DEF 14A of Solitario Resources Corp.
Filed Apr 26, 2024 · FY20230001654954-24-005088
PROPOSAL NO. 1: ELECTION OF DIRECTORS
PROPOSAL NO. 1: ELECTION OF DIRECTORS The Board currently consists of seven directors. We are asking the Shareholders to vote to elect the following director nominees to our Board of Directors at the Annual Meeting who, if elected, will each serve until the next annual meeting of Shareholders or until their successors are elected or appointed and qualified or until any such director’s earlier death, resignation or removal. Unless a vote is withheld by the Shareholder, the proxies solicited by the Board will be voted for the election of each nominee. The seven nominees who receive the most votes will be elected. If a Shareholder does not vote for a nominee or indicates to "withhold" authority to vote for a nominee on the proxy card, that Shareholder's vote will have the same effect as an abstention and will not count either for or against the nominee because directors are elected by plurality voting. Broker non-votes will also have no effect on the outcome of this proposal. If any nominee will not be a candidate for election as a director at the Annual Meeting, it is intended that votes will be cast pursuant to the enclosed proxy for any substitute nominees as may be nominated by the existing directors. No circumstances are presently known which would render any nominee named below unavailable to serve as a director.
PROPOSAL NO. 1: ELECTION OF DIRECTORS
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Identification of Directors
Identification of Directors The slate of nominees for election to Solitario’s Board of Directors is below.
Identification of Directors
| Name | Age | | | Brian Labadie Chairman (1)(2)(3) | 71 | Mr. Labadie has been a director of Solitario since June 2006 and Chairman since March of 2009. He is an independent mining industry consultant. He was a director of Crown Resources Corporation (TSX: CRS) ("Crown") from June of 2002 until August 2006 upon completion of Crown’s merger with Kinross Gold Corporation ("Crown-Kinross Merger") and a director of Battle Mountain Gold Exploration Corporation (formerly OTC:BMGX) from June 2005 to June 2007. In evaluating Mr. Labadie’s qualifications as a director, the Board considered Mr. Labadie’s experience of over 40 years in the mining industry. The specific experience that Mr. Labadie brings to Solitario includes formal training and experience as a mining engineer including developing and operating mines, both as a mine manager and as a senior executive at Miramar Mining Corporation and Echo Bay Mines. The Board believes Mr. Labadie’s operating experience complements and enhances the knowledge and understanding the other Board members and management of Solitario have in mining exploration, and corporate finance. Mr. Labadie spent ten years with Miramar Mining Corporation from November 1996 to September 2006 as the Executive Vice President, COO. Prior to that, Mr. Labadie spent nine years with Echo Bay Mines, Ltd. as Vice President of Operations. Mr. Labadie holds a Bachelor of Science degree in geological engineering from the University of Toronto. | | John Labate (1)(2)(3)(4) | 75 | Mr. Labate has been a director of Solitario since December 2016 and is the Audit Committee Chairman. He is currently CFO of Fortitude Gold Corporation, (OTC: FTCO) a company spun-off from Gold Resource Corporation. From May 2015 to August 2020, he served as the CFO of Gold Resource Corporation. Mr. Labate has held management positions in the mining industry for over 40 years. These include Operations Analysis Manager for Anaconda Minerals Company (1980-1986), Corporate Controller for Bond International Gold (1987-1991), CFO for Crown (1992-1997), CFO for GeoBiotics (1997-1999); CFO for Applied Optical Technologies (1999-2004), CFO for Constellation Copper (2004-2008), CFO for Golden Star Resources (2008-2012) and principal of East Cape Advisors (2012-2015). Mr. Labate is experienced in all aspects of accounting, finance and regulatory management within the public sector of the mining industry in both the United States and Canada. The Board believes Mr. Labate’s formal training in accounting and finance, coupled with his nearly 40 years of industry experience, makes him suited to serve on the Board. Mr. Labate received a Bachelor of Science, Accounting, from San Diego State University and passed all parts of the CPA examination. | | James Hesketh (1)(2)(3)(5) | 67 | Mr. Hesketh has been a director of Solitario since July of 2017. He is presently serving as President, CEO, and Director of Viva Gold Corp., a gold development and exploration company listed on the TSX Venture Exchange (“TSXV”) (TSXV:VAU) and the OTCQB market exchange (OTCQB: VAUCF), which owns an advanced stage gold exploration property near Tonopah Nevada, a position he has held since February 2017. From March 2008 to December 2016. Mr. Hesketh served as President, CEO and Director of Atna Resources, Ltd., a (formerly TSX:ATN), which operated two gold mines, one each in California and Nevada (“Atna Resources”). Prior to that, from 2005 to 2008, Mr. Hesketh served as President, CEO and Director of Canyon Resources Corporation (“Canyon”), a formerly NYSE-American listed mining company, which was merged with Atna Resources in 2008. Prior to joining Canyon, Mr. Hesketh served as Principal Mining Engineer and Vice President of NM Rothschild & Sons (Denver) Inc. from 2000 to 2004, which engaged in structured lending to the global metals and mining industry. Mr. Hesketh has proven leadership skills and broad-based industry experience ranging from mergers and acquisitions to mining finance, to mine permitting, development, construction and operations, both domestically and internationally and under U.S. and international regulatory regimes. In evaluating Mr. Hesketh’s qualifications to serve as a director, the Board believes that his formal training in engineering and economics combined with more than 40 years of broad-based industry experience and leadership makes him uniquely suited to serve on the Board. Mr. Hesketh holds a Bachelor of Science in Mining Engineering and a Master of Science in Mineral economics, both from the Colorado School of Mines. |
Identification of Directors
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Identification of Directors
| Christopher E. Herald (5) | 71 | Mr. Herald has been a director of Solitario since August 1992 as well as Solitario’s CEO Chief Executive Officer since June 1999 and President since August 1993. Mr. Herald also served as a director of Crown starting in April 1989, as CEO of Crown starting in June of 1999, and as President of Crown from November 1990, each until August 2006, when he resigned from such positions upon completion of the Crown-Kinross Merger. In evaluating Mr. Herald’s qualifications to serve as a director, the Board believes his leadership of Solitario since Solitario’s inception as President and then CEO, as well as his knowledge of the Company’s operations, make him a valuable member of the Board. In addition, Mr. Herald has shown a keen insight in the evaluation of various opportunities in the mining industry, including the acquisition of properties for exploration and potential merger and acquisition candidates for Solitario. Mr. Herald has a track record of operating mining companies both with Crown and Solitario and the Board believes this is a significant contributor to the success of Solitario. Prior to joining Crown, Mr. Herald was a Senior Geologist with Echo Bay Mines and Anaconda Minerals. Mr. Herald is currently a director of Viva Gold Corp (TSXV: VAU) and Adamera Minerals (TSXV: ADZ). Mr. Herald was formerly a director of Underworld Resources Inc. from June 2009 to June 2011, and Atna Resources from May 2009 to June 2015. Mr. Herald is a past Chairman of the Denver Gold Group, a non-profit industry trade group that organizes gold mining industry institutional conferences in the United States and Europe. Mr. Herald received a Master of Science in Geology from the Colorado School of Mines and a Bachelor of Science in Geology from the University of Notre Dame. | | Gil Atzmon (1)(4) | 64 | Mr. Atzmon has served as a director of Solitario since July 2017. He is the founder of Zazu Metals Corporation (“Zazu”). Mr. Atzmon previously served as Chairman, CEO and President of Zazu from 2006 until it became a wholly-owned subsidiary of Solitario in July 2017. Mr. Atzmon has over 40 years’ experience in the mineral resources sector. His career has included positions as a mining executive, investment banker and mining fund manager. Mr. Atzmon participated in many global exploration and mining projects and successfully arranged financing for the exploration and development of several mineral properties. Mr. Atzmon is a Nationally Registered Emergency Medical Technician. In evaluating Mr. Atzmon’s qualifications to serve as a director, the Board believes his leadership of Zazu as its founder and as Zazu’s Chief Executive Officer, as well as his knowledge of the Solitario’s Lik exploration project and operations, make him a valuable member of the Board. In 2001 and 2002, Mr. Atzmon acted as Vice President, Corporate Development of Ivanhoe Mines Ltd. In 2000 and 2001, Mr. Atzmon served as a global energy and mining specialist in institutional equity and sales for BNP Paribas. From 1998 to 2000, Mr. Atzmon was Chief Investment Strategist and Portfolio Manager for US Global Investors, Inc. Mr. Atzmon holds a Bachelor of Arts degree in Geology and Geography from Columbia College at Columbia University, New York and holds a Master of Arts in Energy and Mineral Resources Economics from the University of Texas at Austin, Texas. |
Identification of Directors
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Identification of Directors
| Joshua D. Crumb (1)(4) | 44 | Mr. Crumb has been a director of Solitario since July 2017. Mr. Crumb is founder and the Chairman and CEO since December 2020 of Abaxx Technologies Inc. (NEO: ABXX), a financial software company that develops and deploys technological infrastructure for global commodity exchanges and digital marketplaces. Mr. Crumb is the co-founder and Chief Strategy Officer since 2021 of BitGold Inc., (TSXV: XAU) an internet platform for acquiring, holding and making payments in gold. Mr. Crumb also is a founder and prior to 2020 a former Director and Chief Strategy Officer of Goldmoney Inc., a financial service and technology company. Mr. Crumb was a director of Zazu from 2011 until it became a wholly-owned subsidiary of Solitario. Mr. Crumb was previously an Executive Director at Goldman Sachs, working as the Senior Metals Strategist in the Global Economics, Commodities and Strategies research division in London from 2010-2012. Mr. Crumb also held various positions within the Lundin group of companies, serving as Director of Corporate Development at Lundin Mining, and Special Project Analyst for group chairman Lukas Lundin. From 2012-2014, Mr. Crumb served as a founder and Director of Loma Vista Capital, and an independent Director of Silver Bull Resources Inc. (OTCQB: SVBL; TSX: SVB)) and Astur Gold Corp (TSX: BDG). In evaluating Mr. Crumb’s qualifications to serve as a director, the Board believes his extensive financial and corporate development experience in both the junior mining industry and the financial services industry as well as his knowledge and leadership of Zazu as one of its directors make him suited to serve on Solitario’s Board. Mr. Crumb holds a Master of Science in Mineral Economics, a Graduate Certificate in International Political Economy, and a Bachelor of Science degree in Engineering from the Colorado School of Mines. | | Debbie Austin (1)(5) | 71 | Ms. Austin was appointed to the Board in April 2022. She worked for more than 30 years in roles of increasing responsibility at Crown and Solitario until her retirement from Solitario in 2018. She has a unique understanding of the corporate operations, structure and goals at Solitario as well as the mining industry in general and the investment community associated with the junior mining industry. During her career, Ms. Austin has had significant interaction with all types of shareholders, both retail and institutional, and has developed relationships and a high level of skill in these areas. The Board believes Ms. Austin’s experience and knowledge will specifically benefit Solitario and complements the current Board members’ experience in the areas of mineral geology, mining technology and accounting and administration. The Board believes Ms. Austin brings value to Solitario by enhancing not only its investor relations but also Solitario’s broader environmental, safety and governance (“ESG”) efforts as the Board recognizes that Solitario’s stakeholders are increasingly applying these non-financial factors as part of their analysis process in identifying investment opportunities. Ms. Austin currently serves as a director of the Yoakum National Bank in Yoakum, Texas. Ms. Austin received her Bachelor of Science degree magna cum laude from Texas A&M University. |
Identification of Directors
| 1. | The Board has determined this director to be an independent member of the Board in accordance with Section 803A of the NYSE American Company Guide. | | 2. | Member of the Audit Committee. | | 3. | Member of the Compensation Committee. | | 4. | Member of the Nominating and Governance Committee. | | 5. | Member of the Health, Safety, Environment and Social Responsibility Committee |
Identification of Directors
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF THE NOMINEES LISTED ABOVE. ————————————--
Compensation of Directors
Compensation of Directors In addition to any equity awards our directors receive the following cash compensation in their capacities as directors:
Compensation of Directors
| Annual Director retainer fee: | $9,800 ($2,450 per quarter) | | Additional Chairman fee: | $2,300 ($575 per quarter) | | Additional Audit Committee Chairman fee: | $2,300 ($575 per quarter) |
Compensation of Directors
All the above referenced fees were as of December 31, 2023. Director fees are paid quarterly during the year. Fees cover participation in all board and committee meetings, including the position of all committee chairmen (excluding audit chairman who receives an additional fee). A deduction may be made for any regularly scheduled board meeting (four quarterly meetings) that is missed. There were no changes in the Director fees during 2023 from 2022. The following table provides summary information regarding compensation earned by our directors during the fiscal year ended December 31, 2023:
Compensation of Directors
| Name (1) | Fees earned or paid in cash ($) | Stock Awards (2) ($) | Option Awards (2) ($) | Non-equity incentive plan compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | | Mr. Labadie, Chairman | 12,100 | - | - | - | - | - | 12,100 | | Mr. Atzmon | 9,800 | - | - | - | - | - | 9,800 | | Ms. Austin | 9,800 | - | - | - | - | - | 9,800 | | Mr. Crumb | 9,800 | - | - | - | - | - | 9,800 | | Mr. Hesketh | 9,800 | - | - | - | - | - | 9,800 | | Mr. Labate | 12,100 | - | - | - | - | - | 12,100 |
Compensation of Directors
| (1) Mr. Herald served as a director during 2023 and 2022 and as the Chief Executive Officer. He received a salary and other compensation for his services as an officer of Solitario during the year ended December 31, 2023, which are shown below under the “Summary Compensation Table”. He did not receive any separate compensation for his services as director. | | (2) There were no stock or stock option awards granted to directors during 2023. |
Objectives of the Company’s Compensation Program
These reviews were not used to create specific benchmarks applicable to our NEO compensation levels. These reviews were used to inform the Compensation Committee of current standards in the industry as such standards may relate, in their independent judgment, to appropriate modifications to Solitario's existing compensation levels. During much of 2023 and 2022, Solitario's activities were generally focused on (i) the acquisition and expansion of the mineral claims as well as the ongoing exploration of the Golden Crest project; (ii) the negotiation and securing of certain non-brokered equity private placements with cash proceeds of $7,120,000 to the Company, with no broker fees or warrants; (iii) the exploration planning and evaluation of the potential of the Lik deposit with our joint venture partner Teck; (iv) the evaluation and planning of the potential of our Florida Canyon project with our joint venture partner Nexa Resources Ltd. and (v) the evaluation of mineral properties for acquisition and or junior mining companies with mineral properties for strategic investment in the form of potential merger, acquisition or sale. The focus of Solitario during the two most recent fiscal years did not directly compare in all cases to the activities of the Peer Group Companies. Accordingly, the Compensation Committee took the difference in focus into consideration when reviewing the compensation of Solitario’s NEOs compared to the Peer Group Companies. Additionally, Solitario has traditionally maintained a very minimal staff and the difference in the number of total employees of Solitario, which currently has seven full-time employees world-wide (excluding certain contractors), compared to the Peer Group Companies, does not lend itself to effective use of specific benchmarks.
Key Elements of Executive Compensation
(1) Base Salary The Compensation Committee attempts to provide a base salary to the NEOs that is commensurate with their review of the Peer Group Companies. The Compensation Committee increased the base salary for the NEOs during 2023, as discussed above, during its meeting in January 2023. Increases or decreases in base salary are dependent on the Compensation Committee's evaluation of each Named Executive Officer’s performance, the effect of a peer group review, the performance of the entire Company relative to the Company’s general goals and objectives, and the Company’s current and projected financial resources. No Named Executive Officer receives minimum base salary payments pursuant to any employment agreement, or other agreement. The Compensation Committee has authority from the Board to set the base salary of our executives at any amount it believes is appropriate. Although the Compensation Committee, reviews the accomplishments of the NEOs against general goals of the Company, such as planned exploration programs, potential mineral property acquisitions and dispositions, evaluation of strategic opportunities, corporate financing activities and market price of our Common Stock, among other things, the Compensation Committee has full discretion to set compensation levels and has not set specific compensation levels to specific criteria. Some of the general criteria are discussed above. (2) Bonuses The Compensation Committee may provide bonuses to the NEOs, in its sole discretion, based upon their evaluation of the individual NEO in light of certain parameters, including, but not exclusively, the following:
Key Elements of Executive Compensation
In establishing its goals for any particular year, the Compensation Committee strives to ensure that the goals provide both an incentive and an attainable goal that provides Shareholders with the opportunity for return on their investment while minimizing corporate and Shareholder risk to the extent possible. Although certain targets and goals related to certain operational goals such as potential property acquisitions and/or potential merger or acquisition activities, if any, are confidential, the Compensation Committee has attempted to structure these types of goals to be reasonable and obtainable by our NEOs, without undue risk to the assets of Solitario. Due to the nature of Solitario's activities relating to (i) the evaluation of mineral properties for acquisition; (ii) the evaluation of strategic opportunities for a corporate merger, acquisition or sale; (iii) the expansion and on-going positive exploration of our Golden Crest project in South Dakota during 2023 and 2022: (iv) the exploration and evaluation of our Lik project in Alaska; (v) the exploration and evaluation of our Florida Canyon project in Peru and (vi) early-stage exploration of mineral properties located in Peru and North America, the goals for our NEOs are not specifically related to traditional financial metrics, such as revenue growth, earnings or earnings per share. The operational targets and goals are more subjective and generally include (i) the evaluation and negotiation of related agreements for the acquisition or disposition of mineral property; (ii) evaluation of strategic opportunities; (iii) land and royalty joint ventures on our existing properties, (iv) exploration activities and success, both on our own and through joint ventures; (v) training and retaining employees or contractors and (vi) operational activities including: maintaining adequate liquidity to fund future exploration activities, financial reporting and disclosure, and shareholder return. The Compensation Committee also evaluates the financial strength and prospects for the junior exploration segment of the mining industry. The Compensation Committee reviews the annual goals with the NEOs at or near the start of each year. The evaluation of the performance of our NEOs, relative to the goals outlined herein, has been and is expected to continue to be at the discretion of the Compensation Committee. As discussed above, the Compensation Committee awarded bonuses of $62,000 paid during 2023 and total bonuses of $45,000 paid during 2022 to our NEOs. (3) Equity The only equity compensation our NEOs have historically received is in the form of stock options granted pursuant to our equity compensation plans adopted by our Shareholders, with the exercise price of such options equal to the current market value of our Common Stock at the date of grant. The Compensation Committee believes that a portion of our NEOs’ compensation should be performance based and tied to the long-term value of the Company. The Compensation Committee also believes that our compensation policies should be fair to our Shareholders and be focused on our long-term viability. The Compensation Committee believes the granting of stock options or other forms of equity-based compensation aligns the interests of the NEOs with those of our shareholders and provides the incentive to manage the Company from the perspective of an owner of the Company. In addition, the Compensation Committee believes the vesting terms of the stock options granted from our equity compensation plans, discussed below, provide that a significant portion of the compensation will be received at a future date, which provides a tempered longer-term incentive for our NEOs as well as an incentive for them to remain with the Company.
Key Elements of Executive Compensation
The amount of all individual grants and the grant date of the stock options have been determined periodically by the Compensation Committee or by the full Board. All grants to date have, as of the date of the approval by the Compensation Committee (or the full Board, if requested by the Compensation Committee), an option exercise price at the fair market value equal to the quoted price of a share of Solitario stock on the NYSE American on the date of grant. Generally, all option grants from the 2013 Plan vest 25% on the date of grant and the remaining options vest at 25% per year on the anniversary of the grant over a three-year period. The Company’s 2013 Solitario Resources Corp. Omnibus Stock and Incentive Plan (the “2013 Plan”) expired in 2023 and the Company could no longer grant awards from the 2013 Plan. There were no grants of options or other equity-based awards to our NEOs during 2023. On September 8, 2022, Solitario granted an aggregate of 2,360,000 options under the 2013 Plan including a total of 1,110,000 options to our NEOs. The 2,360,000 options granted have a five-year life, exercise price of $0.60 per share and had a total grant date fair value of $876,000, based upon a Black-Scholes model with a volatility of 73%, and a risk-free interest rate of 3.4%. During 2023, the Shareholders of the Company approved the 2023 Solitario Stock and Incentive Plan (the “2023 Plan”). In the future, our officers and directors may receive equity-based awards pursuant to the 2023 Plan, which may take the form of stock options or other forms of awards including restricted stock awards, restricted stock units or stock appreciation rights. There were no awards granted under the 2023 Plan to our NEOs during 2023.
Employment Agreements
Employment Agreements None of our NEOs have on-going employment agreements other than individual Change in Control Severance Benefits Agreements, discussed under “Change in Control Agreements” below.
Change in Control Agreements
Change in Control Agreements The Compensation Committee and Solitario consider it essential to the best interest of its Shareholders to foster the continuous employment of key management personnel. In this regard, the Compensation Committee and Board recognize that, as is the case with many publicly held corporations and their subsidiaries, the possibility of a change in control may exist and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its Shareholders. Accordingly, on March 14, 2007, the Compensation Committee approved separate Change in Control Severance Benefits Agreements (each a "CIC") for each of the persons serving as our NEOs, Mr. Herald, Mr. Maronick and Mr. Hunt. Each CIC provides for the payment of severance benefits if the employment of one of the NEOs is terminated during a period of three years following the last day of the month in which a Change in Control of Solitario (as defined in the CIC) occurs equal to 2.5 times the base salary of the NEO. In addition, any unvested stock options held by the NEO will vest upon the Change in Control. The CIC provides an additional gross up for any taxes due as a result of Excise Tax, as defined by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”).
Change in Control Agreements
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Change in Control Agreements
Generally, the CIC defines a "Change in Control" as (i) a person acquiring more than 50% of the outstanding stock of the Company, (ii) the Shareholders of the Company approving a merger or acquisition whereby more than 50% of the outstanding shares held prior to the vote will be held by a new person or corporation, (iii) the shareholders of the Company approving the sale or disposition of substantially all of the company's assets, or (iv) the shareholders of the Company approving a plan of liquidation or dissolution of the Company. Benefits are payable under each CIC after a Change in Control if the NEO terminates his employment for "good reason," or is terminated by the Company, other than for "cause." "Good reason" is generally defined as a reduction in the compensation, or level of responsibility or forced relocation, among other things. "Cause" is generally defined in the CIC as the conviction of a felony, gross and willful failure to perform assigned duties, and dishonest conduct that is intentional and materially injurious to the Company.
Summary Compensation Table
Summary Compensation Table The following table provides summary information regarding compensation earned by our Named Executive Officers for the fiscal years ended December 31, 2023 and 2022:
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1)(2) | Option Awards ($)(1)(2) | Non-equity incentive plan compensation | All Other Compensation ($) (3) | Total ($) | | Christopher E Herald, CEO | 2023 | 172,000 | 97,000 | - | - | - | 30,000 | 299,000 | | | 2022 | 155,000 | 15,000 | - | 155,875 | - | 27,000 | 352,875 | | Walter H Hunt, COO | 2023 | 152,000 | 77,000 | - | - | - | 30,000 | 259,000 | | | 2022 | 140,000 | 15,000 | - | 131,752 | - | 27,000 | 313,752 | | James R. Maronick, CFO | 2023 | 150,000 | 84,000 | - | - | - | 30,000 | 264,000 | | | 2022 | 135,000 | 15,000 | - | 124,329 | - | 27,000 | 301,329 |
SUMMARY COMPENSATION TABLE
| (1) No stock or stock option awards were granted during 2023. | | (2) The amount represents the grant date fair value of option awards granted during the year in accordance with FASB ASC No. 718. See Note 10, “Employee Stock Compensation Plans” to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion regarding assumptions used to calculate fair value. | | The total grant date fair value of the options granted on September 8, 2022 to our NEOs were as follows: |
SUMMARY COMPENSATION TABLE
| Mr. Herald: | 420,000 options; $155,875 | | Mr. Hunt: | 355,000 options; $131,752 | | Mr. Maronick | 235,000 options; $124,329 |
SUMMARY COMPENSATION TABLE
| (3) Mr. Herald, Mr. Hunt and Mr. Maronick each received $30,000 and $27,000, respectively, for 401(K) matches during 2023 and 2022. |
Option Exercises and Stock Vested
Option Exercises and Stock Vested
OPTION EXERCISES AND STOCK VESTED TABLE
OPTION EXERCISES AND STOCK VESTED TABLE The following options were exercised by our NEOs during 2023:
OPTION EXERCISES AND STOCK VESTED TABLE
| Name | Option Awards | | Stock Awards | | | | Number of Shares Acquired on Exercise (#) | Value realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value realized on Vesting ($) | | Christopher E Herald, CEO | 400,000 | 84,000 | - | - | | Mr. Hunt, COO | 270,000 | 64,800 | - | - | | James R. Maronick, CFO | 250,000 | 57,500 | - | - |
OPTION EXERCISES AND STOCK VESTED TABLE
There were no exercises of stock options during the year ended December 31, 2022 by our NEOs.
OPTION EXERCISES AND STOCK VESTED TABLE
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Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control As noted under "Executive Compensation" in this Proxy Statement, the Company entered into certain change in control agreements on March 14, 2007 with our NEOs pursuant to which our NEOs may receive payment in the event that such officer is terminated within three years following a change in control. The terms of the CICs are more fully described under "Change in Control Agreements" in the "Executive Compensation" section above. The potential payments to each NEO are described below in the event of an assumed change in control as defined in the applicable CIC as of December 31, 2023.
Potential Payments Upon Termination or Change in Control
| Name | Salary (1) | Stock option vesting (2) | Tax gross up (3) | Total | | Christopher E. Herald, CEO | $430,000 | $- | $- | $417,425 | | Walter H, Hunt, COO | 380,000 | - | - | 376,325 | | James R. Maronick, CFO | 375,000 | - | - | 363,525 |
Potential Payments Upon Termination or Change in Control
| (1) Two and one-half times current base salary as of December 31, 2023. The amount in the table above is shown as paid as a lump sum payment. | | (2) At December 31, 2023, the price of a share of our common stock as quoted on the NYSE American was $0.56 per share. Accordingly, there is no amount representing any intrinsic value of any unvested options at December 31, 2023, shown above, held by our NEOs from the acceleration of unvested options, as all the outstanding options priced below $0.56 per share were 100% vested. | | (3) The CIC provides for a gross-up for taxes in the event the combined salary and all other compensation, triggered by a change in control, results in Excise Tax, as defined by Section 4999 of the Code. The CIC provides for additional cash compensation to pay the NEO for the Excise Tax, which is 20% of all compensation in excess of the excise tax base salary amount, when the payments, including the fair value from acceleration of vesting for unvested options, under the CIC exceed three times the excise tax base salary. The excise tax base salary is the average of the prior five years taxable compensation from the date of the payment under the CIC, which is considered the five years prior to December 31, 2023 for the above calculation. The total CIC payments did not exceed three times the excise tax base salary as of December 31, 2023. |
Potential Payments Upon Termination or Change in Control
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PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE As required by Item 402(v) of Regulation S-K, we are providing the following information on the relationship between Compensation Actually Paid (“CAP”) and Solitario’s performance for our NEOs (including the Principal Executive Officer, or PEO) and total shareholder return, which is defined as the change in the value of an investment in our common stock of $100 at December 31, 2020 through December 31, 2023 (the “TSR”). The definition of CAP and TSR are mandated by Item 402 and are not used by the Compensation Committee in its pay-for-performance assessments. See our "Executive Compensation" section of this Proxy Statement for a discussion on Solitario’s executive compensation philosophy, our incentive programs and practices and policies that align the interests of our NEOs to those of our shareholders.
PAY VERSUS PERFORMANCE
| Year | Summary Compensation Table Total For PEO (1) | Compensation Actually Paid to PEO (2) | Average Summary Compensation Table Total For Non-PEO Named Executive Officers (3) | Average Compensation Actually Paid to Non-PEO Named Executive Officers (4) | Value of Initial Fixed Investment on Total Shareholder Return (5) | Net Income (Loss) (in thousands) | | 2023 | $299,000 | $345,692 | $261,500 | $301,686 | $100 | $(3,754) | | 2022 | $352,875 | $401,306 | $307,541 | $350,289 | $111 | $(3,928) | | 2021 | $164,000 | $236,437 | $146,500 | $202,706 | $89 | $(2,367) |
PAY VERSUS PERFORMANCE
| (1) Amount for Chris Herald, our CEO in 2023 and 2022 from the Summary Compensation Table (“SCT”) above. | | (2) Adjustments for to the SCT total to arrive at the CAP are as follows: |
PAY VERSUS PERFORMANCE
| Reconciliation of PEO SCT Total and Compensation Actually Paid (6) | 2023 | 2022 | 2021 | | Total Compensation as reported in SCT | $299,000 | $352,875 | $164,000 | | Less fair value of equity awards granted during the year as reported in the SCT | - | (155,875) | - | | Fair value of unvested equity awards granted in the current year – value at the end of the year | - | 121,375 | - | | Fair value of options granted in the current year that vested in the current year | - | 38,969 | - | | Fair value of options granted in prior years that vested in the current year | 64,509 | 38,550 | 73,772 | | Change in the fair value of unvested equity options granted in prior years | (17,817) | 5,412 | (1,335) | | Compensation actually paid per Item 402 | $345,692 | $401,306 | $236,437 |
PAY VERSUS PERFORMANCE
| (3) Amount for the average of Mr. Hunt and Mr. Maronick, our Non-PEO’s in 2023, 2022 and 2021 from the SCT above. | | (4) The following amounts represent averages for our Non-PEO’s to arrive at the necessary adjustments to the SCT: |
PAY VERSUS PERFORMANCE
| Reconciliation of Average Non-PEO SCT Total and Compensation Actually Paid (6) | 2023 | 2022 | 2021 | | Total average compensation as reported in SCT | $261,500 | $307,541 | $146,500 | | Less fair value of equity awards granted during the year as reported in the SCT | - | (128,041) | - | | Fair value of unvested equity awards granted in the current year – value at the end of the year | - | 99,701 | - | | Fair value of options granted in the current year that vested in the current year | - | 32,010 | - | | Fair value of options granted in prior years that vested in the current year | 54,821 | 34,267 | 57,393 | | Change in the fair value of unvested equity options granted in prior years | (14,635) | 4,811 | (1,187) | | Compensation actually paid per Item 402 | $301,686 | $350,289 | $202,706 |
PAY VERSUS PERFORMANCE
| (5) The TSR is based upon the change in value of $100 invested on the last trading day of 2020 as of the end of the year reported. | | (6) Fair value awards were computed in accordance with Financial Accounting Standards Codification Topic 718 |
PAY VERSUS PERFORMANCE
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PAY VERSUS PERFORMANCE
As an exploration company, Solitario does not have consistent sources of revenues and our goals and objectives are more closely aligned with the success of our exploration activities including acquisition and exploration of mineral claims as further discussed above in our Compensation Discussion and Analysis. We believe the changes in both CAP and TSR shown in the above chart are more closely related to the success of our exploration activities, especially at our Golden Crest project as well as general junior mining industry trends for stock appreciation and declines during 2023, 2022 and 2021 than to each other or other financial metrics. The decrease in net loss in 2023 compared to 2022 is primarily related to a reduction in the amortization of grant date fair value of options granted in prior years as there were no options granted during 2023, which was partially offset by an increase in exploration during 2023 compared to 2022. The increase in net loss during 2022 compared to 2021 related to an increase in exploration expense during 2022 compared to 2021. These increases are appropriate given the nature of Solitario’s exploration business and was a significant contributor to the exploration success at our Golden Crest project during 2023 and 2022. However, expenditures do not necessarily always correlate to exploration success nor to increases in shareholder return.