[LIVE]
[SUBMISSION-CONTACT]
[NAME] NICK SANTINI
[PHONE] (416) 777-6134
[FILER]
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of a Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month(s) of: January 1, 1997 to December 31, 1997
NEWCOURT CREDIT GROUP INC.
BCE Place, 181 Bay Street
Suite 3500, P.O. Box 827
Toronto, Ontario
Canada, M5J 2T3
[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 / / Form 40-F /X/
[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 / / No /X/
[If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b)]
82-
SIGNATURES
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: March 20,1998 NEWCOURT CREDIT GROUP INC.
By: John P. Stevenson
Corporate Secretary
<PAGE>
NEWCOURT CREDIT GROUP INC.
MANAGEMENT INFORMATION CIRCULAR
For the Annual General and Special Meeting of Shareholders
to be held on March 25, 1998
PROXIES
Solicitation of Proxies
This management information circular (the "Information Circular") is
furnished in connection with the solicitation of proxies by the management
of Newcourt Credit Group Inc. (the "Corporation") for use at the Annual
General and Special Meeting of Shareholders of the Corporation to be held
on Wednesday, March 25, 1998 at 10:00 a.m. (Toronto time), and at any
adjournment thereof (the "Meeting"), for the purposes set forth in the Notice
of Meeting. The costs incurred in the preparation and mailing of the form of
proxy, Notice of Meeting and the Information Circular will be borne by the
Corporation. In addition to the use of mail, proxies may be solicited by
personal interviews or by other means of communication or by directors,
officers and employees of the Corporation, who will not be remunerated
therefor.
No person is authorized to give any information or to make any
representation with respect to the matters contained in this Information
Circular other than that information or those representations set out herein,
and, if given or made, such information or representations must not be relied
upon as having been authorized.
Appointment Of Proxies
The persons named in the enclosed form of proxy are directors or officers of
the Corporation. A shareholder submitting a proxy has the right to appoint a
person (who need not be a shareholder of the Corporation) to represent him,
her or it at the Meeting. To exercise this right, the shareholder should
insert the name of the desired representative in the blank space provided
in the form of proxy, or submit another appropriate proxy.
Proxies must be delivered not less than 48 hours before the time of the
Meeting at the office of Montreal Trust Company of Canada, Stock Transfer
Department, 151 Front Street West, 8th Floor, Toronto, Ontario, M5J 2N1, or
to the attention of the Corporate Secretary at the registered office of the
Corporation, Suite 3500, BCE Place, 181 Bay Street, P.O. Box 827, Toronto,
Ontario, M5J 2T3.
The instrument appointing a proxy shall be in writing and shall be executed
by the shareholder or his, her or its attorney authorized in writing or, if the
shareholder is a Corporation, under its corporate seal or by an officer or
attorney thereof duly authorized.
<PAGE>
Revocability of Proxy
A shareholder who has submitted a proxy may revoke it at any time prior to
the exercise thereof. If a person who has given a proxy attends personally at
the Meeting, such person may revoke the proxy and vote in person. In
addition to revocation in any other manner permitted by law, a proxy may be
revoked by instrument in writing executed by the shareholder or his, her or
its attorney authorized in writing or, if the shareholder is a corporation,
under its corporate seal or by an officer or attorney thereof duly
authorized, and deposited either to the attention of the Corporate Secretary
at the registered office of the Corporation at any time up to and including
the last business day before the Meeting at which the proxy is to be used, or
with the Chairman of the Meeting on the day of the Meeting prior to the start
of the Meeting.
Confidentiality of Voting
Under normal circumstances, confidentiality of voting is maintained by
virtue of the fact that proxies and votes are tabulated by the Corporation's
transfer agent. However, such confidentiality may be lost as to any proxy or
ballot if a question arises as to validity or revocation or any other like
matter of a legal nature. Loss of confidentiality may also occur if the
Board of Directors decides that disclosure is in the interest of the
Corporation or its shareholders. Complete confidentiality may be secured by
the shareholder registering his, her or its shares in the name of a nominee.
Exercise of Discretion By Proxy
The common shares of the Corporation (the "Common Shares") represented
by proxy in favour of management will be voted by management for or
against, or withheld from voting, on any poll or ballot at the Meeting and
where the shareholder specifies a choice with respect to any matter to be
acted upon, the Common Shares will be voted for or against, or withheld
from voting, on any poll or ballot in accordance with the specification so
made.
In the absence of such specification, such Common Shares will be voted in
favour of the matters to be acted upon as set out herein. The persons
appointed under the form of proxy furnished by the Corporation are
conferred with discretionary authority with respect to amendments to or
variations of those matters specified in the form of proxy and Notice of
Meeting and with respect to any other matters which may properly be
brought before the Meeting. At the date of this Information Circular,
management of the Corporation knows of no such amendment, variation or
other matter.
INFORMATION CONCERNING THE CORPORATION
Voting Shares and Principal Holders Thereof
The Corporation is authorized to issue an unlimited number of Common
Shares and Special Shares. As at December 31, 1997, 83,070,958 Common
Shares of the Corporation were issued and outstanding. As at the date of this
Information Circular, 139,277,405 Common Shares of the Corporation were
issued and outstanding and no Special Shares were issued and outstanding.
Each Common Share is entitled to one vote per share.
<PAGE>
The Board of Directors has determined that any person holding Common
Shares of record as of 5:00 p.m. (Toronto time) on Monday, February 16,
1998 shall be entitled to vote such Common Shares at the Meeting, except to
the extent that the person has transferred the ownership of his, her or its
Common Shares after 5:00 p.m. (Toronto time) on February 16, 1998 and the
transferee of those Common Shares establishes that he, she or it owns the
Common Shares and requests, no later than ten (10) days before the Meeting,
to be included in the list of those entitled to vote at the Meeting, in which
case the transferee shall be entitled to vote those Common Shares at the
Meeting.
To the knowledge of the directors and officers of the Corporation, as of the
date hereof, the following persons, own beneficially, either directly or
indirectly, or exercise control or direction over, Common Shares carrying
more than 10% of the votes attached to the Common Shares as a class:
<PAGE>
SHAREHOLDERS OWNING COMMON SHARES CARRYING MORE THAN
TEN PER CENT OF THE VOTES ATTACHED TO THE COMMON SHARES AS
A CLASS
<TABLE>
<CAPTION>
Shareholder Number of Common % of Total issued
Shares and Outstanding
Common Shares
<S> <C> <C>
Hercules Holdings (Cayman) Limited 17,633,857 12.7
AIC Group of Funds 14,511,000 10.4
Canadian Imperial Bank of Commerce 14,067,962 10.1
</TABLE>
The directors and senior executive officers of the Corporation (collectively,
the "Insiders"), as a group beneficially own, directly or indirectly, 8,358,719
Common Shares, representing 6.0% of the Common Shares outstanding as at
the date of this Information Circular.
Of the Common Shares beneficially owned, directly or indirectly, by the
Insiders of the Corporation, 1,882,396 Common Shares (the "Escrowed
Shares"), representing 1.4% of the Common Shares outstanding as at the date
hereof, are presently deposited with the Montreal Trust Company of Canada
("Montreal Trust"), as escrow agent, pursuant to an escrow agreement dated
February 11, 1994 as amended by an escrow amending agreement dated
December 12, 1995 (collectively, the "Escrow Agreement") among the
Corporation, Cameron Capital Corporation ("Cameron Capital") (the holding
company of Steven K. Hudson), A&A Capital Limited ("A&A Capital") (the
holding company of Bradley D. Nullmeyer), M&S Capital Limited ("M&S
Capital") (the holding company of David D. McKerroll), Thomas R. Allen,
The Mutual Life Assurance Company of Canada (the "Mutual Group"), and
Canadian Imperial Bank of Commerce ("CIBC"), as lender to Cameron
Capital, A&A Capital and M&S Capital.
The Escrow Agreement provides for the release of the Escrowed Shares as
follows: 10% of the Escrowed Shares were released on November 11, 1994;
a further 20% of such shares were released on each of November 11, 1995,
November 11, 1996, and November 11, 1997; and the remaining 30% will be
released on November 11, 1998.
<PAGE>
The Escrowed Shares may not be transferred within escrow, released from
escrow or otherwise dealt with prior to the above dates without the prior
express consent in writing of the Ontario Securities Commission and of the
Commission des valeurs mobiliores du Quebec. The Escrowed Shares may
be pledged as security for in debtedness to certain financial institutions,
subject to the terms of the Escrow Agreement. The Escrowed Shares owned
by each of Cameron Capital, A&A Capital and M&S Capital have been
pledged to CIBC, as security for indebtedness of such persons to CIBC.
The Mutual Group, CIBC, Hercules Holdings (Cayman) Limited
("Hercules"), Cameron Capital Corporation, A&A Capital Limited and M&S
Capital Limited (together, the "Principal Shareholders") entered into an
amended and restated shareholders' agreement (the "Shareholders'
Agreement") on November 17, 1997. Pursuant to the Shareholders'
Agreement, the Principal Shareholders agreed to nominate and, with the
exception of Hercules, agreed to exercise the voting rights attached to the
Common Shares owned by them in favour of a board of directors of the
Corporation comprising: two (2) nominees of The Mutual Group; two (2)
nominees of CIBC; two (2) nominees of Hercules; three (3) employees of the
Corporation to be selected by Messrs. Hudson, Nullmeyer and McKerroll
(the "Management Shareholders"); and, a majority of nominees who are
independent of the Corporation. The Management Shareholders also agreed
in the Shareholders' Agreement that they will own, directly or indirectly, an
aggregate of not less than 3,500,000 Common Shares.
CORPORATE GOVERNANCE
Overview
The Toronto Stock Exchange (the "TSE") has issued a series of guidelines
for effective corporate governance of publicly traded corporations (the "TSE
Guidelines") which, although not mandatory, contain recommendations with
respect to the constitution of boards of directors and committees of the board,
their functions, their independence from management and other procedures
for ensuring sound corporate governance. The TSE has also adopted as a listing
requirement that disclosure be made by each listed company of its corporate
governance system with reference to the TSE Guidelines. In compliance
with this listing requirement, the following describes the Corporation's
corporate governance practices and the policies of the Board of Directors to
ensure on-going continued compliance with the guidelines.
The Board of Directors and senior management of the Corporation consider
good corporate governance to be central to the effective and efficient
operation of the Corporation and enhancement of shareholder value. Early in
1994, the Board of Directors reviewed its corporate governance practices
which had evolved over many years with the view of adopting a corporate
governance policy in compliance with the recommendations of the TSE
Guidelines. The Board of Directors formally adopted such a policy on
February 1, 1995 and extended the mandate of the Compensation and
Conduct Review Committee of the Board of Directors to monitor all on-
going aspects of the Corporation's corporate governance policies and
procedures.
<PAGE>
Composition of the Board of Directors
A principal recommendation of the TSE Guidelines is that boards of
directors, and each of the committees thereof, of publicly traded corporations
be comprised of a majority of outside and unrelated directors. Twelve (12)
directors were elected at the Annual General and Special Meeting of
Shareholders of the Corporation held on March 25, 1997 and three (3)
directors were appointed by the Board of Directors during 1997. The three
(3) additional directors appointed by the Board of Directors during 1997
were: Gerald E. Beasley, Senior Executive Vice President, Risk
Management, CIBC; Richard E. Venn, Chairman and Chief Executive
Officer, CIBC Wood Gundy Securities Inc.; and, Edwin F. Hawken, formerly
President and Chief Executive Officer of Commcorp Financial Services Inc.
Of the fifteen (15) directors who held office during 1997, eleven (11) would
be considered to be unrelated directors within the meaning of the TSE
Guidelines as they were "independent of management and free from any
interest and any business or other relationship which could, or could
reasonably be perceived to, materially interfere with the director's ability to
act with a view to the best interests of the Corporation, other than interests
and relationships arising from shareholding". The remaining four (4) directors
were: David J. Sharpless, Chairman of the Board of Directors; Steven K.
Hudson, President and Chief Executive Officer; Bradley D. Nullmeyer,
Executive Vice President; and David D. McKerroll, Executive Vice President.
The Articles of the Corporation provide that the Corporation shall have a
Board of Directors consisting of a minimum of ten (10) and a maximum of
twenty (20) directors. On April 18, 1995, the shareholders of the
Corporation approved a special resolution empowering the Board of
Directors to determine the number of directors of the Corporation from time
to time, within these minimum and maximum limitations and subject to
applicable law. The TSE Guidelines recommends that boards of directors
examine their size and, with a view to determining the impact of the number
of directors upon effectiveness, undertake, where appropriate, a program
to reduce the number of directors to a number which facilitates more
effective decision making. The Board of Directors has considered this
recommendation and has determined that a number not exceeding twenty
(20) is the optimum number of members for the Board of Directors for the
ensuing year.
Mandate of The Board of Directors
The Board of Directors has the duty to supervise the management of the
Corporation's business and affairs pursuant to the powers vested in it by the
Business Corporations Act (Ontario) with the objective of maintaining the
strength and integrity of the Corporation. In order to fulfil its mandate, the
Board of Directors, and each committee of the Board, meets regularly on a
quarterly basis and holds additional meetings whenever appropriate to
consider particular issues.
In furtherance of its duties and responsibilities, the Board of Directors: (a)
oversees the Corporation's overall strategic planning process and annual
business plan and monitors the implementation of the short and long term
objectives of the Corporation; (b) directly, and through the Investment
Committee, reviews and assesses the principal risks arising from or incidental
to the business activities of the Corporation and the on-going management of
such risks; (c) directly, through the Audit Committee and through the
Corporation's external auditors, monitors and assesses the Corporation's
internal control and management information systems and approves the
Annual consolidated financial statements of the Corporation and
<PAGE>
Management's Discussion and Analysis of such financial results as contained
in the Corporation's Annual Report to Shareholders; (d) appoints the senior
executives of the Corporation; (e) directly, through the Compensation and
Conduct Review Committee and with the assistance of external human
resources consultants, reviews the performance of senior executives in light
of achievement of business objectives and profit targets and enhancing return
on shareholders' equity, and approves the compensation of senior executives;
(f) oversees the Corporation's public communications policies and
procedures, including disclosure of material information, investor relations
and shareholder communications; and (g) establishes and oversees the
mandate of all committees of the Board and appoints the members to serve
on such committees. All major decisions affecting the business and affairs
of the Corporation, including all major decisions of each committee of the
Board, are subject to ratification and approval by the Board of Directors.
Chairman of The Board of Directors
David J. Sharpless was appointed Chairman of the Board on March 25, 1997,
and held this position until February 4, 1998, at which time the Board of
Directors appointed David F. Banks as Chairman and Mr. Sharpless as
Deputy Chairman. During his tenure as Chairman, Mr. Sharpless also served
as Chairman of the Executive Committee and as a member of both the
Compensation and Conduct Review Committee and the Long Range
Planning Committee. In his capacity as Deputy Chairman, Mr. Sharpless
will continue to assist in corporate matters and will assume responsibility
for managing the Corporation's international operations and significant joint
ventures.
The Chairman of the Board is responsible for ensuring that appropriate
structures and procedures are in place to facilitate the functioning of the
Board, and committees of the Board, independently of management. In this
regard, the Chairman, with the assistance of the Secretary of the Corporation
who reports directly to the Chairman, determines the agenda of all meetings
of the Board and supervises the agenda of all committees of the Board. The
Chairman of the Board is also responsible for monitoring and evaluating the
effectiveness of the Board, the committees of the Board and individual
directors and serves as Chairman of the Executive Committee acting as a
nominating committee for the purpose of selecting nominees to serve as
directors of the Corporation.
Committees of The Board of Directors
The Board of Directors has established five committees of the Board to assist
it in fulfilling its mandate and in order to permit directors to devote the
necessary expertise and resources to particular areas. These committees
include the Executive Committee, the Audit Committee, the Compensation
and Conduct Review Committee, the Long Range Planning Committee and
the Investment Committee. In compliance with the TSE Guidelines, all of
the members of the Audit Committee are unrelated directors and a majority
of the members of each of the other four committees consists of unrelated
directors. During 1997, with the exception of the Executive Committee and
the Investment Committee, the Chairmen of which were David J. Sharpless
and Steven K. Hudson, respectively, the Chairman of each of the committees
was an unrelated director. All committees of the Board of Directors meet
independently of management when required.
<PAGE>
During 1997, the Executive Committee was comprised of five (5) directors,
three (3) of whom were unrelated directors as defined in the TSE Guidelines.
The remaining members were David J. Sharpless, Chairman of the Board of
Directors and Steven K. Hudson, President and Chief Executive Officer of
the Corporation. The Chairman of the Executive Committee during 1997
was David J. Sharpless. The Executive Committee meets only on an as-
required basis when the full Board is not in session and is responsible for
advising executive management on specific business and managerial issues,
such as sensitive or strategic matters and special risk situations, as they
arise. Acting as the nominating committee, the Executive Committee also
establishes the criteria and procedures for the selection of nominees
for election to the Board of Directors. As the Executive Committee does not
exercise all of the powers of the Board, its recommendations are referred to
the Board for approval.
During 1997, the Audit Committee was comprised of four (4) directors, all of
whom were unrelated directors. Bruce I. Robertson was the Chairman of the
Audit Committee. The Audit Committee meets regularly following each financial
quarter and by special meeting if required. Its responsibilities include the
review of the Corporation's external audit plan, internal auditing process,
accounting standards and practices, financial information and accounting
systems, internal control and data security procedures, financial risk
management, and the financial reporting and statements of the Corporation.
The Audit Committee communicates directly with the Corporation's external
auditors and meets with the external auditors, in the absence of management,
at each quarterly meeting of the Audit Committee.
During 1997, the Compensation and Conduct Review Committee was
comprised of five (5) directors, three (3) of whom were unrelated directors.
The remaining two (2) members were David J. Sharpless, and David D.
McKerroll, Executive Vice President of the Corporation. Paul G. Morton
was the Chairman of the Committee. The Compensation and Conduct
Review Committee meets regularly following each financial quarter and by
special meeting if required. This Committee also serves as a corporate
governance committee with the mandate to enhance the Corporation's
corporate governance procedures through a continuing assessment of those
procedures and the formation of corporate governance policy recommendations
to the Board of Directors. Its responsibilities include the review of
transactions with related parties of the Corporation and the on-going
monitoring of the Corporation's procedures with respect to conflicts of
interest, disclosure of information, customer complaints and business ethics.
The Compensation and Conduct Review Committee reviews, at least annually, the
succession plan for the President and Chief Executive Officer and senior
officers of the Corporation and the general human resources policies and
procedures of the Corporation. This Committee also reviews, at least
annually, the performance of the President and Chief Executive Officer and
senior officers and, with the assistance of external human resources
consultants, reviews and recommends to the Board for approval, the level and
form of compensation of the President and Chief Executive Officer and senior
officers and directors of the Corporation.
During 1997, the Long Range Planning Committee was comprised of five (5)
directors, three (3) of whom were unrelated directors. The remaining two (2)
members of the Committee were David J. Sharpless and Steven K. Hudson.
The Chairman of the Committee was William D. Walsh. The mandate of the
Long Range Planning Committee is to identify factors such as market trends,
political and socio-economic trends and national and international
<PAGE>
developments which are likely to influence the business and affairs of the
Corporation and to recommend to the Board of Directors and senior
management of the Corporation long term objectives and strategies in
response to such factors.
During 1997, the Investment Committee was comprised of six (6) directors,
four (4) of whom were unrelated directors. The remaining two (2) members
were: Steven K. Hudson and, Bradley D. Nullmeyer, Executive Vice
President of the Corporation. The Investment Committee meets regularly, if
required, every two weeks. Its responsibilities include the review, and
recommendation for approval to the Board of Directors at least annually, of
the Corporation's Credit Manual; which manual sets out the Corporation's
credit philosophies, guidelines, underwriting procedures, portfolio
management process, individual maximum credit exposures and credit
authorization levels. The Investment Committee also regularly reviews and
monitors the Corporation's investment and lending practices and results,
including reviewing portfolio credit quality, diversification, domestic and
international exposure, arrears and credit losses in excess of established
limits.
Shareholder Communications
The Corporation's shareholder communication policy is, as noted above,
subject to review at least annually by the Compensation and Conduct Review
Committee. The fundamental objective of the shareholder communication
policy is to ensure open, accessible and timely disclosure to all shareholders
of information respecting the business, affairs and performance of the
Corporation. This policy, in conjunction with the Corporation's policies and
procedures with respect to confidentiality and securities trading, ensures that
timely disclosure of all material information is completed in accordance with
the requirements of applicable securities legislation and other statutory
obligations governing the disclosure of such information. To facilitate the
effective and timely dissemination of information to all shareholders, the
Corporation releases its information through newswire services, the general
media, conferences with investment analysts and regular mailings to all
shareholders.
REMUNERATION OF DIRECTORS AND OFFICERS
Compensation of Directors
The directors of the Corporation (other than the Chairman of the Board of
Directors and those directors who are also officers of the Corporation or
employees of The Mutual Group) received cash compensation during 1997
of $20,000 per annum, plus $900 for each meeting of the Board of Directors,
or of any committee thereof, attended. Each Chairman of a committee of the
Board of Directors (other than the Chairman of the Board of Directors and
those directors who are also officers of the Corporation or employees of The
Mutual Group) received an additional cash compensation of $5,000 per
annum. Fees paid to Gerald E. Beasley and Richard E. Venn were paid
directly to CIBC and CIBC Wood Gundy Securities, Inc. ("CIBC Wood
Gundy") respectively. In addition to this cash compensation, on May 2,
1997, the Corporation granted to each director (other than the Chairman of
the Board of Directors and those directors who are also officers of the
Corporation or employees of The Mutual Group, CIBC and CIBC Wood
Gundy), pursuant to the Corporation's stock option plan (the "Option Plan"),
<PAGE>
an option to purchase 3,000 Common Shares, exercisable on or after May 2,
1999 up to and including May 2, 2007, at an exercise price of $26.00 per
Common Share.
David J. Sharpless was appointed Chairman of the Board of Directors on
March 25, 1997. Mr. Sharpless received cash compensation during 1997 of
$558,000 and options to purchase 285,714 Common Shares exercisable as to
twenty-five per cent (25%) on or after May 2, 1999; fifty per cent (50%) on
or after May 2, 2000; seventy-five per cent (75%) on or after May 2, 2001;
and, the remainder on or after May 2, 2002 at an option exercise price of
$26.00 per Common Share.
On the recommendation of the Compensation and Conduct Review
Committee and the advice of independent compensation consultants, on
February 4, 1998, the Board of Directors approved amendments to the
Corporation's policy on remuneration of directors to provide that the annual
compensation to be paid to directors of the Corporation (other than the
Chairman of the Board and those directors who are also officers of the
Corporation or employees of the Mutual Group, CIBC, CIBC Wood Gundy
or Nomura International plc ("Nomura")) shall consist of 500 Common Shares
of the Corporation. These Common Shares will be acquired on behalf of the
director upon the direction of the recipient director through the facilities
of the TSE. The annual compensation to be paid to directors who are also
employees of the Mutual Group, CIBC, CIBC Wood Gundy or Nomura shall be paid
in the form of the cash equivalent of such 500 Common Shares of the
Corporation directly to the Mutual Group, CIBC, CIBC Wood Gundy or Nomura as
the case may be. A fee of $900 for each meeting of the Board of Directors or
Committee thereof attended, shall be paid to all directors (other than the
Chairman of the Board of Directors and those directors who are also employees
of the Corporation); which fee shall be paid directly to the Mutual Group,
CIBC, CIBC Wood Gundy or Nomura, as the case may be, with respect to those
directors who are also employees of such entities. The Board of Directors
has also determined that directors (other than directors who are also
employees of the Mutual Group, CIBC, CIBC Wood Gundy or Nomura) shall be
required to hold a minimum of $250,000 of Common Shares following three (3)
years of appointment to the Board of Directors.
The following table sets out the options held by all directors who are not also
executive officers as a group.
OPTIONS HELD BY DIRECTORS WHO ARE NOT
ALSO EXECUTIVE OFFICERS AS A GROUP
<PAGE>
<TABLE>
<CAPTION>
Number of Market Price at
Optioned Shares Exercise Price Date of Grant Expiry Date
<S> <C> <C> <C> <C>
Options held by 6 directors who 18,000 26.00 26.00 May 2, 2007
are not also executive officers
as a group
Options held by 5 directors who 15,000 14.40 14.40 Feb. 23, 2001
are not also executive officers
as a group
Options held by 4 directors who 16,000 8.75 8.75 Feb. 23, 1998
are not also executive officers
as a group
Options held by 2 directors who 15,600 6.75 6.75 Feb. 23, 1998
are not also executive officers
as a group
Options held by 1 director who 30,000 7.75 7.75 Feb. 23, 1998
is not also an executive officer 20,000 24.25 24.25 Feb. 6, 2007
Notes: (1) An aggregate of 565,940 Common Shares of the Corporation are owned by
such directors who are not also executive officers as a group.
</TABLE>
<PAGE>
Compensation of Executive Officers
The following table sets forth all compensation paid to the Chief Executive
Officer of the Corporation and each of the next four highest paid executive
officers (collectively, the "Named Executive Officers") for the fiscal year
ended December 31, 1997 and for the two prior fiscal years ended December 31,
1996 and December 31, 1995.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
FOR THE YEARS ENDED
DECEMBER 31, 1997, DECEMBER 31, 1996 AND DECEMBER 31, 1995
Annual Long-Term
Compensation Compensation
Other Annual Common Shares
Name and Principal Position Year Salary Bonus Compensation<Fn1> Under Option
<S> <C> <C> <C> <C> <C>
($) ($) ($) (#)
Steven K. Hudson 1997 114,500 2,081,000 59,171 285,714
Chief Executive Officer 1996 114,500 2,775,000 19,144 nil
1995 95,000 1,553,000 24,471 nil
Bradley D. Nullmeyer 1997 94,500 1,385,000 20,902 285,714
President, Newcourt Financial1996 94,500 1,629,000 24,234 nil
1995 75,000 906,000 18,771 nil
David D. McKerroll 1997 94,500 1,324,000 24,313 285,714
President, Newcourt Capital 1996 94,500 1,558,000 24,209 nil
1995 75,000 781,000 19,765 nil
Borden D. Rosiak 1997 294,500 619,000 23,631 285,714
Executive Vice President 1996 294,500 764,000 21,343 40,000
1995 125,000 350,000 10,479 27,500
Daniel A. Jauernig 1997 75,000 670,000 5,020 285,714
President, Newcourt Services 1996 75,000 670,000 7,949 80,000
and Chief Financial Officer 1995 75,000 350,000 7,686 20,000
<Fn1> Other Annual Compensation includes a car allowance, life insurance, health
benefits and vacation pay.
</Fn1>
<Fn2> On February 4, 1998 each of Messrs. Nullmeyer, McKerroll, Rosiak and
Jauernig were appointed by the Board of Directors to their respective
positions shown above. During 1997, Mr. Hudson occupied the position of
President and Chief Executive Officer; each of Messrs. Nullmeyer and
McKerroll occupied the position of Executive Vice President; Mr. Rosiak
occupied the position of Executive Vice President and Chief Financial Officer;
and, Mr. Jauernig occupied the position of Senior Vice President and Treasurer.
</Fn2>
</TABLE>
<PAGE>
The following table sets out the individual grants of options to purchase
Common Shares of the Corporation made during the year ended December 31, 1997
to each of the Named Executive Officers pursuant to the Option Plan.
<TABLE>
<CAPTION>
OPTIONS GRANTED DURING THE YEAR
ENDED DECEMBER 31, 1997
Market Value
Common of Common
Shares % of Total Shares
Under Options Granted Exercise Underlying
Name and Options Employees in the Price Options Expiration
Principal Position Granted<Fn1> Financial Year<Fn2> Date of Grant Date
<S> <C> <C> <C> <C> <C>
(#) (%) ($) ($)
Steven K. Hudson 285,714 11.2 26.00 26.00 May 2, 2007
Chief Executive Officer
Bradley D. Nullmeyer 285,714 11.2 26.00 26.00 May 2, 2007
President, Newcourt Financial
David D. McKerroll 285,714 11.2 26.00 26.00 May 2, 2007
President, Newcourt Capital
Borden D. Rosiak 285,714 11.2 26.00 26.00 May 2, 2007
Executive Vice President
Daniel A. Jauernig 285,714 11.2 26.00 26.00 May 2, 2007
President, Newcourt Services
and Chief Financial Officer
<Fn1> These options were issued on May 2, 1997 pursuant to the Option Plan.
During 1997, the Corporation granted options to purchase in the aggregate
2,557,298 Common Shares, which options are exercisable as to twenty-five per
cent (25%) on or after May 2, 1999; fifty per cent (50%) on or after May 2,
2000; seventy-five per cent (75%) on or after May 2, 2001; and, the remainder
on or after May 2, 2002.
</Fn1>
<Fn2> The percentage of total options granted in 1997 represents the number of
options issued to the Named Executive Officer expressed as a percentage of the
total number of all options issued during the year ended December 31, 1997.
</Fn2>
<Fn3> As of the date of this Information Circular:
* Steven K. Hudson beneficially owns, directly or indirectly, an aggregate of
3,645,389 Common Shares;
* Bradley D. Nullmeyer beneficially owns, directly or indirectly, an aggregate
of 1,936,215 Common Shares;
* David D. McKerroll beneficially owns, directly or indirectly, an aggregate
of 1,545,697 Common Shares;
* Borden D. Rosiak beneficially owns, directly or indirectly, an aggregate of
115,110 Common Shares; and
* Daniel A. Jauernig beneficially owns, directly or indirectly, an aggregate
of 336,566 Common Shares.
</Fn3>
</TABLE>
<PAGE>
The following table sets out the value of options to acquire Common Shares held
by the Named Executive Officers as at December 31, 1997.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES AND
VALUE OF OUTSTANDING OPTIONS
AS AT DECEMBER 31, 1997
Common
Shares
Acquired O Aggregate Unexercised Options to Value of Unexercised in the
Name and Exercise O Value Acquire Common Shares Money Options as at
Principal Position Options Realized<Fn1> as at December 31, 1997 December 31, 1997<Fn5>
<S> <C> <C> <C> <C> <C> <C>
(#) ($) (#) ($)
Exercisable Unexercisable Exercisable Unexercisable
Steven K. Hudson nil nil nil 285,714 nil 6,242,851
Chief Executive Officer
Bradley D. Nullmeyer 204,896<Fn2> 8,794,136 nil 285,714 nil 6,242,851
President, <Fn3>
Newcourt Financial 98,000<Fn2> 2,696,960
David D. McKerroll 183,728<Fn2> 7,885,605 nil 285,714 nil 6,242,851
President, <Fn3>
Newcourt Capital 77,500<Fn2> 2,132,800
Borden D. Rosiak nil nil 54,167 299,047 2,058,762 6,720,839
Executive Vice President
Daniel A. Jauernig 20,000<Fn4> 768,000 67,333 312,381 2,487,388 7,198,863
President, 4,000<Fn4> 157,600
Newcourt Services
and Chief Financial Officer
<Fn1> Based on the difference between the market value per Common Share as at
the date of exercise as quoted on the Toronto Stock Exchange and the exercise
price per Common Share underlying the option.
</Fn1>
<Fn2> If not exercised during this period, these options would otherwise have
expired on November 19, 1997.
</Fn2>
<Fn3> The Common Shares underlying these options are beneficially owned by
Messrs. Nullmeyer and McKerroll, respectively, as of the date hereof.
</Fn3>
<Fn4> If not exercised during this period, these options would otherwise
have expired on February 23, 1998.
</Fn4>
<Fn5> Based on the difference between the market value per Common Share as at
December 31, 1997 as quoted on The Toronto Stock Exchange and the exercise
price per Common Share underlying the option.
</Fn5>
</TABLE>
<PAGE>
Compensation and Conduct Review Committee
During the year ended December 31, 1997, the following individuals served
as members of the Compensation and Conduct Review Committee (the
"Committee"): Paul G. Morton, Chairman of the Committee, David J.
Sharpless, Ronald A. McKinlay, Dr. Steven C. Small and David D.
McKerroll. The Chairman of the Committee and all of the members of the
Committee, other than David J. Sharpless, were, for the purposes of the TSE
Guidelines, outside and unrelated directors.
Report on Executive Compensation
As discussed above under the heading "Corporate Governance", the
Committee is responsible for reviewing and monitoring the compensation
policies of the Corporation to ensure that the Corporation is able to recruit,
retain and motivate competent employees who are capable of implementing
the strategies and achieving the objectives of the Corporation. In furtherance
of this mandate, the Committee met on six (6) occasions during 1997 to
review, among other things, management compensation policies and
practices and strategies and developmental activities relating to the
implementation of a management succession plan. The Committee also has a
specific mandate to review, and recommend to the Board of Directors for
approval, the compensation of the Chairman, directors, executive officers,
including the Named Executive Officers, and other employees of the
Corporation. At its meeting on February 3, 1998, the Committee, with the
advice of independent consultants, recommended that the annual fee paid be
paid in the form of 500 Common Shares of the Corporation to directors of
the Corporation other than the Chairman of the Board of Directors and those
directors who are also officers of the Corporation or employees of the Mutual
Group, CIBC, CIBC Wood Gundy or Nomura, and should be paid in the
form of cash directly to the Mutual Group, CIBC, CIBC Wood Gundy and
Nomura with respect to those directors who are also employees of such
entities. The Common Shares to be paid to the foregoing directors shall be
purchased pursuant to the direction of such directors through the facilities of
the TSE. This recommendation was approved by the Board of Directors
on February 4, 1998.
Steven K. Hudson provides information to the Committee, makes
recommendations on compensation policy matters generally and on the
compensation of the Named Executive Officers, but does not participate in
and is not present during discussions regarding the determination of his own
compensation arrangements. In 1997 the Board approved the extension of
existing employment and compensation agreements with four of the Named
Executive Officers, Steven K. Hudson, Bradley D. Nullmeyer, David D.
McKerroll and Borden D. Rosiak, which terminated on December 31, 1997.
The employment agreements provided for a bonus plan for the
years ended December 31, 1996 and December 31, 1997. Under the plan,
bonus entitlement is calculated by reference to the amount by which the pre-
tax income of the Corporation exceeds certain pre-established targets. At its
meeting on February 4, 1998, the Board of Directors approved new
employment and compensation agreements with each of the four Named
Executive Officers on substantially the same terms and conditions as the
existing agreements and approved employment and compensation
agreements with each of David F. Banks and Daniel A. Jauernig
on comparable terms and conditions to those of the employment and
compensation agreements with the four Named Executive Officers.
<PAGE>
For the purposes of assisting the Committee in its review of executive
compensation matters generally and the terms and conditions of the
employment contracts with each of the Named Executive Officers, the
Corporation retains the services of external compensation consultants.
During 1997, the consultants provided advice to the Committee on the
Corporation's compensation policies generally as they apply to all employees,
and with comparative compensation data with respect to executive
compensation and directors compensation paid by financial services
ompanies of similar size in North America with performance-based executive
and director compensation policies. The compensation of all senior officers,
including the Named Executive Officers, but excluding senior officers and
other employees involved in credit adjudication and loan management, are
consistent with the Corporation's principles and policies underlying employee
compensation generally in establishing a low to moderate base salary coupled
with a bonus based on the individual officer's contribution to the achievement
of the Corporation's financial objectives.
Presented by the Compensation and Conduct Review Committee
Paul G. Morton, Chairman
David D. McKerroll
Ronald A. McKinlay
David J. Sharpless
Dr. Steven C. Small
Indebtedness of Directors and Officers
As at December 31, 1997, there was no outstanding indebtedness to the
Corporation from any officer or director, or former officer or director of the
Corporation, or any associate of any of the foregoing, under securities
purchase or other programs.
Stock Option Plan
On February 4, 1998, the Board of Directors approved an amendment to the
Corporation's stock option plan (the "Option Plan") to provide that, in the
event that an offer is made to acquire more than fifty (50) per cent of the
issued and outstanding Common Shares of the Corporation by a single
shareholder, or shareholders acting in concert, all of the issued and
outstanding options under the Option Plan shall be deemed to be exercisable.
This amendment is subject to regulatory approval.
<PAGE>
Share Performance Graph
The Corporation's Common Shares were listed on The Toronto Stock
Exchange (the "TSE") and the Montreal Exchange (the "ME") on March 28,
1994 and listed on the New York Stock Exchange (the "NYSE") on April 22,
1997. The following graph shows changes in the value of $100 invested in
the Corporation's Common Shares and in the TSE 300 Total Return Index,
from the time of listing to December 31, 1997.
<TABLE>
<CAPTION>
SHARE PERFORMANCE GRAPH
Total Shareholder Return on $100 investment (dividends reinvested)
for the period March 28, 1994 to December 31, 1997
Common Shares TSE 300 Total
of the Corporation Return Index
<S> <C> <C>
March 28, 1994 100.00 100.00
December 30, 1994 115.94 96.00
December 29, 1995 158.03 109.00
December 31, 1996 360.74 141.00
December 31, 1997 732.95 162.00
</TABLE>
<PAGE>
Directors' and Officers' Insurance
The Corporation maintains directors' and officers' liability insurance with an
aggregate annual limit of liability of U.S.$40 million. The premium paid
during the year ended December 31, 1997 for this insurance coverage for
both directors and officers was U.S.$215,000 in the aggregate. Under this
insurance coverage the Corporation, subject to a U.S.$500,000 deductible, is
reimbursed for payments made to directors or officers of the Corporation
required or permitted by law or under provisions of the by-laws of the
Corporation as indemnity for loss, including legal costs, arising from acts,
errors or omissions done or committed by officers or directors in the course
of their duties.
MATTERS TO BE ACTED UPON AT THE MEETING
Election of Directors
The Board of Directors has fixed the number of directors to be elected at the
Meeting at seventeen (17) directors. At the Meeting, shareholders will be
asked to elect seventeen (17) directors to serve until the next annual meeting
of shareholders of the Corporation or until their respective successors have
been elected or appointed. In the absence of instructions to the contrary, the
Common Shares represented by the enclosed form of proxy will be voted for
the nominees herein listed.
Management does not contemplate that any of the nominees will be unable to
serve as a director. In the event that prior to the Meeting, any vacancies
occur in the slate of nominees herein listed, it is intended that discretionary
authority shall be exercised by the person named in the proxy as nominee to
vote the Common Shares represented by proxy for the election of another
person or persons as directors.
Management nominees for the Board of Directors and information
concerning them as furnished by the individual nominees are set out below.
<PAGE>
<TABLE>
<Caption
NOMINEES FOR THE BOARD OF DIRECTORS
Common Shares
Name And Municipality Held As At
of Residence Director Since Principal Occupation February 4, 1998
<S> <C> <C> <C>
David F. Banks<Fn2><Fn4><Fn6> February 4, 1998 Chairman of the Board, Formerly, 85,000
Toronto, Ontario President and Chief Executive
Officer of AT&T Capital
Corporation
Steven K. Hudson<Fn2><Fn5><Fn6>June 30, 1984 Chief Executive Officer 3,645,389
Toronto, Ontario
Bradley D. Nullmeyer<Fn5> February 1, 1991 President, Newcourt Financial 1,936,215
Toronto, Ontario
David D. McKerroll<Fn4> April 18, 1995 President, Newcourt Capital 1,545,697
Toronto, Ontario
Thomas S. Axworthy<Fn6> April 18, 1995 Adjunct Faculty in Public Policy, 26,500
Toronto, Ontario John F. Kennedy School of
Government, Harvard University;
Executive Director, The CRB
Foundation (charitable foundation)
Gerald E. Beasley<Fn5> October 31, 1997 Senior Executive Vice President, Note 1
Mississauga, Ontario Risk Management, Canadian
Imperial Bank of Commerce
Guy Hands<Fn5> February 4, 1998 Managing Director, Principal Note 1
Sevenoaks, England Finance Group, Nomura
International plc
(international investment bank)
Robert F. Kilimnik<Fn5><Fn6> April 16, 1993 Vice President, Investments Note 1
Waterloo, Ontario The Mutual Group
David A. MacIntosh<Fn2><Fn3> April 16, 1993 Executive Vice President Note 1
Waterloo, Ontario The Mutual Group
Ronald A. McKinlay<Fn2><Fn3> January 29, 1993 Retired. Formerly, Chairman of 36,300
Toronto, Ontario <Fn4> the Board and Chairman of Canada
Deposit Insurance Corporation
Paul G. Morton<Fn4><Fn5> April 18, 1995 President, Security Investment 89,000
Toronto, Ontario Corporation Ltd. (private
investment firm)
Bruce I. Robertson<Fn3><Fn5> April 18, 1995 President of B.I. Robertson & 20,500
Toronto, Ontario Associates Ltd. (asset management
firm)
David J. Sharpless April 26, 1993 Deputy Chairman of the Board. 48,170
North York, Ontario Formerly, Senior Partner, Blake,
Cassels & Graydon (barristers &
solicitors)
<PAGE>
Common Shares
Name And Municipality Held As At
of Residence Director Since Principal Occupation February 4, 1998
<S> <C> <C> <C>
Takumi Shibata ___ President, Nomura International plc Note 1
London, England (international investment bank)
Dr. Steven C. Small<Fn3> April 18, 1995 Founder & Senior Partner of Dental 178,640
Toronto, Ontario <Fn4> Anaesthesia Associates (dental/
anaesthesia practice); President,
Thorngard Capital Corporation
(merchant banking firm)
Richard E. Venn<Fn2> October 31, 1997 Chairman and Chief Executive Officer Note 1
Toronto, Ontario CIBC Wood Gundy Securities Inc.
(investment dealer)
William D. Walsh<Fn6> December 14, 1993 General Partner, Sequoia Associates 215,000
Atherton, California (investment firm)
<Fn1> Gerald E. Beasley and Richard E. Venn are nominees of CIBC which
beneficially owns, directly or indirectly, 14,067,962 Common Shares; Guy
Hands and Takumi Shibata are nominees of Hercules which beneficially owns,
directly or indirectly, 17,633,857 Common Shares; and David A. MacIntosh and
Robert F. Kilimnik are nominees of The Mutual Group which beneficially owns,
directly or indirectly, 3,073,450 Common Shares, as at the date hereof. As
nominees of significant shareholders of the Corporation, each of the foregoing
nominees is prohibited by the policies of their respective entities from
owning Common Shares.
</Fn1>
<Fn2> Member of the Executive Committee
</Fn2>
<Fn3> Member of the Audit Committee
</Fn3>
<Fn4> Member of the Compensation and Conduct Review Committee
</Fn4>
<Fn5> Member of the Investment Committee
</Fn5>
<Fn6> Member of the Long Range Planning Committee
</Fn6>
</TABLE>
<PAGE>
The background of each of the nominees for the Board of Directors is described
below:
* David F. Banks, Chairman, was appointed as Chairman of the Board of
Directors on February 4, 1998 following the acquisition by the Corporation
of AT&T Capital Corporation ("AT&T"). Prior to assuming the position of
Chairman, Mr. Banks had served as President and Chief Executive Officer of
AT&T since 1997. Mr. Banks has over twenty-five years of senior financial
services experience in the United States and international markets. From
1994 to 1997 Mr. Banks served as Chief Executive Officer of Penna
Holdings plc and advisor to Nomura International plc, prior to which he
served as Chief Financial Officer of General Atlantic Group Ltd.
* David J. Sharpless was appointed Deputy Chairman of the Board of
Directors on February 4, 1998 and served as Chairman of the Board of
Directors of the Corporation from March 25, 1997 to February 4, 1998. As
Deputy Chairman, Mr. Sharpless is responsible for managing the
corporation's international operations and significant joint ventures. Mr.
Sharpless also serves as Chairman of the Board of Directors of Dell Financial
Services Inc. and has served as a director of the Corporation since 1993. Mr.
Sharpless was a senior partner with the law firm of Blake, Cassels &
Graydon until January 31, 1997.
* Steven K. Hudson, Chief Executive Officer is a founding principal of the
Corporation and has directed its development since 1984. Mr. Hudson has
fifteen years of experience in the asset finance industry. He is Chairman of
the Board of Directors of the Toronto Community Foundation and is a
member of the Board of Directors of AGRA Inc., the Royal Ontario Museum
Foundation and the St. Joseph's Health Centre Foundation of Toronto. He is
a member of the Executive Committee of the Canadian Finance and Leasing
Association and Director of the Foundation for Leasing Education. Mr.
Hudson is a chartered accountant.
* Bradley D. Nullmeyer, President of Newcourt Financial, is a founding
principal of the Corporation and joined the Corporation in 1986. Mr.
Nullmeyer is responsible for the overall management and direction of the
Corporation's commercial finance business, known as Newcourt Financial.
Mr. Nullmeyer is a chartered accountant.
* David D. McKerroll, President of Newcourt Capital, is a founding principal
of the Corporation and joined the Corporation in 1987. Mr. McKerroll is
responsible for the overall management and direction of the Corporation's
corporate finance business known as Newcourt Capital. Mr. McKerroll is a
chartered accountant.
* Thomas S. Axworthy is currently Executive Director of The CRB
Foundation in Montreal and an Adjunct Lecturer, John F. Kennedy School of
Government, Harvard University, where he has held numerous appointments
since 1984, and was formerly Principal Secretary to the Office of the Prime
Minister.
* Gerald E. Beasley has served as Senior Executive Vice President, Risk
Management of The Canadian Imperial Bank of Commerce ("CIBC") since
1994 and has been an officer of CIBC since 1968.
<PAGE>
* Guy Hands has served as Managing Director and Principal Finance Group
of Nomura International plc ("Nomura") since 1994. Prior to joining
Nomura, Mr. Hands served as Head of Global Asset Structuring with
Goldman Sachs International, with whom he had served in various capacities
since 1982.
* Robert F. Kilimnik has served as Vice President, Investments of The
Mutual Group since 1991 and has been associated with The Mutual Group
for over 20 years.
* David A. MacIntosh has served as Executive Vice President of The Mutual
Group since 1987, has been associated with The Mutual Group since 1963
and is a director of a number of subsidiaries and affiliates of The Mutual
Group.
* Ronald A. McKinlay served as Chairman of the Board from December 12,
1994 to March 25, 1997 and has been a director of the Corporation since
1993. Mr. McKinlay retired as Chairman of the Canada Deposit Insurance
Corporation in December, 1991, having served in such position since 1985.
For several years prior to 1985, Mr. McKinlay served as Chairman of The
Clarkson Company Limited (now Ernst & Young Inc.).
* Paul G. Morton is President of Security Investment Corporation Ltd., co-
founder and former President of Global Communications Limited and former
Chairman of the Stadium Corporation of Ontario.
* Bruce I. Robertson is President of B.I. Robertson & Associates Ltd. which
specializes in the management of real estate and mortgages on behalf of
financial institutions and other clients, and was associated as a chartered
accountant for over eleven years with a major firm of chartered accountants.
* Takumi Shibata has served as President of Nomura International plc
("Nomura") since 1997 and has been an officer of Nomura since 1976.
* Dr. Steven C. Small is a Doctor of Dental Surgery, Fellow of the American
Dental Society of Anaesthesia, founder and senior partner of Dental
Anaesthesia Associates and the President of Thorngard Capital Corporation,
a private merchant banking and venture capital firm. Dr. Small is one of the
founding shareholders of the Corporation.
* Richard E. Venn is Chairman and Chief Executive Officer of CIBC Wood
Gundy Securities, Inc. ("CIBC Wood Gundy") and has served in various
executive capacities with CIBC Wood Gundy since 1975.
<PAGE>
* William D. Walsh is founder and general partner of Sequoia Associates, a
private California investment firm established in 1982. Mr. Walsh is a
director of a number of private and public Canadian and U.S. companies.
Appointment of Auditors
In the absence of contrary instructions, the Common Shares represented by
the enclosed form of proxy will be voted in favour of the re-appointment of
the firm of Ernst & Young, Chartered Accountants, of Toronto, Ontario, as
auditors of the Corporation, to hold office until the next annual meeting of
shareholders and to authorize the Board of Directors to fix their
remuneration.
<PAGE>
AMENDMENT TO THE STOCK OPTION PLAN
At the Meeting, shareholders will also be requested to consider and, if
thought advisable, to pass, with or without amendment, a resolution (the
"Resolution") approving an amendment to the Stock Option Plan of the
Corporation dated May 2, 1997 (the "Option Plan") to increase the maximum
number of Common Shares for which options may be granted under the
Option Plan from 9,046,878 to 13,927,740. The text of the proposed
Resolution is attached as Appendix "A" and forms part of this Information
Circular. Copies of the Option Plan are available for inspection at
the registered head office of the Corporation and will be available on request
at the Meeting.
Recommendation of the Board of Directors
Under the stock option policies of The Toronto Stock Exchange (the "TSE")
and the Montreal Exchange (the "ME") which became effective in 1994
(together, the "Exchange Policies"), a stock option plan of a corporation, the
shares of which are listed on the TSE and the ME, must specify a maximum
number of shares issuable under the plan. Pursuant to the Exchange Policies
and with the approval of both the TSE and the ME, on October 30, 1995 the
Board of Directors determined that the maximum number of Common Shares
for which options may be granted under the Option Plan should be fixed at
1,514,305 Common Shares, equal to approximately 8% of the aggregate
number of 19,126,200 Common Shares and Special Shares of the
Corporation then outstanding.
Upon the approval by the shareholders of the Corporation at the Annual
General and Special Meeting of Shareholders held on March 25, 1997, the
Option Plan was amended to provide that the maximum number of Common
Shares for which options may be granted under the Option Plan should be
increased by 3,009,134 Common Shares (or 10% of the issued and
outstanding Common Shares as at December 31, 1996) to 4,523,439. Upon
the share subdivision, on a two (2)-for-one (1) basis, of the Corporation's
Common Shares on April 14, 1997, the maximum number of Common
Shares for which options may be granted under the Option Plan is 9,046,878
or approximately 6.5% of the issued and outstanding Common Shares as of
the date hereof. As at the date of this Information Circular, options to
purchase an aggregate of 6,106,052 Common Shares have been issued,
leaving 2,940,826 Common Shares (or 2.1% of the issued and outstanding
Common Shares) currently remaining reserved for issuance under the Option
Plan.
<PAGE>
As noted under the heading "Voting Shares and Principal Holders Thereof",
139,277,405 Common Shares and no Special Shares are issued and
outstanding as of the date of this Information Circular. Accordingly, if the
shareholders approve the Resolution authorizing the amendment to the
Option Plan to provide that the maximum number of Common Shares for
which options may be granted under the Option Plan shall be 13,927,740
Common Shares, the maximum number of Common Shares issuable under
the amended Option Plan would be 7,821,688 or 5.6% of the issued and
outstanding Common Shares as at February 4, 1998.
The Board of Directors is of the view that an integral component of the
Corporation's success to date has been both the Corporation's performance-
based compensation policy and high levels of employee Common Share
purchase ownership. Currently, approximately twelve (12) million Common
Shares (or approximately 9% of the issued and outstanding Common Shares
as of the date hereof) have been purchased by employees, including officers
and directors, of the Corporation. To encourage continued high levels of
employee share purchase ownership such that the interests of employees of
the Corporation remain closely aligned with the interests of its shareholders,
and to recognize outstanding contributions by employees at all levels of the
Corporation, the Board of Directors has adopted an option allocation policy
which provides that options will be:
* granted only to employees who have purchased a substantial amount of
Common Shares relative to the individual employee's net worth;
* granted to recognize outstanding contributions by employees of the
Corporation;
* widely dispersed throughout all levels of the Corporation;
* granted on terms that provide that 25% of the options may be exercised two
(2) years after the initial grant and an additional 25% thereafter for each of
the subsequent three (3) years; and
* issued at such times when the issuance will minimize dilution to equity.
With the acquisition in late 1997 of Commcorp Financial Services Inc., the
Business Technology Division of Lloyds Bowmaker and AT&T Capital
Corporation and the corresponding increase of an additional 109,128,371
issued and outstanding Common Shares of the Corporation since the last
annual general meeting of shareholders, the Corporation has grown
substantially to become the world's largest independent non-bank financial
institution. The Board of Directors is of the view that it is essential that
its current employee compensation policies, which have proven so successful in
the past, should be continued to ensure that the interests of all of the
employees of the Corporation remain closely aligned with those of its
shareholders. In that regard, the Board of Directors of the Corporation is
recommending that shareholders approve that the Option Plan be amended to
provide the maximum number of Common Shares for which options may be
granted under the Option Plan shall be 13,927,740 Common Shares.
<PAGE>
Votes Required to Pass the Resolution
The Resolution authorizing the proposed amendment to the Option Plan
permitting up to 13,927,740 Common Shares to be issued under the Option
Plan is required to be approved by a majority of votes cast by the
shareholders present in person or represented by proxy at the Meeting
excluding votes cast by Insiders of the Corporation (as defined herein). The
number of votes attaching to the Common Shares that, to the Corporation's
knowledge at the date hereof, will not be counted for the purpose of
determining whether the required level of shareholder approval
has been obtained, is 8,358,719 common Shares. Unless otherwise directed,
the Common Shares represented by the enclosed form of proxy will be voted
in favour of the Resolution to amend the Option Plan.
INTEREST OF CERTAIN PERSONS AND COMPANIES
IN MATTERS TO BE ACTED UPON
Management is not aware of any material interest of any director or officer or
anyone who has held office as such since the beginning of the Corporation's
last financial year or of any associate or affiliate of any of the foregoing in
any matter to be acted on at the Meeting, except as otherwise disclosed
herein.
OTHER MATTERS
Management knows of no amendment, variation or other matter to come
before the Meeting other than the matters referred to in the Notice of Annual
General and Special Meeting. However, if any other matter properly comes
before the Meeting, the accompanying proxy will be voted on such matter in
accordance with the best judgement of the person or persons voting the
proxy.
ADDITIONAL INFORMATION
Additional documents, including copies of the Renewal Annual Information
Form (including any documents incorporated by reference therein) of the
Corporation, the Annual Report and the audited consolidated financial
statements of the Corporation for its most recently completed financial year,
interim financial statements of the Corporation and additional copies of this
Information Circular of the Corporation are available upon request from the
Corporate Secretary, Newcourt Credit Group Inc., Suite 3500, 181 Bay
Street, P.O. Box 827, Toronto, Ontario M5J 2T3.
DIRECTORS' APPROVAL
The foregoing contains no untrue statements of material fact and does not
permit to state a material fact that is required to be stated or that is
necessary to make a statement not misleading in the light of the
circumstances in which it was made.
The contents and the sending of this Information Circular have been
approved by the Board of Directors of the Corporation.
DATED as of February 4, 1998.
David F. Banks
Chairman
<PAGE>
APPENDIX A
RESOLUTION OF THE SHAREHOLDERS OF
NEWCOURT CREDIT GROUP INC.
Amendment to the Stock Option Plan
BE IT RESOLVED THAT:
1. the amendment to the Stock Option Plan described under the heading
"Amendment to the Stock Option Plan" in the Management Information
Circular dated February 4, 1998 be and is hereby approved;
2. the Corporation be and is hereby authorized to make such further
amendments to the Stock Option Plan as may be required by The Toronto
Stock Exchange, Montreal Exchange and the New York Stock Exchange
(collectively, the "Exchanges") as a condition to the granting by such
Exchanges of approval to the amendment to the Stock Option Plan; and
3. any one officer or director of the Corporation be and is hereby authorized
for and on behalf of and in the name of the Corporation, to do all such acts
and things and to execute and deliver, whether under the corporate seal of the
Corporation or otherwise, all such documents, instruments and writings as in
his sole discretion are necessary or desirable to give effect to this
resolution.
<PAGE>
NEWCOURT CREDIT GROUP INC.
NOTICE OF ANNUAL GENERAL AND
SPECIAL MEETING OF SHAREHOLDERS
Notice is hereby given that the Annual General and
Special Meeting of Shareholders (the "Meeting") of
Newcourt Credit Group Inc. (the "Corporation") will be
held at The Design Exchange, 234 Bay Street, Toronto,
Ontario, on Wednesday, March 25, 1998 at 10:00 a.m.
(Toronto time) for the following purposes:
1. to receive the consolidated financial
2. statements of the Corporation for the year
3. ended December 31, 1997 and the Auditors'
4. Report thereon;
5. to elect Directors for the ensuing year;
6. to re-appoint the Auditors of the Corporation
7. and to authorize the Directors to fix the
8. remuneration of the Auditors;
9. to consider and, if deemed advisable, to
10. pass, with or without variation, a
11. resolution, the text of which is set out in
12. Appendix "A" to the accompanying Management
13. Information Circular dated as of
14. February 4, 1998, authorizing an amendment to
15. the Corporation's Stock Option Plan to
16. increase the maximum aggregate number of
17. Common Shares of the Corporation issuable
18. upon exercise of options granted thereunder,
19. as more particularly described in such
20. Management Information Circular;
21. to transact such other business as may be
22. properly brought before the Meeting or any
23. adjournment thereof.
The specific details of the foregoing matters to be put
before the Meeting are set forth in the Management
Information Circular dated as of February 4, 1998
accompanying this Notice. A copy of the audited
consolidated financial statements for the year ended
December 31, 1997 accompanies this Notice.
Shareholders of the Corporation who are unable to attend
the Meeting in person are requested to date and sign the
enclosed form of proxy and return it in the envelope
provided to the Corporation's transfer agent, Montreal
Trust Company of Canada, at 151 Front Street West, Stock
Transfer Department, 8th Floor, Toronto, Ontario, M5J
2N1. In order to be valid and acted upon at the
Meeting, forms of proxy must be returned to Montreal
Trust Company of Canada at the address shown on the
envelope, or to the attention of the Corporate Secretary
at the registered office of the Corporation, Suite 3500,
BCE Place, 181 Bay Street, P.O. Box 827, Toronto,
Ontario, M5J 2T3, not less than 48 hours before the time
fixed for holding the Meeting or any adjournment
thereof.
<PAGE>
A shareholder of record as of 5:00 p.m. (Toronto time)
on February 16, 1998, unless the shareholder has
transferred any Common Shares subsequent to that date
and the transferee shareholder, no later than ten (10)
days before the Meeting, establishes his, her or its
ownership to the Common Shares and requests his, her or
its name to be included on the list of shareholders
prepared for the Meeting, will be entitled to vote the
Common Shares registered in his, her or its name at the
Meeting.
DATED at Toronto, Ontario on February 4, 1998.
BY ORDER OF THE BOARD OF DIRECTORS
David F. Banks
Chairman
<PAGE>
NEWCOURT CREDIT GROUP INC.
Instrument of Proxy for the
Annual General and Special Meeting of Shareholders
March 25, 1998
The undersigned shareholder of Newcourt Credit Group
Inc. (the "Corporation") hereby appoints JOHN P.
STEVENSON, or failing him, DAVID F. BANKS, or failing
him, DAVID J. SHARPLESS, or instead of any of the
foregoing _______________________________ as proxyholder
of the undersigned, with full power of substitution, to
attend, vote and act for and on behalf of the
undersigned at the Annual General and Special Meeting of
Shareholders of the Corporation to be held on March 25,
1998, and at any adjournment thereof (the "Meeting"),
and on every ballot that may take place in consequence
thereof to the same extent and with the same powers as
if the undersigned were personally present at the
Meeting, with authority to vote at the proxyholder's
discretion on amendments or variations to matters
identified in the Notice of Meeting or such other
matters as may properly be brought before the Meeting,
except as otherwise specified below. Without limiting
the general power hereby conferred, the undersigned
hereby directs the proxyholder to vote the Common Shares
of the Corporation represented by this proxy in the
following manner:
1. VOTE ________ OR WITHHOLD FROM VOTING ________ (or,
2. if not specified, VOTE) for the election of the
3. persons nominated as directors listed in the
4. Management Information Circular dated as of
5. February 4, 1998.
6. VOTE ________ OR WITHHOLD FROM VOTING _________
7. (or, if not specified, VOTE) for the re-appointment
8. of Ernst & Young, Chartered Accountants, as
9. auditors of the Corporation and authorizing the
10. directors to fix the auditors' remuneration.
11. VOTE FOR ________ OR VOTE AGAINST _________ (or if
12. not specified, VOTE FOR) the resolution set out in
13. Appendix "A" to the Management Information Circular
14. dated as of February 4, 1998 authorizing the
15. amendment to the Articles of Incorporation of the
16. Corporation changing the name of the Corporation.
17. VOTE FOR ________ OR VOTE AGAINST _________ (or if
18. not specified, VOTE FOR) the resolution set out in
19. Appendix "B" to the Management Information Circular
20. dated as of February 4, 1998 authorizing the
21. amendment to the Stock Option Plan of the
22. Corporation increasing the maximum aggregate number
23. of Common Shares issuable thereunder.
<PAGE>
This proxy is solicited on behalf of the management of
the Corporation. Each shareholder has the right to
appoint a person other than the management nominees
specified above to attend and act on his, her or its
behalf at the Meeting. Such right may be exercised by
inserting the name of the person to be appointed in the
space provided, or by completing another proper form of
proxy and, in either case, depositing the form of proxy
not less than 48 hours preceding the time of the Meeting
at the office of Montreal Trust Company of Canada, Stock
Transfer Department, 151 Front Street West, 8th Floor,
Toronto, Ontario, M5J 2N1; or to the attention of the
Corporate Secretary at the registered office of the
Corporation, Suite 3500, BCE Place, 181 Bay Street,
P.O. Box 827, Toronto, Ontario, M5J 2T3.
The undersigned hereby revokes any prior proxies.
DATED this __________ day of _________________________,
1998.
____________________
Signature of
shareholder
<PAGE>
____________________
Name of shareholder (Please
Print)
The signature of the
shareholder on this Proxy
must be exactly the same as
the name in which the Common
Shares are registered.
If this Proxy is not dated
in the space provided, it
shall be deemed to bear the
date on which it was mailed
to the Corporation.
This Proxy must be executed
by the shareholder or an
attorney authorized in
writing or, if the
shareholder is a
corporation, under its
corporate seal or by an
officer or attorney thereof
duly authorized.
Over page
<PAGE>
151 Front Street West, Toronto, Ontario M5J 2N1
Tel.: (416) 981-9500 Fax: (416) 981-9800
February 23, 1998
To: Alberta Securities Commission
British Columbia Securities Commission
The Manitoba Securities Commission
The Office of the Administrator of Securities, New Brunswick
Securities Commission of Newfoundland
Ontario Securities Commission
Registrar of Securities, Prince Edward Island
Commission des valeurs mobiliores du Quebec
Nova Scotia Securities Commission
Saskatchewan Securities Commission
Securities Registry, Government of the Northwest Territories
Registrar of Securities, Government of the Yukon Territory
Montreal Exchange
The Toronto Stock Exchange
The New York Stock Exchange
Dear Sir/Madam:
Subject: Newcourt Credit Group Inc.
We confirm that the following material was sent by pre-paid mail on
February 20, 1998, to the registered shareholders of Common shares of the
subject Corporation:
1. Notice of Annual General and Special Meeting of
Shareholders/Management Information Circular
2. Proxy
3. Consolidated Financial Statements - December 31, 1997
4. Return Envelope
We further confirm that copies of the above mentioned material, together
with Supplemental Mail List cards, were sent by courier on February 20,
1998, to each intermediary holding shares of the Corporation who responded
to the search procedures
pursuant to Canadian Securities Administrators' National Policy Statement
No. 41 regarding shareholder communications.
In compliance with regulations made under the Securities Act, we are
providing this material to you in our capacity as agent for the subject
Corporation.
Yours truly,
Charmaine Mullings
Assistant Account Manager
Stock Transfer Services
(416)981-9522(416)981-9800 Fax
c.c. John Stevenson
