Yesterday I received a number of proxy forms for voting at the KXL annual general meeting in September, in about two weeks time. Provided in each case was 1) a page on what items are already on the agenda as up for vote and 2) an "Information Circular" background information booklet of nearly 35 pages.

Has anyone else read through the proxy materials, and what opinions do you have on what's proposed and what to vote?

Compensation - we don't get to vote or know what is agreed for 2009 for the compensation of the top people, but there is some past-year data in the booklet. It's normal that being are reasonably compensated, and one can see that no one is particularly suffering in this regard. In 2008, from the proxy booklet:

1) Bill Chornobay was paid at a rate of $83.5 per year + plus $83.5k or more 1-year termination payment (in 2009) + $250k via a consulting co. in his wife's name, plus 2.6 million options. No further expense there as he's left.
2) Brian Maher brought in US$200k via his private consulting company, and 457k options (actually down from 2007). Now President and COO.
3) Terrence King - CEO, and legal guy when KXL was reformulated, $276k via his law firm plus 1.7 million options.

At the end of 2008, King's options were $600k in-the-money, Chornobay's $1.1m in-the-money, and Brian Maher's weren't in the money. I'm very sure Brian Maher is as keen as we are to see his options in the money.

I find Maher the best deal of the bunch.

Proxy vote items: There are 6 items on the proxy vote list, of which #2 = reelect current directors?, #4 is approve 2009 stock option plan?

The stock option plan as described in the proxy documents doesn't propose to lay out exactly who will be given how many options, but sets a limit on options to be awarded in total. Two sections of the proxy document appear to differ - "Securities Authorized for Issuance Under Equity Compensation Plans" suggests that 5.4 million options remain to be awarded, over and beyond the 12.4m already awarded and remaining available for exercise, and unspecified the number awarded and unavailable for exercise - meaning the basis of the plan excluding exercised options is at least 17.8m+ options. However, the "Amendment to stock Option Plan" suggests that the plan as it stands is 14.6m and is to be raised to 18m, i.e. 20% of the 90.4m outstanding shares.

What that boils down to for me is that a bit more than 10% of the company has been offered up as options so far (at an average exercise price of $2.50 - a good incentive to get the share price up!), and that another 10% of the company roughly is to be dilutively offered going forward (likely at much lower but unknown exercise prices).

As well, the Shareholder Protection Plan is to be re-ratified, which appears to be an unalloyed good, as the interests of the largest shareholders e.g. the Richardsons are aligned with those of shareholders, in the case of a hostile takeover. As an aside, we have tended to treat the shareholdings of the Richardsons as personal, proprietary holdings, but I have no doubt that a little, some or most may be beneficially held for other parties.

Who else has an opinion on this?