<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
ALTAIR INTERNATIONAL, INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
ALTAIR INTERNATIONAL INC.
NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that an annual and special meeting of the shareholders
of Altair International Inc. (the "Corporation") will be held at the Board of
Trade of Metropolitan Toronto, Downtown Club, 3 First Canadian Place,
Toronto, Ontario M5X 1C1, Boardroom A, on Tuesday, the 3rd day of June,
1997, at the hour of 10:00 o'clock in the morning (Toronto time) for the
following purposes:
1. To receive and consider the audited financial statements of the Corporation
for the twelve months ended December 31, 1996, together with the report of
the auditors thereon;
2. To elect directors;
3. To appoint auditors and to authorize the directors to fix their remuneration;
4. To consider and, if thought fit, pass a resolution authorizing an amendment
to the stock option plan of the Corporation (the "Plan") to reserve 2,500,000
common shares for issue on the exercise of options granted pursuant to the
Plan; and
5. To transact such further or other business as may properly come before the
meeting or any adjournment or adjournments thereof.
This notice is accompanied by a form of proxy, a copy of the
management information circular and proxy statement, the annual report of the
Corporation containing the audited consolidated financial statements of the
Corporation for the twelve months ended December 31, 1996, the annual report
of the Corporation on Form 10-K as required by the United States Securities
and Exchange Commission and a supplemental mailing list form.
Shareholders who are unable to attend the meeting in person are
requested to complete, date, sign and return the enclosed form of proxy so
that as large a representation as possible may be had at the meeting.
DATED at Toronto, Ontario as of the 15th day of April, 1997.
BY ORDER OF THE BOARD
(Sgd.) William P. Long
President
<PAGE>
ALTAIR INTERNATIONAL INC.
1725 SHERIDAN AVENUE, SUITE 140
CODY, WYOMING 82414
U.S.A.
MANAGEMENT INFORMATION CIRCULAR
AND PROXY STATEMENT
SOLICITATION OF PROXIES
THIS MANAGEMENT INFORMATION CIRCULAR AND PROXY STATEMENT (THE
"INFORMATION CIRCULAR") IS FURNISHED IN CONNECTION WITH THE SOLICITATION BY
THE MANAGEMENT OF ALTAIR INTERNATIONAL INC. (THE "CORPORATION") OF PROXIES TO
BE USED AT THE ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS OF THE CORPORATION
TO BE HELD AT THE TIME AND PLACE AND FOR THE PURPOSES SET FORTH IN THE
ENCLOSED NOTICE OF MEETING (THE "MEETING"). This Information Circular, the
notice of Meeting attached hereto, the accompanying form of proxy, the annual
report of the Corporation for the year ended December 31, 1996 and the annual
report of the Corporation on Form 10-K as required by the United States
Securities and Exchange Commission (the "SEC") are first being mailed to the
shareholders of the Corporation on or about May 5, 1997. It is expected that
the solicitation will be primarily by mail, but proxies may also be solicited
personally or by telephone by regular employees of the Corporation without
additional compensation therefor. The cost of solicitation by management
will be borne directly by the Corporation. Arrangements will be made with
brokerage firms and other custodians, nominees and fiduciaries for the
forwarding of solicitation materials to the beneficial owners of the common
shares of the Corporation ("Common Shares") held by such persons, and the
Corporation will reimburse such brokerage firms, custodians, nominees and
fiduciaries for the reasonable out-of-pocket expenses incurred by them in
connection therewith.
APPOINTMENT AND REVOCATION OF PROXIES
The persons named in the enclosed form of proxy are officers of the
Corporation. A SHAREHOLDER DESIRING TO APPOINT SOME OTHER PERSON TO REPRESENT
HIM AT THE MEETING MAY DO SO either by inserting such person's name in the
blank space provided in that form of proxy or by completing another proper
form of proxy and, in either case, depositing the completed proxy at the
office of the transfer agent indicated on the enclosed envelope not later
than 48 hours (excluding Saturdays and holidays) before the time of holding
the Meeting, or delivered to the chairman on the day of the Meeting or
adjournment thereof.
A proxy given pursuant to this solicitation may be revoked by
instrument in writing, including another proxy bearing a later date, executed
by the shareholder or by his attorney authorized in writing, and deposited
either at the registered office of the Corporation at any time up to and
including the last business day preceding the day of the Meeting, or any
adjournment thereof, at which the proxy is to be used, or with the chairman
of such Meeting on the day of the Meeting, or adjournment thereof, or in any
other manner permitted by law.
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The exercise of a proxy does not constitute a written objection for
the purposes of subsection 185(6) of the Business Corporations Act (Ontario).
VOTING OF PROXIES
Shares represented by properly executed proxies in favour of
persons designated in the printed portion of the enclosed form of proxy WILL
BE VOTED IN RESPECT OF THE ELECTION OF DIRECTORS AND THE APPOINTMENT OF
AUDITORS AND THE REMUNERATION OF AUDITORS AND VOTED FOR THE APPROVAL OF AN
AMENDMENT TO THE STOCK OPTION PLAN OF THE CORPORATION AS STATED UNDER THOSE
HEADINGS IN THIS INFORMATION CIRCULAR OR WITHHELD FROM VOTING OR VOTED
AGAINST IF SO INDICATED ON THE FORM OF PROXY. The enclosed form of proxy
confers discretionary authority upon the persons named therein with respect
to amendments or variations to matters identified in the notice of meeting,
or other matters which may properly come before the Meeting. At the time of
printing this Information Circular, management of the Corporation knows of no
such amendments, variations or other matters to come before the Meeting.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The authorized capital of the Corporation consists of an unlimited
number of Common Shares. At the date of this Information Circular, the
Corporation has issued and outstanding 15,178,245 Common Shares.
The Corporation shall make a list of all persons who are registered
holders of Common Shares on April 28, 1997 (the "Record Date") and the number
of Common Shares registered in the name of each person on that date. Each
shareholder is entitled to one vote for each Common Share registered in his
name as it appears on the list except to the extent that such shareholder has
transferred any of his shares after the Record Date and the transferee of
those shares produces properly endorsed share certificates or otherwise
establishes that he owns the shares and demands, not later than ten days
before the Meeting, that his name be included in the list. In such case the
transferee is entitled to vote his shares at the Meeting.
Two persons present in person and each entitled to vote at a
meeting of shareholders is required for a quorum. An abstention will be
counted as "represented" for the purpose of determining the presence or
absence of a quorum. A broker non-vote, which is an indication by a broker
that it does not have discretionary authority to vote on a particular matter,
will not be treated as "represented" for quorum purposes. Under the Business
Corporations Act (Ontario), once a quorum is established, shareholder
approval with respect to a particular resolution is generally obtained when
the votes cast in favour of the proposal exceed the votes cast against such
proposal. Accordingly, abstentions and broker non-votes will not have the
effect of being considered as votes cast against any matter considered at the
Meeting.
In connection with the election of directors, the four nominees
receiving the highest number of votes will be elected. In order to approve
the proposal in respect of the appointment of
<PAGE>
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independent auditors, the proposed amendment to the stock option plan of the
Corporation (the "Plan") and any other matters presented to shareholders at
the Meeting, the votes cast in favour must exceed the votes cast against.
EXCHANGE RATE INFORMATION
Except as otherwise indicated, all dollar amounts herein are
expressed in Canadian dollars. The following exchange rates represent the
noon buying rate in New York City for cable transfers in Canadian dollars
(CDN.$), as certified for customs purposes by the Federal Reserve Bank of New
York. The following table sets forth, for each of the years indicated, the
period end exchange rate, the average rate (i.e. the average of the exchange
rates on the last day of each month during the period), and the high and low
exchange rates of the Canadian dollar in exchange for U.S. currency (U.S.$)
for the years indicated below, based on the noon buying rates.
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Year Ended December 31,
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1996 1995 1994 1993 1992 1991
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(Canadian dollar per U.S. dollar)
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High .7513 .7527 .7632 .8046 .8757 .8926
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Low .7235 .7023 .7103 .7439 .7761 .8587
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Average .7329 .7305 .7299 .7729 .8235 .8726
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Year End .7301 .7323 .7128 .7544 .7865 .8652
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Set forth below is information with respect to beneficial ownership
of Common Shares as of April 15, 1997 by persons known to the Corporation to
own more than 5% of the outstanding Common Shares, each of the Corporation's
current executive officers and directors, and by all current officers and
directors of the Corporation as a group. Unless otherwise indicated, each of
the shareholders named in the table has sole voting and investment power with
respect to the Common Shares identified as beneficially owned. The
Corporation is not aware of any arrangements, the operation of which may at a
subsequent date result in a change in control of the Corporation.
<PAGE>
-4-
<TABLE>
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Title of Name and Address of Amount and Nature of Percent
Class Beneficial Owner Beneficial Ownership(1) of Class(2)
- - ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common William P. Long 2,097,529(3) 13.8%
57 Sunset Rim
Cody, Wyoming 82414
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Common Patrick Costin 1,025,833(4) 6.7%
1850 Aquila Avenue
Reno, Nevada 89509
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Common James I. Golla 20,000(5) *
829 Terlin Boulevard
Mississauga, Ontario L5H 1T1
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Common Christopher D. Proud 0 *
7225 Woodbine Avenue, Suite 115A
Markham, Ontario L3K 1A3
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Common George Hartman 25,000(6) *
Suite 1201-750 W. Pender Street
Vancouver, B.C. V6C 2T8
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Common All Directors and Officers as a Group 3,168,362(7) 20.9%
(5 persons)
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* Represents less than 1% of the outstanding Common Shares.
(1) Includes all Common Shares issuable pursuant to the exercise or conversion of options
and warrants that are exercisable within 60 days.
(2) Based on 15,178,245 Common Shares outstanding as of April 15, 1997. Common Shares
underlying options or other convertible securities are deemed to be outstanding for
purposes of calculating the percentage ownership of the owner of such securities, but not
for purposes of calculating any other person's percentage ownership.
(3) Includes 56,000 Common Shares held by Dr. Long's minor daughter, 57,500 Common
Shares held by Dr. Long's minor son, and 162,000 Common Shares held by the MBRT
Trust, an irrevocable trust for the benefit of the minor children of Dr. Long. Dr. Long
disclaims any beneficial interest in such 275,500 Common Shares.
(4) Includes 617,500 Common Shares held in escrow and to be released dependent upon net
income adjusted for non-cash items ("Cash Flow"), as defined in the escrow agreement,
generated by Fine Gold Recovery Systems, Inc. ("Fine Gold"). The basis for share release
is one Common Share for CDN. $0.45 of Cash Flow. Common Shares still in escrow on
April 21, 1999 are subject to cancellation by the Corporation. Mr. Costin is entitled to
exercise all voting rights applicable to the escrowed shares. As of April 15, 1997, none
of such shares had been released from escrow. Also includes 185,000 Common Shares
subject to presently exercisable options granted to Mr. Costin pursuant to the Plan.
(5) Includes 20,000 Common Shares subject to presently exercisable options granted to Mr.
Golla pursuant to the Plan.
(6) Includes 25,000 Common Shares subject to presently exercisable options granted to Mr.
Hartman pursuant to the Plan.
(7) Includes 230,000 Common Shares subject to presently exercisable options granted to
officers and directors pursuant to the Plan.
</TABLE>
EXECUTIVE COMPENSATION
(a) COMPENSATION OF OFFICERS
The following table, presented in accordance with Form 40 of the
Regulation made under the Securities Act (Ontario) and Regulation 14A
promulgated under the United States Securities and Exchange Act of 1934 (the
"Exchange Act"), sets forth all annual and long-term compensation for
services rendered in all capacities to the Corporation for the fiscal years
ended December 31, 1996, December 31, 1995 and December 31, 1994 in respect
of William P. Long who was, at December 31, 1996, the President of the
Corporation and Patrick Costin who was, at December 31, 1996, a
Vice-President of the Corporation (collectively, the "Named Executive
<PAGE>
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Officers"). The Corporation had no other executive officers whose total
salary and bonuses during the fiscal year ended December 31, 1996 exceeded
Cdn. $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
- - ------------------------------------------------------------------------------------------------------------------------------
Annual Compensation(1) Long Term Compensation All Other
----------------------------------- --------------------------------------- Compensation
Restricted ($)
Fiscal Other Shares or Securities
Year Annual Restricted Under Options LTIP
Name and Ended Salary Bonus Compensation Share Units Granted (2) Payouts
Title Dec. 31, (U.S. $) (U.S.$) (U.S.$) (#) (#) ($)
- - -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William P. Long, 1996 90,000(3) 9,120 Nil Nil 250,000 Nil Nil
President
and Director of the 1995 91,200(3) 9,120 Nil Nil 166,000 Nil Nil
Corporation
1994 91,200 9,120 Nil Nil 221,000 Nil Nil
- - -------------------------------------------------------------------------------------------------------------------------------
Patrick Costin, 1996 80,000 Nil Nil Nil 125,000 Nil Nil
Vice-President of
the Corporation 1995 20,000 Nil Nil Nil 160,000 Nil Nil
1994 Nil Nil Nil Nil 50,000 Nil Nil
</TABLE>
(1) All compensation paid is stated in United States dollars. Dr. Long was
paid U.S. $120,200 in compensation during 1994. Dr. Long was paid U.S.
$110,000 in compensation during 1995. Dr. Long was paid U.S. $60,000 in
compensation during 1996. As at December 31, 1996, U.S. $115,360 of
compensation payable to Dr. Long remained outstanding.
(2) Options to purchase Common Shares granted pursuant to the Plan.
(3) U.S. $50,000 of compensation payable to Dr. Long in 1995 and U.S. $30,000
of compensation payable to Dr. Long in 1996 is in the form of a consulting
fee.
<PAGE>
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(b) OPTION GRANTS IN 1996
The following table provides details with respect to stock options granted
to the Named Executive Officers during the year ended December 31, 1996:
<TABLE>
- - -------------------------------------------------------------------------------------------------------------
Market Potential Realizable
% of Total Value of Value at Assumed
Options Securities Annual Rates of Share
Securities Granted Underlying Price Appreciation
Under to Options on Option Term
Options Employees Exercise the Date of ---------------------
Granted in Financial Price Grant Expiration 5% 10%
Name (#)(1) Year (CDN.$) (CDN.$) Date(2) (CDN.$) (CDN.$)
- - -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
William P. Long, 250,000(3) 34% 4.00 4.00(4) May 27, 2001 276,284 610,510
President and
Director of the
Corporation
- - -------------------------------------------------------------------------------------------------------------
Patrick Costin, 125,000 17% 3.70 3.70(5) March 7, 2001 127,781 278,361
Vice-President of
the Corporation
- - -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Options awarded to the Named Executive Officers are to purchase Common
Shares pursuant to the Plan.
(2) Unexercised options are subject to early expiration upon the termination
of employment of the optionee with the Corporation or its affiliates and
on the optionee's retirement or death.
(3) Represents options granted on May 27, 1996 that become exercisable on
May 27, 1997.
(4) Based on the closing price of the Common Shares on the ASE on May 24,
1996, the last business day prior to the date of grant.
(5) Based on the closing price of the Common Shares on the ASE on March 6,
1996.
<PAGE>
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(c) OPTIONS EXERCISED AND AGGREGATES REMAINING AT YEAR-END
The following table provides information regarding options held by the
Named Executive Officers as at December 31, 1996 and options exercised by the
Named Executive Officers during the year ended December 31, 1996:
<TABLE>
- - --------------------------------------------------------------------------------------------------
Value of Unexercised
Unexercised Options In-the-money Options at
Securities Aggregate at December 31, 1996 December 31, 1996
Acquired on Value ------------------------------------------------------
Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
Name (#) (CDN. $) (#) (#) (CDN. $) (CDN. $)
- - --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
William P. Long, 166,000 1,253,300(1) Nil 250,000(3) N/A 1,850,000(4)
President and 221,000 1,768,000(2)
Director
- - --------------------------------------------------------------------------------------------------
Patrick Costin, 50,000 407,500(5) 60,000(7) Nil 648,000(4) N/A
Vice-President of 100,000 790,000(6) 125,000(8) 962,500(4) N/A
the Corporation
- - --------------------------------------------------------------------------------------------------
</TABLE>
(1) Based on the difference between the exercise price of such options of
$0.65 per share and the closing price of the Common Shares on the ASE on
November 15, 1996, the date of exercise, of CDN. $8.20.
(2) Based on the difference between the exercise price of such options of
$0.20 per share and the closing price of the Common Shares on the ASE on
November 15, 1996, the date of exercise, of CDN. $8.20.
(3) Exercisable at CDN. $4.00 per share from May 27, 1997 until 5:00 p.m.
(Toronto time) on May 27, 2001.
(4) The closing price of the Common Shares on the ASE on December 31, 1996
was CDN. $11.40.
(5) Based on the difference between the exercise price of such options of
CDN. $0.20 per share and the closing price of the Common Shares on the
ASE on November 6, 1996, the date of exercise, of CDN. $8.35.
(6) Based on the difference between the exercise price of such options of
CDN. $0.50 per share and the closing price of the Common Shares on the
ASE on November 8, 1996, the date of exercise, of CDN. $8.40.
(7) Exercisable at CDN. $0.60 per share until 5:00 p.m. (Toronto time) on
August 8, 1998.
(8) Exercisable at CDN. $3.70 per share until 5:00 p.m. (Toronto time) on
March 7, 2001.
(d) COMPENSATION OF DIRECTORS
Directors who are not officers of the Corporation are not currently paid
any fees for their services as directors. Directors who are not officers are
entitled to receive compensation to the extent that they provide services to
the Corporation at rates that would be charged by such directors for such
services to arm's length parties. No amounts were paid to directors during
the year ended December 31, 1996 other than amounts paid to Dr. Long set forth
herein and CDN. $20,000 paid to Christopher Proud for consulting services.
Directors are also entitled to participate in the Plan. The Corporation
has outstanding options to purchase 762,000 Common Shares, 295,000 of which
have been granted to directors.
<PAGE>
-8-
(e) EMPLOYMENT CONTRACTS
William P. Long, President of the Corporation, is a full-time employee of
the Corporation. Pursuant to his employment agreement dated January 1, 1988
and amended June 30, 1990 and April 1, 1996, a monthly salary of U.S. $7,600
is payable to Dr. Long. In addition, Dr. Long is entitled to receive an
annual bonus to be determined by the board of directors of the Corporation,
which bonus may not be less than 10% of Dr. Long's annual compensation. In
the event of a takeover, merger or consolidation of the Corporation, if the
voting control of over 35% of the issued stock is acquired by an individual or
a group of individuals and Dr. Long's agreement is terminated by the
Corporation within 180 days before or one year thereafter, or by Dr. Long
within one year thereafter, then Dr. Long shall be issued 200,000 Common
Shares.
Patrick Costin, a Vice President of the Corporation and the President of
Fine Gold, a wholly-owned subsidiary of the Corporation, is employed by Fine
Gold pursuant to the terms of an employment agreement entered into August 15,
1994. The agreement will terminate on December 31, 1997 unless terminated
earlier in accordance with the terms of the agreement. The agreement provides
that Mr. Costin shall be paid a salary of at least U.S. $5,000 per month and
may be entitled to bonuses as determined by the board of directors of Fine
Gold.
(f) COMPENSATION COMMITTEE REPORT
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE
CORPORATION'S PREVIOUS FILINGS UNDER THE UNITED STATES SECURITIES ACTS OF
1993, AS AMENDED (THE "SECURITIES ACT"), OR THE EXCHANGE ACT THAT INCORPORATES
BY REFERENCE, IN WHOLE OR IN PART, SUBSEQUENT FILINGS INCLUDING, WITHOUT
LIMITATION, THE INFORMATION CIRCULAR, THE COMPENSATION COMMITTEE REPORT AND
THE PERFORMANCE GRAPHS HEREIN BELOW SET FORTH SHALL NOT BE DEEMED TO BE
INCORPORATED BY REFERENCE INTO ANY SUCH FILINGS.
As required by the proxy rules promulgated by the SEC and applicable
Canadian securities laws, this Compensation Committee Report describes the
overall compensation goals and policies applicable to the executive officers
of the Corporation, including the basis for determining the compensation of
executive officers for the 1996 fiscal year.
COMPOSITION OF COMPENSATION COMMITTEE
The Corporation's executive compensation program is administered by the
board of directors of the Corporation as the Corporation does not have an
independent compensation committee. The board of directors of the Corporation
currently consists of William Long, Christopher Proud, James Golla and George
Hartman. Mr. Proud is not nominated for re-election at the Meeting. Dr. Long
is the President of the Corporation, and Mr. Golla is the Secretary of the
Corporation. None of the other directors is an officer or employee of the
Corporation.
<PAGE>
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COMPENSATION OBJECTIVES AND POLICIES
In determining the amount and composition of compensation for the
Corporation's executive officers, the board of directors is guided by several
factors. Because the Corporation has very few employees, compensation
practices are flexible in response to the needs and talents of the individual
officer, entrepreneurial, and geared toward rewarding contributions that
enhance shareholder value. Because the Corporation has no significant revenues
from operations and needs capital for research and development, the
Corporation keeps salaries and bonuses comparatively low and compensates
employees (including executive officers) primarily in the form of stock
options. The extensive use of stock options is also designed to align the
interest of the executive officers and other employees with the long-term
interests of the Corporation and to attract and retain talented employees, who
can enhance the Corporation's value. Although certain members of the board
are also executive officers, none participates in the determination of his own
salary or bonus.
COMPENSATION COMPONENTS
ANNUAL BASE SALARY. The Corporation's compensation of its executive
officers consists of three components: base salary, bonuses, and long-term
incentive awards in the form of stock options. The board establishes base
salaries based primarily on its subjective judgment, taking into consideration
both qualitative and quantitative factors. Among the factors considered by
the board are: (i) the qualifications and performance of each executive
officer; (ii) the performance of the Corporation as measured by such factors
as market share growth and increased shareholder value; (iii) salaries
provided by other companies inside and outside the industry that are of a
comparable size and at a similar development stage, to the extent known; and
(iv) the capital position and needs of the Corporation. The board does not
assign any specific weights to these factors in determining salaries. It
does, however, try to keep base salaries as low as possible, consistent with
the needs and status of the executive officers, in order to preserve capital
for future growth and development.
INCENTIVE BONUSES. The Corporation also compensates its executive
officers in the form of bonuses. The Corporation's President, William P.
Long, is entitled to receive a bonus, the amount of which is determined by the
board but in no event is less than ten percent of his annual base salary. In
addition, the Corporation may pay bonuses to other executive officers or key
employees in the future as a reward for significant and specific achievements
that have a significant impact on shareholder value. Because the Corporation
is a development stage corporation and does not have a history of earnings per
share, net income, or other conventional data to use as a benchmark for
determining the amount or existence of bonus awards, the board generally makes
such determinations based on its subjective evaluation of each individual's
contribution to the Corporation. In some cases, however, bonuses payable to
individuals may be tied to specific criteria identified at the time of
engagement. In the 1996 fiscal year, no executive officer received a bonus
except that received by Dr. Long, as described in greater detail below. The
board's action was based on its conclusion that, despite the superior personal
performance of the executive officers, no cash incentive bonuses other than
the bonus paid to Dr. Long should be awarded in the 1996 fiscal year due to
the lack of significant revenue during the 1996 fiscal year.
<PAGE>
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STOCK OPTIONS. The Corporation relies extensively on stock options to
compensate executive officers and other key employees. The Plan, which is
described in greater detail below, is designed to give each option holder an
interest in preserving and maximizing shareholder value in the longer term, to
reward option holders for past performance, to give option holders the
incentive to remain with the Corporation long term. Individual grants are
determined on the basis of the board's assessment of an individual's current
and expected future performance, level of responsibilities, and the importance
of his or her position with, and contribution to, the Corporation. In the
1996 fiscal year, the board awarded options to purchase 250,000 Common Shares
to Dr. Long and options to purchase 125,000 Common Shares to Patrick Costin in
order to ensure that each has a continued interest in setting strategies and
making decisions that enhance shareholder value.
CHIEF EXECUTIVE COMPENSATION FOR 1996
Based on the board's subjective impression of the salaries of presidents
or chief executive officers of similarly situated development stage companies
(both in and outside the industry), the increasing value of the Common Shares,
the Corporation's progress in finding a market niche and exploiting its
assets, and the board's subjective assessment of the contribution of Dr. Long,
the board of directors determined in April, 1996 to retain Dr. Long's base
salary at U.S. $7,600 per month and guarantee him a bonus equal to at least
10% of his annual salary. Based on all of the aforementioned factors, but
primarily the Corporation's lack of significant revenue during the 1996 fiscal
year, the board determined to pay Dr. Long a bonus of U.S. $9,120 in respect
of the 1996 fiscal year, the minimum under his employment contract. The board
determined to grant Dr. Long 250,000 options during the year ended December
31, 1996 in order to ensure that he has a continued interest to set strategies
and make decisions that enhance shareholder value.
The foregoing is submitted by the board of directors.
William P. Long
James Golla
Christopher D. Proud
George Hartman
(h) PERFORMANCE GRAPH
The following chart compares the total cumulative shareholder return for
CDN. $100 invested in Common Shares with the total return of the Alberta Stock
Exchange Index (the "ASE Index") and with the total return of four companies
(Harnischfeger Industries, Inc., Terex Corporation, Cooper Industries, Inc.
and Global Industrial Technologies, Inc.) operating in the same general
business as the Corporation (the "Line of Business Index"). The comparison is
made for the period commencing on December 31, 1990. Trading data in respect
of periods prior to March, 1994, have been restated to reflect the three for
one share consolidation that occurred during March, 1994.
<PAGE>
-11-
[GRAPH]
<TABLE>
- - ----------------------------------------------------------------------------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1990 1991 1992 1993 1994 1995 1996
- - ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
the Corporation 100 12.82 133.33 46.15 8.55 166.67 974.36
- - ----------------------------------------------------------------------------------------
ASE Index 100 99.02 137.02 224.71 156.26 212.41 373.93
- - ----------------------------------------------------------------------------------------
Line of Business
Index (1) 100 147.24 114.73 115.70 100.73 111.65 140.73
- - ----------------------------------------------------------------------------------------
</TABLE>
(1) Trading information is not available for Global Industrial Technologies,
Inc. prior to 1993. Accordingly, the Line of Business Index has been
calculated without including data for Global Industrial Technologies, Inc.
for years prior to 1993.
ELECTION OF DIRECTORS
The Articles of Incorporation of the Corporation, as amended provide
that the board may consist of a minimum of three and a maximum of nine
directors, to be elected annually. Each director will hold office until the
next annual meeting or until his successor is duly elected unless his office
is earlier vacated in accordance with the By-laws of the Corporation. By
special resolution of the shareholders passed on June 27, 1988, the directors
have been empowered to set the size of the board of directors of the
Corporation. The Business Corporations Act (Ontario) provides that the
directors may not, between meetings of shareholders, appoint an additional
director if, after such appointment, the total number of directors would be
greater than one and one-third times the number of directors required to have
been elected at the last annual meeting of shareholders.
At the Meeting, shareholders of the Corporation will be asked to elect
four directors (the "Nominees"). The following table provides the names of
the Nominees and information concerning them. The persons in the enclosed
form of proxy intend to vote for the election of the
<PAGE>
-12-
Nominees. Management does not contemplate that any of the Nominees will be
unable to serve as a director. Each director elected will hold office until
his successor is elected at the next annual meeting of the Corporation, or any
adjournment thereof, or until his successor is elected or appointed. None of
the Nominees or current directors or officers was selected pursuant to any
arrangement or understanding between him and any other person.
<TABLE>
- - ------------------------------------------------------------------------------------------------------------
Number of Common Shares
Name & Municipality Period of Service Beneficially Owned or Over
of Residence Office as a Director Which Control is Exercised(1)
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
William Long President & Director Since 1988 2,097,529 (2)
Cody, Wyoming
- - ------------------------------------------------------------------------------------------------------------
James Golla Director & Secretary Since 1994 20,000 (3)
Mississauga, Ontario
- - ------------------------------------------------------------------------------------------------------------
George Hartman Director Since 1997 25,000 (4)
Lyons Bay, British Columbia
- - ------------------------------------------------------------------------------------------------------------
Robert Sheldon Director N/A Nil
West Vancouver, British Columbia
- - ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The information as to Common Shares beneficially owned or over which they
exercise control or direction not being within the knowledge of the
Corporation has been furnished by the respective nominees individually.
Includes all Common Shares issuable pursuant to the exercise or conversion
of options that are exercisable within 60 days.
(2) Includes 56,000 Common Shares held by Dr. Long's minor daughter, 57,500
Common Shares held by Dr. Long's minor son, and 162,000 Common
Shares held by the MBRT Trust, an irrevocable trust for the benefit of
the minor children of Dr. Long. Dr. Long disclaims any beneficial
interest in such 275,500 Common Shares.
(3) Includes 20,000 Common Shares subject to presently exercisable options
granted to Mr. Golla pursuant to the Plan.
(4) Includes 25,000 Common Shares subject to presently exercisable options
granted to Mr. Hartman pursuant to the Plan.
IF ANY OF THE ABOVE NOMINEES IS FOR ANY REASON UNAVAILABLE TO SERVE
AS A DIRECTOR, PROXIES IN FAVOUR OF MANAGEMENT WILL BE VOTED FOR ANOTHER
NOMINEE IN THEIR DISCRETION UNLESS THE SHAREHOLDER HAS SPECIFIED IN THE PROXY
THAT HIS SHARES ARE TO BE WITHHELD FROM VOTING IN THE ELECTION OF DIRECTORS.
Set forth below is a description of each of the directors and
executive officers of the Corporation including their principal occupations
for the past five years:
DIRECTORS
WILLIAM P. LONG, 50, has been the President and a director of the
Corporation since 1988, and the Secretary and a director of Fine Gold since
the merger of TMI with and into Fine Gold in February, 1996. Fine Gold is a
wholly-owned subsidiary of the Corporation. Dr. Long also served as the Vice
President of the wholly-owned subsidiary of the Corporation formerly known as
Mineral Recovery Systems, Inc. which was merged with and into Fine Gold in
June, 1996. Dr. Long has been an executive officer and director of Carlin
Gold Corporation (the name of which was changed to Mineral Recovery Systems,
Inc. ("MRS") following the Fine Gold merger), since its formation in April,
1987. From 1987 to 1988, Dr. Long was a mineral and energy consultant,
providing various services to clients in the mining and energy industries,
including arranging precious metal property
<PAGE>
-13-
acquisitions, supervising mineral evaluations, and providing market analyses.
From 1980 to 1986, Dr. Long served as the Executive Vice President and Chief
Financial Officer of Thermal Exploration Corporation. From 1974 to 1980, Dr.
Long was employed by Amax Exploration, Inc. in various capacities, including
Systems Engineer, Business Analyst and Business Manager. Dr. Long is
affiliated with the American Institute of Chemical Engineers and the American
Institute of Mining Engineers. He obtained a bachelors degree in Chemical and
Petroleum Refining Engineering and a Ph.D. in Mineral Economics from the
Colorado School of Mines in 1969 and 1974, respectively.
JAMES I. GOLLA, 64, was appointed Secretary of the Corporation in
November, 1996 and has been a director of the Corporation since February,
1994. He also currently serves as a director of Thornbury Capital Ltd. Mr.
Golla has been a journalist with the Globe and Mail, a Toronto business
newspaper, since 1954, specializing in business news for the past five years.
GEORGE E. HARTMAN, 48, was elected a director of the Corporation in
March, 1977. From 1995 to April, 1997 Mr. Hartman served as President of
Planvest Pacific Financial Corp. ("Planvest Pacific"), a Vancouver-based
financial planning firm with over 250 representatives, 27,500 clients and $1
billion of assets under management. Mr. Hartman became Vice-Chairman of C.M.
Oliver & Company Limited when Planvest and C.M. Oliver & Company Limited
amalgamated effective April, 1997. In addition, Mr. Hartman continues to
serve as President of Hartman & Corporation, Inc., a firm founded by Mr.
Hartman in 1991 which provides consulting services to the financial services
industry. Mr. Hartman is the author of RISK IS A FOUR-LETTER WORD--THE ASSET
ALLOCATION APPROACH TO INVESTING, a Canadian best-seller published in 1992 and
now in its fifth printing, and host of a weekly personal finance radio
program, "Money Matters," aired on AM 1040 in Vancouver, British Columbia.
ROBERT SHELDON, 74, is nominated for election as a director of the
Corporation at the Meeting. Mr. Sheldon was the President of Newmont
Exploration of Canada Limited until his retirement in 1988. Since his
retirement, Mr. Sheldon has acted as a part-time consultant. Mr. Sheldon has
over 47 years' experience implementing, supervising and managing the
exploration, development and production of non-ferrous mineral deposits. He
is currently a member of the Association of Professional Engineers of British
Columbia, the Canadian Institute of Mining and Metallurgy, the Society of
Mining Engineers, and is a past president of the British Columbia and Yukon
Chamber of Mines and of the Engineers Club.
EXECUTIVE OFFICERS
The executive officers of the Corporation are William Long, Patrick
Costin, and James Golla. Certain information regarding Messrs. Long and Golla
is set forth above under "Election of Directors - Directors" Certain
information regarding Mr. Costin follows.
PATRICK COSTIN, 53, was appointed a Vice President of the
Corporation in June, 1996, and also currently serves as the President and a
director of Fine Gold and MRS. Mr. Costin also served as the President of the
wholly-owned subsidiary of the Corporation formerly known as Mineral Recovery
Systems, Inc. from March 1995 until its merger with and into Fine Gold in June
1996. Mr. Costin is the chief executive officer of Costin and Associates, a
minerals consulting organization
<PAGE>
-14-
founded by Mr. Costin in 1992 which specializes in identification and
evaluation of North American mine and mineral deposit acquisition
opportunities. From 1982 to 1992, Mr. Costin served as the manager of U.S.
exploration for Rio Algom Ltd. Mr. Costin's additional experience in the
mining and minerals industry includes Senior Mineral Economist for the
Stanford Research Institute from 1977 to 1982, Senior Geologist for Chevron
Resources from 1975 to 1976, Senior Geologist for Newmont Mining Corporation
of Canada from 1967 to 1975, and Geologist for United Keno Hill Mines Ltd.
from 1965 to 1967. Mr. Costin obtained a bachelors degree in Geological
Engineering and a masters degree in Minerals Economics from the Colorado
School of Mines in 1965 and 1975, respectively. He is a member of the
American Institute of Mining Engineers, and a member of the Colorado Mining
Association, for which he served as director from 1987 to 1992.
COMPLIANCE WITH SECTION 16(a) OF THE UNITED STATES EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Corporation's
officers and directors to file reports concerning their ownership of Common
Shares with the SEC and to furnish the Corporation with copies of such
reports. During the fiscal year ended December 31, 1996, the Corporation's
officers and directors were not yet subject to Section 16(a). Beginning
January 24, 1997 with the effectiveness of the Corporation registration of the
Common Stock under Section 12(g) of the Exchange Act, the Corporation's
officers and directors became subject to Section 16(a).
George Hartman, a director of the Corporation, was required to file
his initial statement of beneficial ownership on Form 3 on March 3, 1997. The
Corporation received his Form 3 on March 10, 1997 and, based solely on its
review of Form 3, believes that the SEC received it on the same date. William
P. Long, Patrick Costin, James Golla, and Christopher D. Proud were required
to file their initial statements of beneficial ownership on Form 3 on January
24, 1997. The Corporation received the Form 3 for each of them on January 25,
1997 and, based solely on its review of each said Form 3, believes that the
SEC received them on the same day. The Corporation is aware of no other
officer or director who has failed to timely file any other reports required
by Section 16(a) of the Exchange Act.
APPOINTMENT OF AUDITORS
Unless such authority is withheld, the persons named in the
accompanying proxy intend to vote for the appointment of McGovern, Hurley,
Cunningham, Chartered Accountants (the "Principal Accountants"), as auditors
of the Corporation for the 1997 year, and to authorize the directors to fix
their remuneration. The Principal Accountants will be present at the Meeting
and will have the opportunity to make a statement if they so desire and are
expected to be available to respond to appropriate questions. The Principal
Accountants have been auditors of the Corporation since 1992. For the four
prior years, T.H. Bernholtz & Co., Chartered Accountants, served as the
Corporation's auditors.
<PAGE>
-15-
AUDIT COMMITTEE AND MEETINGS OF DIRECTORS
The Corporation is required to have an audit committee, the function
of which is to recommend the Corporation's independent auditors and to review
the Corporation's accounting practices, controls and all services performed by
the independent auditors. The audit committee did not meet during the fiscal
year ended December 31, 1996 but did review the Corporation's financial
statements and approved such financial statements via unanimous consent
resolution. If elected as directors by the shareholders at the Meeting, the
following directors will be appointed members of the Corporation's audit
committee:
James Golla
George Hartman
Robert Sheldon
During the fiscal year ended December 31, 1996, the board of
directors held one meeting. In addition, the board of directors considered
and acted on various matters throughout the year by executing seventeen
consent resolutions. No director attended fewer than 75 percent of the total
number of meetings of the board and of the committees on which he served. The
Corporation does not maintain a standing nominating committee of the board of
directors.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Included in accounts payable and accrued liabilities of the
Corporation for fiscal years 1996 and 1995 are approximately CDN. $115,360 and
CDN. $64,000, respectively, owing to William P. Long, the President of the
Corporation. Such amounts represent accrued salary and bonuses payable to Dr.
Long. No terms of repayment have been negotiated with respect to such amounts.
During the 1995 fiscal year, the Corporation advanced to Dr. Long
approximately CDN. $45,000, which does not bear interest and is not subject to
a repayment schedule. This amount was paid to Dr. Long as an advance against
expenses to be incurred by Dr. Long on behalf of the Corporation. As of
December 31, 1996, none of this amount remained outstanding. Other than the
1995 advance to Dr. Long, no officer or director of the Corporation, nor any
associate thereof, has been indebted to the Corporation or its subsidiaries at
any time during the last three years.
INDEBTEDNESS OF OFFICERS AND DIRECTORS TO THE CORPORATION
No officer or director of the Corporation was indebted to the
Corporation, as at December 31, 1996 or as at the date of this Information
Circular.
AMENDMENT TO STOCK OPTION PLAN
The Plan was approved by the shareholders of the Corporation on May,
19, 1996. The following description of the Plan does not purport to be
complete and is qualified in its entirety by reference to the full text
thereof.
<PAGE>
-16-
PURPOSE. The purpose of the Plan is to authorize the grant to service
providers for the Corporation of options to purchase Common Shares and thus
benefit the Corporation by enabling it to attract, retain and motivate
employees and service providers by providing them with the opportunity,
through share options, to acquire an increased proprietary interest in the
Corporation.
ADMINISTRATION. The Plan is administered by the board of directors of the
Corporation. Subject to approval of the granting of options by the board of
directors, the Corporation may grant options under the Plan.
SHARES SUBJECT TO PLAN. The aggregate number of Common Shares which may be
issued and sold under the Plan is currently limited to 2,000,000. At the
Meeting, shareholders will be asked to consider approving an amendment to the
Plan increasing the number of Common Shares that may be issued under the Plan
to 2,500,000. The total number of Common Shares which may be reserved for
issuance to any one individual under the Plan shall not exceed 5% of the
outstanding issue. An aggregate of 710,000 Common Shares have been issued
upon the exercise of options granted under the Plan, and 762,000 Common Shares
remain reserved for issue upon the exercise of outstanding options. In the
event the number of outstanding Common Shares is increased, decreased, changed
into, or exchanged for a different number or kind of Common Shares or security
of the Corporation through reorganization, merger, recapitalization,
reclassification, stock split, reverse stock split or similar transaction, the
maximum number of Common Shares available for issuance under the Plan shall be
proportionately adjusted.
LIMITS WITH RESPECT TO INSIDERS. The maximum number of Common Shares which
may be reserved for issuance to insiders under the Plan is 10% of the Common
Shares issued and outstanding at the time of the grant. The maximum number of
Common Shares which may be issued to insiders under the Plan, together with
any other previously established or proposed share compensation arrangements,
within any one year period is 10% of the outstanding issue. The maximum number
of Common Shares which may be issued to any one insider and his or her
associates under the Plan, together with any other previously established or
proposed share compensation arrangements, within a one-year period is 5% of
the Common Shares outstanding at the time of the grant (on a non-diluted
basis). Any entitlement to acquire Common Shares granted prior to the
optionee becoming an insider shall be excluded for the purposes of the limits
set out immediately above.
ELIGIBILITY. Options may be granted only to service providers for the
Corporation. The term "service providers for the Corporation" means (a) any
employee or insider of the Corporation or any of its subsidiaries other than
persons or entities who would be insiders solely on account of the person or
entity having beneficial ownership of more than ten percent of the Common
Shares, and (b) any other person or entity engaged to provide ongoing
management or consulting services for the Corporation or any entity controlled
by the Corporation. Subject to the foregoing, the board of directors has full
and final authority to determine the persons or entities who are to be granted
options under the Plan and the number of Common Shares subject to each option.
Approximately six employees are currently eligible to participate in the Plan
in addition to an indeterminable number of non-employee service providers.
<PAGE>
-17-
PRICE. The purchase price for the Common Shares under each option is
determined by the board of directors on the basis of the market price of the
Common Shares, which shall be the prior day closing price on any exchange on
which the Common Shares are traded.
PERIOD OF OPTION AND RIGHTS TO EXERCISE. Options may not be granted for a
term exceeding five years. Options may, at the discretion of the board of
directors, provide that the number of Common Shares which may be acquired
pursuant to the option shall not exceed a specified number each year during
the term of the option. The Common Shares to be purchased upon each exercise
of any option shall be paid for in full at the time of such exercise. No
option which is held by a service provider may be exercised unless the
optionee is then a service provider for the Corporation, except in the case of
death or within a period of ninety days following cessation of the optionee's
status as service provider.
NON-TRANSFERABILITY. No option granted under the Plan is transferrable by an
optionee otherwise than by will or by the laws of descent and distribution,
and such option shall be exercisable, during an optionee's lifetime, only by
the optionee.
AMENDMENT AND TERMINATION OF THE PLAN. The board of directors may at any time
amend or terminate the Plan, but where amended, such amendment is subject to
regulatory approval. The Corporation is seeking shareholder approval of the
proposed amendment to the Plan in order to comply with certain requirements of
the ASE.
EXPIRY OF OPTION. Any option issued pursuant to the Plan that remains
unexercised at the expiry date shall terminate, subject to any extension of
the expiry date permitted in accordance with the Plan.
VALUE OF BENEFITS TO CERTAIN PERSONS
The Corporation is unable to determine the amount of benefits that
may be received in the future by participants under the Plan, as participation
is subject to the discretion of the Board of Directors.
CERTAIN INFORMATION REGARDING OUTSTANDING OPTIONS
Certain information regarding outstanding unexercised options is
summarized below.
<PAGE>
-18-
<TABLE>
Market Value
Date All of Underlying
Options Number of Common Shares
Exercise May First Options as of
Price Date Be Expiry Unexercised April 15, 1997(1)
Name (CDN.$) of Grant Exercised Date Outstanding (CDN. $)
- - --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Pat Costin 0.60 08/08/95 08/08/95 08/08/98 60,000 489,000
Vice President
- - --------------------------------------------------------------------------------------------------------
David Lloyd 0.60 08/08/95 08/08/95 08/08/98 15,000 122,250
- - --------------------------------------------------------------------------------------------------------
Pat Costin 3.70 03/07/96 03/07/96 03/07/01 125,000 631,250
Vice President
- - --------------------------------------------------------------------------------------------------------
Tracy LaFollette 3.70 03/07/96 03/07/96 03/07/01 20,000 101,000
- - --------------------------------------------------------------------------------------------------------
Fred Bechhold 5.00 05/14/96 04/01/97 05/14/98 80,000 300,000
- - --------------------------------------------------------------------------------------------------------
William Long, President
and Director 4.00 05/27/96 05/27/97 05/27/01 250,000 1,187,500
- - --------------------------------------------------------------------------------------------------------
Robert Brandon Harrison 4.20 07/29/96 07/29/96 07/29/01 75,000 341,250
- - --------------------------------------------------------------------------------------------------------
Edward Dickinson 4.50 07/31/96 07/31/96 07/31/01 50,000 212,500
- - --------------------------------------------------------------------------------------------------------
James Golla 8.40 11/06/96 11/06/96 11/06/01 20,000 7,000
Secretary and Director
- - --------------------------------------------------------------------------------------------------------
David Lloyd 9.40 12/31/96 12/31/96 12/31/01 25,000 Nil
- - --------------------------------------------------------------------------------------------------------
Steven Lynch 9.40 12/31/96 12/31/96 12/31/01 17,000 Nil
- - --------------------------------------------------------------------------------------------------------
George Hartman, Director 12.35 03/10/97 03/10/97 03/10/02 25,000 Nil
- - --------------------------------------------------------------------------------------------------------
TOTAL: 762,000
- - --------------------------------------------------------------------------------------------------------
</TABLE>
(1) The closing price of the Common Shares as reported by the ASE on
April 15, 1997 was CDN. $8.75 per share.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN
The following tax discussion is a brief summary of the United
States federal income tax law applicable to the Plan. The discussion is
intended solely for general information and omits certain information which
does not apply generally to all participants in the Plan.
GRANT OF OPTIONS. In the opinion of the Corporation with respect to
employees of the Corporation or its subsidiaries (an "Employee"), the options
issued pursuant to the Plan qualify as "incentive stock options" within the
meaning of Section 42(2) of the United States Internal Revenue Code (the
"Internal Revenue Code"). Accordingly, an Employee recipient of options
under the Plan incurs no income tax liability, and the Corporation obtains no
deduction, from the grant of the options.
EXERCISE OF OPTIONS. An Employee will not be subject to federal income tax
upon the exercise of an option granted under the Plan, nor will the
Corporation be entitled to a tax deduction by reason of
<PAGE>
-19-
such exercise, provided that the holder is still employed by the Corporation
(or terminated employment no longer than three months before the exercise
date). The Employee will have a cost basis in the Common Shares acquired upon
such exercise equal to the option exercise price.
DISPOSITION OF SHARES ACQUIRED UNDER THE PLAN. In order to defer taxation on
the difference between the fair market value and exercise price of Common
Shares acquired upon exercise of an option, the Employee must hold the Common
Shares during a holding period which runs through the later of one year after
the option exercise date or two years after the date the option was granted.
The only exceptions are for dispositions of shares upon death, as part of a
tax-free exchange of shares in a corporate reorganization, into joint tenancy
with right of survivorship with one more person, or the mere pledge or
hypothecation of shares.
If an Employee disposes of Common Shares acquired under the Plan
before expiration of the holding period in a manner not described above, such
as by gift or ordinary sale of such Common Shares, the Employee must
recognize as ordinary compensation income in the year of disposition the
difference between the exercise price and the fair market value of the Common
Shares as of the date of exercise. This amount must be recognized as income
even if it exceeds the fair market value of the Common Shares as of the date
of disposition or the amount of the sales proceeds received. The Corporation
will be entitled to a corresponding compensation expense deduction.
Disposition of Common Shares after expiration of the required
holding period will result in the recognition of gain or loss in the amount
of the difference between the amount realized on the sale of the Common
Shares and the exercise price for such Common Shares. Any loss on such a sale
will be a long-term capital loss. Any gain on such a sale will be taxed as
ordinary income up to the amount of the difference between the exercise price
and the fair market value of the Common Shares as of the date of exercise
with any additional gain taxed as a long-term capital gain.
NON-EMPLOYEE RECIPIENTS. In the opinion of the Corporation, options issued
pursuant to the Plan to consultants and other non-Employees will not qualify
as "incentive stock options" under Section 42(2) of the Internal Revenue Code
("Non-qualified Options"). The recipient of a Non-qualified Option incurs no
income tax liability, and the Corporation obtains no deduction, from the
grant of the options. Upon the exercise of a Non-qualified Option, however,
the amount by which the fair market value of the Common Shares exceeds the
exercise price will be taxed to the optionee as ordinary compensation income.
The Corporation will generally be entitled to a deduction in the same
amount, provided it satisfies certain requirements relating to the terms of
the option and makes all required wage withholdings on the compensation
element attributable to the exercise (or qualifies for an exemption to the
withholding requirements). In general, the optionee's tax basis in the
Common Shares acquired by exercising a Non-qualified Option is equal to the
fair market value of such Common Shares on the date of exercise. Upon a
subsequent sale of any such Common Shares in a taxable transaction, the
optionee will realize a capital gain or loss in an amount equal to the
difference between his or her tax basis and the sale price.
<PAGE>
-20-
PROPOSED AMENDMENT TO THE PLAN
At the Meeting, shareholders will be asked to consider, and if
thought fit, approve an ordinary resolution in the form attached hereto as
Schedule I, to amend the Plan by increasing the number of Common Shares that
may be issued under the Plan from 2,000,000 to 2,500,000 (the "Option Plan
Resolution"). The Option Plan Resolution will affect no other terms or
provisions of the Plan.
CERTAIN INTERESTS OF DIRECTORS
In considering the recommendation of the board of directors with
respect to the Option Plan Resolution, shareholders should be aware that the
members of the board of directors have certain interests which may present
them with conflicts of interest in connection with such proposal. As
discussed above, executive officers and directors may be among those who are
granted options under the Plan. The Board of Directors recognizes that
amendment of the underlying the Option Plan Resolution may benefit certain
directors of the Corporation and their successors, but believes that approval
of the Option Plan Resolution will advance the interests of the Corporation
and its shareholders by enabling the Corporation to further encourage
employees and consultants of the Corporation to make significant
contributions to the long term success of the Corporation.
RECOMMENDATION OF BOARD OF DIRECTORS REGARDING OPTION PLAN
RESOLUTION AND VOTES NECESSARY FOR APPROVAL
The board of directors believes the proposed amendment to the Plan
is in the best interests of the Corporation, and therefore, unanimously
recommends that the shareholders vote FOR approval of the Option Plan
Resolution. Approval will be obtained if a majority of the votes cast are in
favour.
INTEREST OF INSIDERS IN MATERIAL TRANSACTIONS
Except as otherwise disclosed herein, no insider of the Corporation
has any interest in material transactions involving the Corporation.
PROPOSALS OF SHAREHOLDERS
In order to be included in the proxy statement and form of proxy
relating to the Corporation's annual meeting of shareholders to be held in
1998, proposals which shareholders intend to present at such annual meeting
must be received by the corporate secretary of the Corporation, at the
Corporation's executive offices, 1725 Sheridan Avenue, Suite 140, Cody,
Wyoming 82414, no later than January 15, 1998.
* * * * * * * * *
<PAGE>
-21-
The contents and sending of this Information Circular have been
approved by the Directors of the Corporation.
DATED as of the 15th day of April, 1997.
ALTAIR INTERNATIONAL INC.
(Sgd.) William Long
President
<PAGE>
SCHEDULE I
RESOLUTION OF THE SHAREHOLDERS
OF
ALTAIR INTERNATIONAL INC.
BE IT RESOLVED THAT:
1. the number of common shares of the Corporation issuable pursuant to
the stock option plan of the Corporation be increased to 2,500,000
common shares of the Corporation; and
2. any director or officer of the Corporation is hereby authorized and
directed to execute and deliver, under corporate seal or otherwise,
all such documents and instruments and to do all such acts as in the
opinion of such director or officer may be necessary or desirable to
give effect to this resolution.
<PAGE>
ALTAIR INTERNATIONAL INC.
PROXY
ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
JUNE 3, 1997
THIS PROXY IS SOLICITED BY THE MANAGEMENT OF
ALTAIR INTERNATIONAL INC.
The undersigned shareholder of Altair International Inc. (the
"Corporation") hereby nominates, constitutes and appoints William P. Long,
President and director, or failing him, James Golla, director, or instead of
any of them, _____________________, as nominee of the undersigned to attend
and vote for and on behalf of the undersigned at the annual and special
meeting of shareholders of the Corporation to be held on the 3rd day of June,
1997 and at any adjournment or adjournments thereof, to the same extent and
with the same power as if the undersigned were personally present at the said
meeting or such adjournment or adjournments thereof, and without limiting the
generality of the power hereby conferred, the nominees are specifically
directed to vote the shares represented by this proxy as indicated below.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AND WHERE A
CHOICE IS SPECIFIED WILL BE VOTED AS DIRECTED. WHERE NO CHOICE IS SPECIFIED,
THIS PROXY WILL CONFER DISCRETIONARY AUTHORITY AND WILL BE VOTED IN FAVOUR OF
THE RESOLUTIONS REFERRED TO ON THE REVERSE SIDE.
THIS PROXY ALSO CONFERS DISCRETIONARY AUTHORITY TO VOTE IN RESPECT
OF ANY AMENDMENTS OR VARIATIONS TO THE MATTERS IDENTIFIED IN THE NOTICE OF
MEETING OR ANY OTHER MATTER WHICH MAY PROPERLY COME BEFORE THE MEETING ABOUT
WHICH THE CORPORATION DOES NOT KNOW AS OF THE DATE THIS PROXY IS MAILED AND
IN SUCH MANNER AS SUCH NOMINEE IN HIS JUDGMENT MAY DETERMINE.
A SHAREHOLDER HAS THE RIGHT TO APPOINT A PERSON TO ATTEND AND ACT
FOR HIM AND ON HIS BEHALF AT THE MEETING OTHER THAN THE PERSONS DESIGNATED IN
THIS FORM OF PROXY. SUCH RIGHT MAY BE EXERCISED BY FILLING THE NAME OF SUCH
PERSON IN THE BLANK SPACE PROVIDED AND STRIKING OUT THE NAMES OF MANAGEMENT'S
NOMINEES, OR BY COMPLETING ANOTHER PROPER FORM OF PROXY AND, IN EITHER CASE,
DEPOSITING THE PROXY AS INSTRUCTED BELOW.
TO BE VALID, THIS PROXY MUST BE RECEIVED BY THE TRANSFER AGENT AT
THE ADDRESS INDICATED ON THE ENCLOSED ENVELOPE NOT LATER THAN 48 HOURS
(EXCLUDING SATURDAYS AND HOLIDAYS) BEFORE THE TIME OF HOLDING THE MEETING OR
ADJOURNMENT THEREOF, OR DELIVERED TO THE CHAIRMAN ON THE DAY OF THE MEETING
OR ADJOURNMENT THEREOF.
The nominees are directed to vote the shares represented by this proxy
as follows:
1. ELECTION OF DIRECTORS, each to serve until the next annual meeting
of shareholders of the Corporation and until their respective successor shall
have been duly elected and shall qualify:
/ / FOR all nominees listed below (except as marked to the
contrary).
/ / WITHHOLD AUTHORITY to vote for all nominees listed below.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST
BELOW.)
<PAGE>
William Long James Golla
George Hartman Bob Sheldon
2. Proposal in respect to the appointment of McGovern, Hurly,
Cunningham, Chartered Accountants, as auditors of the Corporation.
/ / FOR / / AGAINST / / WITHHOLD
3. Ordinary resolution approving an amendment to the stock option plan
for the Corporation to reserve an aggregate of 2,5000,000 common shares for
issue thereunder, a copy of which resolution is annexed as Schedule I to the
management information circular of the Corporation dated as of April 15, 1997.
/ / FOR / / AGAINST / / WITHHOLD
4. At the nominee's discretion upon any amendments or variations to
matters specified in the notice of the annual and special meeting or upon any
other matters as may properly come before the annual and special meeting or
any adjournments thereof about which the Corporation does not know as of the
date this proxy is mailed.
THE SHARES REPRESENTED BY THIS PROXY WILL BE
VOTED IN ACCORDANCE WITH THE INSTRUCTIONS GIVEN
ON ANY VOTE OR BALLOT CALLED AT THE ANNUAL AND
SPECIAL MEETING. UNLESS A SPECIFIC INSTRUCTION IS
INDICATED, SAID SHARES WILL BE VOTED FOR
CONFIRMATION AND/OR APPROVAL OF THE MATTERS
SPECIFIED IN ITEMS 1, 2 AND 3. ALL OF WHICH ARE
SET FORTH IN THE ACCOMPANYING MANAGEMENT
INFORMATION CIRCULAR RECEIPT OF WHICH IS HEREBY
ACKNOWLEDGED.
This proxy revokes and supersedes all proxies
of earlier date.
DATED this day of , 1997.
PRINT NAME:
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SIGNATURE:
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NOTES:
1. This proxy must be signed by the
shareholder or his attorney duly authorized in
writing, or if the shareholder is a
corporation, by the proper officers or
directors under its corporate seal, or by an
officer or attorney thereof duly authorized.
2. A person appointed as nominee to represent
a shareholder need not be a shareholder of the
Corporation.
3. If not dated, this proxy is deemed to bear
the date on which it was mailed on behalf of
the management of the Corporation.
4. Each shareholder who is unable to attend
the Meeting is respectfully requested to date
and sign this form of proxy and return it using
the self-addressed envelope provided.
<PAGE>
Appendix A
The attached Altair International Inc. Stock Option Plan (the "Stock
Option Plan") is filed as an appendix to this management information circular
and proxy statement as required by Regulation 14A of the Securities Exchange
Act of 1934. A copy of the attached Stock Option Plan will not be circulated
to shareholders.
ALTAIR INTERNATIONAL INC.
STOCK OPTION PLAN
1. PURPOSE
The purpose of this stock option plan (the "Plan") is to authorize the
grant to service providers for Altair International Inc. (the "Corporation")
of options to purchase common shares ("shares") of the Corporation's capital
and thus benefit the Corporation by enabling it to attract, retain and
motivate service providers by providing them with the opportunity, through
share options, to acquire an increased proprietary interest in the
Corporation.
2. ADMINISTRATION
The Plan shall be administered by the board of directors of the
Corporation. Subject to approval of the granting of options by the board of
directors, the Corporation shall grant options under the Plan.
3. SHARES SUBJECT TO PLAN
Subject to adjustment under the provisions of paragraph 12 hereof, the
aggregate number of shares of the Corporation which may be issued and sold
under the Plan will not exceed 2,000,000 shares. The total number of shares
which may be reserved for issuance to any one individual under the Plan shall
not exceed 5% of the outstanding issue. The Corporation shall not, upon the
exercise of any option, be required to issue or deliver any shares prior to
(a) the admission of such shares to listing on any stock exchange on which
the Corporation's shares may then be listed, and (b) the completion of such
registration or other qualification of such shares under any law, rules or
regulation as the Corporation shall determine to be necessary or advisable.
If any shares cannot be issued to any optionee for whatever reason, the
obligation of the Corporation to issue such shares shall terminate and any
option exercise price paid to the Corporation shall be returned to the
optionee.
4. LIMITS WITH RESPECT TO INSIDERS
(a) The maximum number of shares which may be reserved for issuance to
insiders under the Plan, any other employer stock option plans
or options for services, shall be 10% of the shares issued and
outstanding at the time of the grant (on a non-diluted basis).
(b) The maximum number of shares which may be issued to insiders under
the Plan, together with any other previously established or proposed
share compensation arrangements, within any one year period shall be
10% of the outstanding issue. The maximum number of shares which may
be issued to any one insider and his or her associates under the Plan,
together with any other previously established or
<PAGE>
2
proposed share compensation arrangements, within a one year period
shall be 5% of the shares outstanding at the time of the grant
(on a non-diluted basis).
(c) Any entitlement to acquire shares granted pursuant to the Plan, any
other employer stock option plans, options for services or any other
share compensation agreement, prior to the optionee becoming an
insider, shall be excluded for the purposes of the limits set out in
paragraphs (a) and (b) above.
5. ELIGIBILITY
Options shall be granted only to service providers for the Corporation.
The term "service providers for the Corporation" means (a) any employee or
insider of the Corporation or any of its subsidiaries, and (b) any other
person or entity engaged to provide ongoing management or consulting services
for the Corporation or any entity controlled by the Corporation. The terms
"insider", "controlled" and "subsidiary" shall have the meanings ascribed
thereto in the Securities Act (Ontario) from time to time. Notwithstanding
the foregoing, no person or entity shall qualify as a "service provider for
the Corporation" solely on account of the person or entity having beneficial
ownership of more than ten percent of the shares of the Corporation. Subject
to the foregoing, the board of directors shall have full and final authority
to determine the persons or entities who are to be granted options under the
Plan and the number of shares subject to each option.
6. PRICE
The purchase price (the "Price") for the shares of the Corporation under
each option shall be determined by the board of directors on the basis of the
market price, where "market price" shall mean the prior trading day closing
price of the shares of the Corporation on any stock exchange on which the
shares are listed, and where there is no such closing price, "market price"
shall mean the average of the most recent bid and ask of the shares of the
Corporation on any stock exchange on which the shares are listed. In no
event shall the Price be less than the market price on The Toronto Stock
Exchange, if the shares of the Corporation are then listed on such exchange.
7. PERIOD OF OPTION AND RIGHTS TO EXERCISE
Subject to the provisions of this paragraph 7 and paragraphs 8, 9 and 10
below, options will be exercisable in whole or in part, and from time to
time, during the currency thereof. Options shall not be granted for a term
exceeding five years. Options may, at the discretion of the board of
directors, provide that the number of shares which may be acquired pursuant
to the option shall not exceed a specified number each year during the term
of the option. The shares to be purchased upon each exercise of any option
(the "optioned shares") shall be paid for in full at the time of such
exercise. Except as provided in paragraphs 8 and 9 below, no option which
is held by a service provider may be exercised unless the optionee is then a
service provider for the Corporation.
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3
8. CESSATION OF PROVISION OF SERVICES
If any optionee who is a service provider shall cease to be a service
provider for the Corporation for any reason (except as otherwise provided in
paragraph 9) the optionee may, but only within the period of ninety days next
succeeding such cessation and in no event after the expiry date of the
optionee's option, exercise the optionee's option.
9. DEATH OF OPTIONEE
In the event of the death of an optionee during the currency of the
optionee's option, the option theretofore granted to the optionee shall be
exercisable within, but only within, the period of one year next succeeding
the optionee's death, and in no event after the expiry date of the option.
Before expiry of an option under this paragraph 9, the board of directors
shall notify the optionee's representative in writing of such expiry.
10. EXTENSION OF OPTION
In addition to the provisions of paragraphs 8 and 9, the board of
directors may extend the period of time within which an option held by a
deceased optionee may be exercised or within which an option may be exercised
by an optionee who has ceased to be a service provider for the Corporation,
but such an extension shall not be granted beyond the original expiry date of
the option. Any extensions of options granted under this Plan are subject to
applicable regulatory approval.
11. NON-TRANSFERABILITY OF OPTION
No option granted under the Plan shall be transferrable by an optionee
otherwise than by will or by the laws of descent and distribution, and such
option shall be exercisable, during an optionee's lifetime, only by the
optionee.
12. ADJUSTMENTS IN SHARES SUBJECT TO PLAN
The aggregate number and kind of shares available under the Plan shall
be appropriately adjusted in the event of a reorganization, recapitalization,
stock split, stock dividend, combination of shares, merger, consolidation,
rights offering or any other change in the corporate structure or shares of
the Corporation. The options granted under the Plan may contain such
provisions as the board of directors may determine with respect to
adjustments to be made in the number and kind of shares covered by such
options and in the option price in the event of any such change.
13. AMENDMENT AND TERMINATION OF THE PLAN
The board of directors may at any time amend or terminate the Plan, but
where amended, such amendment is subject to regulatory approval.
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4
14. EFFECTIVE DATE OF THE PLAN
The Plan becomes effective on the date of its approval by the
shareholders of the Corporation.
15. EVIDENCE OF OPTIONS
Each option granted under the Plan shall be embodied in a written option
agreement between the Corporation and the optionee which shall give effect to
the provisions of the Plan.
16. EXERCISE OF OPTION
Subject to the provisions of the Plan and the particular option, an
option may be exercised from time to time by delivering to the Corporation at
its registered office a written notice of exercise specifying the number of
shares with respect to which the option is being exercised and accompanied by
payment in cash or certified cheque for the full amount of the purchase price
of the shares then being purchased.
Upon receipt of a certificate of an authorized officer directing the
issue of shares purchased under the Plan, the transfer agent is authorized
and directed to issue and countersign share certificates for the optioned
shares in the name of such optionee or the optionee's legal personal
representative or as may be directed in writing by the optionee's legal
personal representative.
17. NOTICE OF SALE OF ALL OR SUBSTANTIALLY ALL SHARES OR ASSETS
If at any time when an option granted under this Plan remains
unexercised with respect to any optioned shares, (a) a general offer to
purchase all of the issued shares of the Corporation is made by a third party
or (b) the Corporation proposes to sell all or substantially all of its
assets and undertaking or to merge, amalgamate or be absorbed by or into any
other corporation (save and except for a subsidiary or subsidiaries of the
Corporation) under any circumstances which involve or may involve or require
the liquidation of the Corporation, a distribution of its assets among its
shareholders, or the termination of the corporate existence of the
Corporation, the Corporation shall use its best efforts to bring such offer
or proposal to the attention of the optionee as soon as practicable and (i)
the option granted under this Plan may be exercised, as to all or any of the
optioned shares in respect of which such option has not previously been
exercised, by the optionee at any time up to and including, (but not after) a
date thirty (30) days following the date of the completion of such sale or
prior to the close of business on the expiry date of the option, whichever is
the earlier; and (ii) the Corporation may require the acceleration of the
time for the exercise of the said option and of the time for the fulfilment
of any conditions or restrictions on such exercise.
<PAGE>
5
18. RIGHTS PRIOR TO EXERCISE
An optionee shall have no rights whatsoever as a shareholder in respect
of any of the optioned shares (including any right to receive dividends or
other distributions therefrom or thereon) other than in respect of optioned
shares in respect of which the optionee shall have exercised the option to
purchase hereunder and which the optionee shall have actually taken up and
paid for.
19. GOVERNING LAW
This Plan shall be construed in accordance with and be governed by the
laws of the Province of Ontario and shall be deemed to have been made in said
Province, and shall be in accordance with all applicable securities laws.
20. EXPIRY OF OPTION
On the expiry date of any option granted under the Plan, and subject to
any extension of such expiry date permitted in accordance with the Plan, such
option hereby granted shall forthwith expire and terminate and be of no
further force or effect whatsoever as to such of the optioned shares in
respect of which the option has not been exercised.
21. APPROVAL
The Plan has been approved by the shareholders of the Corporation on May
10, 1996 and amended by the directors of the Corporation on May 2, 1997.
DATED at Toronto, Ontario, this 10th day of May, 1997.
/s/ William Long
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William Long, President
