approximately $1.7 million in the
aggregate. See the heading “Certain Relationships and Related
Transactions, and Director Independence – Related Party Transactions –
Arrangement Agreement and Related Transactions” below.
Melvyn Williams. Mr. Williams’ employment
agreement of February 16, 2004 was amended on January 23, 2006 and March 18,
2009 and provides that:
|
·
|
Mr.
Williams receives a minimum annual base salary of $265,000 and a
discretionary annual cash bonus based on Apollo’s
performance. As at April 29, 2010 Mr. Williams’ annual salary
was $265,000;
|
|
·
|
Mr.
Williams is entitled to receive an automobile allowance of $10,000 per
annum; and
|
|
·
|
in
the event of the termination of his employment without cause or upon a
change of control of Apollo (defined as the occurrence, within a single
transaction or series of related transactions occurring within the same
12-month period, of a change in the identity of persons who individually
or collectively hold rights to elect, or to approve the election of, a
majority of the members of Apollo’s board of directors, including, without
limitation, transactions consisting of one or more sales or other
transfers of assets or equity securities, mergers, consolidations,
amalgamations, reorganizations, or any similar transactions), (i) Mr.
Williams will be entitled to receive severance equal to 24 months of his
base salary, 50% of the bonus entitlement for the 24 month period (such
bonus entitlement is based on a percentage of annual base salary of
approximately 75%), and any other compensation to which he would otherwise
have been entitled during such 24 month period and (ii) any options
granted to Mr. Williams shall immediately
vest.
|
Richard F. Nanna.
Apollo assumed the terms and conditions of an employment agreement dated as of
April 1, 2002, between Mr. Nanna and Nevoro Gold Corporation, Apollo’s
predecessor. Mr. Nanna’s employment agreement was amended on January
23, 2006 and March 18, 2009 and provides that:
|
·
|
Mr.
Nanna receives a minimum annual base salary of $230,000 and a
discretionary annual cash bonus based on Apollo’s
performance. As at April 29, 2010 Mr. Nanna’s annual salary was
$230,000;
|
|
·
|
Mr.
Nanna is entitled to receive an automobile allowance of $15,000 per annum
and an allowance for social/sports club membership of $5,000 per annum;
and
|
|
·
|
In
the event of the termination of his employment without cause or upon a
change of control of Apollo (defined as the occurrence, within a single
transaction or series of related transactions occurring within the same
12-month period, of a change in the identity of persons who individually
or collectively hold rights to elect, or to approve the election of, a
majority of the members of Apollo’s board of directors, including, without
limitation, transactions consisting of one or more sales or other
transfers of assets or equity securities, mergers, consolidations,
amalgamations, reorganizations, or any similar transactions), (i) Mr.
Nanna will be entitled to receive severance equal to 36 months of his base
salary, 50% of the bonus entitlement for the 36 month period (such
bonus entitlement is based on a percentage of annual base salary of
approximately 75%), and any other compensation to which he would otherwise
have been entitled during such 36 month period and (ii) any options
granted to Mr. Nanna shall immediately
vest.
|
6
Timothy G.
Smith. Mr.
Smith’s employment agreement provides that:
|
·
|
Mr.
Smith receives a minimum annual base salary of $200,000 and a
discretionary annual cash bonus based on the performance of the Black Fox
and Montana Tunnels mines. As at April 29, 2010 Mr. Smith’s annual salary
was $200,000;
|
|
·
|
Mr.
Smith is entitled to an automobile for personal use;
and
|
|
·
|
In
the event of the termination of his employment without cause or upon a
change of control of Apollo (defined as the occurrence, within a single
transaction or series of related transactions occurring within the same
12-month period, of a change in the identity of persons who individually
or collectively hold rights to elect, or to approve the election of, a
majority of the members of Apollo’s board of directors, including, without
limitation, transactions consisting of one or more sales or other
transfers of assets or equity securities, mergers, consolidations,
amalgamations, reorganizations, or any similar transactions), Mr. Smith
will be entitled to receive severance equal to 15 months of his base
salary and benefits to which he would otherwise have been entitled for a
period of 12 months.
|
Brent E.
Timmons. Mr.
Timmons’ employment agreement provides that:
|
·
|
Mr.
Timmons receives a minimum annual base salary of $140,000 and a
discretionary annual cash bonus based on the performance of
Apollo. As at April 29, 2010 Mr. Timmons’ annual salary was
$140,000;
|
|
·
|
Mr.
Timmons is entitled to an automobile allowance of $10,000 per annum;
and
|
|
·
|
In
the event of the termination of his employment without cause or upon a
change of control of Apollo (defined as the occurrence, within a single
transaction or series of related transactions occurring within the same
12-month period, of a change in the identity of persons who individually
or collectively hold rights to elect, or to approve the election of, a
majority of the members of Apollo’s board of directors, including, without
limitation, transactions consisting of one or more sales or other
transfers of assets or equity securities, mergers, consolidations,
amalgamations, reorganizations, or any similar transactions), Mr. Timmons
will be entitled to receive severance equal to 12 months of his base
salary and benefits to which he would otherwise have been entitled for a
period of 12 months.
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Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the U.S. Exchange Act requires Apollo’s officers and directors, and
persons who own more than ten percent (10%) of any class of equity securities of
Apollo, to file reports of ownership and changes of ownership of such securities
with the SEC. Based solely upon a review of Forms 3, 4 and 5 and
amendments thereto furnished to Apollo pursuant to Section 16a-3 of the
U.S. Exchange Act, no person who at any time during 2009 was a director,
officer, or beneficial owner of more than ten percent (10%) of any class of
equity securities of Apollo failed to file on a timely basis, as disclosed in
the above forms, reports required by Section 16(a) of the U.S. Exchange Act
during the most recent fiscal year.
7
Code
of Business Conduct and Ethics
In 2003,
Apollo formally adopted a Code of Business Conduct and Ethics and related
policies, which sets high standards for ethical behavior throughout the
organization. The Code of Business Conduct and Ethics provides the entire
organization with the same frame of reference for dealing with sensitive and
complex issues such as conflicts of interest, use of information,
confidentiality of personal information, confidentiality of business
information, corporate opportunities, use of inside information, fair trading,
protection and use of company assets, accounting practices, records retention,
compliance with laws, rules and regulations, and duty to report and
consequences.
In
addition, in 2004 Apollo formally adopted a Code of Ethics (the “Code”) pursuant
to section 406 of the United States Sarbanes-Oxley Act of 2002 (“SOX”) and the
rules of the NYSE Amex in order to provide written standards and
guidance to Apollo’s directors, principal executive officer, principal financial
officer, principal accounting officer or controller or those performing similar
functions and any ‘‘executive officers’’ (as defined under Rule 16a-1(f) of the
Securities Exchange Act of 1934, as amended) of Apollo not named above. The
purpose of the Code is to promote:
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honest,
and ethical conduct, including the ethical handling of actual or apparent
conflicts of interest between personal and professional
relationships;
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compliance
with applicable governmental laws, rules and
regulations;
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full,
fair, accurate, timely and understandable disclosure in reports and
documents that Apollo files with, or submits to, the SEC and in other
public communications made by
Apollo;
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the
prompt internal reporting of violations of the Code to an appropriate
person or persons identified in the Code;
and
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accountability
for adherence to the Code.
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The Code
is posted on Apollo’s website at www.apollogold.com. Amendments of/and waivers
granted under the Code will be disseminated on Apollo’s website.
Director
Nominations
Apollo’s
board of directors will consider all potential candidates for nomination by the
board of directors for election as directors who are recommended by Apollo’s
shareholders, directors, officers, and employees. Apollo’s Nominating
Committee has adopted written procedures to be followed by shareholders in
submitting such recommendations. Candidates proposed by shareholders will be
evaluated by the Nominating Committee in the same manner as candidates who are
not proposed by shareholders. While shareholders may propose director nominees
at any time, Apollo must receive the required notice (described below) on or
before the date set forth in the prior year’s annual proxy statement under the
heading “Shareholder Proposals” in order to be considered by the Nominating
Committee in connection with Apollo’s next annual meeting of
shareholders.
Shareholders
wishing to recommend a director candidate to serve on Apollo’s board of
directors may do so by providing advance written notice to the chairman of
Apollo’s Nominating Committee, which identifies the candidate and includes the
information described below. The notice should be sent to the following address
by the dates set forth under “Shareholder Proposals:” Apollo Gold Corporation,
5655 South Yosemite Street, Suite 200, Greenwood Village, Colorado,
80111-3220.
8
The
notice shall contain the following information:
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The
name of the nominating shareholders and the address, phone number and
e-mail address at which the nominating shareholders can be
contacted.
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Evidence
of the number of common shares of Apollo held by the nominating
shareholders, a statement of how long the nominating shareholders have
held those shares, and a statement that the nominating shareholders will
continue to hold those shares at least through Apollo’s next annual
meeting of shareholders.
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The
candidate’s full name, together with the address, phone number and e-mail
address at which the candidate can be
contacted.
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A
statement of the candidate’s qualifications and experiences, and any other
qualities that the nominating shareholders believe that the candidate
would bring to Apollo’s board of
directors.
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A
description of all arrangements or understandings, if any, between the
shareholders and the candidate and any other person or persons with
respect to the candidate’s proposed service on Apollo’s board of
directors.
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The
candidate’s resume, which must include at a minimum a detailed description
of the candidate’s business, professional or other appropriate experience
for at least the last ten (10) years, a list of other boards of directors
of public companies on which the candidate currently serves or on which he
or she served in the last ten (10) years, and undergraduate and
post-graduate educational
information.
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A
written statement, signed by the candidate, agreeing that if he or she is
selected by Apollo’s Nominating Committee and the board of directors, he
or she will (i) be a nominee for election to Apollo’s board of directors,
(ii) provide all information necessary for Apollo to include in Apollo’s
proxy statement under applicable SEC or NYSE Amex rules, and (iii) serve
as a director if he or she is elected by
shareholders.
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Any
additional information that the nominating shareholders believe is
relevant to Apollo’s Nominating Committee’s consideration of the
candidate.
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Apollo’s
Nominating Committee may employ any of the following procedures in identifying
nominees to serve as directors of Apollo: (a) evaluating persons suggested by
shareholders or others, (b) conducting inquiries into background and
qualifications, (c) retaining a search firm, (d) obtaining advice and assistance
from internal or external legal, accounting, or other advisors, and (e) other
procedures appropriate to the character of the expertise or other director
characteristic needed on Apollo’s board of directors in any specific
situation.
Apollo’s
board of directors has adopted the following series of minimum qualifications
and specific qualities and skills for Apollo’s directors, which will serve as
the basis upon which potential director candidates are evaluated by Apollo’s
Nominating Committee:
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integrity;
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commitment
to devoting necessary time and attention to his or her duties to
Apollo;
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independence;
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business
experience;
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specialized
skills or experience;
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9
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diversity
of background and experience (including race, ethnicity, nationality,
gender and age);
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freedom
from conflicts of interest; and
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other
criteria appropriate to the character of the expertise or other director
characteristic needed on Apollo’s board of directors in any specific
situation.
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With
respect to the nomination of continuing directors for re-election, the
individual’s contributions to Apollo’s board of directors are also considered.
The board of directors believes that the backgrounds and qualifications of our
directors, considered as a group, should provide a composite mix of skills,
experience, and knowledge that will assure that Apollo’s board of directors can
continue to fulfill its responsibilities. The board of directors
takes into account the benefits of, but does ascribe any specific weight to,
diversity of background and experience including matters of race, ethnicity,
nationality, gender and age. Because the assessment of the diversity of Apollo’s
board of directors as well as the effectiveness of achieving diversity from a
variety of perspectives is based on the individual subjective evaluation of each
director, Apollo’s board of directors does not engage in any formal benchmarking
procedure in respect thereof.
Audit
Committee and Audit Committee Financial Expert
During
2009, Apollo’s board of directors had four standing committees, namely, the
Audit Committee, Compensation Committee, Technical Committee, and Nominating
Committee.
The Audit
Committee is composed of the following three independent non-employee directors:
Messrs. Babensee, Kaiser and Peat. Mr. Peat is chairperson of the
Audit Committee. Apollo’s board of directors has determined that each
of Messrs. Babensee, Kaiser and Peat meet the independence and the financial
literacy requirements of National Instrument 52-110 “Audit Committees,” the
Toronto Stock Exchange, or TSX, and the NYSE Amex and the applicable rules and
regulations promulgated by the SEC. The board of directors has also
determined that Mr. Peat is an “audit committee financial expert” as defined in
Item 407(d)(5) of Regulation S-K.
Apollo’s
board of directors has adopted a Charter of the Audit Committee, which, among
other responsibilities, requires the Audit Committee to oversee Apollo’s
financial reporting process and the quality of its financial
reporting. In discharging its responsibilities, the Audit Committee
meets regularly with Apollo’s auditors and chief financial
officer. The Audit Committee Charter is posted on Apollo’s website at
www.apollogold.com.
ITEM
11. EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
Apollo
experienced dramatic changes during the past year. To properly
understand Apollo and its compensation philosophies, it is important to
understand its business environment and the recent hardships that it has
faced. Among other things, during 2009 Apollo transitioned its
operational focus from its Montana Tunnels mine, which ceased milling operations
on April 30, 2009 to its Black Fox mine, a new mining operation, which began
commercial gold production in late May 2009. Apollo believes that
fully understanding the steps it has taken over the past year to forge ahead
into the next decade will provide insight into its past compensation practices
and the steps it intends to take in the future to align the interests of its
executives with the interests of Apollo’s shareholders.
10
Business
Environment
In 2009,
Apollo encountered a number of significant challenges. During the
first quarter of 2009, Apollo expended substantial effort to obtain the
necessary financing to satisfy certain debt obligations and fund the start up of
its Black Fox mine. During the second quarter of 2009, Apollo faced
the operational challenge of transitioning the Montana Tunnels property from an
operational mine and milling facility to a care and maintenance property while
concurrently bringing its Black Fox mine into production to ensure continuity in
Apollo’s revenue stream. Finally, although the Black Fox mill was
processing ore at the rate planned and recoveries were satisfactory, the grade
of ore delivered to the mill was lower than expected. As a result,
for the three-month period ended July 31, 2009, gold production was less than
80% of the amount that we agreed to produce with the Project Facility
Banks. This shortfall triggered a “review event” as defined in the
Project Facility. A “review event” enables the Project Facility Banks
to review the Project Facility and determine if they wish to continue with the
financing. Despite these and other challenges, our management team
was able to:
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negotiate
and enter into the Black Fox project finance facility and completion of a
private placement in July 2009 which enabled Apollo to move forward with
the development of its Black Fox
mine;
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commence
commercial gold production at the Black Fox mine and increase throughput
of the Black Fox mill;
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complete
the acquisition of certain mineral properties referred to as the Pike
River Property located near Apollo’s Black Fox mine and Grey Fox
property;
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commence
an exploratory drilling program on the Grey Fox and Pike River
properties;
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place
the Montana Tunnels mine on care and maintenance and adopt a plan to sell
Apollo’s interest in the mine, which sale was completed in
2010;
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negotiate
a series of deferments in connection with the Black Fox project finance
facility thereby allowing Apollo to work with the Project Facility Banks
to develop a new resource model and life of mine plan;
and
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continue
standardization of processes and procedures at Black Fox to eliminate
redundancies and reduce costs.
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Overview
of Executive Compensation For 2009
Historically,
Apollo has awarded incentive compensation to its executive officers based, in
part, on individual performance as generally discussed in the sections that
follow. This individual component of incentive compensation is paid
in the form of cash bonuses and equity compensation and is generally distributed
in during the first quarter each year.
In light
of the pending transaction with Linear, Apollo’s board of directors has not made
any decisions or assessments regarding incentive compensation for the fiscal
year ended December 31, 2009. Apollo’s board of directors, upon the
recommendation of the Compensation Committee, has determined that this deviation
from historical compensation practices is appropriate because of the pendency of
the Arrangement and the restrictions on payments of incentive compensation and
grants of equity compensation contained in the Arrangement
Agreement.
Objectives
of Apollo’s Compensation Program
The
Compensation Committee of Apollo’s board of directors (for the purposes of this
discussion, the “Committee”) has responsibility for approving the compensation
program for Apollo’s chief executive officer, chief financial officer and three
other most highly compensated executive officers (collectively, the “Named
Executive Officers”). The Committee acts pursuant to the Compensation
Committee Charter that has been approved by Apollo’s board of
directors.
11
The
compensation program for Apollo’s Named Executive Officers is designed to
attract, retain and reward talented executives who can contribute to Apollo’s
long-term success and thereby build value for Apollo’s shareholders. The program
is organized around four fundamental principles:
A Substantial Portion of
Apollo’s Named Executive Officer Compensation Program Should Be
Performance-Based. Apollo’s compensation program is designed to reward
superior performance. It accomplishes this in a number of ways. In terms of cash
compensation, target award opportunities provided to each Named Executive
Officer under Apollo’s bonus plan (which pays bonuses on the basis of
performance over a one-year period) are set at a percentage of each Named
Executive Officer’s base salary, which is generally in the range of 50% for vice
presidents, 75% for senior vice presidents and up to 100% for the chief
executive officer. Whether and to what extent bonuses under the bonus plan are
paid depends entirely on the extent to which the company-wide, mine and project
and individual goals set by the Committee pursuant to the bonus plan are
attained.
A Substantial Portion of
Named Executive Officer Compensation Should Be Delivered in the Form of Equity
Awards. The Committee believes that a substantial portion of total
compensation should be delivered in the form of equity in order to align the
interests of Apollo’s Named Executive Officers with the interests of Apollo’s
shareholders. In terms of equity awards, the target award opportunities provided
to each Named Executive Officer are set as a percentage of each Named Executive
Officer’s base salary, which is generally in the range of 50% for vice
presidents, 75% for senior vice presidents and 100% for the chief executive
officer. Whether and to what extent equity awards are made depends entirely on
the extent to which the company-wide, mine and project and individual goals set
by the Committee are attained. The stock option awards are valued at the grant
date fair value.
Apollo’s Compensation
Program for Named Executive Officers Should Enable Apollo to Compete for
First-Rate Executive Talent. Apollo’s shareholders are best served when
Apollo can attract and retain talented executives with compensation packages
that are competitive but fair. The Committee has historically striven to create
a compensation package for Named Executive Officers that delivers total
compensation that is competitive in comparison to the average of the total
compensation delivered by certain peer companies with which Apollo competes for
executive talent (the “Peer Group”). To assist in making this comparison, the
Committee subscribes to the annual Mining Industry Salary Survey published by
Coopers Consulting Ltd. In 2009, the Peer Group selected by the Committee
consisted of the following companies:
Lake
Shore Gold Corp.
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Alamos
Gold Inc.
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Aurizon
Mines Ltd.
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Eldorado
Gold Corp.
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Golden
Star Resources Ltd.
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Minefinders
Ltd.
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Apollo’s Compensation
Program for Named Executive Officers Should Be Fair, and Perceived as Such, Both
Internally and Externally. The Committee strives to create a compensation
program that will be perceived as fair, both internally and externally. It
accomplishes this by comparing the compensation that is provided to Apollo’s
Named Executive Officers:
(i) to
the compensation, as described above, provided to officers of the companies
included in the Peer Group, as a means to measure external fairness;
and
(ii) to
other senior employees of Apollo, as a means to measure internal
fairness.
The
Elements of Apollo’s Compensation Program
This
section describes the various elements of Apollo’s compensation program for
Named Executive Officers, together with a discussion of various matters relating
to those items, including why the Committee chooses to include the items in the
compensation program.
12
Cash
Compensation
Apollo’s
compensation program for Named Executive Officers is designed so that a
percentage of each Named Executive Officer’s total compensation is paid in
cash. Cash compensation paid is comprised of salary and, if earned, a
cash bonus pursuant to Apollo’s bonus plan. The percentage of cash compensation
paid relative to a Named Executive Officer’s total compensation is generally set
at up to 75% of total compensation in the case of vice presidents, up to 70% for
senior vice presidents and up to 67% for the president. Salary is included in
Apollo’s Named Executive Officer compensation package because the Committee
believes it is appropriate that some portion of the compensation that is
provided to Named Executive Officers be in a form that is fixed and liquid.
Performance-based bonuses are included to incentivize Apollo’s Named Executive
Officers to attain particular objectives that the Committee believes are
consistent with the overall goals set for Apollo by its board of directors. The
components comprising the cash portion of total compensation are described
below.
Salary. Base salary for Named
Executive Officers for any given year is generally fixed by the Committee at its
meeting in March of each year. Increases or decreases in base salary on a
year-over-year basis are dependent on the Committee’s assessment of the
performance of Apollo overall, Apollo’s mining projects and the particular
individual. Other than the fact that executive officers have employment
agreements with a minimum level of salary specified within the agreement, the
Committee is free to set Named Executive Officer salary at any level it deems
appropriate. In fixing salaries, the Committee is generally mindful of its
overall goal to keep cash compensation for its executive officers within the
range of cash compensation paid by companies in Apollo’s Peer Group. The amount
of cash compensation that is provided in the form of salary is generally less,
assuming threshold performance levels are met, than the amount that is provided
in the form of bonuses and equity awards under Apollo’s short and long-term
bonus plans, each of which is described below. This weighting reflects the
Committee’s objective of ensuring that a substantial amount of each Named
Executive Officers total compensation is tied to company-wide, mine and project
results and individual performance goals.
Bonus Plans. Apollo has a
cash bonus plan in which Named Executive Officers participate. This plan, which
is described below, provides cash compensation to Named Executive Officers only
if, and to the extent that, performance conditions set by the Committee are met.
Bonus targets are set annually based on Apollo’s plan and budget for such fiscal
year and are set at levels that Apollo believes will be reasonably difficult to
achieve.
In
determining the amount of target bonuses under the bonus plan, the Committee
considers several factors, including:
(i) the
target bonuses set, and actual bonuses paid, in recent years;
(ii) the
desire to ensure, as described above, that a substantial portion of total
compensation is performance-based;
(iii) the
relative importance, in any given year, of the long and short-term performance
goals established pursuant to the bonus plan; and
(iv) the
compensation practices of the Peer Group, as determined in published
compensation surveys.
Performance
objectives for the bonus plan are developed through an iterative process. Based
on a review of business plans, management, which includes the Named Executive
Officers, develops preliminary recommendations for Committee review. The
Committee reviews management’s preliminary recommendations and establishes final
goals. In establishing final goals, the Committee strives to ensure that the
incentives provided pursuant to the bonus plan are consistent with the strategic
goals set by Apollo’s board of directors, that the goals set are sufficiently
ambitious so as to provide a meaningful incentive and that bonus payments,
assuming target levels of performance are attained, will be consistent with the
overall Named Executive Officer compensation program established by the
Committee. The Committee reserves the discretion to reduce or not pay bonuses
under the bonus plan even if the relevant performance targets are
met.
13
If the
Arrangement is not consummated, the Committee intends to reevaluate the payment
of incentive compensation relative to each executive officer’s individual
performance in accordance with its customary practices as outlined below and
make recommendations to Apollo’s board of directors in respect thereof at the
first meeting of the board of directors immediately following termination of the
Arrangement. If the Arrangement is consummated, the Committee will
reevaluate the payment of incentive compensation relative to each executive
officer’s individual performance and make recommendations to Apollo’s board of
directors in respect thereof at the first meeting of the board of directors
following consummation of the Arrangement.
For the
fiscal year ended December 31, 2009, the bonus targets upon which cash bonuses
were to be based included the following objectives:
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completion
of the project financing of the Black Fox project by February
2009;
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commencement
of gold production at Black Fox during May 2009 and the achievement of
planned production;
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completion
of the stripping of the glacial till for Phase I of the Black Fox open pit
by June 2009;
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completion
of all mine site infrastructure at Black Fox by October
2009;
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ensuring
that the Black Fox project passes all of the completion tests, as set out
in the Project Facility Agreement, by October 31,
2009;
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commencement
of permitting Phase II and III of the Black Fox open pit during the second
quarter 2009, to be substantially completed by December 31,
2009;
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completion
of the initial exploration work program at Grey Fox by November 2009 with
the goal of publishing an inferred resource in the first quarter
2010;
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production
at the Montana Tunnels mine to average a mill throughput rate of 13,000
tpd ore for the period January through April 2009 at planned metal
production;
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placement
of the Montana Tunnels mine on care and maintenance in May 2009;
and
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conversion
of Apollo’s financial reporting from Canadian GAAP to U.S. GAAP for the
fiscal year ended December 31,
2009.
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Some of
the bonus targets above were not achieved; in particular the targeted Black Fox
mine gold production and the completion of the tests required by the Project
Facility Banks as part of the Project Facility. Production of gold
did commence on schedule in May 2009 and the mill was successful in achieving
the targeted throughput rate of 2,000 tonnes per day of ore during the last
quarter 2009. However, as noted in Apollo’s Quarterly Report on Form
10-Q for the quarterly period ended September 30, 2009, Apollo triggered a
review event as defined in the Project Facility as a result of failing to
achieve 80% of its targeted production during that quarter.
In light
of the pending transaction with Linear and the limitations contained in the
Arrangement Agreement on awarding incentive compensation prior to the closing of
the Arrangement, Apollo’s board of directors has not made any decisions or
individual assessments regarding incentive compensation for the fiscal year
ended December 31, 2009.
Equity
Compensation
As
described above, the Committee believes that a portion of each Named Executive
Officer’s compensation should be in the form of equity awards because the
Committee believes that such awards serve to align the interests of Named
Executive Officers and Apollo’s shareholders. Equity awards to Apollo’s Named
Executive Officers are made pursuant to Apollo’s Stock Option Incentive Plan.
The Stock Option Incentive Plan provides for awards in the form of stock
options. The principal terms of the Stock Option Incentive Plan are
summarized below under the heading “Apollo Stock Option Incentive Plan
Information.”
14
The
amount of equity compensation that is provided to each Named Executive Officer
in a given year is generally determined by reference to the Named Executive
Officer’s base salary for that year. That is, the Committee each year approves
an equity award or awards for each Named Executive Officer with a cash value
that is determined by multiplying the Named Executive Officer’s base salary by a
percentage that is chosen by the Committee. The percentage that the Committee
selects for these purposes in a given year is dependent on the Committee’s
assessment, for that year, of the appropriate balance between cash and equity
compensation. In making that assessment, the Committee considers factors such as
the relative merits of cash and equity as a device for retaining and
incentivizing Named Executive Officers and the practices, as reported in
published compensation surveys, of other companies in the Peer
Group.
In light
of the pending transaction with Linear and the limitations contained in the
Arrangement Agreement on awarding equity compensation prior to the closing of
the Arrangement, Apollo’s board of directors has not made any decisions or
individual assessments regarding equity awards for the fiscal year ended
December 31, 2009.
Practices
Regarding the Grant of Options
The
Committee has generally followed a practice of making all option grants to its
executive officers during the first quarter of each year based on the previous
year’s performance. For the last 5 years, the Committee has granted these annual
awards at its regularly scheduled meeting in March. Apollo does not
otherwise have any program, plan or practice to time annual option grants to its
executives in coordination with the release of material non-public
information.
While the
bulk of Apollo’s option awards to Named Executive Officers have historically
been made pursuant to Apollo’s annual grant program, the Committee retains the
discretion to make additional awards to Named Executive Officers at other times,
in connection with the initial hiring of a new officer, for retention purposes
or otherwise. Apollo refers to such grants as “ad hoc” awards. The Committee has
generally followed the practice of making such ad hoc awards only during a time
when Apollo’s Named Executive Officers would be permitted, pursuant to Apollo’s
insider trading policy, to trade in Apollo’s securities. Other than in this
respect, Apollo does not have any program, plan or practice to time ad hoc
awards in coordination with the release of material non-public
information.
Peer
Comparisons and Survey Data
In its
annual evaluation of the compensation of Apollo’s executive officers, the
Committee uses peer comparisons and survey sources to obtain a general
understanding of current compensation practices for the market in which Apollo
competes. Specifically, the Committee reviews the annual Mining
Industry Salary Survey published by Coopers Consulting Ltd., a national,
broad-based industry survey, and relevant data from the peer group identified
above. The Committee does not benchmark executive compensation at a
certain level or percentile based on the survey or peer comparison
data. Rather, this data is only one of the components considered when
setting executive compensation. Other factors include, but are not
necessarily limited to, level of responsibility, individual performance, and
budget constraints.
In
evaluating the appropriateness and adequacy of Apollo’s compensation structure
for its executive officers, the Committee considered a peer group of companies
with similar principal corporate offices, levels of mineral production and
amount of mineral reserves. The Committee believes these factors are
appropriate as reference points to determine the composition of the peer group
because they provide a reasonable basis for comparing like positions and scopes
of responsibilities.
15
Perquisites
The Named
Executive Officers receive various perquisites provided by or paid for by
Apollo. These perquisites can include memberships in social and sports clubs,
car allowances and gross up payments equal to the taxes payable on certain
perquisites.
Apollo
provides these perquisites because:
(i) in
many cases, such as membership in social and sports clubs, the perquisite makes
Apollo’s executives more efficient and effective and thereby is a benefit to us,
and
(ii) these
perquisites are provided by a number of companies in the Peer Group to their
named executive officers and it is therefore important for retention and
recruitment purposes that Apollo does the same.
The
Committee reviews the perquisites provided to its Named Executive Officers on a
regular basis, in an attempt to ensure that they continue to be appropriate in
light of the Committee’s overall goal of designing a compensation program for
Named Executive Officers that maximizes the interests of Apollo’s
shareholders.
Executive
Officers
See the Section above entitled “ITEM
11. DIRECTORS, EXECUTIVE
OFFICERS AND CORPORATE GOVERNANCE – Executive Officers” for a description of our
Named Executive Officers, their background and experience and their employment
agreements with Apollo.
Stock
Ownership Guidelines
Apollo
has not established stock ownership guidelines for the Named Executive Officers.
Apollo’s Insider Trading and Confidentiality Policy prohibits Apollo’s executive
officers from engaging in selling short Apollo’s common shares or engaging in
hedging or offsetting transactions regarding Apollo’s common
shares.
Role
of Executive Officers in Compensation Decisions
Apollo’s
chief executive officer annually reviews the performance of each Named Executive
Officer (other than the chief executive officer whose performance is reviewed by
the Committee). The conclusions and recommendations reached, which cover salary
adjustments and annual award amounts, are presented to the
Committee. The Committee can exercise discretion in modifying any of
the recommended salary adjustments or annual awards. Executive
officers of Apollo have no role in the compensation of Apollo’s
directors.
Indemnification
Agreements
Apollo
has entered into indemnification agreements with its directors and senior
executives. These agreements indemnify such persons against certain liabilities
that may arise by reason of their status as a director or officer, to advance
their expenses incurred as a result of a proceeding as to which they may be
indemnified and to cover such person under the directors and officers liability
insurance policy. Apollo believes these indemnification agreements enhance
Apollo’s ability to attract and retain knowledgeable and experienced executives
and independent, non-management directors.
Tax
Implications of Executive Compensation
Apollo’s
program was structured to comply with Section 162(m) of the Internal Revenue
Code of 1986, as amended, which places a limit of $1,000,000 on the amount of
compensation that may be deducted by Apollo in any year with respect to the
Named Executive Officers unless the compensation is performance based
compensation as described in such Section 162(m).
16
Summary
Compensation Table For Named Executive Officers
The
following table sets forth the compensation earned by the Principal Executive
Officer, Principal Financial Officer and other Named Executive Officers for
services rendered to Apollo and its subsidiaries for the fiscal years ended
December 31, 2009, 2008 and 2007.
Name
and
Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)(1)
|
Non-
Equity
Incentive
Plan
Compen-
sation
($)
|
Non-
qualified
Deferred
Compen-
sation
Earnings
($)
|
All
Other
Compen-
sation
($)
|
Total
($)
|
|||||||||||||||||||||||||
R.
David Russell,
|
2009
|
366,638 | 0 | 0 | 140,680 | 0 | 0 | 18,091 | (2) | 525,409 | ||||||||||||||||||||||||
President
and Chief
|
2008
|
299,423 | 272,800 | 0 | 218,642 | 0 | 0 | 15,903 | (2) | 806,768 | ||||||||||||||||||||||||
Executive
Officer
|
2007
|
255,000 | 136,000 | 0 | 187,738 | 0 | 0 | 13,306 | (2) | 592,044 | ||||||||||||||||||||||||
Melvyn
Williams,
|
2009
|
|
248,654 | 0 | 0 | 99,130 | 0 | 0 | 20,397 | (2) | 360,181 | |||||||||||||||||||||||
Chief
Financial Officer
|
2008
|
174,231 | 130,950 | 0 | 98,389 | 0 | 0 | 20,170 | (2) | 423,740 | ||||||||||||||||||||||||
and
Senior VP —
|
2007
|
150,000 | 100,000 | 0 | 150,190 | 0 | 0 | 19,380 | (2) | 420,570 | ||||||||||||||||||||||||
Finance
and Corporate
|
||||||||||||||||||||||||||||||||||
Development
|
||||||||||||||||||||||||||||||||||
Richard
F. Nanna,
|
2009
|
220,385 | 0 | 0 | 99,130 | 0 | 0 | 8,900 | (2) | 328,415 | ||||||||||||||||||||||||
Senior
Vice President —
|
2008
|
174,231 | 130,950 | 0 | 98,389 | 0 | 0 | 6,925 | (2) | 410,495 | ||||||||||||||||||||||||
Exploration
|
2007
|
150,000 | 100,000 | 0 | 150,190 | 0 | 0 | 5,535 | (2) | 405,725 | ||||||||||||||||||||||||
Timothy
G. Smith,
|
2009
|
188,462 | 0 | 0 | 43,827 | 0 | 0 | 13,668 | (3) | 245,957 | ||||||||||||||||||||||||
Vice
President — U.S.
|
2008
|
147,582 | 67,500 | 0 | 59,033 | 0 | 0 | 3,653 | (3) | 278,768 | ||||||||||||||||||||||||
and
Canadian Operations
|
2007
|
135,000 | 50,000 | 0 | 50,689 | 0 | 0 | 5,542 | (3) | 241,231 | ||||||||||||||||||||||||
Brent
E. Timmons,
|
2009
|
135,192 | 0 | 0 | 33,601 | 0 | 0 | 15,733 | (4) | 184,526 | ||||||||||||||||||||||||
Vice
President &
|
2008
|
112,115 | 51,750 | 0 | 50,288 | 0 | 0 | 14,895 | (4) | 229,048 | ||||||||||||||||||||||||
Controller
|
2007
|
94,615 | 50,000 | 0 | 30,038 | 0 | 0 | 12,001 | (4) | 186,654 |
(1) Apollo
calculates the fair value of each option award granted at the time of grant
using the Black-Scholes option-pricing model. For the assumptions
made in calculating the fair value of options, see footnote (2) to the table in
“Grants of Plan-Based Awards” below and “Note 14—Share Capital” to the
financial statements included in this Annual Report on Form 10-K for the
fiscal year ended December 31, 2009.
(2) In
2007, 2008 and 2009 Apollo paid a vehicle allowance, plus a sports club
allowance, life insurance, and a contribution towards his tax liability related
to the preceding items.
(3) In
2007, 2008 and 2009 Apollo paid a vehicle allowance and life
insurance.
(4) In
2007, 2008 and 2009 Apollo paid a vehicle allowance, a sports club allowance and
life insurance.
17
Grants
Of Plan-Based Awards
The
following table provides information related to non-equity and equity-based
awards made to the Named Executive Officers for the 2009 fiscal
year:
Estimated
Future Payouts Under Non-
Equity
Incentive Plan Awards
|
Estimated
Future Payouts Under
Equity
Incentive Plan Awards
|
All
Other
Stock
Awards:
Number
|
All
Other
Option
Awards:
Number
of
Securities
|
Exercise
or
Base
Price
of
|
||||||||||||||||||||||||||||||||||
Name
and Principal
Position
|
Grant
Date
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Threshold
#
|
Target
#
|
Maximum
#
|
of
Shares
of
Stock
or
Units
|
Underlying
Options
(1)(2)
|
Option
Awards
($/Sh)
|
||||||||||||||||||||||||||||
R.
David Russell,
|
March 31, 2009
|
N/A | N/A | N/A | N/A | N/A | N/A | N/A | 650,000 | 0.32 | ||||||||||||||||||||||||||||
President
and Chief
|
||||||||||||||||||||||||||||||||||||||
Executive
Officer
|
||||||||||||||||||||||||||||||||||||||
Melvyn
Williams,
|
March 31, 2009
|
N/A | N/A | N/A | N/A | N/A | N/A | N/A | 458,025 | 0.32 | ||||||||||||||||||||||||||||
Chief
Financial
|
||||||||||||||||||||||||||||||||||||||
Officer
and Senior
|
||||||||||||||||||||||||||||||||||||||
Vice
President —
|
||||||||||||||||||||||||||||||||||||||
Finance
and
|
||||||||||||||||||||||||||||||||||||||
Corporate
|
||||||||||||||||||||||||||||||||||||||
development
|
||||||||||||||||||||||||||||||||||||||
Richard
F. Nanna,
|
March 31, 2009
|
N/A | N/A | N/A | N/A | N/A | N/A | N/A | 458,025 | 0.32 | ||||||||||||||||||||||||||||
Senior
Vice
|
||||||||||||||||||||||||||||||||||||||
President
—
|
||||||||||||||||||||||||||||||||||||||
Exploration
|
||||||||||||||||||||||||||||||||||||||
Timothy
G. Smith,
|
March 31, 2009
|
N/A | N/A | N/A | N/A | N/A | N/A | N/A | 202,500 | 0.32 | ||||||||||||||||||||||||||||
Vice
President —
|
||||||||||||||||||||||||||||||||||||||
U.S.
and Canadian
|
||||||||||||||||||||||||||||||||||||||
Operations
|
||||||||||||||||||||||||||||||||||||||
Brent
E. Timmons,
|
March 31, 2009
|
N/A | N/A | N/A | N/A | N/A | N/A | N/A | 155,250 | 0.32 | ||||||||||||||||||||||||||||
Vice
President and
|
||||||||||||||||||||||||||||||||||||||
Controller
|
(1)
|
All
options were granted under Apollo’s Stock Option Incentive
Plan.
|
(2)
|
The
fair value of each option granted is estimated at the time of grant using
the Black-Scholes option-pricing model with weighted average assumptions
for grants as follows:
|
2009
|
2008
|
2007
|
||||||||||
Risk-free
interest rate
|
1.9 | % | 2.9 | % | 4.0 | % | ||||||
Dividend
yield
|
0 | % | 0 | % | 0 | % | ||||||
Volatility
|
78 | % | 73 | % | 71 | % | ||||||
Expected
life in years
|
6 | 6 | 6 | |||||||||
Weighted
average grant-date fair value of stock options
|
$ | 0.22 | $ | 0.44 | $ | 0.37 |
Apollo
Stock Option Incentive Plan Information
Apollo’s
Amended and Restated Stock Option Incentive Plan (the “Stock Option Incentive
Plan”) was approved by the Committee and the board of directors in 2009
partially in response to the board of directors’ belief that the 3,858,377
shares then outstanding and available for future issuance under plan did not
give Apollo sufficient flexibility to adequately provide for future incentives
to Apollo’s employees and directors. Apollo’s shareholders approved
the Stock Option Incentive Plan at Apollo’s 2009 annual meeting of shareholders
on May 7, 2009. The principal terms of the Stock Option
Incentive Plan are summarized below.
Purpose. The purpose of the
Stock Option Incentive Plan is to attract and motivate directors, officers,
employees of and service providers to Apollo and its subsidiaries and thereby
advance Apollo’s interests by affording such persons an opportunity to acquire
an equity interest in Apollo through the stock options.
18
Administration. The
Committee, which administers the Stock Option Incentive Plan, has authority
under the plan to fix the terms and conditions of individual agreements with
participants, including the duration of the award and any vesting requirements,
subject to requirements of applicable regulatory authorities. The Stock Option
Incentive Plan permits Apollo’s board of directors to grant options for the
purchase of Apollo common shares for a term of up to 10 years.
Authorized Shares; Limits on
Awards. The number of Apollo common shares granted pursuant to each
option is determined in the discretion of Apollo’s board of directors, provided
that in the case of any one person, the aggregate number of Apollo common shares
reserved for issuance may not exceed 5% of the total number of Apollo common
shares outstanding at the time of the grant. The aggregate number of Apollo
common shares reserved for issuance to insiders of Apollo (as defined in the
Stock Option Incentive Plan), at any time, or in any one-year period, under all
security based compensation arrangements, cannot exceed 10% of the total number
of outstanding Apollo common shares.
Eligibility. Persons eligible
to receive awards under the Stock Option Incentive Plan include directors,
executive officers, employees and consultants of Apollo and its affiliates.
Vesting provisions with respect to the options are determined and imposed by
Apollo’s board of directors, at their discretion.
Pricing of Awards. In
accordance with the provisions of the Stock Option Incentive Plan, the option
price and the terms and conditions on which the options may be exercised are set
out in written stock option agreements, in the form approved by Apollo’s board
of directors, entered into by Apollo and each option holder. Under the Stock
Option Incentive Plan, the option price is determined by Apollo’s board of
directors and may either be in Canadian dollars or United States dollars. If the
exercise price is in Canadian dollars, the exercise price shall not be lower
than the closing price on the TSX on the trading day prior to the date of the
grant. If the exercise price is in United States dollars, the exercise price
shall not be lower than the greater of: (a) the closing price on the NYSE Amex
on the trading day prior to the date of the grant, or (b) the closing price on
the TSX (such closing price converted into United States dollars using the Bank
of Canada noon nominal rate of exchange on the same date as such closing price)
on the trading day prior to the date of the grant.
Transfer Restrictions; Termination
of Awards. The options are not transferable and terminate on the earlier
of the expiry date and the date that the optionee ceases to be eligible for any
reason whatsoever, other than death. In the event of death, the option is fully
exercisable by the optionee’s legal representative on the earlier of the expiry
date and one year from the date of death. Option agreements approved by Apollo’s
board of directors may provide that all or any part of the options that are
outstanding upon the occurrence of a change of control may continue to be
exercised by the holder for such extended period up to and including the normal
expiry date of such options.
Loans. Subject to compliance
with applicable corporate and securities Laws, Apollo’s board of directors may
at any time authorize Apollo to loan money to a plan participant in order to
assist him or her to exercise options granted under the Stock Option Incentive
Plan. Such loan shall be provided on a non-recourse basis, shall be non-interest
bearing and shall be on such other terms and conditions to be determined from
time to time by Apollo’s board of directors. Apollo’s board of directors has not
loaned any money to option holders and has no intention to do so in the
future.
Changes to the Stock Option
Incentive Plan. The Stock Option Incentive Plan may be amended by
Apollo’s board of directors, subject to approval of the shareholders as well as
the TSX and the NYSE Amex.
Outstanding
Equity Awards At Fiscal Year-End
The
following table provides information related to any equity-based awards
outstanding as of December 31, 2009 for the Named Executive
Officers:
19
Option
Awards
|
Stock
Awards
|
|||||||||||||||||||||
Name
and Principal Position
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
Equity
Incentive
Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
(#)
|
Market
Value
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
($)
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units
or
Other
Rights
That
Have
Not
Vested
(#)
|
Equity
Incentive
Plan
Awards:
Market
or
Payout
Value
of
Unearned
Shares,
Units
or
Other
Rights
That
Have
Not
Vested
($)
|
|||||||||||||
R.
David Russell,
|
250,000 | 2.24 |
2/18/2013
|
|||||||||||||||||||
President
and Chief
|
250,000 | 0.65 |
3/10/2015
|
|||||||||||||||||||
Executive
Officer(1)
|
81,000 | 0.48 |
8/10/2016
|
|||||||||||||||||||
500,000 | 0.57 |
2/6/2017
|
|
|||||||||||||||||||
250,000 | 250,000 | 0.66 |
3/27/2018
|
|
||||||||||||||||||
650,000 | 0.32 |
3/31/2019
|
||||||||||||||||||||
Melvyn
Williams,
|
200,000 | 2.05 |
3/10/2014
|
|||||||||||||||||||
Chief
Financial
|
125,000 | 0.65 |
3/10/2015
|
|||||||||||||||||||
Officer
and Senior
|
125,000 | 0.65 |
3/28/2016
|
|||||||||||||||||||
Vice
President —
|
27,000 | 0.48 |
8/10/2016
|
|||||||||||||||||||
Finance
and
|
400,000 | 0.57 |
2/6/2017
|
|||||||||||||||||||
Corporate
|
112,500 | 112,500 | 0.66 |
3/27/2018
|
||||||||||||||||||
Development(2)
|
458,025 | 0.32 |
3/31/2019
|
|||||||||||||||||||
Richard
F. Nanna,
|
200,000 | 2.24 |
2/18/2013
|
|||||||||||||||||||
Senior
Vice
|
250,000 | 0.65 |
3/10/2015
|
|||||||||||||||||||
President
—
|
400,000 | 0.57 |
2/6/2017
|
|||||||||||||||||||
Exploration(3)
|
112,500 | 112,500 | 0.66 |
3/27/2018
|
||||||||||||||||||
458,025 | 0.32 |
3/31/2019
|
||||||||||||||||||||
Timothy
G. Smith,
|
60,000 | 2.05 |
3/10/2014
|
|||||||||||||||||||
Vice
President —
|
125,000 | 0.65 |
3/10/2015
|
|||||||||||||||||||
US
and Canadian
|
60,000 | 0.20 |
12/12/2015
|
|||||||||||||||||||
Operations
(4)
|
135,000 | 0.57 |
2/6/2017
|
|||||||||||||||||||
67,500 | 67,500 | 0.66 |
3/27/2018
|
|||||||||||||||||||
202,500 | 0.32 |
3/31/2019
|
||||||||||||||||||||
Brent
E. Timmons,
|
40,000 | 0.20 |
12/12/2015
|
|||||||||||||||||||
Vice
President and
|
80,000 | 0.57 |
2/6/2017
|
|||||||||||||||||||
Controller(5)
|
57,500 | 57,500 | 0.66 |
3/27/2018
|
||||||||||||||||||
155,250 | 0.32 |
3/31/2019
|
(1)
|
R.
David Russell – 250,000 unexercised options with a strike price of $0.66
vested on March 27, 2010. Of the 650,000 unexercised options
with a strike price of $0.32, 50% vested on March 31, 2010 and 50% will
vest on March 31, 2011.
|
(2)
|
Melvyn
Williams – 112,500 unexercised options with a strike price of $0.66 vested
on March 27, 2010. Of the 458,025 unexercised options with a
strike price of $0.32, 50% vested on March 31, 2010 and 50% will vest on
March 31, 2011.
|
(3)
|
Richard
F. Nanna – 112,500 unexercised options with a strike price of
$0.66 vested on March 27, 2010. Of the 458,025 unexercised
options with a strike price of $0.32, 50% vested on March 31, 2010 and 50%
will vest on March 31, 2011.
|
(4)
|
Timothy
G. Smith – 67,500 unexercised options with a strike price of $0.66 vested
on March 27, 2010. Of the 202,500 unexercised options with a
strike price of $0.32, 50% vested on March 31, 2010 and 50% will vest on
March 31, 2011.
|
(5)
|
Brent
E. Timmons – 57,500 unexercised options with a strike price of
$0.66 vested on March 27, 2010. Of the 155,250 unexercised
options with a strike price of $0.32, 50% vested on March 31, 2010 and 50%
will vest on March 31, 2011.
|
20
Option
Exercises and Stock Vested
The
following table provides information related to stock options exercised by the
Named Executive Officers and restricted stock that became vested during the 2009
fiscal year for the Named Executive Officers:
Option
Awards
|
Stock
Awards
|
|||||||||||||||
Name
and Principal Position
|
Number
of
Shares
Acquired
on
Exercise
(#)
|
Value
Realized
on
Exercise
($)
|
Number
of
Shares
Acquired
on
Vesting
(#)
|
Value
Realized
on
Vesting
($)
|
||||||||||||
R.
David Russell,
|
0 | 0 | 0 | 0 | ||||||||||||
President
and Chief Executive Officer
|
||||||||||||||||
Melvyn
Williams,
|
0 | 0 | 0 | 0 | ||||||||||||
Chief
Financial Officer and Senior
|
||||||||||||||||
Vice
President — Finance and
|
||||||||||||||||
Corporate
Development
|
||||||||||||||||
Richard
F. Nanna,
|
0 | 0 | 0 | 0 | ||||||||||||
Senior
Vice President — Exploration
|
||||||||||||||||
Timothy
G. Smith,
|
0 | 0 | 0 | 0 | ||||||||||||
Vice
President — U.S. and Canadian
|
||||||||||||||||
Operations
|
||||||||||||||||
Brent
E. Timmons,
|
0 | 0 | 0 | 0 | ||||||||||||
Vice
President and Controller
|
||||||||||||||||
Administration
|
||||||||||||||||
Potential
Payments Upon Termination Or Change In Control
Apollo
has entered into employment agreements with the following Named Executive
Officers: R. David Russell, Melvyn Williams, Richard F. Nanna, Timothy G. Smith
and Brent E. Timmons. These employment agreements provide for
payments and other benefits if the Named Executive Officer is terminated under
the circumstances specified in the employment agreements following a “change of
control” as defined in such employment agreements. Described below are the terms
of such payments and estimates regarding the amounts for each of the Named
Executive Officers.
Upon the
successful completion of the Arrangement, Mr. Russell shall resign from the
position of president and chief executive officer of Apollo. Apollo
and Linear have agreed that Mr. Russell shall receive all termination and other
amounts owing under his employment agreement as if he had been terminated
without cause, which amounts shall not exceed approximately $1.7
million.
R. David Russell. In
the event of the termination of his employment without cause or upon a change of
control of Apollo (defined, according to the March 20, 2009 amendment to Mr.
Russell’s employment agreement with Apollo, as the occurrence, within a single
transaction or series of related transactions occurring within the same 12-month
period, of a change in the identity of persons who individually or collectively
hold rights to elect, or to approve the election of, a majority of the members
of Apollo’s board of directors, including, without limitation, transactions
consisting of one or more sales or other transfers of assets or equity
securities, mergers, consolidations, amalgamations, reorganizations, or any
similar transactions), (i) Mr. Russell will be entitled to receive severance
equal to 36 months of his base salary, 50% of the bonus entitlement for the 36
month period (such
bonus entitlement is based on a percentage of annual base salary of up to 100%),
and any other compensation/benefits to which he would otherwise have been
entitled during such 36 month period and (ii) any options granted to Mr. Russell
shall immediately vest.
If Mr.
Russell had been terminated on December 31, 2009 without cause or as the result
of a change of control, he would have been entitled to the
following:
21
Salary
|
$ | 1,140,000 |
Lump
sum
|
|||
Bonus
|
570,000 |
Lump
sum
|
||||
Health
care benefits
|
45,000 |
3
years duration
|
||||
Vehicle
|
45,000 |
3
years duration
|
||||
Sports
Club
|
15,000 |
3
years duration
|
||||
Total
|
$ | 1,715,000 |
Melvyn Williams. Mr.
Williams’ employment agreement provides that, in the event of the termination of
his employment without cause or upon a change of control of Apollo (defined,
according to the March 20, 2009 amendment to Mr. Williams’ employment agreement
with Apollo, as the occurrence, within a single transaction or series of related
transactions occurring within the same 12-month period, of a change in the
identity of persons who individually or collectively hold rights to elect, or to
approve the election of, a majority of the members of Apollo’s board of
directors, including, without limitation, transactions consisting of one or more
sales or other transfers of assets or equity securities, mergers,
consolidations, amalgamations, reorganizations, or any similar transactions),
(i) Mr. Williams will be entitled to receive severance equal to 24 months of his
base salary, 50% of the bonus entitlement for the 24 month period (such
bonus entitlement is based on a percentage of annual base salary of
approximately 75%), and any other compensation/benefits to which he would
otherwise have been entitled during such 24 month period and (ii) any options
granted to Mr. Williams shall immediately vest.
If Mr.
Williams had been terminated on December 31, 2009 without cause or as the result
of a change of control, he would have been entitled to the
following:
Salary
|
$ | 530,000 |
Lump
sum
|
|||
Bonus
|
265,000 |
Lump
sum
|
||||
Health
care benefits
|
30,000 |
2
years duration
|
||||
Vehicle
|
20,000 |
2
years duration
|
||||
Total
|
$ | 845,000 |
Richard F. Nanna. Mr.
Nanna’s employment agreement provides that, in the event of the termination of
his employment without cause or upon a change of control of Apollo (defined,
according to the March 20, 2009 amendment to Mr. Nanna’s employment agreement
with Apollo, as the occurrence, within a single transaction or series of related
transactions occurring within the same 12-month period, of a change in the
identity of persons who individually or collectively hold rights to elect, or to
approve the election of, a majority of the members of Apollo’s board of
directors, including, without limitation, transactions consisting of one or more
sales or other transfers of assets or equity securities, mergers,
consolidations, amalgamations, reorganizations, or any similar transactions),
(i) Mr. Nanna will be entitled to receive severance equal to 36 months of his
base salary, 50% of the bonus entitlement for the 36 month period (such
bonus entitlement is based on a percentage of annual base salary of
approximately 75%), and any other compensation/benefits to which he would
otherwise have been entitled during such 36 month period and (ii) any options
granted to Mr. Nanna shall immediately vest.
If Mr.
Nanna had been terminated on December 31, 2009 without cause or as the result of
a change of control, he would have been entitled to the following:
Salary
|
$ | 690,000 |
Lump
sum
|
|||
Bonus
|
345,000 |
Lump
sum
|
||||
Health
care benefits
|
45,000 |
3
years duration
|
||||
Vehicle
|
45,000 |
3
years duration
|
||||
Sports
Club
|
15,000 |
3
years duration
|
||||
Total
|
$ | 1,140,000 |
22
Timothy G. Smith. Mr.
Smith’s employment agreement provides that, in the event of the termination of
his employment without cause or upon a change of control of Apollo (defined as
the occurrence, within a single transaction or series of related transactions
occurring within the same 12-month period, of a change in the identity of
persons who individually or collectively hold rights to elect, or to approve the
election of, a majority of the members of Apollo’s board of directors,
including, without limitation, transactions consisting of one or more sales or
other transfers of assets or equity securities, mergers, consolidations,
amalgamations, reorganizations, or any similar transactions), Mr. Smith will be
entitled to receive severance equal to 15 months of his base salary and benefits
to which he would otherwise have been entitled for a period of 12
months.
If Mr.
Smith had been terminated on December 31, 2009 without cause or as the result of
a change of control, he would have been entitled to the following:
Salary
|
$ | 250,000 |
Lump
sum
|
|||
Health
care benefits
|
18,750 |
1
year duration
|
||||
Vehicle
|
10,000 |
1
year duration
|
||||
Total
|
$ | 278,750 |
Brent E. Timmons. Mr.
Timmons’ employment agreement provides that, in the event of the termination of
his employment without cause or upon a change of control of Apollo (defined as
the occurrence, within a single transaction or series of related transactions
occurring within the same 12-month period, of a change in the identity of
persons who individually or collectively hold rights to elect, or to approve the
election of, a majority of the members of Apollo’s board of directors,
including, without limitation, transactions consisting of one or more sales or
other transfers of assets or equity securities, mergers, consolidations,
amalgamations, reorganizations, or any similar transactions), Mr. Timmons will
be entitled to receive severance equal to 12 months of his base salary and
benefits to which he would otherwise have been entitled for a period of 12
months.
If Mr.
Timmons had been terminated on December 31, 2009 without cause or as the result
of a change of control, he would have been entitled to the
following:
Salary
|
$ | 140,000 |
Lump
sum
|
|||
Health
care benefits
|
15,000 |
1
year duration
|
||||
Vehicle
|
10,000 |
1
year duration
|
||||
Total
|
$ | 165,000 |
Indebtedness
Of Directors And Officers
No
director or officer of Apollo, and no associate of any director or officer of
Apollo, was indebted to Apollo at any time during the year ended December 31,
2009.
Directors’
And Officers’ Insurance
Apollo
has directors’ liability insurance for the directors and officers of Apollo and
its subsidiaries. The aggregate annual premium is $136,600. The annual insurance
coverage under the applicable policy is limited to $10,000,000 per policy year
with an additional $10,000,000 excess coverage per year.
There is
a $150,000 deductible provision for securities claims and $100,000 deductible
provision for all other claims made by Apollo. The limit does not apply to
claims by any director or officer.
Compensation
of Directors
The
director compensation program is designed to enable Apollo to attract and retain
highly qualified individuals to serve as directors. In 2009, directors’
compensation, which is paid only to non-employee directors, consisted
of:
|
·
|
an
annual retainer of $12,500;
|
23
|
·
|
additional
annual retainer of chairman of the Apollo Board of
$15,000;
|
|
·
|
a
board meeting fee of $1,000 per meeting if attended in person or $500 if
attended telephonically;
|
|
·
|
an
additional annual retainer for audit committee chairperson of $10,000 and
additional annual retainer for other committee chairpersons of
$5,000;
|
|
·
|
a
committee meeting fee of $750 per meeting if attended in person or $500 if
attended telephonically;
|
|
·
|
a
travel fee of $500 per travel day, other than a day on which a meeting
occurs; and
|
|
·
|
reimbursement
of related travel and out-of-pocket
expenses.
|
The
compensation entitlements referred to above were adopted by Apollo’s board of
directors effective January 1, 2009. Directors of Apollo are also
eligible to receive options to acquire shares of Apollo. The number of options
is determined by Apollo’s board of directors after reviewing the recommendations
of the Committee.
The
following table summarizes the compensation paid by Apollo to non-employee
directors for the fiscal year ended December 31, 2009:
Name
|
Fees
Earned
($)
|
Stock
Awards
($)
|
Option
Awards
(1)(2)
($)
|
Non-
Equity
Incentive
Plan
Compensation
($)
|
Change
in
Pension
Value
and
Non
Qualified
Deferred
Compensation
Earnings
($)
|
All
Other
Compensation
($)
|
Total
($)
|
|||||||||||||||||||||
G.
Michael Hobart
|
24,000 | 0 | 10,822 | 0 | 0 | 0 | 34,822 | |||||||||||||||||||||
Marvin
K. Kaiser
|
34,500 | 0 | 10,822 | 0 | 0 | 0 | 45,322 | |||||||||||||||||||||
David
W. Peat
|
43,000 | 0 | 10,822 | 0 | 0 | 0 | 53,822 | |||||||||||||||||||||
Robert
Babensee
|
38,000 | 0 | 10,822 | 0 | 0 | 0 | 48,822 | |||||||||||||||||||||
Charles
E. Stott, Jr.
|
55,500 | 0 | 14,068 | 0 | 0 | 0 | 69,568 | |||||||||||||||||||||
W.S.
(Steve) Vaughan
|
21,500 | 0 | 10,822 | 0 | 0 | 0 | 32,322 |
(1)
|
As
of December 31, 2009, the aggregate number of option awards outstanding
for each director was as follows: G. Michael Hobart — 295,000 (of which
227,500 were vested), Marvin K. Kaiser — 255,000 (of which 187,500 were
vested), David W. Peat — 255,000 (of which 187,500 were vested), Robert
Babensee — 255,000 (of which 187,500 were vested), Charles E. Stott, Jr. —
385,000 (of which 295,000 were vested) and W.S. Steve Vaughan — 295,000
(of which 227,500 were vested).
|
(2)
|
The
fair value of each option granted is estimated at the time of grant using
the Black-Scholes option-pricing model with weighted average assumptions
for grants as follows:
|
2009
|
2008
|
2007
|
||||||||||
Risk-free
interest rate
|
1.9 | % | 2.9 | % | 4.0 | % | ||||||
Dividend
yield
|
0 | % | 0 | % | 0 | % | ||||||
Volatility
|
78 | % | 73 | % | 71 | % | ||||||
Expected
life in years
|
6 | 6 | 6 | |||||||||
Weighted
average grant-date fair value of stock options
|
$ | 0.22 | $ | 0.44 | $ | 0.37 |
24
As at
December 31, 2009, the aggregate number of options granted to non-employee
directors was 1,740,000, of which 1,312,500 had vested.
On March
31, 2009, Mr. Stott was granted 65,000 options and each of Messrs. Hobart,
Babensee, Kaiser, Peat and Vaughan were granted 50,000 options at a strike price
of $0.32 with a term of 10 years. The options vest 50% on the first anniversary
of the grant and 50% on the second anniversary. The grant date fair value was
$68,175 (which amount includes amounts that are not allocable to
2009).
Compensation
Committee Interlocks and Insider Participation
During
2009, each of Messrs. Babensee, Peat and Stott served on Apollo’s
Compensation Committee. None of these directors was a current or
former officer or employee of Apollo, and none had any related person
transaction involving Apollo. During 2009, none of our executive officers served
on the board of directors of any entity that had one or more executive officers
serving on the Apollo Board.
Compensation
Committee Report
The
Compensation Committee has reviewed and discussed the Compensation Discussion
and Analysis (“CDA”) with management and, based on that review and discussion,
has recommended to the board of directors that the CDA be included with this
Annual Report on Form 10-K for the fiscal year ended December 31,
2009.
Submitted
by: Compensation Committee
Charles
E. Stott, Chairperson
Robert W.
Babensee
David
W. Peat
ITEM
12. SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER
MATTERS
Equity
Compensation Plan Information
The
following table provides information about Apollo common shares that may be
issued upon the exercise of options or warrants under Apollo’s existing equity
compensation plan as of December 31, 2009.
Plan
Category
|
(a)
Number
of
Securities
to
be Issued Upon
Exercise
of
Outstanding
Options
(#)
|
(b)
Weighted-
Average
Exercise
Price of
Outstanding
Options
($)
|
(c)
Number
of Securities
Remaining
Available
for Future Issuance
Under
Equity Compensation
Plans
(Excluding Securities
Reflected
in Column (a))
(#)
|
||||||||||
Equity
compensation plans approved by security holders:
|
|||||||||||||
Stock
Option Incentive Plan
|
11,594,371 | $ | 0.64 | 11,666,758 | |||||||||
Equity
compensation plans not approved by security holders
|
0 | N/A | 0 | ||||||||||
Total
|
11,594,371 | $ | 0.64 | 11,666,758 |
Securities
and Principal Holders of Securities
The
authorized share capital of Apollo consists of an unlimited number of common
shares. Each Apollo common share entitles the holder thereof to one vote on all
matters to be acted upon by Apollo shareholders. As at the date
hereof, there are 337,973,660 Apollo common shares issued and
outstanding.
25
The
following table sets forth certain information known to Apollo with respect to
the beneficial ownership of Apollo common shares as of April 29, 2010 by (i) all
persons who are known to Apollo to be beneficial owners of five percent (5%) or
more of the Apollo common shares, (ii) each of the director nominees, (iii) the
Named Executive Officers and (iv) all directors nominees and Named Executive
Officers as a group.
Beneficial
ownership is determined in accordance with the rules of the SEC and includes
voting or investment power with respect to the securities. Apollo common shares
subject to options or warrants that are currently exercisable or exercisable
within 60 days of April 29, 2010 are deemed to be outstanding and to be
beneficially owned by the person or group holding such options or warrants for
the purpose of computing the percentage ownership of such person or group but
are not treated as outstanding for the purpose of computing the percentage
ownership of any other person or group. Unless otherwise indicated, the address
for each of the individuals listed in the table is c/o Apollo Gold Corporation,
5655 South Yosemite Street, Suite 200, Greenwood Village, Colorado, 80111-3220.
Unless otherwise indicated by footnote, the persons named in the table have sole
voting and sole investment power with respect to all Apollo common shares shown
as beneficially owned by them, subject to applicable community property
laws.
Name
and Address of Beneficial Owner
|
Shares
Beneficially
Owned(1)
|
Percent of Class(2)
|
||||||
Linear
Gold Corp.(3)
|
62,500,000 | 18.49 | % | |||||
RAB
Special Situations (Master) Fund Limited(4)
|
26,158,465 | (5) | 7.49 | %(6) | ||||
Baker
Steel Capital Managers LLP(7)
|
25,054,500 | (8) | 7.41 | % | ||||
RMB
Australia Holdings Limited(9)
|
38,661,702 | (10) | 10.40 | %(11) | ||||
Macquarie
Bank Limited(12)
|
50,505,463 | (13) | 13.14 | %(14) | ||||
W.S.
(Steve) Vaughan (Director)
|
270,000 | (15) | * | |||||
G.
Michael Hobart (Director)
|
325,545 | (15)(16) | * | |||||
Charles
E. Stott (Director)
|
523,300 | (15) (16) | * | |||||
Robert
W. Babensee (Director)
|
320,000 | (15) (16) | * | |||||
Marvin
K. Kaiser (Director)
|
255,000 | (15) | * | |||||
David
W. Peat (Director)
|
267,500 | (15) (16) | * | |||||
R.
David Russell (CEO and President, Director)
|
3,692,100 | (15)(16) (17) | 1.09 | %(18) | ||||
Melvyn
Williams (Sr. Vice President and CFO)
|
1,930,846 | (15) (16) | * | |||||
Richard
F. Nanna (Sr. Vice President)
|
2,332,138 | (15) | * | |||||
Timothy
G. Smith (Vice President and General Manager)
|
641,220 | (15) | * | |||||
Brent
E. Timmons (Vice President & Controller)
|
388,525 | (15) (16) | * | |||||
All
Named Executive Officers and directors as a group (11
persons)
|
10,945,901 | (15)(16) | 3.17 | %(19) |
*
Represents less than 1% of the outstanding Apollo common
shares.
(1)
|
Unless
otherwise noted, all shares are Apollo common
shares.
|
(2)
|
Unless
otherwise noted, based on 337,973,660 Apollo common shares outstanding as
of April 29, 2010.
|
(3)
|
The
address for Linear Gold Corp. is 2000 Barrington Street, Suite 502,
Halifax, Nova Scotia, B3J 3K1.
|
(4)
|
The
address for RAB Special Situations (Master) Fund Limited is P.O. Box 908
GT, Walker House Mary Street, George Town, Cayman
Islands.
|
(5)
|
Based
on information provided on behalf of RAB Special Situations (Master) Fund
Limited on or about April 8, 2010. RAB Special Situations (Master)
Fund Limited reported having sole voting and dispositive power over (i)
14,661,265 Apollo common shares (ii) $4,290,000 principal amount of
convertible debentures convertible, along with interest payable in the
form of Apollo common shares, into Apollo common shares to acquire up to a
maximum additional 9,352,200 Apollo common shares, which convertible
debenture was acquired in Apollo’s Series 2007-A convertible debenture
placement which was completed in February 2007 (the “2007 Convertible
Debenture Offering”) and (iii) 2,145,000 warrants to purchase Apollo
common shares with an exercise price of $0.50 per share, expiring February
23, 2011.
William Philip Seymour Richards, the fund manager of RAB Special
Situations (Master) Fund Limited, reported having sole voting and
dispositive power over 350,000 Apollo common shares and having shared
voting and dispositive power over the securities described in (i), (ii)
and (iii) above. The convertible debentures acquired in the 2007
Convertible Debenture Offering by RAB Special Situations (Master) Limited
were amended on February 26, 2010 to extend the term of the convertible
debentures to August 23, 2010, the consideration for which was the issue
of the 2,145,000 warrants described in (iii) above and the issue of an
additional 800,000 Apollo common shares to RAB Special Situations (Master)
Fund Limited. Concurrent with execution of the amendment, RAB Special
Situations (Master) Fund Limited exercised 8,580,000 warrants at $0.25 per
share.
|
26
(6)
|
Calculated
based on 349,470,860 Apollo common shares outstanding (337,973,660 Apollo
common shares outstanding as of April 29, 2010 plus (i) 9,352,200 Apollo
common shares issuable upon conversion of $4,290,000 principal amount of
convertible debentures, plus interest payable thereon in the form of
Apollo common shares and (ii) 2,145,000 warrants to purchase Apollo common
shares with an exercise price of $0.50 per share, expiring February 23,
2011, in each case owned by RAB Special Situations (Master) Fund
Limited). Under the terms of the warrants and convertible
debenture acquired in the 2007 Convertible Debenture Offering, and as
amended on February 26, 2010, in no event shall such securities be
converted into or exercised for Apollo common shares, if after giving
effect to such conversion or exercise, the holder would, in aggregate,
beneficially own Apollo common shares in excess of 9.99% of the then
issued and outstanding Apollo common shares, within the meaning of Rule
13d-1 of the U.S. Exchange Act.
|
(7)
|
The
address for Baker Steel Capital Managers LLP is 86 Jermyn Street, London,
SW1Y 6JD.
|
(8)
|
Based
on information provided by Baker Steel Capital Managers LLP on or about
April 7, 2010. Apollo common shares beneficially owned by Baker
Steel Capital Managers LLP are held through various affiliated entities
including, but not limited to, Genus Dynamic Gold Fund, CF Ruffer Baker
Steel Gold Fund, RIT Capital Partners PLC, Select Gold Fund, Genus
National Resources Fund and Rothschild Investment Trust. Each
of the foregoing funds is managed by Baker Steel Capital Managers LLP and,
consequently, the funds share voting and dispositive power with Baker
Steel Capital Managers LLP in respect of the 25,054,500 total Apollo
common shares.
|
(9)
|
The
address for RMB Australia Holdings Limited is Level 13, 60 Castlereagh
Street, Sydney, NSW 2000 Australia.
|
(10)
|
Based
on information reported by RMB Australia Holdings Limited in its Schedule
13D/A filed with the SEC on March 12, 2009. Apollo common shares
beneficially owned includes: (i) 4,716,800 Apollo common shares and (ii)
an aggregate of 33,944,902 Apollo common shares issuable upon exercise of
Common Share purchase warrants beneficially owned by RMB Australia
Holdings Limited, of which (a) 1,000,000 warrants are exercisable to
purchase 1,000,000 Apollo common shares at a price of Cdn.$0.50 per share,
(b) 21,307,127 warrants are exercisable to purchase 21,307,127 Apollo
common shares at a price of Cdn.$0.221 per share and (c) 11,637,775
warrants are exercisable to purchase 11,637,775 Apollo common shares at a
price of Cdn.$0.252 per share.
|
(11)
|
Calculated
based on 371,918,562 Apollo common shares outstanding (337,973,660 Apollo
common shares outstanding as of April 29, 2010 plus the 33,944,902 Apollo
common shares issuable upon exercise of the 33,944,902 Common Share
purchase warrants owned by RMB Australia Holdings Limited described in
footnote (10) above).
|
(12)
|
The
address for Macquarie Bank Limited is 1 Martin Place, Sydney, NSW 2000,
Australia.
|
(13)
|
Based
on information reported by Macquarie Bank Limited in its Schedule 13D/A
filed with the SEC on March 4, 2009. Apollo common shares
beneficially owned includes: (i) 4,000,000 Apollo common shares
and (ii) an aggregate of 46,505,463 Apollo common shares issuable upon
exercise of Common Share purchase warrants beneficially owned by Macquarie
Bank Limited, of which (a) 2,000,000 warrants are exercisable to purchase
2,000,000 Apollo common shares at Cdn.$0.65 per share, (b) 21,307,127
warrants are exercisable to purchase 21,307,127 Apollo common shares at a
price of Cdn.$0.221 per share and (c) 23,198,336 warrants are exercisable
to purchase 23,198,336 Apollo common shares at a price of Cdn.$0.252 per
share.
|
(14)
|
Calculated
based on 384,479,123 Apollo common shares outstanding (337,973,660 Apollo
common shares outstanding as of April 29, 2010 plus the 46,505,463 Apollo
common shares issuable upon exercise of the 46,505,463 Common Share
purchase warrants owned by Macquarie Bank Limited as described in footnote
(13) above).
|
(15)
|
Amounts
shown include Apollo common shares subject to options exercisable within
60 days of April 29, 2010 as follows: 270,000 Apollo common shares for Mr.
Vaughan; 270,000 Apollo common shares for Mr. Hobart; 352,500 Apollo
common shares for Mr. Stott; 230,000 Apollo common shares for Mr.
Babensee; 230,000 Apollo common shares for Mr. Kaiser; 230,000 Apollo
common shares for Mr. Peat; 1,906,000 Apollo common shares for Mr.
Russell; 1,331,013 Apollo common shares for Mr. Williams; 1,304,013 Apollo
common shares for Mr. Nanna; 616,250 Apollo common shares for Mr. Smith
and 312,625 Apollo common shares for Mr.
Timmons.
|
(16)
|
Amounts
shown include Apollo common shares subject to warrants exercisable within
60 days of April 29, 2010 as follows: 54,545 Apollo common
shares for Mr. Hobart; 5,000 Apollo common shares for Mr. Stott; 20,000
Apollo common shares for Mr. Babensee; 12,500 Apollo common shares for Mr.
Peat; 50,000 Apollo common shares for Mr. Russell; 50,000 Apollo common
shares for Mr. Williams and 20,000 Apollo common shares for Mr.
Timmons.
|
(17)
|
Includes
100 Apollo common shares owned by a member of Mr. Russell’s immediate
family.
|
(18)
|
Calculated
based on 339,929,660 Apollo common shares outstanding (337,973,660 Apollo
common shares outstanding as of April 29, 2010 plus (i) 1,906,000 Apollo
common shares issuable upon exercise of stock options held by Mr. Russell
and described in footnote (16) above and (ii) 50,000 Apollo common shares
issuable upon exercise of warrants held by Mr. Russell and described in
footnote (17) above).
|
27
(19)
|
Calculated
based on 345,238,106 Apollo common shares outstanding
(337,973,660 Apollo common shares outstanding as of April 29, 2010 plus
(i) 7,052,401 Apollo common shares issuable upon exercise of stock options
described in footnote (16) above and (ii) 212,045 Apollo common shares
issuable upon exercise of warrants described in footnote (17)
above).
|
ITEM
13. CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
Policy
Regarding Related Party Transactions
Apollo or
one of its subsidiaries may occasionally enter into transactions with certain
“related persons.” Related persons include Apollo’s executive officers,
directors, 5% or more beneficial owners of Apollo Shares, immediate family
members of these persons and entities in which one of these persons has a direct
or indirect material interest. Apollo refers to transactions with these related
persons as “related party transactions.” All related party transactions may be
consummated or continue only if:
|
·
|
the
audit committee shall have approved or ratified such transaction and if
the transaction is on terms comparable to those that could be obtained in
arm’s length dealings with unrelated third
parties;
|
|
·
|
the
transaction is approved by the disinterested members of Apollo’s board of
directors; or
|
|
·
|
the
transaction involves compensation approved by Apollo’s Compensation
Committee.
|
Apollo’s
policy regarding related party transactions is evidenced by a written policy
which was adopted by Apollo’s board of directors. All of the related
party transactions described below under the heading “Related Party
Transactions” have been approved pursuant to these policies and
procedures.
Related
Party Transactions
Except as
described below and elsewhere in this Annual Report on Form 10-K, no director or
senior officer or associate of a director or senior officer nor, to the best
knowledge of the directors or senior officers of Apollo after having made
reasonable inquiry, any person or company who beneficially owns, directly or
indirectly, voting securities of Apollo carrying more than five (5%) percent of
the voting rights attached to any class of voting securities of Apollo
outstanding at the date hereof, or any associate or affiliate thereof, has any
interest in any material transaction involving Apollo currently proposed or to
which Apollo was or became a party during the fiscal year ended December 31,
2009.
Arrangement
Agreement and Related Transactions
On March
31, 2010, Apollo and Linear entered into the Arrangement Agreement which
provides that Mr. Russell, Apollo’s president and chief executive officer, shall
receive all termination and other amounts owing under his employment agreement
as if he had been terminated without cause, which amounts shall not exceed
approximately $1.7 million. In addition, immediately following
consummation of the Arrangement, it is contemplated that three directors who
currently serve on Apollo’s board of directors, currently expected to be Messrs.
Kaiser, Peat, and Stott, will continue to serve on the board of directors of the
combined company.
On March
31, 2010, in connection with the Arrangement Agreement, the management and
directors of both Apollo and Linear entered into customary support agreements,
representing, in the aggregate, approximately 3.7 million Apollo common shares
and 3.4 million Linear common shares. Pursuant to the support
agreements, each director and executive officer of Apollo party to such
agreement committed to, among other things:
28
|
·
|
immediately
cease and terminate existing discussions, if any, with any person with
respect to any potential direct or indirect acquisition of, or any other
business combination involving, Apollo or any material part of its assets,
which we collectively refer to in this Annual Report on Form 10-K as an
Apollo Acquisition Proposal;
|
|
·
|
not,
directly or indirectly, make, solicit, assist, initiate, encourage or
otherwise facilitate any inquiries, proposals or offers from any person,
other than Apollo or its affiliates, relating to any Apollo Acquisition
Proposal or participate in, any discussions or negotiations regarding any
information with respect to any Apollo Acquisition Proposal or conduct any
activity otherwise detrimental to the
Arrangement;
|
|
·
|
not
sell, assign, transfer or otherwise convey, dispose of, encumber or
restrict the voting rights of any of their Apollo securities (including
Apollo common shares);
|
|
·
|
vote
all of their Apollo common shares in favor of the Arrangement and any
resolutions or matters relating thereto at any meeting of Apollo
shareholders called to consider the
same;
|
|
·
|
not
withdraw any proxy (if any) delivered to Apollo or its depositary agent in
connection with any meeting of Apollo shareholders called to approve the
Arrangement; and
|
|
·
|
vote
against any proposal (other than a “Superior Proposal” as defined in the
Arrangement Agreement) submitted to Apollo shareholders in respect of any
amalgamation, merger, sale of Apollo’s or its affiliates’ or associates’
assets, take-over bid, plan of arrangement, reorganization,
recapitalization, shareholder rights plan, liquidation or winding-up of,
reverse take-over or other business combination or similar transaction
involving Apollo or any of its subsidiaries; (i) which would reasonably be
regarded as being directed towards or likely to prevent or delay the
successful completion of the Arrangement; or (ii) which would reasonably
be expected to result in a material adverse effect in respect of
Apollo.
|
Transactions
with the Project Facility Banks
On
February 20, 2009, Apollo entered into the Project Facility with the Project
Facility Banks pursuant to which Apollo borrowed $70,000,000 in order to the
fund the development, construction and operation of its Black Fox project. The
Project Facility replaced the $15,000,000 bridge facility agreement that Apollo
had previously entered into on December 10, 2008.
In
connection with the Project Facility, Apollo issued 34,836,111 warrants to the
Project Facility Banks (11,637,775 to RMB Australia Holdings Limited and
23,198,336 to Macquarie Bank Limited) as partial consideration for financing
services provided in connection with the Project Facility. Each
warrant entitles the holder thereof to purchase one Apollo common share pursuant
to the terms and conditions of the warrant. The warrants expire 48 months from
their date of issuance and have an exercise price of Cdn.$0.252 per warrant
share, subject to customary anti-dilution adjustments. Such warrants are in
addition to the 42,614,254 warrants (21,307,127 to each Project Facility Bank)
issued to the Project Facility Banks in connection with the bridge facility
agreement. Assuming exercise by the Project Facility Banks of all warrants held
by them, following completion of the Arrangement, RMB Australia Holdings Limited
and Macquarie Bank Limited would beneficially own approximately 7.01% and 8.95%,
respectively, of Apollo’s issued and outstanding capital stock (on an otherwise
undiluted basis).
On
September 28, 2009, Apollo entered into an agreement with the Project Facility
Banks and RMB Resources Inc., pursuant to which the Project Facility Banks
agreed, subject to the condition that Apollo provide a new resource model and
life of mine plan in respect of the Black Fox project to the Project Facility
Banks prior to November 15, 2009, to defer (i) the first scheduled repayment of
$9,300,000 due on September 30, 2009 (the “Deferred Payment”) under the Project
Facility and (ii) the requirement to fund the debt service reserve account also
due on September 30, 2009 (the “Deferred Funding Obligation”), which, in
accordance with the terms of the Project Facility, requires a reserve amount
equal to, at all times after initial funding, the greater of $5,000,000 or the
aggregate repayment amount due on the next repayment date (collectively, the
“First Deferral”).
29
In
addition, as part of the First Deferral, the Project Facility Banks agreed to
conduct a technical review of the Black Fox project and extend the date by which
the project completion test under the Project Facility must be satisfied to
March 31, 2010. The project completion test was originally required to be
successfully completed by October 31, 2009 and requires Apollo to demonstrate to
RMB Resources Inc., acting on behalf of the Project Facility Banks, that the
Black Fox mine satisfies certain general and operational criteria during a
predetermined test period. As a result of the First Deferral, the
Deferred Payment and the Deferred Funding Obligation was made payable on the
earlier to occur of (i) the completion of the Project Facility Banks’ technical
review process of the Black Fox mine and (ii) December 31, 2009.
On
December 30, 2009, Apollo entered into a second agreement with the Project
Facility Banks pursuant to which the Project Facility Banks agreed to further
defer the Deferred Payment and the Deferred Funding Obligation, and to defer the
second scheduled repayment under the Project Facility of $6,000,000 originally
due on December 31, 2009 (the “Second Repayment”), in each case, until the
earlier to occur of (i) the completion of the Project Facility Banks’ technical
review process of the Black Fox mine and (ii) February 28, 2010 (collectively,
the “Second Deferral”).
On
February 25, 2010, Apollo entered into a third agreement with the Project
Facility Banks pursuant to which the Project Facility Banks agreed to further
defer the Deferred Payment, the Deferred Funding Obligation, and the Second
Repayment, in each case, until the earlier to occur of (i) the completion of the
Project Facility Banks’ technical review process of the Black Fox mine and (ii)
March 31, 2010.
As
discussed above under the heading “Recent Developments - Black Fox Financing
Agreement,” on March 9, 2010, the Project Facility Banks executed and delivered
the Consent Letter, which was agreed to and accepted by each of Apollo and
Linear, pursuant to which the Project Facility Banks agreed, subject to the
terms and conditions contained in the Consent Letter, to the Consent, the
Standstill Provisions and the revised payment schedule.
On March
18, 2010, the Project Facility Banks entered into lock-up agreements in favour
of Apollo pursuant to which the Project Facility Banks agreed to, subject to
certain exceptions, refrain from offering, selling, contracting to sell,
lending, or entering into any other agreement to transfer the economic
consequences of any of the Apollo common shares or Apollo warrants held by them
until December 31, 2010. The Project Facility Banks also entered into
support agreements pursuant to which they agreed, subject to customary
exceptions in the context of a Superior Proposal and other terms and conditions
set out in such agreements, to vote their Apollo common shares in favour of the
issuance of Apollo common shares in connection with the Arrangement and all
other matters relating to the Arrangement at the meeting of Apollo shareholders
held to consider the Arrangement.
Other
Transactions
In 2009,
Apollo paid $12,000 for consulting services to Surradial Inc., an entity owned
by the brother of R. David Russell, the president and chief executive officer of
Apollo. In 2009, Apollo paid Fogler, Rubinoff LLP $428,000, in respect of legal
services provided to Apollo. Mr. Hobart, a director and assistant secretary of
Apollo, is a partner at Fogler, Rubinoff LLP.
Director
Independence
The
Canadian securities regulatory authorities have adopted National Instrument
58-101 “Disclosure of Corporate Governance Practices” (“NI 58-101”), which
requires disclosure of Apollo’s approach to corporate governance, and National
Policy 58-201 “Corporate Governance Guidelines” (“NP 58-201”), which provides
guidance on corporate governance practices. In the U.S., Apollo is
subject to disclosure requirements pursuant to (i) Regulation 14A promulgated
under the Securities Exchange Act of 1934, as amended, (ii) the United States
Sarbanes-Oxley Act of 2002 and (iii) the NYSE Amex listing standards and
corporate governance requirements (“NYSE Amex Standards”), which require similar
disclosure.
30
NI 58-101
and the NYSE Amex Standards generally define an “independent director” as a
non-employee director who is affirmatively determined by the board of directors
not to have a material relationship with the listed company that would interfere
with the exercise of independent judgment.
NP 58-201
states that the board of directors of every corporation should be constituted
with a majority of individuals who qualify as unrelated directors. The NYSE Amex
Standards require that each listed company must have a sufficient number of
independent directors on its board of directors such that at least a majority of
such directors are independent directors subject to the certain
exceptions. Apollo’s board of directors has determined that six of
its directors, namely Messrs. Hobart, Stott, Vaughan, Babensee, Kaiser and Peat,
are independent directors. Mr. Russell is the president and chief
executive officer of Apollo, and Apollo’s board of directors has determined that
Mr. Russell is not independent.
Apollo’s
board of directors believes that all of its directors, including its
non-independent director, make a valuable contribution to the board of directors
and Apollo. As indicated above, a majority of Apollo’s directors are
independent. The non-independent director possesses an extensive knowledge of
the Apollo’s business and has extensive business experience, both of which have
proven to be beneficial to the other directors, and his participation
contributes to the effectiveness of the board of directors. Apollo’s board of
directors also monitors potential conflicts of interest and has a written policy
setting forth the expectation that each director avoid any action, position or
interest that conflicts with or gives the appearance of a conflict.
Apollo’s
board of directors has four standing committees: an Audit Committee, a
Compensation Committee, a Technical Committee and a Nominating Committee. The
committees are generally composed of outside directors, a majority of whom are
independent directors in accordance with the NYSE Amex Standards. All of the
directors on the Audit Committee, Compensation Committee and Nominating
Committee are also independent directors in accordance with NP
58-201.
ITEM
14. PRINCIPAL
ACCOUNTING FEES AND SERVICES
The
following table shows the aggregate fees, all of which were pre-approved by
Apollo’s Audit Committee pursuant to its pre-approval policy described below,
billed to Apollo for professional services by Deloitte & Touche LLP for
fiscal years 2009 and 2008 (in Cdn.$):
Fiscal
2009
|
Fiscal
2008
|
|||||||
Audit
Fees
|
$ | 405,000 | $ | 315,000 | ||||
Audit-Related
Fees
|
$ | 148,000 | $ | 110,000 | ||||
Tax
Fees
|
$ | 0 | $ | 0 | ||||
All
Other Fees
|
$ | 35,000 | $ | 159,000 | ||||
Total
|
$ | 588,000 | $ | 584,000 |
Audit Fees. This category
includes the aggregate fees billed for professional services rendered for the
audits of Apollo’s consolidated financial statements for fiscal years 2009 and
2008, for the reviews of the financial statements included in Apollo’s quarterly
reports on Form 10-Q during fiscal 2009 and 2008, and for other services that
are normally provided by the independent auditors in connection with statutory
and regulatory filings or engagements for the relevant fiscal
years.
Audit-Related Fees. This
category includes the aggregate fees billed in each of the last two fiscal years
for assurance and related services by the independent auditors that are
reasonably related to the performance of the audits or reviews of the financial
statements and are not reported above under “Audit Fees,” and generally consist
of fees for other engagements under professional auditing standards, accounting
and reporting consultations, internal control-related matters, and audits of
employee benefit plans.
31
Tax Fees. This category
includes the aggregate fees billed in each of the last two fiscal years for
professional services rendered by the independent auditors for tax compliance,
tax planning and tax advice. Of these amounts, $0 was related to tax compliance
services for review of federal and state tax returns for both 2009 and
2008.
All Other Fees. This category
includes the aggregate fees billed in each of the last two fiscal years for
products and services provided by the independent auditors, other than those
reported above under “Audit Fees,” “Audit-Related Fees” and “Tax
Fees.”
In the
past, Apollo’s board of directors has reviewed and approved the fees to be paid
to the auditors. Such fees have been based upon the complexity of the matters in
question and the time incurred by the auditors. Management believes that the
fees negotiated in the past with the auditors of Apollo were reasonable in the
circumstances and would be comparable to fees charged by other auditors
providing similar services.
The Audit
Committee has reviewed and considered whether the provision of services other
than audit services is compatible with maintaining the auditors’ independence.
Commencing in 2003, the Audit Committee considered and pre-approved expenditure
limits for Apollo’s auditors and reviewed and pre-approved the provision of
non-audit services by Apollo’s auditors to ensure they are consistent with
maintaining the auditor’s independence.
The Audit
Committee has established a policy requiring pre-approval of all audit
engagement letters and fees for all auditing services (including providing
comfort letters in connection with securities underwritings) and all permissible
non-audit services performed by the independent auditors. Such services may be
approved at a meeting of the Audit Committee or by the Chairman of the Audit
Committee, provided that the Chairman presents any such pre-approvals to the
Audit Committee at each of its scheduled meetings.
PART
IV
ITEM
15. EXHIBITS,
FINANCIAL STATEMENT SCHEDULES
(a) Documents
filed as part of this Annual Report on Form 10-K or incorporated by
reference:
(1) All
Financial Statements. Our consolidated financial statements are
listed on the “Index to Financial Statements” on Page F-1 to this
report.
(2) Financial
Statements Schedules. Our consolidated financial statements, the
notes thereto and other related information are listed on the “Index to
Financial Statements” on Page F-1 to this report.
(3) Exhibits. See
(b) below.
(b) The
following exhibits are filed as part of this Annual Report on Form 10-K or,
where indicated, were previously filed and are hereby incorporated by
reference:
Exhibit
No.
|
Exhibit
Name
|
|
3.1
|
Certificate
of Continuance of Apollo Gold Corporation filed May 28, 2003, filed with
the SEC on June 23, 2003 as Exhibit 3.12 to the Registration Statement on
Form 10 (File No. 001-31593).
|
|
3.2
|
By-Laws
of Apollo Gold Corporation, as amended to date, filed with the SEC on June
23, 2003 as Exhibit 3.13 to the Registration Statement on Form 10 (File
No. 001-31593).
|
|
4.1
|
Sample
Certificate of Common Shares of Apollo Gold Corporation, filed with the
SEC on June 23, 2003 as Exhibit 4.1 to the Registration Statement on Form
10 (File No. 001-31593).
|
32
Exhibit
No.
|
Exhibit
Name
|
|
4.2
|
Shareholder
Rights Plan Agreement, dated January 17, 2007, by and between Apollo Gold
Corporation and CIBC Mellon Trust Company, filed with the SEC on January
19, 2007 as Exhibit 4.1 to the Current Report on Form
8-K
|
|
4.3
|
Form
of Purchase Agreement, dated October 30, 2006, by and among Apollo Gold
Corporation and certain investors, filed with the SEC on November 1, 2006
as Exhibit 4.4 to the Current Report on Form 8-K.
|
|
4.4
|
Form
of Subscription Agreement, dated February 23, 2007, by and among Apollo
Gold Corporation and certain investors, filed with the SEC on February 26,
2007 as Exhibit 4.1 to the Current Report on Form 8-K.
|
|
4.5
|
Form
of Convertible Debenture, dated February 23, 2007, by and among Apollo
Gold Corporation and certain investors, filed with the SEC on February 26,
2007 as Exhibit 4.2 to the Current Report on Form 8-K.
|
|
4.6
|
First
Amending Agreement, dated February 16, 2009, by and between Apollo Gold
Corporation and RAB Special Situations (Master) Fund Limited, filed with
the SEC on February 19, 2009 as Exhibit 10.1 to the Current Report on Form
8-K.
|
|
4.7
|
Second
Amending Agreement, dated February 23, 2010, by and between Apollo Gold
Corporation and RAB Special Situations (Master) Fund Limited, filed with
the SEC on March 1, 2010 as Exhibit 10.1 to the Current Report on Form
8-K.
|
|
4.8
|
Third
Amending Agreement, dated February 26, 2010, by and between Apollo Gold
Corporation and RAB Special Situations (Master) Fund Limited, filed with
the SEC on March 1, 2010 as Exhibit 10.2 to the Current Report on Form
8-K.
|
|
4.9
|
Form
of Warrant, dated February 26, 2010, by and between Apollo Gold
Corporation and RAB Special Situations (Master) Fund Limited, filed with
the SEC on March 1, 2010 as Exhibit 10.3 to the Current Report on Form
8-K.
|
|
4.10
|
Form
of Registration Rights Agreement, dated February 23, 2007, by and among
Apollo Gold Corporation and certain investors, filed with the SEC on
February 26, 2007 as Exhibit 4.5 to the Current Report on Form
8-K.
|
|
4.11
|
Form
of Subscription Agreement, dated October 31, 2007, by and among Apollo
Gold Corporation and certain investors, filed with the SEC on November 1,
2007 as Exhibit 4.2 to the Current Report on Form 8-K.
|
|
4.12
|
Form
of Registration Rights Agreement, dated October 31, 2007, by and among
Apollo Gold Corporation and certain investors, filed with the SEC on
November 1, 2007 as Exhibit 4.3 to the Current Report on Form
8-K.
|
|
4.13
|
Warrant
Indenture, dated as of July 9, 2008, between CIBC Mellon Trust Company and
Apollo Gold Corporation,
filed with the SEC on July 10, 2008 as Exhibit 4.1 to the Current Report
on Form 8-K.
|
|
4.14
|
Certificate
of Agent’s Compensation Option to Purchase Units of Apollo Gold
Corporation issued to Haywood Securities Inc., filed with the SEC on July
25, 2008 as Exhibit 10.1 to the Current Report on Form
8-K.
|
|
4.15
|
Certificate
of Agent’s Compensation Option to Purchase Units of Apollo Gold
Corporation issued to Blackmont Capital Inc., filed with the SEC on July
25, 2008 as Exhibit 10.2 to the Current Report on Form
8-K.
|
|
4.16
|
|
Form
of Agents’ Warrant to Purchase Common Shares of Apollo Gold Corporation,
filed with the SEC on July 25, 2008 as Exhibit 10.3 to the Current Report
on Form 8-K.
|
4.17
|
Form
of Subscription Agreement for Flow-Through Shares by and among Apollo Gold
Corporation and certain investors, filed with the SEC on August 26, 2008
as Exhibit 4.2 to the Current Report on Form 8-K.
|
|
4.18
|
Form
of Registration Rights Agreement for Flow-Through Shares by and among
Apollo Gold Corporation and certain investors, filed with the SEC on
August 26, 2008 as Exhibit 4.3 to the Current Report on Form
8-K.
|
33
Exhibit
No.
|
Exhibit
Name
|
|
4.19
|
Form
of Warrant Certificate issued by Apollo Gold Corporation to RMB Australia
Holdings Limited and Macquarie Bank Limited, filed with the SEC on
December 16, 2008 as Exhibit 10.2 to the Current Report on Form
8-K.
|
|
4.20
|
Form
of Warrant Certificate issued by Apollo Gold Corporation to RMB Australia
Holdings Limited and Macquarie Bank Limited, filed with the SEC on
February 24, 2009 as Exhibit 10.2 to the Current Report on Form
8-K.
|
|
4.21
|
Form
of Subscription Agreement for Flow-Through Shares by and among Apollo Gold
Corporation and certain investors, filed with the SEC on December 31, 2008
as Exhibit 4.1 to the Current Report on Form 8-K.
|
|
4.22
|
Form
of Registration Rights Agreement for Flow-Through Shares by and among
Apollo Gold Corporation and certain investors, filed with the SEC on
December 31, 2008 as Exhibit 4.2 to the Current Report on Form
8-K.
|
|
4.23
|
Form
of Warrant Certificate issued by Apollo Gold Corporation to Haywood
Securities Inc., filed with the SEC on December 31, 2008 as Exhibit 10.1
to the Current Report on Form 8-K.
|
|
4.24
|
Form
of Warrant Certificate issued by Apollo Gold Corporation to Haywood
Securities Inc., filed with the SEC on February 24, 2009 as Exhibit 10.3
to the Current Report on Form 8-K.
|
|
4.25
|
Form
of Compensation Option Certificate to Common Shares of Apollo Gold
Corporation issued to Haywood Securities Inc., filed with the SEC on July
20, 2009 as Exhibit 4.1 to the Current Report on Form
8-K.
|
|
4.26
|
Form
of Compensation Option Certificate to Common Shares of Apollo Gold
Corporation issued to Blackmont Capital Inc., filed with the SEC on July
20, 2009 as Exhibit 4.2 to the Current Report on Form
8-K.
|
|
4.27
|
Form
of Subscription Agreement for Common Shares by and among Apollo Gold
Corporation and certain U.S. investors, filed with the SEC on July 20,
2009 as Exhibit 4.3 to the Current Report on Form 8-K.
|
|
4.28
|
Form
of Subscription Agreement for Common Shares by and among Apollo Gold
Corporation and certain non-U.S. investors, filed with the SEC on July 20,
2009 as Exhibit 4.4 to the Current Report on Form 8-K.
|
|
4.29
|
Form
of Subscription Agreement for Flow-Through Shares by and among Apollo Gold
Corporation and certain investors, filed with the SEC on July 20, 2009 as
Exhibit 4.5 to the Current Report on Form 8-K.
|
|
4.30
|
Form
of Registration Rights Agreement by and among Apollo Gold Corporation and
certain investors, filed with the SEC on July 20, 2009 as Exhibit 4.6 to
the Current Report on Form 8-K.
|
|
|
||
10.1
|
|
Amended
and Restated Employment Agreement, dated May, 2003, by and between Apollo
Gold Corporation and R. David Russell, filed with the SEC on June 23, 2003
as Exhibit 10.1 to the Registration Statement on Form 10 (File No.
001-31593).+
|
10.2
|
Amended
and Restated Employment Agreement, dated May, 2003, by and between Apollo
Gold Corporation and Richard F. Nanna, filed with the SEC on June 23, 2003
as Exhibit 10.2 to the Registration Statement on Form 10 (File No.
001-31593).+
|
|
10.3
|
Employment
Agreement by and between Apollo Gold Corporation and Melvyn Williams,
effective as of February 16, 2004, as amended, filed with the SEC on
September 24, 2004 as Exhibit 10.3 to the Current Report on Form
8-K.+
|
|
10.4
|
Form
of Amendment No. 1, dated January 23, 2006, to Amended and Restated
Employment Agreement, by and between Apollo Gold Corporation and each of
R. David Russell, Melvyn Williams and Richard F. Nanna, filed with the SEC
on January 27, 2006 as Exhibit 10.2 to the Current Report on Form
8-K.+
|
|
10.5
|
Employment
Agreement by and between Apollo Gold Corporation and Montana Tunnels
Mining, Inc. and Timothy G. Smith, effective as of February 15, 2004,
filed with the SEC on March 25, 2008 as Exhibit 10.25 to the Annual Report
on Form 10-K.+
|
34
Exhibit
No.
|
Exhibit
Name
|
|
10.6
|
Employment
Agreement by and between Apollo Gold Corporation and Brent E. Timmons,
effective as of April 1, 2007, filed with the SEC on March 25, 2008 as
Exhibit 10.26 to the Annual Report on Form 10-K.+
|
|
10.7
|
Apollo
Gold Corporation Stock Option Incentive Plan, as amended and restated May
7, 2009, filed with the SEC on April 9, 2009 as Schedule B to Apollo Gold
Corporation’s Proxy Statement on Schedule 14A.+
|
|
10.8
|
Apollo
Gold, Inc. and Affiliated Companies Company Retirement Plan (Employee
Savings Plan), filed with the SEC on June 23, 2003 as Exhibit 10.12 to the
Registration Statement on Form 10 (File No.
001-31593).+
|
|
10.9
|
Form
of Indemnification Agreement by and between Apollo Gold Corporation and
Richard F. Nanna, filed with the SEC on September 24, 2004 as Exhibit 10.1
to the Current Report on Form 8-K.
|
|
10.10
|
Form
of Indemnification Agreement by and among Apollo Gold, Inc.; Apollo Gold
Exploration, Inc.; Apollo Gold Finance Inc.; and Donald W. Vagstad, filed
with the SEC on September 24, 2004 as Exhibit 10.2 to the Current Report
on Form 8-K.
|
|
10.11
|
Form
of Amended and Restated Indemnification Agreement dated November 18, 2005,
by and among Apollo Gold, Inc.; Apollo Gold Finance, Inc.; Montana Tunnels
Mining, Inc. and each of R. David Russell, Melvyn Williams, David K.
Young, Donald O. Miller, James T. O’Neil, Jr., G. Michael Hobart, W.S.
Vaughan, and Charles Stott, filed with the SEC on March 31, 2006 as
Exhibit 10.20 to the Annual Report on Form 10-K.
|
|
10.12
|
Asset
Purchase Agreement, dated June 6, 2008, by and among Apollo Gold
Corporation and St Andrew Goldfields Ltd. and Fogler, Rubinoff LLP, as
escrow agent, filed with the SEC on June 11, 2008 as Exhibit 10.1 to the
Current Report on Form 8-K.
|
|
10.13
|
First
Amending Agreement to the Asset Purchase Agreement, dated June 30, 2008,
by and among Apollo Gold Corporation and St Andrew Goldfields Ltd. and
Fogler, Rubinoff LLP, as trustee, filed with the SEC on July 1, 2008 as
Exhibit 10.1 to the Current Report on Form 8-K.
|
|
10.14
|
Acknowledgment,
Consent and Undertaking, dated July 23, 2008, provided by Apollo Gold
Corporation to St Andrew Goldfields Ltd. amending the Asset Pursuant
Agreement among Apollo Gold Corporation, St Andrew Goldfields Ltd. and
Fogler, Rubinoff LLP, filed with the SEC on July 24, 2008 as Exhibit 10.2
to the Current Report on Form 8-K.
|
|
10.15
|
Facility
Agreement, dated December 10, 2008, by and among Apollo Gold Corporation,
RMB Australia Holdings Limited, RMB Resources Inc. and Macquarie Bank
Limited, filed with the SEC on December 16, 2008 as Exhibit 10.1 to the
Current Report on Form 8-K.
|
|
10.16
|
General
Security Agreement dated December 10, 2008, by and between Apollo Gold
Corporation and RMB Resources Inc., filed with the SEC on December 16,
2008 as Exhibit 10.3 to the Current Report on Form 8-K.
|
|
10.17
|
Priority
Agreement, dated December 10, 2008, by and among Apollo Gold Corporation,
RMB Australia Holdings Limited, RMB Resources Inc. and Macquarie Bank
Limited, filed with the SEC on December 16, 2008 as Exhibit 10.4 to the
Current Report on Form 8-K.
|
|
10.18
|
Facility
Agreement dated February 20, 2009, by and among Apollo Gold Corporation,
RMB Australia Holdings Limited, RMB Resources Inc. and Macquarie Bank
Limited, filed with the SEC on February 24, 2009 as Exhibit 10.1 to the
Current Report on Form 8-K.
|
|
10.19
|
Engagement
Letter by and between Apollo Gold Corporation and Haywood Securities Inc.,
filed with the SEC on February 24, 2009 as Exhibit 10.4 to the Current
Report on Form 8-K.
|
|
10.20
|
Amendment
No. 2 to Amended and Restated Employment Agreement, dated March 20, 2009,
between Apollo Gold Corporation and R. David Russell, filed with the SEC
on March 25, 2009 as Exhibit 10.1 to the Current Report on Form
8-K.+
|
35
Exhibit
No.
|
Exhibit
Name
|
|
10.21
|
Amendment
No. 2 to Amended and Restated Employment Agreement, dated March 20, 2009,
between Apollo Gold Corporation and Melvyn Williams, filed with the SEC on
March 25, 2009 as Exhibit 10.2 to the Current Report on Form
8-K.+
|
|
10.22
|
Amendment
No. 3 to Amended and Restated Employment Agreement, dated March 20, 2009,
between Apollo Gold Corporation and Richard F. Nanna, filed with the SEC
on March 25, 2009 as Exhibit 10.3 to the Current Report on Form
8-K.+
|
|
10.23
|
Purchase
and Sale Agreement, dated March 12, 2009, by and between Apollo Gold
Corporation and Newmont Canada Corporation, filed with the SEC on
September 15, 2009 as Exhibit 10.1 to the Current Report on Form
8-K.
|
|
10.24
|
Royalty
Agreement, dated March 25, 2009, by and between Apollo Gold Corporation
and Newmont Canada Corporation, filed with the SEC on September 15, 2009
as Exhibit 10.2 to the Current Report on Form 8-K.
|
|
10.25
|
Agreement,
dated September 28, 2009, by and among Apollo Gold Corporation, RMB
Australia Holdings Limited, Macquarie Bank Limited and RMB Resources Inc.,
filed with the SEC on October 2, 2009 as Exhibit 10.1 to the Current
Report on Form 8-K.
|
|
10.26
|
Agreement,
dated December 30, 2009, by and among Apollo Gold Corporation, RMB
Australia Holdings Limited, Macquarie Bank Limited and RMB Resources Inc.,
filed with the SEC on January 6, 2010 as Exhibit 10.1 to the Current
Report on Form 8-K.
|
|
10.27
|
Purchase
Agreement, dated February 1, 2010, by and among Apollo Gold, Inc., Elkhorn
Goldfields, LLC, Calais Resources, Inc. and Calais Resources Colorado,
Inc., filed with the SEC on February 3, 2010 as Exhibit 10.1 to the
Current Report on Form 8-K.
|
|
10.28
|
Promissory
Note, dated February 1, 2010, by Calais Resources, Inc. and Calais
Resources Colorado, Inc. in favor of Apollo Gold Corporation, filed with
the SEC on February 3, 2010 as Exhibit 10.1 to the Current Report on Form
8-K.
|
|
10.29
|
Employee
Leasing Agreement, dated February 1, 2010, between Montana Tunnels Mining,
Inc. and Apollo Gold Corporation, filed with the SEC on February 3, 2010
as Exhibit 10.1 to the Current Report on Form 8-K.
|
|
10.30
|
Agreement,
dated February 25, 2010, by and among Apollo Gold Corporation, RMB
Australia Holdings Limited, Macquarie Bank Limited and RMB Resources Inc.,
filed with the SEC on March 1, 2010 as Exhibit 10.4 to the Current Report
on Form 8-K.
|
|
10.31
|
Letter
of Intent dated, March 9, 2010, between Apollo Gold Corporation and Linear
Gold Corp., filed with the SEC on March 9, 2010 as Exhibit 10.1 to the
Current Report on Form 8-K.
|
|
10.32
|
Subscription
Agreement, dated March 9, 2010, between Apollo Gold Corporation and Linear
Gold Corp., filed with the SEC on March 9, 2010 as Exhibit 10.2 to the
Current Report on Form 8-K.
|
|
10.33
|
Consent
Letter, dated March 9, 2010, among Apollo Gold Corporation, Linear Gold
Corp., RMB Resources Inc., RMB Australia Holdings Limited and Macquarie
Bank Limited, filed with the SEC on March 9, 2010 as Exhibit 10.3 to the
Current Report on Form 8-K.
|
|
10.34
|
Purchase
Agreement, dated March 12, 2010, among Apollo Gold Corporation, Apollo
Gold Corporation, Calais Resources, Inc. and Calais Resources Colorado,
Inc. and Duane A. Duffy, Glenn E. Duffy, Luke Garvey and James
Ober.*
|
|
21.1
|
List
of subsidiaries of Apollo Gold Corporation.*
|
|
23.1
|
Consent
of Deloitte & Touche LLP.*
|
36
Exhibit
No.
|
Exhibit
Name
|
|
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act.*
|
|
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act.*
|
|
31.3
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act.**
|
|
31.4
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act.**
|
|
32.1
|
Certification
of Chief Executive Officer and Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act.*
|
*
|
Previously
filed with the original Annual Report on Form
10-K.
|
**
|
Filed
herewith.
|
+
|
Management
contracts or compensatory plans or
arrangements.
|
37
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this Amendment No. 1 to Annual Report on
Form 10-K/A to be signed on its behalf by the undersigned, thereunto duly
authorized.
APOLLO
GOLD CORPORATION
|
||
(registrant)
|
||
April
29, 2010
|
By:
|
/s/ R. David
Russell
|
R.
David Russell
|
||
President
and Chief Executive Officer
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed by the following persons on behalf of the registrant, in the capacities
and on the dates indicated.
Signature
|
Title
|
Date
|
||
/s/ R. David
Russell
|
President
and Chief Executive Officer, and
|
April
29, 2010
|
||
R.
David Russell
|
Director
(Principal Executive Officer)
|
|||
/s/ Charles E.
Stott
|
Chairman
of the Board of Directors
|
April
29, 2010
|
||
Charles
E. Stott
|
||||
/s/ G. Michael
Hobart
|
Director
|
April
29, 2010
|
||
G.
Michael Hobart
|
||||
/s/ Robert W.
Babensee
|
Director
|
April
29, 2010
|
||
Robert
W. Babensee
|
||||
/s/ W. S.
Vaughan
|
Director
|
April
29, 2010
|
||
W.
S. Vaughan
|
||||
/s/ Marvin K.
Kaiser
|
Director
|
April
29, 2010
|
||
Marvin
K. Kaiser
|
||||
/s/ David W.
Peat
|
Director
|
April
29, 2010
|
||
David
W. Peat
|
||||
/s/ Melvyn
Williams
|
Chief
Financial Officer and Senior Vice
|
April
29, 2010
|
||
Melvyn
Williams
|
President
– Finance and Corporate
|
|||
Development
(Principal Financial and
Accounting
Officer)
|
38
INDEX
TO EXHIBITS
Exhibit
No.
|
Exhibit
Name
|
|
31.3
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act
|
|
31.4
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act
|
|
39