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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 Under
the Securities Exchange Act of 1934
For the month of April, 2007
Cameco Corporation
(Commission file No. 1-14228)
2121 – 11th Street West
Saskatoon, Saskatchewan, Canada S7M 1J3
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
     
Form 20-F o
  Form 40-F þ
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
     
Yes o
  No þ
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):
 
 

 

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Exhibit Index
         
Exhibit No.   Description   Page No.
 
        
1.
   Supplemental Disclosure to Management Proxy Circular   3 - 5
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
         
Date: April 10, 2007  Cameco Corporation
 		  
  By:   "Gary M.S. Chad"    
    Gary M.S. Chad, Q.C.   
    Senior Vice-President, Governance, Legal and Regulatory Affairs, and Corporate Secretary   
 

 

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CAMECO CORPORATION
SUPPLEMENTAL DISCLOSURE TO THE MANAGEMENT PROXY CIRCULAR
APRIL 10, 2007
At the time of printing Cameco’s 2007 management proxy circular, the awards of performance share units (PSUs) and stock options to the Named Executive Officers in respect of performance in 2006 had not yet been granted due to a trading blackout period imposed by the corporation. As the trading blackout period was subsequently lifted, the PSU and option awards were granted to the Named Executive Officers on March 30, 2007. Information about such awards is included in the tables below.
     2007 Executive Stock Option and PSU Grants
The following table provides details on the option grants and PSU grants on March 30, 2007 to the Named Executive Officers to recognize performance in 2006. This information is in addition to that required to be disclosed under applicable securities law requirements.
                                                         
Name   Securities Under Options Granted
(#)		     Value of Options on Date of Grant1
($)		     Exercise Price
($/security)2		     Expiration
Date		     PSUs
Granted3
(#)		     Value of PSUs Granted3,4
($)		     Performance Period Maturation5  
Gerald W. Grandey
     40,000       856,400       46.88     March 30, 2015     15,000       703,200     December 31, 2009
O. Kim Goheen
     25,000       535,250       46.88     March 30, 2015     8,000       375,040     December 31, 2009
Terry V. Rogers
     13,500       289,035       46.88     March 30, 2015     0       —       —  
George B. Assie
     30,000       642,300       46.88     March 30, 2015     8,000       375,040     December 31, 2009
Gary M.S. Chad
     20,000       428,200       46.88     March 30, 2015     6,000       281,280     December 31, 2009
 
Notes: 
 
1.   The stock option awards made on March 30, 2007 are valued using the Black-Scholes option-pricing model to determine a value of approximately $21.41 per option. Key assumptions used in this model were: a dividend yield of 0.34%, 35% volatility, a risk-free rate of 4.0%, and an eight-year life. This approach may not be identical to that used by other companies and is sensitive to the assumptions used. Therefore, the figures may not be directly comparable across companies.
 
2.   The stock option exercise price of $46.88 was determined based upon the closing price of Cameco shares on the TSX on the day immediately preceding the grant.
 
3.   The amounts shown reflect 100% of the original number of PSUs awarded and have not been adjusted to reflect performance. The actual number of PSUs that will be earned by the Named Executive Officers can vary from 0% to 150% of the original number granted based on Cameco’s performance (and 200% for truly exceptional performance).
 
4.   The amounts shown represent the product of the number of PSUs granted to each Named Executive Officer and $46.88, the closing price of Cameco shares on the TSX on the day immediately preceding the grant.
 
5.   The three-year performance period for the PSUs granted on March 30, 2007 is from January 1, 2007 to December 31, 2009. Payout will occur within 90 days of the end of the performance period, unless the executive’s employment ceases due to retirement, permanent disability, death or termination without cause prior to the end of the performance period, in which case payout will occur earlier and be pro-rated to the executive’s employment period during the three years.
     Total Compensation Disclosure
The following table shows the total compensation, as determined by the Human Resources and Compensation Committee (HRCC) and approved by the Board, for the Named Executive Officers for the last three fiscal years (2006, 2005 and 2004). Cameco defines total compensation as the aggregate of all compensation sources, including base salary, annual incentive, performance-based equity incentives (e.g. option grants and PSUs), pension benefits and perquisites. The data included in this table is intended to reflect compensation for the performance in the year noted, which disclosure is different than that in the Summary Compensation Table disclosed on page 37 of Cameco’s 2007 management proxy circular. The cash bonus and grants of PSUs and options were awarded in respect of performance in the fiscal year indicated and were granted in the subsequent fiscal year.

 

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    Year  
    2006     2005     2004  
    ($)     ($)     ($)  
Gerald W. Grandey
                        
President and Chief Executive Officer
                        
Annualized base salary
     806,000       771,300       741,000  
Cash bonus
     0       600,000       650,000  
Performance Share Units (PSUs)1
     703,200       706,680       2,433,600  
Stock Options2
     856,400       1,615,940       2,558,325  
Other annual compensation3
     23,408       20,844       30,767  
Annual pension service cost4
     241,700       221,600       180,800  
 
                  
TOTAL COMPENSATION
     2,630,708       3,936,364       6,594,492  
 
                  
 
                        
O. Kim Goheen
                        
Senior Vice-President and Chief Financial Officer
                        
Annualized base salary5
     418,000       400,000       145,833  
Cash bonus
     184,000       234,000       186,200  
Performance Share Units (PSUs)1
     375,040       353,340       340,704  
Stock Options2
     535,250       864,340       1,096,425  
Other annual compensation3
     29,942       33,046       28,086  
Annual pension service cost4
     113,200       105,700       31,300  
 
                  
TOTAL COMPENSATION
     1,655,432       1,990,426       1,828,548  
 
                  
 
                        
Terry Rogers
                        
Senior Vice-President and Chief Operating Officer
                        
Annualized base salary
     503,700       482,000       463,500  
Cash bonus
     150,000       253,300       286,000  
Performance Share Units (PSUs)1
     0       392,600       454,272  
Stock Options2
     289,035       939,500       1,315,710  
Other annual compensation3
     37,825       35,542       35,297  
Annual pension service cost4
     162,400       152,900       112,700  
 
                  
TOTAL COMPENSATION
     1,142,960       2,255,842       2,667,479  
 
                  
 
                        
George Assie
                        
Senior Vice-President, Marketing and Business Development
                        
Annualized base salary
     503,700       482,000       463,500  
Cash bonus
     242,000       324,000       310,000  
Performance Share Units (PSUs)1
     375,040       392,600       486,720  
Stock Options2
     642,300       1,014,660       1,534,995  
Other annual compensation3
     32,842       30,933       28,599  
Annual pension service cost4
     108,800       109,700       78,200  
 
                  
TOTAL COMPENSATION
     1,904,682       2,353,893       2,902,014  
 
                  
 
                        
Gary M.S. Chad
                        
Senior Vice-President, Governance, Legal and Regulatory Affairs and Corporate Secretary
                        
Annualized base salary
     391,900       375,000       290,000  
Cash bonus
     157,000       173,700       160,100  
Performance Share Units (PSUs)1
     281,280       298,376       227,136  
Stock Options2
     428,200       751,600       1,096,425  
Other annual compensation 3
     17,339       16,016       18,967  
Annual pension service cost 4
     117,800       118,500       88,800  
 
                  
TOTAL COMPENSATION
     1,393,519       1,733,192       1,881,428  
 
                  
 
Notes: 
 
1.   This item represents the portion of total direct compensation that was granted as PSUs. As PSUs account for a significant portion of the Named Executive Officers’ long-term incentive awards, PSUs are being disclosed for the year in respect of which they were granted, which is the same approach adopted for disclosing option awards. For the award made in March 2007 for fiscal 2006 performance, this represents the following number of PSUs for the Named Executive Officers at a grant price of $46.88: 15,000 PSUs for Mr. Grandey; 8,000 PSUs for Mr. Goheen; 0 PSUs for Mr. Rogers; 8,000 PSUs for Mr. Assie; and 6,000 PSUs for Mr. Chad. For the award made in March 2006 for fiscal 2005 performance, this represents the following number of PSUs for the Named Executive Officers at a grant price of $39.26: 18,000 PSUs for Mr. Grandey; 9,000 PSUs for Mr. Goheen; 10,000 PSUs for Mr. Rogers; 10,000 PSUs for Mr. Assie; and 7,600 PSUs for

 

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    Mr. Chad. For the award made in March 2005 for fiscal 2004 performance, this represents the following number of PSUs for the Named Executive Officers at a grant price of $27.04 (as adjusted for the February 17, 2006 stock split): 90,000 PSUs for Mr. Grandey; 12,600 PSUs for Mr. Goheen; 16,800 PSUs for Mr. Rogers; 18,000 PSUs for Mr. Assie; and 8,400 PSUs for Mr. Chad. The amounts shown reflect 100% of the original number of PSUs awarded and have not been adjusted to reflect performance. The actual number of PSUs that will be earned by the Named Executive Officers can vary from 0% to 150% of the original number granted based on Cameco’s performance (and 200% for truly exceptional performance).
 
2.   This item represents the portion of total direct compensation that was granted as stock option awards. For compensation purposes, the awards made in March 2007 for fiscal 2006 performance, in 2006 for fiscal 2005 performance, and in 2005 for fiscal 2004 performance were valued using the Black-Scholes option-pricing model to determine values of approximately $21.41 per option in 2007, $18.79 per option in 2006 and $12.18 per option in 2005. Key assumptions used in this model in 2007 were: a dividend yield of 0.34%, 35% volatility, a risk-free rate of 4.0% and an eight-year life. Key assumptions used in this model in 2006 were: a dividend yield of 0.39%, 35% volatility, a risk-free rate of 4.2% and an eight-year life. Key assumptions used in 2005 were: a dividend yield of 0.44%, 34.4% volatility, a risk-free rate of 4.2% and an eight-year life. This approach may not be identical to that used by other companies and is sensitive to the assumptions used. Therefore, the figures may not be directly comparable across companies.
 
3.   This represents employer contribution to all perquisites and, for Messrs. Goheen, Rogers and Assie, this also includes employer contribution under the defined contribution pension plan. In addition, for Messrs. Grandey, Goheen and Chad, this amount includes the dollar value of imputed interest benefits computed in accordance with the Income Tax Act (Canada) for loans provided to Named Executive Officers under the Cameco stock option plan to purchase Cameco shares; and, for Mr. Grandey, in addition for 2004, 2005 and a portion of 2006, for a loan; and for Mr. Goheen, for a housing loan in 2004, 2005 and a portion of 2006. As of December 31, 2006, these loans have been repaid.
 
4.   Annual pension service cost is the value of the projected pension earned for the year of service credited for the specific fiscal year.
 
5.   Mr. Goheen’s base salary for 2004 has been pro-rated to reflect five months as chief financial officer commencing August 1, 2004.
     Stock Option Plan
On March 30, 2007, Cameco granted 942,775 options under Cameco’s stock option plan to a total of 640 recipients ranging from senior executives to first line supervisory employees, as compared to 1,470,730 options granted to 522 recipients in March 2006.
A maximum of 43,017,198 Cameco shares, representing 12% of the issued and outstanding Cameco shares as of March 30, 2007, may be issued under Cameco’s Stock Option Plan (Option Plan) and pursuant to any other compensation arrangement. As of the close of business on March 30, 2007, there were 7,194,202 Cameco shares, representing 2.0% of the issued and outstanding Cameco shares, to be issued upon the exercise of outstanding options under the Option Plan, and 12,355,999 Cameco shares, representing 3.5% of the issued and outstanding Cameco shares, remaining available for issuance under the Option Plan.
The following shows the activity in the Option Plan which has taken place since inception:
         
Initial Share Reserve Maximum (August 15, 1995)
     31,460,418  
Share Reserve Increase (June 12, 2006)
     11,556,780  
Share Reserve Maximum
     43,017,198  
Remaining Available for Grant
     12,355,999  
Total Shares Issuable Under Outstanding Options (end of business March 30, 2007)
     7,194,202  
Issued and Outstanding Shares (end of business March 30, 2007)
     353,429,916  
Total Shares Issuable Under Outstanding Options/Total Shares Issued and Outstanding (end of business March 30, 2007)
     2.0 %