Document:

exv4w14

 

This document is important and requires your immediate
attention. If you have any questions as to how to deal with it,
you should consult your investment dealer, lawyer or other
professional advisor. No securities regulatory authority in
Canada or the United States has expressed an opinion about, or
passed upon the fairness or merits of, the offer to which this
document relates, the securities offered pursuant to such offer
or the adequacy of the information contained in this document
and it is an offence to claim otherwise.

Legend for U.S. Residents:
Information contained herein is subject to completion or
amendment. A registration statement relating to these securities
has been filed with the United States Securities and Exchange
Commission. These securities may not be sold nor may offers to
buy be accepted prior to the time the registration statement
becomes effective. This Notice of Variation and Extension shall
not constitute an offer to sell or the solicitation of an offer
to buy, nor shall there be any sale of these securities in any
state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such state.

	 	 	 	 	 
	 	 	
    	 	
    February 7, 2005

NOTICE OF VARIATION AND EXTENSION

by

GLAMIS GOLD LTD.

of its

OFFER TO PURCHASE

all of the outstanding common shares of

GOLDCORP INC.

for the increased price of 0.92 of a common share of

Glamis Gold Ltd.

for each common share of Goldcorp Inc.

       
Glamis Gold Ltd. (“Glamis”) hereby gives notice that
it has varied the terms of its Offer (the “Original
Offer”) dated January 7, 2005 to purchase all of the
outstanding common shares (the “Goldcorp Shares”) of
Goldcorp Inc. (“Goldcorp”) by (i) increasing the
price offered for each Goldcorp Share from 0.89 of a common
share of Glamis (a “Glamis Share”) to 0.92 of a Glamis
Share and (ii) extending the expiry time (the “Expiry
Time”) of the Offer from 9:00 p.m. (Toronto time) on
February 14, 2005 to 9:00 p.m. (Toronto time) on
February 24, 2005.

			
	 	
    THE OFFER, AS VARIED, IS OPEN FOR ACCEPTANCE UNTIL
    9:00 P.M. (TORONTO TIME) ON FEBRUARY 24, 2005 UNLESS
    WITHDRAWN OR EXTENDED.	 

      
This Notice of Variation and Extension should be read in
conjunction with the Offer to Purchase and Circular (the
“Offer and Circular”) dated January 7, 2005.
Except as otherwise set forth herein, the terms and conditions
previously set forth in the Offer and Circular and the related
Letter of Transmittal and Notice of Guaranteed Delivery continue
to be applicable in all respects to the Offer. Unless the
context requires otherwise, terms not defined herein have the
meanings set forth in the Offer and Circular. The term
“Offer” means the Original Offer, as amended by this
Notice of Variation and Extension.

 

     
Shareholders who have validly deposited and not withdrawn their
Goldcorp Shares will receive the increased price and need take
no further action to accept the Offer. Shareholders who have not
already deposited their Goldcorp Shares and who wish to accept
the Offer must properly complete and execute the Letter of
Transmittal (printed on BLUE paper) which accompanied the
Original Offer or a manually signed facsimile thereof and
deposit it, together with the certificates representing their
Goldcorp Shares, at one of the offices of the Depositary, in
accordance with the instructions in the Letter of Transmittal.
Alternatively, Shareholders may follow the procedure for
guaranteed delivery set forth in Section 5 of the Offer to
Purchase contained in the Offer and Circular, “Procedure
for Guaranteed Delivery”, by using the Notice of Guaranteed
Delivery (printed on YELLOW paper) that accompanied the
Original Offer or a facsimile thereof. Shareholders whose
Goldcorp Shares are registered in the name of a nominee should
contact their brokers, investment dealer, bank, trust company,
or other nominee for assistance in depositing their Goldcorp
Shares to the Offer.

     
Questions and requests for assistance may be directed to the
Depositary or Georgeson Shareholder Communications Canada, Inc.,
the Information Agent for the Offer. Contact details for such
persons may be found on the back page of this Notice of
Variation and Extension. Additional copies of this document,
the Offer and Circular and related materials may be obtained
without charge on request from the Information Agent at its
offices specified on the back page of this document.
Additionally, copies of this document and related materials may
be found at www.sedar.com and www.sec.gov.

     
This document does not constitute an offer or a solicitation
to any person in any jurisdiction in which such offer or
solicitation is unlawful. The Offer is not being made or
directed to, nor is this document being mailed to, nor will
deposits of Goldcorp Shares be accepted from or on behalf of,
Shareholders in any jurisdiction in which the making or
acceptance of the Offer would not be in compliance with the laws
of such jurisdiction. However, Glamis may, in its sole
discretion, take such action as it may deem necessary to extend
the Offer to Shareholders in any such jurisdiction.

     
All dollar references in this Notice of Variation and
Extension are in United States dollars, except where otherwise
indicated.

The Dealer Manager for the Offer is:

Orion Securities Inc.

	 	 	 
	
    
    In Canada

    	 	
    In the United States
	
    
    Orion Securities Inc.

    	 	
    Orion Securities (USA) Inc.

 

SOURCE OF INFORMATION CONCERNING GOLDCORP AND WHEATON
RIVER

     
The information concerning Goldcorp and Wheaton River Minerals
Ltd. contained in this Notice of Variation and Extension has
been taken from or is based upon publicly available documents or
records on file with Canadian securities regulatory authorities
and which are available at www.sedar.com and from the
U.S. Securities and Exchange Commission (the
“SEC”) at www.sec.gov. Although Glamis has no
knowledge that would indicate that any statements contained
herein which are taken from or based upon such documents and
records or other public sources are untrue or incomplete, Glamis
does not assume any responsibility for the accuracy or
completeness of the information taken from or based upon such
documents, records and public sources, or for any failure by
Goldcorp or Wheaton River to disclose publicly events or facts
which may have occurred or which may affect the significance or
accuracy of any such information, but which are unknown to
Glamis.

NOTICE TO SHAREHOLDERS IN THE UNITED STATES

     
The Offer is made by a Canadian corporation that is
permitted, under a multijurisdictional disclosure system adopted
by the securities regulatory authorities in Canada and the
United States, to prepare the Offer in accordance with the
disclosure requirements of Canada. Shareholders in the United
States should be aware that such requirements are different from
those of the United States. The financial statements included or
incorporated by reference in the Offer have been prepared in
accordance with Canadian generally accepted accounting
principles, and may be subject to Canadian auditing and auditor
independence standards, and thus may not be comparable to
financial statements of United States companies.

     
The enforcement by investors of civil liabilities under
United States federal securities laws may be affected adversely
by the fact that Glamis is incorporated or organized under the
laws of British Columbia, that some or all of its officers and
directors may be residents of a foreign country, that some or
all of the experts named herein may be residents of a foreign
country, and that all or a substantial portion of the assets of
Glamis and such persons may be located outside the United
States.

     
Glamis has filed with the SEC a Registration Statement on
Form F-10, as amended, and has mailed the Offer and
Circular and this Notice of Variation and Extension to
Shareholders concerning the proposed business combination with
Goldcorp. GLAMIS URGES SHAREHOLDERS TO READ THE REGISTRATION
STATEMENT, OFFER AND CIRCULAR AND THIS NOTICE OF VARIATION AND
EXTENSION AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE
SEC, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors
and securityholders will be able to obtain the documents free of
charge at the SEC’s website, www.sec.gov. In addition,
documents filed with the SEC by Glamis will be available free of
charge from Glamis. You should direct requests for documents to
Investor Relations, Glamis Gold Ltd., 5190 Neil Road,
Suite 310, Reno, Nevada 89502-8502, telephone
(775) 827-4600. To obtain timely delivery, such documents
should be requested not later than February 17, 2005, five
business days before the Expiry Date.

     
THE SECURITIES OFFERED PURSUANT TO THE OFFER HAVE NOT BEEN
APPROVED OR DISAPPROVED BY THE SEC OR ANY UNITED STATES STATE
SECURITIES COMMISSION NOR HAS THE SEC OR ANY UNITED STATES STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THE OFFER AND CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENCE.

     
U.S. resident Shareholders should be aware that acceptance
of the Offer by them as described herein may have tax
consequences both in the United States and in Canada. See
Sections 15 and 16 of the Circular contained in the Offer
and Circular, “Certain Canadian Federal Income Tax
Considerations” and “Certain U.S. Income Tax
Considerations”. All tax consequences may not be fully
described therein and U.S. resident Shareholders are urged to
consult with their tax advisors.

 

STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

     
This Notice of Variation and Extension, including the pro forma
consolidated financial statements of Glamis in Annex A,
contains forward-looking statements. Forward-looking statements
include, but are not limited to, statements with respect to the
future price of gold, the estimation of mineral reserves, the
realization of mineral reserve estimates, the timing and amount
of estimated future production, costs of production, capital
expenditures, costs and timing of the development of new
deposits, success of exploration activities, Glamis’
hedging practices, permitting time lines, currency fluctuations,
requirements for additional capital, government regulation of
mining operations, environmental risks, unanticipated
reclamation expenses, title disputes or claims, limitations on
insurance coverage and the timing and possible outcome of
pending litigation. Often, but not always, forward-looking
statements can be identified by the use of words such as
“plans”, “expects” or “does not
expect”, “is expected”, “budget”,
“scheduled”, “estimates”,
“forecasts”, “intends”,
“anticipates” or “does not anticipate”, or
“believes”, or variation of such words and phrases or
state that certain actions, events or results “may”,
“could”, “would”, “might” or
“will” be taken, occur or be achieved. Forward-looking
statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or
achievements of Glamis to be materially different from any
future results, performance or achievements expressed or implied
by the forward-looking statements. Such factors include, among
others, the actual results of current exploration activities;
actual results of current reclamation activities; conclusions of
economic evaluations; changes in project parameters as plans
continue to be refined; future prices of gold; possible
variations in ore grade or recovery rates; failure of plant,
equipment or processes to operate as anticipated; accidents,
labour disputes and other risks of the mining industry; delays
in obtaining governmental approvals or financing or in the
completion of development or construction activities, as well as
those factors discussed in the section entitled “Risk
Factors” in Annex A to the Offer and Circular.
Although Glamis has attempted to identify important factors that
could cause actual actions, events or results to differ
materially from those described in forward-looking statements,
there may be other factors that cause actions, events or results
not to be as anticipated, estimated or intended. There can be no
assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on
forward-looking statements.

NON-GAAP FINANCIAL MEASURES

     
Glamis uses certain non-GAAP financial disclosures in its
reports. The reported cash costs of production should not be
considered as an alternative to operating profit or net profit
attributable to shareholders, or as an alternative to other
Canadian or U.S. generally accepted accounting principle
measures and may not be comparable to other similarly titled
measures of other companies. However, Glamis believes that cash
costs of production per ounce of gold, by mine, is a useful
indicator to investors and management of a mine’s
performance as it provides: (i) a measure of the
mine’s cash margin per ounce, by comparison of the cash
operating costs per ounce by mine to the price of gold;
(ii) the trend in costs as the mine matures; and
(iii) an internal benchmark of performance to allow for
comparison against other mines. In addition, the difference
between cost of sales as presented in the consolidated
statements of operations and cash costs of production for Glamis
is due to the cost of any incremental ounces put into or sold
out of finished goods inventory, compared to those ounces
actually produced during the year. For Glamis, there is no
significant difference between the total cash cost per ounce of
production and total cash cost per ounce sold.

2

 

NOTICE OF VARIATION AND EXTENSION

TO: THE HOLDERS OF COMMON SHARES OF GOLDCORP INC.

     
By notice to Computershare Investor Services Inc. (the
“Depositary”) dated February 7, 2005 and as set
forth in this Notice of Variation and Extension (the
“Notice of Variation”), Glamis has varied its Offer
(the “Original Offer”) dated January 7, 2005 to
purchase all of the issued and outstanding Goldcorp Shares. The
term “Offer” means the Offer described in Glamis’
Offer to Purchase and Circular (the “Offer and
Circular”) dated January 7, 2005, as amended by this
Notice of Variation. The Offer is open for acceptance until
9:00 p.m. (Toronto time) on February 24, 2005 (the
“Expiry Date”), unless further extended or
withdrawn.

     
This Notice of Variation should be read in conjunction with the
Offer and Circular. Except as otherwise set forth herein, the
terms and conditions previously set forth in the Offer and
Circular and the related Letter of Transmittal and Notice of
Guaranteed Delivery continue to be applicable in all respects to
the Offer. Unless the context requires otherwise, terms not
defined herein have the meanings set forth in the Offer and
Circular.

		
	1.	
    Increase in Price Offered for Goldcorp Shares

     
Glamis has varied the Original Offer by increasing the price
payable for each Goldcorp Share from 0.89 of a Glamis Share to
0.92 of a Glamis Share.

     
Assuming that all of the conditions of the Offer are satisfied
or waived, all Shareholders whose Goldcorp Shares are taken up
under the Offer, including those Shareholders who have already
deposited their Goldcorp Shares to the Offer, will receive the
increased price for their Goldcorp Shares.

     
Based on the volume-weighted average trading price of the Glamis
Shares and the Goldcorp Shares on the New York Stock Exchange
(the “NYSE”) for the 30 trading days ended
December 15, 2004 (the last trading day prior to the
announcement of the Original Offer), the increased Offer values
each Goldcorp Share at $18.40. The increased Offer represents a
premium of approximately 26.7% over the value of the Goldcorp
Shares on the NYSE for that period.

     
Based on the volume-weighted average trading price of the Glamis
Shares and the Goldcorp Shares on the Toronto Stock Exchange
(the “TSX”) for the 30 trading days ended
December 15, 2004 (the last trading day prior to the
announcement of the Original Offer), the increased Offer values
each Goldcorp Share at Cdn.$22.11. The increased Offer
represents a premium of approximately 27.7% over the value of
the Goldcorp Shares on the TSX for that period.

     
Based on the closing prices for the Glamis Shares and the
Goldcorp Shares on the NYSE and the TSX on Friday,
February 4, 2005, (the last trading day prior to
Glamis’ announcement of the increase in the Offer price),
the increased Offer values each Goldcorp Share at $15.05 and
Cdn.$18.86, respectively, and the increased Offer represents
additional consideration to Goldcorp shareholders of $0.49 and
Cdn.$0.62 per Goldcorp Share, respectively.

     
Assuming that all of the Goldcorp Shares that were issued and
outstanding as of December 22, 2004, and that all of the
Goldcorp Shares that were issuable upon exercise of outstanding
Goldcorp Options and Goldcorp Warrants as at December 22,
2004, are tendered to the Offer and taken up by Glamis, Glamis
would issue 193,314,694 Glamis Shares, an increase of 6,303,740
Glamis Shares from the Original Offer. The revised pro forma
goodwill charge as at September 30, 2004 for the
transaction is $1,633.6 million, which is
$350.0 million less than that previously stated for the
Original Offer. The reason for this reduction in the goodwill
charge is the use of recent market prices for Glamis Shares. See
Annex A hereto for revised pro forma consolidated financial
information as at and for the nine months ended
September 30, 2004 and for the year ended December 31,
2003, after giving effect to the acquisition of all of the
Goldcorp Shares pursuant to the Offer and Section 4 below,
“Summary Pro Forma Financial Information.” This
information is derived from and should be read in conjunction
with the financial statements and the related notes to those
financial statements incorporated by reference or included
therein.

3

 

		
	2.	
    Conditions to the Offer

     
The conditions to the Offer have not changed. See Section 2
of the Offer to Purchase contained in the Offer and Circular,
“Conditions to the Offer”.

     
It remains a condition of the Offer that the Shareholders DO NOT
APPROVE the resolution (the “Wheaton River
Resolution”) proposed by management of Goldcorp to issue up
to 200,000,000 Goldcorp Shares in connection with
Goldcorp’s offer dated December 29, 2004 to acquire
all of the outstanding common shares of Wheaton River. The
Wheaton River Resolution will be voted on at the meeting of
Shareholders to be held on Thursday, February 10, 2005 (the
“Goldcorp Meeting”). If the Wheaton River
Resolution is approved by Shareholders, a material condition to
the Offer will not be satisfied and the Offer will not
proceed.

		
	3.	
    Extension of the Offer

     
By notice to the Depositary on February 7, 2005, Glamis
amended the Offer by extending the Expiry Time from
9:00 p.m. (Toronto time) on February 14, 2005 to
9:00 p.m. (Toronto time) on February 24, 2005, unless
Glamis withdraws the Offer or further extends the period during
which the Offer is open for acceptance. Accordingly, the
definitions of “Expiry Date” and “Expiry
Time” in the Offer are amended to read in full as follows:

		
	 	     
    “Expiry Date” means February 24, 2005 or
    such later date as is set out in a notice of extension of the
    Offer issued at any time and from time to time extending the
    period during which Goldcorp Shares may be deposited to the
    Offer, provided that, if such day is not a business day, then
    the Expiry Date will be the next business day.
	 
	 	     
    “Expiry Time” means 9:00 p.m. (Toronto
    time) on the Expiry Date.

		
	4.	
    Summary Pro Forma Financial Information

     
The selected pro forma consolidated financial information set
forth below should be read in conjunction with the unaudited pro
forma consolidated financial statements, the accompanying notes
thereto and the compilation report of KPMG LLP thereon appended
hereto as Annex A. The pro forma consolidated balance sheet
has been prepared from the unaudited consolidated balance sheet
of each of Glamis and Goldcorp as at September 30, 2004 and
gives pro forma effect to the acquisition of Goldcorp as if the
transaction occurred on September 30, 2004. The pro forma
consolidated statement of operations for the nine-month period
ended September 30, 2004 and for the year ended
December 31, 2003 has been prepared from the unaudited
statements of operations of each of Glamis and Goldcorp for the
nine months ended September 30, 2004 and from the audited
statements of operations of each of Glamis and Goldcorp for the
year ended December 31, 2003 and gives pro forma effect to
the acquisition of Goldcorp as if the transaction occurred on
January 1, 2003.

4

 

Glamis Pro Forma Financial Data

(Dollar amounts in millions except per share and gold price
data)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Glamis Actual	
	 	 	 	 	 	 	 	
	 	 	Pro Forma		 	Pro Forma		 	 	 	As at December 31	
	 	 	as at		 	as at		 	As at		 	(restated)(2)	
	 	 	September 30,		 	December 31,		 	September 30,		 	 	
	 	 	2004		 	2003(1)		 	2004		 	2003		 	2002	
	 	 	 		 	 		 	 		 	 		 	 	
	 	 	(unaudited)	
	
    
    Current assets

    	 	$	485.1	 	 	 	—	 	 	$	54.2	 	 	$	156.2	 	 	$	180.5	 
	
    
    Non-current assets

    	 	$	3,579.8	 	 	 	—	 	 	$	517.6	 	 	$	377.9	 	 	$	297.3	 
	
    
    Total assets

    	 	$	4,064.9	 	 	 	—	 	 	$	571.8	 	 	$	534.1	 	 	$	477.8	 
	
    
    Current liabilities

    	 	$	49.0	 	 	 	—	 	 	$	26.8	 	 	$	10.8	 	 	$	11.5	 
	
    
    Working capital

    	 	$	436.1	 	 	 	—	 	 	$	27.4	 	 	$	145.4	 	 	$	169.1	 
	
    
    Long-term liabilities

    	 	$	602.7	 	 	 	—	 	 	$	92.1	 	 	$	88.6	 	 	$	77.7	 
	
    
    Shareholders’ equity

    	 	$	3,413.2	 	 	 	—	 	 	$	452.9	 	 	$	434.7	 	 	$	388.6	 
	
    
    Common shares outstanding

    	 	 	311,129,372	 	 	 	—	 	 	 	130,694,678	 	 	 	130,133,678	 	 	 	125,978,115	 
	
    
    Book value per share

    	 	$	10.97	 	 	 	—	 	 	$	3.47	 	 	$	3.34	 	 	$	3.08	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Glamis Actual	
	 	 	 	 	 	 	 	
	 	 	Pro Forma for		 	 	 	 	 	 
	 	 	the Nine		 	Pro Forma		 	For the Nine		 	For the Year Ended	
	 	 	Months		 	For the Year		 	Months		 	December 31	
	 	 	Ended		 	Ended		 	Ended		 	(restated)(2)	
	 	 	September 30,		 	December 31,		 	September 30,		 	 	
	 	 	2004		 	2003		 	2004		 	2003		 	2002	
	 	 	 		 	 		 	 		 	 		 	 	
	 	 	(unaudited)	
	
    
    Revenue

    	 	$	200.4	 	 	$	346.6	 	 	$	61.3	 	 	$	84.0	 	 	$	80.8	 
	
    
    Gross profit(4)

    	 	$	120.5	 	 	$	217.0	 	 	$	31.5	 	 	$	42.4	 	 	$	39.7	 
	
    
    Net earnings

    	 	$	16.0	 	 	$	43.2	 	 	$	14.8	 	 	$	18.2	 	 	$	13.8	 
	
    
    Net earnings from continuing operations before extraordinary
    items and cumulative effect of change in accounting principles(3)

    	 	$	16.0	 	 	$	43.2	 	 	$	14.8	 	 	$	18.2	 	 	$	13.8	 
	
    
    Basic earnings per share

    	 	$	0.05	 	 	$	0.14	 	 	$	0.11	 	 	$	0.14	 	 	$	0.14	 
	
    
    Diluted earnings per share

    	 	$	0.05	 	 	$	0.14	 	 	$	0.11	 	 	$	0.14	 	 	$	0.14	 
	
    
    Net cash provided by operating activities

    	 	$	55.9	 	 	$	122.2	 	 	$	25.2	 	 	$	27.0	 	 	$	28.3	 
	
    
    Ounces of gold produced

    	 	 	611,678	 	 	 	833,139	 	 	 	149,927	 	 	 	230,294	 	 	 	251,919	 
	
    
    Average gold price realized per ounce

    	 	$	403	 	 	$	367	 	 	$	404	 	 	$	368	 	 	$	313	 

 

		
	(1) 	
    In accordance with Canadian regulatory pronouncements, a pro
    forma balance sheet was not required to be prepared as at
    December 31, 2003.
	 
	(2) 	
    Effective January 1, 2004, Glamis adopted:
    (a) retroactively without restatement the use of the fair
    value method of accounting for stock-based compensation issued
    to employees; and (b) retroactively with restatement new
    guidance with respect to the measurement and recognition of
    asset retirement obligations. The amounts presented for 2003 and
    2002 have been restated from those previously presented to give
    effect to the change in the accounting for asset retirement
    obligations.
	 
	(3) 	
    Since there were no extraordinary items or cumulative effects of
    changes in accounting principle with respect to the relevant
    periods, these figures are the same as the amounts reported
    under the heading “Net earnings” with respect to such
    periods.
	 
	(4) 	
    Gross profit is defined as revenue less cost of sales.

5

 

		
	5.	
    Price Range and Trading Volumes of Glamis Shares and Goldcorp
    Shares

     
The following table updates the reported high and low prices and
the average daily volume of trading of the Glamis Shares on the
NYSE and the TSX:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	NYSE		 	TSX	
	 	 	 		 	 	
	 	 	 	 	Average		 	 	 	Average	
	 	 	 	 	Daily		 	 	 	Daily	
	Calendar Period	 	High		 	Low		 	Volume		 	High		 	Low		 	Volume	
	 	 	 		 	 		 	 		 	 		 	 		 	 	
	 	 	$		 	$		 	 	 	Cdn.$		 	Cdn.$		 	 
	
    
    2005

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    January

    	 	 	16.82	 	 	 	15.58	 	 	 	890,945	 	 	 	20.40	 	 	 	19.26	 	 	 	861,589	 
	
    
    February 1-4

    	 	 	16.37	 	 	 	15.90	 	 	 	997,325	 	 	 	20.50	 	 	 	19.68	 	 	 	966,988	 

 

Note: Source of data in the table is Bloomberg.

    
The following table updates the reported high and low prices and
the average daily volume of trading of the Goldcorp Shares on
the NYSE and the TSX:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	NYSE		 	TSX	
	 	 	 		 	 	
	 	 	 	 	Average		 	 	 	Average	
	 	 	 	 	Daily		 	 	 	Daily	
	Calendar Period	 	High		 	Low		 	Volume		 	High		 	Low		 	Volume	
	 	 	 		 	 		 	 		 	 		 	 		 	 	
	 	 	$		 	$		 	 	 	Cdn.$		 	Cdn.$		 	 
	
    
    2005

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    January

    	 	 	14.79	 	 	 	13.58	 	 	 	1,553,755	 	 	 	18.00	 	 	 	16.77	 	 	 	1,366,251	 
	
    
    February 1-4

    	 	 	14.35	 	 	 	13.89	 	 	 	984,200	 	 	 	17.75	 	 	 	17.34	 	 	 	702,859	 

 

Note: Source of data in the table is Bloomberg.

		
	6.	
    Recent Developments

     
On January 17, 2005, Glamis filed and commenced mailing to
Shareholders, a dissident proxy circular (the “Dissident
Circular”) for the Goldcorp Meeting. In the Dissident
Circular, Glamis urged Shareholders to vote against the Wheaton
River Resolution.

     
On January 21, 2005, Goldcorp announced that it was
delaying the Goldcorp Meeting until February 10, 2005 and
Goldcorp filed and commenced mailing to Shareholders a
Directors’ Circular and Supplemental Management Information
Circular.

     
On January 27, 2005, Glamis filed (and on January 28,
2005 commenced mailing) Supplemental Information to its
Dissident Circular.

     
On January 28, 2005, Glamis announced that it had retained
Citigroup Global Markets Inc. as co-advisor with Orion
Securities Inc. in connection with the Offer.

     
On February 7, 2005, Glamis gave the Depositary notice of
the variation and extension of the Original Offer, as described
in this Notice of Variation.

		
	7.	
    Time for Acceptance

     
Goldcorp Shares not previously deposited to the Offer may be
deposited in accordance with the provisions of Section 4 of
the Offer to Purchase contained in the Offer and Circular,
“Time and Manner for Acceptance” until the Expiry Time
on the Expiry Date.

		
	8.	
    Take-up of and Payment for Deposited Goldcorp Shares

     
If all of the conditions referred to in Section 2 of the
Offer to Purchase contained in the Offer and Circular,
“Conditions to the Offer”, have been fulfilled or,
where permitted, waived at the Expiry Time, Glamis will take up
the Goldcorp Shares deposited under the Offer and not withdrawn
as soon as possible, but in any event not later than
10 days from the Expiry Date, and will pay for the Goldcorp
Shares taken up as soon as possible, but in any event not later
than the earlier of three business days after taking up these
Goldcorp Shares and 10 days after the Expiry Date. In
accordance with applicable law, Glamis will promptly take up and
pay for Goldcorp Shares deposited under the Offer after the date
on which it first takes up Goldcorp Shares deposited under the
Offer, but in any event not later than 10 days after the
deposit

6

 

of such Goldcorp Shares. See Section 3 of the Offer to
Purchase contained in the Offer and Circular, “Payment for
Deposited Goldcorp Shares”.

		
	9.	
    Right to Withdraw Deposited Goldcorp Shares

     
Goldcorp Shares may be withdrawn by or on behalf of a depositing
Shareholder (unless otherwise required or permitted by
applicable Law) (i) at any time when the Goldcorp Shares
have not been taken up; (ii) at any time before the
expiration of 10 business days from the date of a notice of
change or variation in respect of the Offer; (iii) if
Glamis has not paid for the Shareholder’s Goldcorp Shares
within three business days after having taken them up; or
(iv) at any time after March 8, 2005 provided that the
Goldcorp Shares have not been accepted for payment by Glamis
before the receipt by the Depositary of the notice of withdrawal
in respect of such Goldcorp Shares.

     
See Section 8 of the Offer to Purchase contained in the
Offer and Circular, “Right to Withdraw Deposited Goldcorp
Shares”, for additional detail regarding withdrawal of
deposited Goldcorp Shares.

		
	10.	
    Amendment of the Original Offer

     
The Offer and Circular, the Original Offer, the Letter of
Transmittal and the Notice of Guaranteed Delivery are amended to
reflect the variation and extension contemplated by, and the
information contained in, this Notice of Variation.

		
	11.	
    Directors’ Approval

     
The contents of this Notice of Variation have been validly
approved, and the sending thereof to the Shareholders has been
duly authorized, by the board of directors of Glamis.

		
	12.	
    Offerees’ Statutory Rights

     
Securities legislation in certain of the provinces and
territories of Canada provides Shareholders with, in addition to
any other rights that they may have at law, rights of rescission
or damages, or both, if there is a misrepresentation in a
circular or notice that is required to be delivered to such
Shareholders. However, such rights must be exercised within
prescribed time limits. Shareholders should refer to the
applicable provisions of the securities legislation of their
province or territory for the particulars of those rights or
consult with a lawyer.

7

 

APPROVAL AND CERTIFICATE OF GLAMIS

     
The contents of the Offer and Circular and this Notice of
Variation have been approved by, and the sending thereof to the
Shareholders has been authorized by, the Board of Directors of
Glamis. The foregoing contains no untrue statement of a material
fact and does not omit to state a material fact that is required
to be stated or that is necessary to make a statement not
misleading in the light of the circumstances in which it was
made. In addition, the foregoing does not contain any
misrepresentation likely to affect the value or the market price
of the securities which are the subject of the Offer.

Dated: February 7, 2005.

	 	 	 
	
    
    (Signed) C. Kevin McArthur

    	 	
    (Signed) Cheryl S. Maher
	
    
    President and Chief Executive Officer

    	 	
    Chief Financial Officer
	
    On behalf of the Board of Directors
	 
	
    
    (Signed) A. Dan Rovig

    	 	
    (Signed) Kenneth F. Williamson
	
    
    Director

    	 	
    Director

8

 

ANNEX A

REVISED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

GLAMIS GOLD LTD.

COMPILATION REPORT ON PRO FORMA FINANCIAL STATEMENTS

The Board of Directors

Glamis Gold Ltd.

     
We have read the accompanying unaudited pro forma consolidated
balance sheet of Glamis Gold Ltd. (the “Company”) as
at September 30, 2004 and the unaudited pro forma
consolidated statements of operations for the nine months then
ended and for the year ended December 31, 2003, and have
performed the following procedures:

		
	 	     
    1. Compared the figures in the columns captioned
    “Glamis Gold Ltd.” to the unaudited financial
    statements of the Company as at September 30, 2004 and for
    the nine months then ended, and the audited financial statements
    of the Company for the year ended December 31, 2003,
    respectively, and found them to be in agreement.
	 
	 	     
    2. Compared the figures in the columns captioned
    “Goldcorp Inc.” to the unaudited financial statements
    of Goldcorp Inc. as at September 30, 2004 and for the nine
    months then ended, and the audited financial statements of
    Goldcorp Inc. for the year ended December 31, 2003,
    respectively, and found them to be in agreement.
	 
	 	     
    3. Made enquiries of certain officials of the Company who
    have responsibility for financial and accounting matters about:

		
	 	     
    (a) The basis for determination of the pro forma
    adjustments; and
	 
	 	     
    (b) Whether the pro forma financial statements comply as to
    form in all material respects with the published requirements of
    Canadian securities legislation.

		
	 	     
    The officials:

		
	 	     
    (a) described to us the basis for determination of the pro
    forma adjustments; and
	 
	 	     
    (b) stated that the pro forma financial statements comply
    as to form in all material respects with the published
    requirements of Canadian securities legislation.

		
	 	     
    4. Read the notes to the pro forma financial statements,
    and found them to be consistent with the basis described to us
    for determination of the pro forma adjustments.
	 
	 	     
    5. Recalculated the application of the pro forma
    adjustments to the aggregate of the amounts in the columns
    captioned “Glamis Gold Ltd.” and “Goldcorp
    Inc.” as at September 30, 2004 and for the nine months
    then ended, and for the year ended December 31, 2003, and
    found the amounts in the column captioned “Pro forma
    consolidated” to be arithmetically correct.

     
A pro forma financial statement is based on management
assumptions and adjustments which are inherently subjective. The
foregoing procedures are substantially less than either an audit
or a review, the objective of which is the expression of
assurance with respect to management’s assumptions, the pro
forma adjustments, and the application of the adjustments to the
historical financial information. Accordingly, we express no
such assurance. The foregoing procedures would not necessarily
reveal matters of significance to the pro forma financial
statements, and we therefore make no representation about the
sufficiency of the procedures for the purposes of a reader of
such statements.

Vancouver, Canada

		
	 	
    (Signed) KPMG LLP

February 7, 2005

		
	 	
    Chartered Accountants

     
COMMENTS FOR UNITED STATES READERS ON DIFFERENCES BETWEEN

CANADIAN AND UNITED STATES REPORTING STANDARDS

     
The above report, provided solely pursuant to Canadian
requirements, is expressed in accordance with standards of
reporting generally accepted in Canada. To report in conformity
with United States standards on the reasonableness of the pro
forma adjustments and their application to the pro forma
financial statements requires an examination or review
substantially greater in scope than the review we have
conducted. Consequently, we are unable to express any opinion in
accordance with standards of reporting generally accepted in the
United States with respect to the compilation of the
accompanying unaudited pro forma financial information.

Vancouver, Canada

		
	 	
    (Signed) KPMG LLP

February 7, 2005

		
	 	
    Chartered Accountants

A-1

 

GLAMIS GOLD LTD.

PRO FORMA CONSOLIDATED BALANCE SHEET

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Pro Forma	
	 	 	 	 	 	 	 	 	Consolidated	
	 	 	Glamis Gold Ltd.		 	Goldcorp Inc.		 	 	 	Glamis Gold Ltd.	
	 	 	September 30,		 	September 30,		 	Pro Forma		 	September 30,	
	 	 	2004		 	2004		 	Adjustments		 	2004	
	 	 	 		 	 		 	 		 	 	
	 	 	 	 	 	 	(Note 3)		 	 
	 	 	(Unaudited)	
	 	 	(Expressed in millions of United States dollars)	
	
    ASSETS
	 
	
    
    Cash and cash equivalents

    	 	$	22.4	 	 	$	315.6	 	 	$	70.1	(a)	 	$	348.1	 
	 	 	 	 	 	 	 	 	 	 	 	(60.0	) (c)	 	 	 	 
	
    
    Gold bullion

    	 	 	—	 	 	 	26.2	 	 	 	43.9	(b)	 	 	70.1	 
	
    
    Marketable securities

    	 	 	—	 	 	 	23.7	 	 	 	10.6	(b)	 	 	—	 
	 	 	 	 	 	 	 	 	 	 	 	(34.3	) (e)	 	 	 	 
	
    
    Inventory

    	 	 	22.6	 	 	 	15.2	 	 	 	—	 	 	 	37.8	 
	
    
    Other current assets

    	 	 	9.2	 	 	 	19.9	 	 	 	—	 	 	 	29.1	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	54.2	 	 	 	400.6	 	 	 	30.3	 	 	 	485.1	 
	
    
    Mineral property, plant and equipment

    	 	 	498.2	 	 	 	240.7	 	 	 	1,146.0	(b)	 	 	1,884.9	 
	
    
    Goodwill

    	 	 	—	 	 	 	—	 	 	 	1,633.6	(b)	 	 	1,633.6	 
	
    
    Other assets

    	 	 	19.4	 	 	 	7.6	 	 	 	34.3	(e)	 	 	61.3	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	$	571.8	 	 	$	648.9	 	 	$	2,844.2	 	 	$	4,064.9	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	
    LIABILITIES AND SHAREHOLDERS’ EQUITY
	
    
    Liabilities:

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	
    
    Current liabilities

    	 	$	26.8	 	 	$	22.2	 	 	$	—	 	 	$	49.0	 
	 	
    
    Site closure and reclamation costs

    	 	 	6.9	 	 	 	22.3	 	 	 	—	 	 	 	29.2	 
	 	
    
    Future income taxes

    	 	 	85.2	 	 	 	64.3	 	 	 	424.0	(b)	 	 	573.5	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	118.9	 	 	 	108.8	 	 	 	424.0	 	 	 	651.7	 
	
    
    Shareholders’ equity:

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	
    
    Share capital (note 4)

    	 	 	471.1	 	 	 	379.2	 	 	 	70.1	(a)	 	 	3,372.4	 
	 	 	 	 	 	 	 	 	 	 	 	(449.3	) (b)	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	2,901.3	(b)	 	 	 	 
	 	
    
    Contributed surplus

    	 	 	16.8	 	 	 	5.6	 	 	 	(5.6	)(b)	 	 	75.8	 
	 	 	 	 	 	 	 	 	 	 	 	59.0	(d)	 	 	 	 
	 	
    
    Cumulative translation adjustment

    	 	 	—	 	 	 	81.2	 	 	 	(81.2	) (b)	 	 	—	 
	 	
    
    Retained earnings (deficit)

    	 	 	(35.0	)	 	 	74.1	 	 	 	(74.1	) (b)	 	 	(35.0	)
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	452.9	 	 	 	540.1	 	 	 	2,420.2	 	 	 	3,413.2	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	$	571.8	 	 	$	648.9	 	 	$	2,844.2	 	 	$	4,064.9	 
	 	 	 	 	 	 	 	 	 	 	 	 	 

See accompanying notes to pro forma consolidated financial
statements.

A-2

 

GLAMIS GOLD LTD.

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Pro Forma	
	 	 	 	 	 	 	 	 	Consolidated	
	 	 	Glamis Gold Ltd.		 	Goldcorp Inc.		 	 	 	Glamis Gold Ltd.	
	 	 	Nine-Month		 	Nine-Month		 	 	 	Nine-Month	
	 	 	Period Ended		 	Period Ended		 	Pro Forma		 	Period Ended	
	 	 	September 30, 2004		 	September 30, 2004		 	Adjustments		 	September 30, 2004	
	 	 	 		 	 		 	 		 	 	
	 	 	 	 	 	 	(Note 3)		 	 
	 	 	(Unaudited)	
	 	 	(Expressed in millions of United States dollars, except per share amounts)	
	
    
    Revenue

    	 	$	61.3	 	 	$	139.1	 	 	$	—	 	 	$	200.4	 
	
    
    Costs and expenses:

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	
    
    Cost of sales

    	 	 	29.8	 	 	 	50.1	 	 	 	—	 	 	 	79.9	 
	 	
    
    Depreciation and depletion

    	 	 	12.9	 	 	 	12.8	 	 	 	55.9	(f)	 	 	81.6	 
	 	
    
    Exploration

    	 	 	2.6	 	 	 	4.0	 	 	 	—	 	 	 	6.6	 
	 	
    
    General and administrative

    	 	 	5.5	 	 	 	8.9	 	 	 	—	 	 	 	14.4	 
	 	
    
    Other operating expenses

    	 	 	0.7	 	 	 	—	 	 	 	—	 	 	 	0.7	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	51.5	 	 	 	75.8	 	 	 	55.9	 	 	 	183.2	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    Earnings from operations

    	 	 	9.8	 	 	 	63.3	 	 	 	(55.9	)	 	 	17.2	 
	
    
    Interest and other income (expense)

    	 	 	8.5	 	 	 	(0.5	)	 	 	—	 	 	 	8.0	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    Earnings before income taxes

    	 	 	18.3	 	 	 	62.8	 	 	 	(55.9	)	 	 	25.2	 
	
    
    Provision for income taxes:

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	
    
    Current

    	 	 	1.2	 	 	 	26.4	 	 	 	—	 	 	 	27.6	 
	 	
    
    Future

    	 	 	2.3	 	 	 	—	 	 	 	(20.7	) (f)	 	 	(18.4	)
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	3.5	 	 	 	26.4	 	 	 	(20.7	)	 	 	9.2	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    Net earnings

    	 	$	14.8	 	 	$	36.4	 	 	$	(35.2	)	 	$	16.0	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    Basic earnings per share (note 5)

    	 	$	0.11	 	 	$	0.19	 	 	 	—	 	 	$	0.05	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    Weighted average common shares outstanding (millions of shares)

    	 	 	130.5	 	 	 	189.6	 	 	 	—	 	 	 	310.9	 
	 	 	 	 	 	 	 	 	 	 	 	 	 

See accompanying notes to pro forma consolidated financial
statements.

A-3

 

GLAMIS GOLD LTD.

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Pro Forma	
	 	 	Glamis Gold Ltd.		 	 	 	 	 	Consolidated	
	 	 	Year Ended		 	Goldcorp Inc.		 	 	 	Glamis Gold Ltd.	
	 	 	December 31,		 	Year Ended		 	 	 	Year Ended	
	 	 	2003		 	December 31,		 	Pro Forma		 	December 31,	
	 	 	(restated)		 	2003		 	Adjustments		 	2003	
	 	 	 		 	 		 	 		 	 	
	 	 	(Note 2)		 	 	 	(Note 3)		 	 
	 	 	(Unaudited)	
	 	 	(Expressed in millions of United States dollars,	
	 	 	except per share amounts)	
	
    
    Revenue

    	 	$	84.0	 	 	$	262.6	 	 	$	—	 	 	$	346.6	 
	
    
    Costs and expenses:

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	
    
    Cost of sales

    	 	 	41.6	 	 	 	88.5	 	 	 	(0.5	)(g)	 	 	129.6	 
	 	
    
    Depreciation and depletion

    	 	 	17.7	 	 	 	24.1	 	 	 	120.7	(f)	 	 	162.5	 
	 	
    
    Exploration

    	 	 	5.6	 	 	 	3.0	 	 	 	—	 	 	 	8.6	 
	 	
    
    General and administrative

    	 	 	5.9	 	 	 	12.2	 	 	 	(1.8	)(g)	 	 	16.3	 
	 	
    
    Other operating expenses

    	 	 	0.4	 	 	 	—	 	 	 	—	 	 	 	0.4	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	71.2	 	 	 	127.8	 	 	 	118.4	 	 	 	317.4	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    Earnings from operations

    	 	 	12.8	 	 	 	134.8	 	 	 	(118.4	)	 	 	29.2	 
	
    
    Interest and other income

    	 	 	4.4	 	 	 	18.0	 	 	 	—	 	 	 	22.4	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    Earnings before income taxes

    	 	 	17.2	 	 	 	152.8	 	 	 	(118.4	)	 	 	51.6	 
	
    
    Provision for income taxes:

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	
    
    Current

    	 	 	0.2	 	 	 	54.0	 	 	 	—	 	 	 	54.2	 
	 	
    
    Future

    	 	 	(1.2	)	 	 	—	 	 	 	(44.6	) (f)	 	 	(45.8	)
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	(1.0	)	 	 	54.0	 	 	 	(44.6	)	 	 	8.4	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    Net earnings

    	 	$	18.2	 	 	$	98.8	 	 	$	(73.8	)	 	$	43.2	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    Basic earnings per share (note 5)

    	 	$	0.14	 	 	$	0.54	 	 	 	—	 	 	$	0.14	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	
    
    Weighted average common shares outstanding (millions of shares)

    	 	 	128.1	 	 	 	183.6	 	 	 	—	 	 	 	308.5	 
	 	 	 	 	 	 	 	 	 	 	 	 	 

See accompanying notes to pro forma consolidated financial
statements.

A-4

 

GLAMIS GOLD LTD.

NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Expressed in millions of United States dollars, except per
share amounts)

Nine-month period ended September 30, 2004

1.     Description of Offer to
Purchase Goldcorp Inc.:

     
On December 16, 2004, Glamis Gold Ltd. (“Glamis”
or the “Company”) announced a proposed business
combination with Goldcorp Inc. (“Goldcorp”), whereby
Glamis offered to acquire all of the issued and outstanding
common shares of Goldcorp in exchange for common shares of
Glamis, at an exchange ratio of 0.89 of a Glamis common share
for each common share of Goldcorp. Glamis filed an offering
circular dated January 7, 2005 in connection with the offer
announced December 16, 2004. On February 7, 2005,
Glamis announced an amendment to their offer for Goldcorp,
whereby Glamis offers 0.92 of a Glamis common share for each
common share of Goldcorp. The accompanying pro forma
consolidated financial statements have been compiled for
purposes of inclusion in a Notice of Variation and Extension
dated February 7, 2005, issued by the Board of Directors of
Glamis in connection with this proposed business combination,
including the proposed offering of Glamis common shares
thereunder.

     
Assuming all in-the-money options to purchase Goldcorp shares at
December 22, 2004 are exercised and assuming all Goldcorp
shares are exchanged in this offer, Glamis will issue
approximately 180.4 million Glamis common shares in
exchange for approximately 196.1 million Goldcorp common
shares issued and outstanding. Immediately following the
exchange, approximately 42% of Glamis’ outstanding common
shares would be held by current Glamis shareholders and
approximately 58% of the shares would be held by current
Goldcorp shareholders. For the purposes of purchase accounting,
Glamis is considered to be the acquirer because Glamis initiated
the take-over bid, the relative share ownership of the two
groups of shareholders is similar, there will be no significant
non-controlling interests in the combined entity by former
Goldcorp shareholders, it is expected that Glamis’ board of
directors and management will retain their positions in the
combined entity and Glamis’ corporate office will continue
to be the headquarters of the combined entity. As a result, the
pro forma financial statements reflect Goldcorp’s assets
and liabilities at their estimated fair values as of the date of
the announcement of the proposed acquisition.

     
The value assigned in these pro forma financial statements to
the Glamis common shares to be issued is based upon a Glamis
common share price of $16.08, representing the average closing
common share price of Glamis on the New York and Toronto stock
exchanges for the five trading days before February 7,
2005, being the date of the public announcement of Glamis’
increased bid for Goldcorp.

     
As a consequence of the nature of this transaction, there may
be, and likely will be, actions and other events or changes
initiated by Goldcorp that will significantly change the
purchase price allocations. For example, the fair value of
mineral property, plant and equipment in these pro forma
financial statements has been estimated using a preliminary
analysis of the discounted future cash flows based on proven and
probable mineral reserves at December 31, 2003, adjusted
for production to September 30, 2004, plus an estimate of
the fair value of other mineral resources. In addition, the fair
value of gold bullion in these pro forma financial statements is
based on ounces held at September 30, 2004 and the fair
value of marketable securities in these pro forma financial
statements is based on shares held at September 30, 2004.
The excess of the purchase price over the fair value of the net
assets is shown as goodwill. Changes to reserves, resources,
gold bullion held and marketable securities held, in addition to
changes to other assets and liabilities, will result in changes
to the fair values of the assets and liabilities and
accordingly, will impact the amount of goodwill. In addition,
the purchase price in these pro forma financial statements has
been determined based on recent share prices of the Company. For
purposes of Glamis’ actual accounting for this transaction,
these prices will be updated to the time sufficient shares have
been tendered to make Glamis’ offer binding and the
proposed transaction is approved. The Company has also prepared
these pro forma financial statements and the allocation of the
purchase price set out herein solely based upon publicly
available information on Goldcorp. Additional information may
exist that is not publicly available that could have an impact
on these pro forma financial statements and such purchase price
allocation. The final calculation and related allocation of the
purchase price, and the fair values of Goldcorp’s assets
and liabilities, is subject to completion of definitive
appraisals which would be carried out following completion of
the acquisition. It is likely that the fair values of assets and
liabilities will vary from those shown and the differences may
be material.

A-5

 

GLAMIS GOLD LTD.

NOTES TO PRO FORMA CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)

     
Completion of the proposed transaction requires approval by
shareholders of Glamis of the removal of a restriction on the
number of common shares that Glamis may issue and approval of
certain regulatory authorities. In addition, a condition of the
offer is that Goldcorp shareholders do not approve the issuance
of common shares of Goldcorp pursuant to a proposed share
exchange take-over bid made by Goldcorp for the common shares of
Wheaton River Minerals Ltd. (“Wheaton River”).

		
	2.	
    Basis of Presentation:

     
These pro forma consolidated financial statements have been
prepared by management of Glamis, in accordance with Canadian
generally accepted accounting principles (“GAAP”) to
give effect to the proposed business combination between Glamis
and Goldcorp. For accounting purposes, the proposed transaction
has been accounted for as an acquisition of Goldcorp by Glamis.
The pro forma consolidated financial statements have been
prepared using the purchase method whereby the net assets of
Goldcorp have been recorded at their fair values. Refer to
note 6 for a discussion of significant differences between
Canadian GAAP and U.S. GAAP, as it pertains to these pro forma
consolidated financial statements.

     
These pro forma consolidated financial statements include:

		
	 	     
    (a) a pro forma consolidated balance sheet prepared from
    the unaudited consolidated balance sheet of each of Glamis and
    Goldcorp as at September 30, 2004, which gives pro forma
    effect to the acquisition of Goldcorp and the assumptions
    described in note 3, as if these transactions occurred on
    September 30, 2004;
	 
	 	     
    (b) a pro forma consolidated statement of operations for
    the nine-month period ended September 30, 2004, prepared
    from the unaudited interim consolidated statement of operations
    of each of Glamis and Goldcorp for the nine-month period ended
    September 30, 2004, which gives pro forma effect to the
    acquisition of Goldcorp and the assumptions described in
    note 3, as if these transactions occurred on
    January 1, 2003; and
	 
	 	     
    (c) a pro forma consolidated statement of operations for
    the year ended December 31, 2003, prepared from the
    consolidated statement of operations of each of Glamis and
    Goldcorp for the year ended December 31, 2003, which gives
    pro forma effect to the acquisition of Goldcorp and the
    assumptions described in note 3, as if these transactions
    occurred on January 1, 2003.

     
The Glamis and Goldcorp financial statements referred to above
have been prepared in accordance with Canadian GAAP. The
statement of operations of Glamis for the year ended
December 31, 2003 has been restated to reflect the effect
of the retroactive change in the method of accounting for asset
retirement obligations which Glamis adopted effective
January 1, 2004. Goldcorp’s information has been
compiled from publicly available information.

     
It is management’s opinion that these pro forma financial
statements include all adjustments necessary for the fair
presentation, in all material respects, of the proposed
transaction described above in accordance with Canadian GAAP
applied on a basis consistent with Glamis’ accounting
policies. No adjustments have been made to reflect potential
cost savings that may occur subsequent to completion of the
transaction. The pro forma statements of operations do not
reflect non-recurring charges or credits directly attributable
to the transaction, of which none are currently anticipated.

     
These pro forma consolidated financial statements are not
intended to reflect the results of operations or the financial
position of Glamis which would have actually resulted had the
proposed transaction been effected on the dates indicated.
Further, the pro forma financial information is not necessarily
indicative of the future operating results of Glamis as a result
of the transaction.

     
The pro forma consolidated financial statements should be read
in conjunction with the consolidated financial statements of
each of Glamis and Goldcorp for each of the nine-month periods
ended September 30, 2004 and the year ended
December 31, 2003.

A-6

 

GLAMIS GOLD LTD.

NOTES TO PRO FORMA CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)

3.     Pro Forma Assumptions:

     
The pro forma consolidated balance sheet gives effect to the
following transactions as if they had occurred on
September 30, 2004:

		
	 	     
    (a) the issuance of 6,163,339 common shares of Goldcorp on
    exercise of in-the-money options to purchase shares of Goldcorp
    for proceeds of $70.1 million;
	 
	 	     
    (b) the issuance of 180,434,694 common shares of Glamis to
    the shareholders of Goldcorp at a price of $16.08 per
    common share, in exchange for their common shares of Goldcorp;
	 
	 	     
    (c) the payment of $25.0 million for estimated
    transaction costs and the $35.0 million termination fee to
    be paid by Goldcorp to Wheaton River under the terms of
    Goldcorp’s take-over bid for Wheaton River;
	 
	 	     
    (d) an accrual for the $59.0 million value of Glamis
    common shares expected to be issued to Goldcorp warrant holders
    on exercise of their Goldcorp share purchase warrants, at the
    same exchange ratio as offered to Goldcorp shareholders, in
    excess of the cash proceeds to be received by Goldcorp on
    exercise of those warrants; and
	 
	 	     
    (e) the reclassification of marketable securities from
    current assets to other assets, to be consistent with the
    presentation adopted by Glamis for its available-for-sale
    securities.
	 
	 	     
    A summary of the proposed allocation of the consideration given
    to the net assets of Goldcorp, including the additional future
    income taxes resulting from differences between the fair value
    and tax value of assets and liabilities, is as follows:

	 	 	 	 	 	 
	
    
    Fair value of net assets to be acquired:

    	 	 	 	 
	 
	 	
    
    Cash and cash equivalents

    	 	$	385.7	 
	 	
    
    Gold bullion

    	 	 	70.1	 
	 	
    
    Marketable securities

    	 	 	34.3	 
	 	
    
    Other current assets

    	 	 	35.1	 
	 	
    
    Mineral property, plant and equipment (including value assigned
    to mineral reserves and mineral resources)

    	 	 	1,386.7	 
	 	
    
    Other non-current assets (excluding marketable securities)

    	 	 	7.6	 
	 	
    
    Goodwill

    	 	 	1,633.6	 
	 	 	 	 
	 	 	 	 	3,553.1	 
	 	
    
    Accounts payable and accrued liabilities

    	 	 	(22.2	)
	 	
    
    Reserve for site closure and reclamation

    	 	 	(22.3	)
	 	
    
    Future income taxes

    	 	 	(488.3	)
	 	 	 	 
	 	 	 	$	3,020.3	 
	 	 	 	 
	
    
    Consideration given:

    	 	 	 	 
	 	
    
    Issuance of 180,434,694 common shares of Glamis

    	 	$	2,901.3	 
	 	
    
    Excess of Glamis common shares to be issued over exercise price
    of Goldcorp warrants

    	 	 	59.0	 
	 	
    
    Estimated transaction costs

    	 	 	60.0	 
	 	 	 	 
	 	 	 	$	3,020.3	 
	 	 	 	 

A-7

 

GLAMIS GOLD LTD.

NOTES TO PRO FORMA CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)

		
	 	     
    The pro forma consolidated statements of operations for the
    nine-month period ended September 30, 2004 and for the year
    ended December 31, 2003, give pro forma effect to the
    following assumptions as if the transactions described in
    (a) through (e) above had occurred on January 1,
    2003:
	 
	 	     
    (f) the increase in depreciation and depletion expense to
    reflect amortization of the excess of the fair value of proven
    and probable mineral reserves allocated to mineral property,
    plant and equipment over Goldcorp’s book value of the
    related mineral property, plant and equipment based on actual
    production for the period, offset by the related future income
    tax recovery; and
	 
	 	     
    (g) an adjustment to eliminate Goldcorp’s stock-based
    compensation expense for the year ended December 31, 2003,
    to be consistent with the accounting policy of Glamis for
    stock-based compensation for the year ended December 31,
    2003.

		
	4.	
    Share Capital:

     
(a) Common shares:

		
	 	     
    After giving effect to the pro forma assumptions in note 3,
    the issued and fully paid share capital of Glamis would be as
    follows:

	 	 	 	 	 	 	 	 	 
	 	 	Number of		 	 
	 	 	Shares		 	Amount	
	 	 	 		 	 	
	
    
    Balance, September 30, 2004

    	 	 	130,694,678	 	 	$	471.1	 
	
    
    Acquisition of Goldcorp by way of the issuance of common shares
    (note 3(b))

    	 	 	180,434,694	 	 	 	2,901.3	 
	 	 	 	 	 	 	 
	
    
    Pro forma balance, September 30, 2004

    	 	 	311,129,372	 	 	$	3,372.4	 
	 	 	 	 	 	 	 

 

			
	 	(b) 	
    Share purchase options and warrants:

		
	 	     
    Reference should be made to the notes to the consolidated
    financial statements referred to above for each of Glamis and
    Goldcorp for commitments to issue common shares pursuant to
    share purchase options and warrants. The proposed transaction
    provides that on completion, all outstanding share purchases
    options and warrants of Goldcorp will continue under their
    current terms and conditions, although on exercise, the option
    and warrant holders will receive common shares of Glamis at the
    same exchange ratio as offered to Goldcorp shareholders.

		
	5.	
    Earnings Per Share:

     
The calculation of pro forma basic earnings per share in the pro
forma consolidated statements of operations for the nine-month
period ended September 30, 2004 and for the year ended
December 31, 2003, is based on the weighted average number
of common shares of Glamis actually outstanding for the
nine-month period ended September 30, 2004 and for the year
ended December 31, 2003, plus the 180,434,694 shares
of Glamis to be issued to acquire the outstanding shares of
Goldcorp, as if the transactions described in note 3
occurred on January 1, 2003.

6.                Differences
Between Canadian and U.S. Generally Accepted Accounting
Principles:

     
If these pro forma consolidated financial statements had been
compiled using U.S. GAAP, the only significant differences
from Canadian GAAP relate to the application of the changes in
the method of accounting for asset retirement obligations and
income taxes.

     
Under U.S. GAAP, the cumulative effect of the change in the
method of accounting for asset retirement obligations is
recorded in the period of the change (2003), as opposed to
retroactive application with restatement as required under
Canadian GAAP. As a result, pro forma earnings and earnings per
share for the year ended December 31, 2003 would

A-8

 

GLAMIS GOLD LTD.

NOTES TO PRO FORMA CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)

increase by a total of $1.8 million and $0.01 per share, to
$45.0 million or $0.15 per share, if the pro forma
consolidated financial statements were prepared in accordance
with U.S. GAAP. This difference would have no impact on the
pro forma balance sheet as at September 30, 2004 or the pro
forma statement of operations for the nine months ended
September 30, 2004.

     
In addition, a difference in the method of adopting the asset
and liability method of accounting for income taxes in Glamis
between Canadian GAAP and U.S. GAAP results in mineral
property, plant and equipment being increased by
$2.1 million from that reported for Canadian GAAP purposes
in the pro forma consolidated balance sheet as at
September 30, 2004, with an offsetting decrease to deficit.
The impact of this difference on the pro forma consolidated
statements of operations for the nine months ended
September 30, 2004 and the year ended December 31,
2003 if presented in accordance with U.S. GAAP, would be to
reduce net earnings by $0.4 million and $0.5 million
respectively, and earnings per share by $0.00 and $0.00
respectively.

A-9

 

The Depositary for the Offer is:

COMPUTERSHARE INVESTOR SERVICES INC.

Toronto

	 	 	 
	
    By Mail

    P.O. Box 7021

    31 Adelaide Street East

    Toronto, Ontario

    M5C 3H2

    Attn: Corporate Actions	 	
    By Hand or by Courier

    100 University Avenue

    9th Floor

    Toronto, Ontario

    M5J 2Y1

Toll Free: 1-800-564-6253

E-Mail:

service@computershare.com

Vancouver

By Hand, by Registered Mail or by Courier

510 Burrard Street, 2nd Floor

Vancouver, British Columbia

V6C 3B9

The Information Agent for the Offer is:

GEORGESON SHAREHOLDER COMMUNICATIONS CANADA, INC.

66 Wellington Street West

TD Tower, Suite 5210

Toronto Dominion Centre

Toronto, Ontario

M5K 1J3

North American Toll Free Number: 1-877-288-7946

U.S. Bank and Brokers Call Collect: 212-440-9800

Any questions and requests for assistance may be directed by
Shareholders to the Depositary or the Information Agent at their
respective telephone numbers and locations set out above.
Shareholders may also contact their broker, dealer, commercial
bank, trust company or other nominee for assistance concerning
the Offer.<PAGE>

                                                                    EXHIBIT 10.5

                AMENDED AND RESTATED WESTERN DIGITAL CORPORATION

                   NON-EMPLOYEE DIRECTORS STOCK-FOR-FEES PLAN

            This plan (1) was implemented in 1992, (2) was amended and restated
effective as of January 9, 1997 to require directors to take half their annual
retainer fee in stock, permit deferrals of cash or stock under the plan, and
make certain other changes to conform the plan to the new version of Rule 16b-3
and ease administration, (3) was amended and restated effective as of January
27, 2000, to require directors to take $20,000 of their annual retainer fee in
stock, increase the premium to 25% for deferral of annual retainers or meeting
fees received in the form of common stock and provide a premium of 15% for
deferral of annual retainers or meeting fees received in the form of cash, (4)
was amended and restated effective as of November 14, 2002, to extend the term
of the plan to December 31, 2012, and (5) was amended and restated effective as
of November 18, 2004, to eliminate (i) the requirement that directors receive
half of their annual retainer fee in stock, and (ii) the requirement that the
Company pay non-employee directors a 15% premium on cash annual retainer fees or
cash meeting fees that the director elects to defer under the Company's Deferred
Compensation Plan.

      1.    PURPOSE.

            The purposes of this Western Digital Corporation Non-Employee
Director Stock-For-Fees Plan (the "PLAN") are to advance the interests of
Western Digital Corporation (the "COMPANY") and its stockholders by increasing
ownership by the Company's non-employee directors of the Company's Common Stock,
thereby aligning their interests more closely with the interests of the
Company's other stockholders, and to make available to the Company the cash that
would otherwise have been paid to non-employee directors receiving Common Stock
in lieu of fees hereunder.

      2.    ADMINISTRATION.

            The Plan shall be administered by the Company, which shall have the
power to construe the Plan, to resolve all questions arising under the Plan, to
adopt and amend such rules and regulations for the administration of the Plan as
it may deem desirable, and otherwise to carry out the terms of the Plan, but
only to the extent not contrary to the express provisions of the Plan. The
determinations, interpretations, and other actions of the Company of or under
the Plan or with respect to any Common Stock granted pursuant to the Plan shall
be final and binding for all purposes and on all persons. Neither the Company
nor any officer or employee thereof shall be liable for any action or
determination taken or made under the Plan in good faith. Notwithstanding the
foregoing, the Company shall have no authority or discretion as to the persons
who will receive Common Stock granted pursuant to the Plan, the number of shares
of Common Stock to be issued under the Plan, the time at which such grants are
made, the number of shares of Common Stock to be granted at any particular time,
or any other matters that are specifically governed by the provisions of the
Plan.

<PAGE>

      3.    PARTICIPATION IN THE PLAN.

            Directors of the Company who are not employees of the Company or any
subsidiary of the Company ("ELIGIBLE DIRECTORS") shall be eligible to
participate in the Plan. Each Eligible Director shall, if required by the
Company, enter into an agreement with the Company in such form as the Company
shall determine consistent with the provisions of the Plan for purposes of
implementing the Plan or effecting its purposes. In the event of any
inconsistency between the provisions of the Plan and any such agreement, the
provisions of the Plan shall govern.

      4.    STOCK SUBJECT TO THE PLAN.

            (a) Number of Shares. The shares that may be issued under the Plan
shall be authorized and unissued shares or treasury shares of the Company's
Common Stock (the "COMMON STOCK"). The maximum aggregate number of shares that
may be issued under the Plan shall be four hundred thousand (400,000), subject
to adjustment upon changes in capitalization of the Company as provided in
Section 4(b). The maximum aggregate number of shares issuable under the Plan may
be increased from time to time by approval of the Company's Board of Directors,
and by the stockholders of the Company if stockholder approval is required
pursuant to the applicable rules of any stock exchange, or, in the opinion of
the Company's counsel, any other law or regulation binding upon the Company.

            (b) Adjustments. If the Company shall at any time increase or
decrease the number of its issued and outstanding shares of Common Stock
(whether by reason of reorganization, merger, consolidation, recapitalization,
stock dividend, stock split, combination of shares, exchange of shares, change
in corporate structure, or otherwise), then the number of shares of Common Stock
still available for issue hereunder shall be increased or decreased
appropriately and proportionately.

      5.    STOCK ELECTIONS.

            Each Eligible Director may make an "ELECTION" to receive Common
Stock in lieu of any or all of (i) the annual retainer fee otherwise payable to
him or her in cash for that calendar year, and/or (ii) the meeting attendance
fees otherwise payable to him or her in cash for that calendar year. Such
Election for any calendar year must be in writing and must be delivered to the
Secretary of the Company not later than the end of the immediately preceding
calendar year. In addition, newly elected or appointed Eligible Directors shall
make an interim Election as of the date they join the board, which interim
Election shall govern until the immediately ensuing calendar year. Separate
Elections must be made for each calendar year; if an Eligible Director does not
make a written Election for any particular calendar year, then such Eligible
Director shall be deemed to have elected to receive all meeting fees and his or
her retainer fee for that calendar year in cash.

                                       2
<PAGE>

      6.    ISSUANCE OF COMMON STOCK.

            (a) Timing and Amounts of Issuances.

                  (i) Common Stock issuable to an Eligible Director in lieu of
annual retainer or meeting fees shall be issued not later than ten days after
the date such annual retainer or meeting fees, as the case may be, would have
been paid if paid in cash.

                  (ii) The number of shares of Common Stock issuable in lieu of
cash annual retainer fees (whether or not deferred) shall be determined by
dividing the amount of cash fees being replaced by Common Stock by the Fair
Market Value (as defined below) of the Common Stock on the first trading day of
the calendar year for which the annual retainer is being paid (or January 27 in
the case of 2000) or, in the case of an annual retainer being paid to a newly
appointed or elected Eligible Director for a partial year, on the date such
Eligible Director joins the board.

                  (iii) The number of shares of Common Stock issuable in lieu of
cash meeting fees (whether or not deferred) shall be determined by dividing the
amount of cash fees being replaced by Common Stock by the Fair Market Value of
the Common Stock on the date of the meeting for which the fee is paid.

            (b) Fractional of Shares. No fractional shares shall be issued under
the Plan. The portion of annual retainer or meeting fees that would be paid in
Common Stock but for the proscription on fractional shares shall be paid in cash
along with any portion of the fee (or the next subsequent fee) that the Eligible
Director has elected to receive in cash. For directors electing no cash for a
particular calendar year, fractional share equivalent cash balances shall be
held by the Company until the end of that calendar year and then distributed in
cash to the Eligible Director without interest.

            (c) Fair Market Value. For the purposes of the Plan, the "FAIR
MARKET VALUE" of the Common Stock as of any issuance or deferral date shall be
the closing price of the Common Stock on the New York Stock Exchange (or another
national stock exchange or the NASDAQ National Market System, if the Common
Stock trades thereon but not on the NYSE) as of such date (or, if no such shares
were traded on such date, as of the next preceding day on which there was such a
trade, provided that the closing price on such preceding date is not less than
100% of the fair market value of the Common Stock, as determined in good faith
by the Company, on the date of issuance). If at any time the Common Stock is no
longer traded on a national stock exchange or the NASDAQ National Market System,
the Fair Market Value of the Common Stock as of any issuance date shall be as
determined by the Company in good faith in the exercise of its reasonable
discretion.

            (d) Issuance of Certificates. As promptly as practicable following
each issuance of Common Stock hereunder, the Company shall issue to the
recipient Eligible Director a stock certificate or certificates registered in
his or her name representing the number of shares of Common Stock issued.

                                       3
<PAGE>

      7.    DEFERRAL.

            (a) Election to Defer. An Eligible Director may elect to defer the
receipt of any cash or stock annual retainer or meeting fees payable during the
period to which an Election applies. Any such deferral election by an Eligible
Director shall specify whether the fees to be deferred are fees that the
Eligible Director is required or has elected to receive in Common Stock, and
shall be made and take effect at the times specified in the Company's Deferred
Compensation Plan (the "DEFERRED COMPENSATION PLAN"). The deferral shall not
change the form (cash versus Common Stock) in which the fee is to be paid at the
end of the deferral period, notwithstanding the fact that during the deferral
period fees ultimately payable in Common Stock may be general unsecured
obligations of the Company to the Eligible Director.

            (b) Common Stock Premium. The Company shall pay a 25% premium to
each Eligible Director who elects to defer annual retainer or meeting fees to be
received in Common Stock. The number of shares of Common Stock deferred and the
premium thereon shall be calculated by multiplying the amount of cash fees being
replaced by Common Stock and deferred by 1.25, and then dividing that product by
the Fair Market Value of the Common Stock on the date set forth in Section
6(a)(ii) or Section 6(a)(iii) for annual retainer or meeting fees, respectively.
Any premium Common Stock shall be subject to the same deferral election, and
deliverable to the Eligible Director on the same terms, as the Common Stock upon
which the premium is paid.

            (c) Plan Shares. All shares issued or issuable under the Plan,
including deferred shares and shares issuable as premiums on deferrals, shall be
deducted from the shares available under the Plan at the time first issued or
deferred, provided that shares deferred and not ultimately issued and delivered
to the Eligible Director shall be returned to the pool of available shares under
the Plan.

            (d) Deferred Compensation Plan. Deferral of Eligible Directors'
fees, whether payable in cash or Common Stock and including any premiums, shall
be administered pursuant to the Deferred Compensation Plan.

      8.    SECURITIES LAWS.

            (a) Investment Representations. The Company may require any Eligible
Director to whom an issuance of securities is made or a deferred delivery
obligation is undertaken as a condition of receiving securities pursuant to such
issuance or obligation to give written assurances in substance and form
satisfactory to the Company and its counsel to the effect the such person is
acquiring the securities for his or her own account for investment and not with
any present intention of selling or otherwise distributing the same in violation
of applicable securities laws, and to such other effects as the Company deems
necessary or appropriate to comply with federal and applicable state securities
laws.

            (b) Listing, Registration, and Qualification. Anything to the
contrary herein notwithstanding, each issuance of securities shall be subject to
the requirement that, if at any time the Company or its counsel shall determine
that the listing, registration, or qualification of the securities subject to
such issuance upon any securities exchange or under any state or federal

                                       4
<PAGE>

law, or the consent or approval of any governmental or regulatory body, is
necessary or advisable as a condition of, or in connection with, such issuance
of securities, such issuance shall not occur in whole or in part unless such
listing, registration, qualification, consent, or approval shall have been
effected or obtained on conditions acceptable to the Company. Nothing herein
shall be deemed to require the Company to apply for or to obtain such listing,
registration, or qualification.

            (c) Restrictions on Transfer. The securities issued under the Plan
shall be restricted by the Company as to transfer unless the grants are made
under a registration statement that is effective under the Securities Act of
1933, as amended, or unless the Company receives an opinion of counsel
satisfactory to the Company to the effect that registration under state or
federal securities laws is not required with respect to such transfer.

      9.    WITHHOLDING TAXES.

            Whenever shares of Common Stock are to be issued under the Plan, the
Company shall have the right prior to the delivery of any certificate or
certificates for such shares to require the recipient to remit to the Company an
amount sufficient to satisfy federal, state and local withholding tax
requirements attributable to the issuance. In the absence of payment by an
Eligible Director to the Company of an amount sufficient to satisfy such
withholding taxes, or an alternative arrangement with the Eligible Director that
is satisfactory to the Company, the Company may make such provisions as it deems
appropriate for the withholding of any such taxes which the Company determines
it is required to withhold.

      10.   AMENDMENT OF THE PLAN.

            The Board of Directors of the Company may suspend or terminate the
Plan or any portion thereof at any time, and may amend the Plan from
time-to-time in any respect the Board of Directors may deem to be in the best
interests of the Company; provided, however, that no such amendment shall be
effective without approval of the stockholders of the Company if stockholder
approval of the amendment is then required pursuant to the applicable rules of
any securities exchange, or, in the opinion of the Company's counsel, any other
law or regulation binding on the Company.

      11.   EFFECTIVE DATE AND DURATION OF THE PLAN.

            The Plan shall, subject to approval by the Company's stockholders at
the Company's 1992 Annual Meeting, be effective January 1, 1993. The Plan shall
terminate at 11:59 p.m. on December 31, 2012, unless sooner terminated by action
of the Board of Directors. Elections may be made under the Plan prior to its
effectiveness, but no issuances under the Plan shall be made before its
effectiveness or after its termination.

      12.   GOVERNING LAWS.

            The Plan and all rights and obligations under the Plan shall be
construed in accordance with and governed by the laws of the State of
California, excluding its conflicts of laws principles.

                                       5

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