<PAGE>
APPENDIX 2
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C., 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15D-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of January, 2000
PEACE ARCH ENTERTAINMENT GROUP INC.
- -------------------------------------------------------------------------------
(Translation of Registrant's name into English)
#302, 1132 Hamilton Street, Vancouver, B.C., Canada, V6B 2S2
- --------------------------------------------------------------------------------
(Address of principal executive office)
[Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20F or Form 40-F.
Form 20-F [ X ] Form 40-F [___]]
[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-_______________ )]
<PAGE>
PEACE ARCH LOGO
NOTICE OF ANNUAL GENERAL MEETING OF MEMBERS
TAKE NOTICE that the 2000 Annual General Meeting of the Members of Peace Arch
Entertainment Group Inc. (hereinafter called the "Company") will be held at
#302, 1132 Hamilton Street, Vancouver, British Columbia, on:
24th February 2000
at the hour of 2:00 o'clock in the afternoon (Vancouver time) for the following
purposes:
1. to receive the Report of the Directors;
2. to receive the financial statements of the Company for its fiscal year
ended 31st August 1999 and the report of the Auditors thereon;
3. to appoint Auditors for the ensuing year and to authorize the Directors
to fix their remuneration;
4. to determine the number of directors and to elect directors;
5. to pass a resolution authorizing the directors to arrange from time to
time additional arm's length private placements, in accordance with The
Toronto Stock Exchange guidelines, not to exceed the current number of
issued and outstanding shares in the aggregate of the Company and not
materially affecting control of the Company.
6. to transact such other business as may properly come before the
Meeting.
Accompanying this Notice are an Information Circular and Form of Proxy.
A shareholder entitled to attend and vote at the Meeting is entitled to appoint
a proxy holder to attend and vote in his stead. If you are unable to attend the
Meeting in person, please read the Notes accompanying the Form of Proxy enclosed
herewith and then complete and return the Proxy within the time set out in the
Notes. The enclosed Form of Proxy is solicited by Management but, as set out in
the Notes, you may amend it if you so desire by striking out the names listed
therein and inserting in the space provided the name of the person you wish to
represent you at the Meeting.
Dated at Vancouver, British Columbia, this 12th day of January, 2000.
BY ORDER OF THE BOARD OF DIRECTORS
"Timothy Gamble"
President
2
<PAGE>
PEACE ARCH LOGO
3rd Floor, 1132 Hamilton Street
Vancouver, B.C., Canada V6B 2S2
Telephone: (604) 681-9308
INFORMATION CIRCULAR
AS AT AND DATED 12th JANUARY 2000
This Information Circular accompanies the Notice of the 2000 Annual General
Meeting of Members of PEACE ARCH ENTERTAINMENT GROUP INC. (hereinafter called
the "Company"), and is furnished in connection with a solicitation of proxies
for use at that Meeting and at any adjournment thereof.
REVOCABILITY OF PROXY
In addition to revocation in any other manner permitted by law, a proxy may be
revoked by instrument in writing executed by the member or his attorney
authorized in writing, or if the member is a corporation, by a duly authorized
officer or attorney thereof, and deposited either at the registered office of
the Company at any time up to and including the last business day preceding the
day of the Meeting, or any adjournment thereof, or, as to any matter in respect
of which a vote shall not already have been cast pursuant to such proxy, with
the Chairman of the Meeting on the day of the Meeting, or any adjournment
thereof, and upon either of such deposits the proxy is revoked.
PERSONS OR COMPANIES MAKING THE SOLICITATION
THE ENCLOSED PROXY IS BEING SOLICITED BY MANAGEMENT OF THE COMPANY
Solicitations will be made by mail and possibly supplemented by telephone or
other personal contact to be made without special compensation by regular
officers and employees of the Company. The Company may reimburse members'
nominees or agents (including brokers holding shares on behalf of clients) for
the cost incurred in obtaining from their principals authorization to execute
forms of proxy. No solicitation will be made by specifically engaged employees
or soliciting agents. The cost of solicitation will be borne by the Company.
VOTING SHARES AND PRINCIPAL HOLDERS THEREOF
The Company is authorized to issue 100,000,000 Class A Multiple Voting Shares
without par value, 100,000,000 Class B Subordinate Voting Shares without par
value and 25,000,000 preference shares without par value. There are issued and
outstanding 1,517,965 Class A Multiple Voting Shares and 2,267,978 Class B
Subordinate Voting Shares and no preference shares. At a General Meeting of the
Company, on a show of hands, every member present in person and entitled to vote
and every proxyholder duly appointed by a holder of a share who would have been
entitled to vote shall have one (1) vote and, on a poll, every member present in
person or represented by proxy or other proper authority and entitled to vote
shall have ten (10) votes for each Class A Multiple Voting Share and one (1)
vote for each Class B Subordinate Voting Share of which such member is the
registered holder.
To the knowledge of the directors and senior officers of the Company, no person
or company beneficially owns, directly or indirectly, or exercises control or
direction over, voting securities carrying more than 10% of the outstanding
voting rights attached to any one class of voting securities of the Company,
other than:
<TABLE>
<CAPTION>
======================================================================================================================
NUMBER OF SECURITIES PERCENTAGE OF CLASS
---------------------------------------------------------
NAME TYPE OF OWNERSHIP CLASS A CLASS B CLASS A CLASS B
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Working Opportunity Fund Direct 160,000 160,000 10.54% 7.05%
(EVCC) Ltd.
======================================================================================================================
</TABLE>
The directors have determined that all members of record as of the 12th day of
January, 2000 will be entitled to receive notice of and to vote at the Meeting.
Those members so desiring may be represented by proxy at the Meeting. The
instrument of proxy and the power of attorney or other authority, if any, under
which it is signed or a notarially certified copy thereof, must be deposited
either at the office of the Registrar and Transfer Agent
3
<PAGE>
of the Company, CIBC Mellon Trust Company, Suite 1600, The Oceanic Plaza,
1066 West Hastings Street, Vancouver, B.C., Canada, V6E 3X1 or at the Head
Office of the Company at #302, 1132 Hamilton Street, Vancouver, B.C., Canada,
V6B 2S2 not less than 48 hours, Saturdays, Sundays and holidays excepted,
prior to the time of the holding of the Meeting or any adjournment thereof.
THE SHARES REPRESENTED BY THE PROXY SOLICITED HEREBY WILL BE VOTED OR WITHHELD
FROM VOTING IN ACCORDANCE WITH THE INSTRUCTIONS GIVEN. WHERE NO CHOICE IS OR
WHERE BOTH CHOICES ARE SPECIFIED IN RESPECT OF ANY MATTER TO BE ACTED UPON, THE
SHARES REPRESENTED BY THE PROXY HEREBY SOLICITED SHALL BE VOTED FOR THE ADOPTION
OF ALL SUCH MATTERS.
ELECTION OF DIRECTORS
Each Director of the Company is elected annually and holds office until the next
Annual General Meeting of the Members unless that person ceases to be a Director
before then. In the absence of instructions to the contrary the shares
represented by 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
SHARES REPRESENTED BY PROXY FOR THE ELECTION OF ANY OTHER PERSON OR PERSONS AS
DIRECTORS.
Management proposes that the number of directors for the Company be determined
at six (6) for the ensuing year subject to such increases as may be permitted by
the Articles of the Company. The Management nominees for the Board of Directors
and information concerning them as furnished by the individual nominees is as
follows:
<TABLE>
<CAPTION>
============================================================================================================================
NO. OF SHARES BENEFICIALLY OWNED,
DIRECTLY OR INDIRECTLY, OR OVER
WHICH CONTROL OR DIRECTION IS PRINCIPAL OCCUPATION AND IF NOT AT
EXERCISED AT THE DATE OF THIS PRESENT AN ELECTED DIRECTOR,
NAME AND DIRECTOR INFORMATION CIRCULAR OCCUPATION DURING THE PAST FIVE (5)
PRESENT OFFICE HELD SINCE --------------------------------- YEARS
CLASS A SHARES CLASS B SHARES
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TIMOTHY GAMBLE October 22, 63,099 Shares[1] 63,099 Shares[1] President of Peace Arch Entertainment
1986 Group Inc.
President
- ----------------------------------------------------------------------------------------------------------------------------
STEPHEN CHEIKES January 20, 32,700 Shares[2] 32,700 Shares[2] Co-Chairman and CEO of Monarch
1998 Entertainment Inc., a film production
Compensation Committee Member service finance company
- ----------------------------------------------------------------------------------------------------------------------------
VINCENT LUM[4]
November Nil Nil Investment Manager of Royal Bank
Audit and Nominating 19, 1998 Capital Corporation since 1997.
(Chairman) Committees Member
- ----------------------------------------------------------------------------------------------------------------------------
DARRELL ELLIOTT August 20, Nil Nil Senior Vice President of MDS Capital
1998 Corporation since August 1999.
Audit (Chairman) and
Compensation Committees
Member
============================================================================================================================
</TABLE>
4
<PAGE>
<TABLE>
============================================================================================================================
<S> <C> <C> <C> <C>
YAD GARCHA[4] July 7, 1998 Nil Nil Vice-President of Investment at
GrowthWorks Capital Ltd.
Audit, Nominating and
Compensation (Chairman)
Committees Member
- ----------------------------------------------------------------------------------------------------------------------------
W.D. CAMERON WHITE February 61,376 Shares[3] 61,376 Shares[3] Chief Executive Officer of Peace Arch
12, 1993 Entertainment Group Inc.
Chief Executive Officer and
Nominating Committee Member
============================================================================================================================
</TABLE>
[1] 35,000 Class A Shares and 35,000 Class B Shares are registered in the
name of Plantation Capital Corp., a corporation controlled by Mr. Gamble.
[2] 32,100 Class A Shares and 32,100 Class B Shares are registered in the
name of The Storyteller Group Enterprises, a corporation controlled by Mr.
Cheikes.
[3] 35,000 Class A Shares and 35,000 Class B Shares are registered in the
name of W.D. Cameron White Law Corporation, a corporation controlled by Mr.
White.
[4] Pursuant to a Shareholders' Agreement dated 27th May 1998, between,
inter alia, the company and Working Opportunities Fund (EVCC) Ltd. and Royal
Bank Capital Corp., WOF and RBCC each have the right to a Director nominee
(Messrs. Garcha and Lum, respectively) to the Company's Board of Directors, as
long as WOF continues to hold at least 52,800 Class A and Class B Shares of the
company and RBCC hold Shares equal to at least 35,200 Class A and Class B Shares
of the Company.
All of the nominees are residents of Canada. The Company has audit, nominating
and compensation committees, the members of which are set out above.
Advance Notice of the Meeting was published pursuant to Section 135 of the
Company Act at Vancouver, B.C. on 9th December 1999.
EXECUTIVE COMPENSATION
(FORM 41, B.C. SECURITIES ACT)
"CEO" means the individual who served as chief executive officer of the Company
or acted in a similar capacity during the most recently completed financial
year.
"Named Executive Officer" means the CEO regardless of the amount of compensation
of that individual, each of the Company's four most highly compensated executive
officers, other than the CEO, who were serving as executive officers at the end
of the most recently completed financial year and whose total salary and bonus
amounted to $100,000 or more and any individuals whose total salary and bonus
during the most recently completed financial year exceeded $100,000 whether or
not they were an executive officer at the end of such financial year.
The following table sets forth all annual and long term compensation for
services to the Company for the three most recently completed financial years as
at 31st August 1999 in respect of the Named Executive Officers. At the end of
the most recently completed financial year, the Company had four Named Executive
Officers, Cameron White, the Company's CEO, Timothy Gamble, the Company's
President, Juliet Jones, the Company's CFO and Larry Sugar, President of the
Company's subsidiary, Peace Arch Productions Inc. There were no other executive
officers of the Company, or other individuals, whose total compensation exceeded
$100,000 during the financial year ended 31st August 1999.
5
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG TERM COMPENSATION
----------------------------------
AWARDS PAYOUTS
----------------------------------------------------------------------------
NAME AND OTHER ANNUAL SECURITIES UNDER ALL OTHER
PRINCIPAL YEAR SALARY BONUS COMPENSATION OPTION GRANTED LTIP PAYOUTS COMPENSATION
POSITION [1] ($) ($) ($) (#) ($) ($)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
WD Cameron 1999 $165,000 Nil $35,000[2] Nil $100,000 Nil
White, CEO
------------------------------------------------------------------------------------------------------
1998 $90,000 Nil $60,000[2] 7,000 [5] Nil Nil
7,000 [6]
------------------------------------------------------------------------------------------------------
1997 $60,000 Nil $14,000[2] 16,025 [5] Nil Nil
16,015 [6]
------------------------------------------------------------------------------------------------------
Timothy
Gamble, 1999 $165,000 Nil $35,000[3] Nil $100,000 Nil
President
------------------------------------------------------------------------------------------------------
1998 $90,000 Nil $60,000[3] 7,000 [5] Nil Nil
7,000 [6]
------------------------------------------------------------------------------------------------------
1997 $60,000 Nil Nil 4,000 [5] Nil Nil
4,000 [6]
------------------------------------------------------------------------------------------------------
Larry Sugar
President 1999 Nil Nil Nil Nil Nil $1,956,000[4]
Peace Arch
Productions Inc.
------------------------------------------------------------------------------------------------------
1998 Nil Nil Nil 5,000 [5] Nil $1,284,777[4]
5,000 [6]
------------------------------------------------------------------------------------------------------
1997 Nil Nil Nil Nil Nil $725,391[4]
------------------------------------------------------------------------------------------------------
Juliet Jones
Chief 1999 $120,000 Nil Nil Nil $60,000 Nil
Financial
Officer
------------------------------------------------------------------------------------------------------
1998 $80,000 Nil Nil 5,000 [5]
5,000 [6]
------------------------------------------------------------------------------------------------------
1997 $55,000 Nil Nil 3,800 [5] Nil Nil
3,800 [6]
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
[1] Ended 31st August.
[2] A company controlled by Mr. White received fees of $35,000 in 1999,
$60,000 in 1998 and $14,000 in 1997 from the Company.
[3] A company controlled by Mr. Gamble received fees of $35,000 in 1999 and
$60,000 in 1998.
[4] Paid as production fees.
[5] Class A Shares
[6] Class B Shares
6
<PAGE>
LONG TERM INCENTIVE PLANS -
AWARDS IN MOST RECENTLY COMPLETED FINANCIAL YEAR
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
PERFORMANCE OR ESTIMATED FUTURE PAYOUTS UNDER
SECURITIES UNITS OTHER PERIOD UNIT NON-SECURITIES-PRICE-BASED PLANS
OR OTHER RIGHTS (#) MATURATION OR --------------------------------------
NAME PAYOUT
- -----------------------------------------------------------------------------------------------------------------
THRESHHOLD TARGET MAXIMUM
($ OR #) ($ OR #) ($ OR #)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
W.D. Cameron White N/A August 31, 1999 N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------
Timothy Gamble N/A August 31, 1999 N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------
Juliet Jones N/A August 31, 1999 N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
The maximum Performance Bonus entitlement shall be equal to 50% of the each of
Messrs. White, Gamble and Ms. Jones' (the "Employee") base salary during the
relevant fiscal year. For greater certainty, the Employees' base salary during
the fiscal year ended August 31, 1999 shall be deemed to be $200,000 per annum
in the case of Messrs. White and Gamble and $120,000 per annum in the case of
Ms. Jones.
The actual entitlement shall be based on the share price performance of the
Company's shares and shall be calculated as a percentage of the maximum
entitlement. The percentage increase or decrease of the Company's shares during
the year shall be compared to the share price performance of a peer group of
companies (the "Peer Group"). The composition of the Peer Group shall be
determined by the Compensation Committee of the Company and the Employee at the
beginning of each fiscal year.
If the price performance of the Company's shares ranks in the top quartile of
the Peer Group, the Employee will earn the maximum Performance Bonus. If the
price performance of the Company's shares ranks in the second quartile, the
Employee will earn 50% of the maximum Performance Bonus. If the price
performance of the Company's shares ranks in the lower half of the Peer Group,
the Employee will not be entitled to the Performance Bonus. Price performance
will be calculated based on a 10 day trading average taken during the last five
and the first five trading days of each fiscal year.
OPTION GRANTS DURING THE MOST RECENTLY COMPLETED FINANCIAL YEAR
During the most recently completed financial year, there were no options granted
to the Named Executive Officers.
AGGREGATED OPTION EXERCISES DURING THE MOST RECENTLY COMPLETED
FINANCIAL YEAR AND FINANCIAL YEAR END OPTION VALUES
During the most recently completed financial year, there were no options
exercised by the Named Executive Officers.
<TABLE>
<CAPTION>
=================================================================================================================
UNEXERCISED OPTIONS AT FISCAL YEAR VALUE OF UNEXERCISED IN
SECURITIES AGGREGATE END EXERCISABLE/ UNEXERCISABLE (#) THE MONEY OPTIONS AT
ACQUIRED ON VALUE FISCAL YEAR END
NAME OF NAMED EXER-CISE REALIZED ($) EXERCISABLE/
EXECUTIVE OFFICERS (#) UNEXERCISABLE ($)
-------------------------------------
Class A Shares Class B Shares
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cameron White Nil N/A 21,275/1,750 21,275/1,750 Nil/Nil
- -----------------------------------------------------------------------------------------------------------------
Timothy Gamble Nil N/A 21,500/1,750 21,500/1,750 Nil/Nil
- -----------------------------------------------------------------------------------------------------------------
Juliet Jones Nil N/A 11,300/2,500 11,300/2,500 Nil/Nil
- -----------------------------------------------------------------------------------------------------------------
Larry Sugar Nil N/A 13,750/1,250 13,750/1,250 Nil/Nil
=================================================================================================================
</TABLE>
Except for the Company's Stock Option Plan, there are no plans in effect
pursuant to which cash or non-cash compensation was paid or distributed to Named
Executive Officers during the most recently completed financial year or is
proposed to be paid or distributed in a subsequent year.
7
<PAGE>
COMPOSITION OF THE COMPENSATION COMMITTEE
During the last fiscal year, the Company's Compensation Committee was comprised
of Yad Garcha (Chairman), Stephen Cheikes and Darrell Elliott, none of whom are
or were officers or employees of the Company.
REPORT ON EXECUTIVE COMPENSATION
It is the responsibility of the Compensation Committee to administer the
compensation policies related to the executive management of the Company,
including those named in the Summary Compensation Table above.
Executive compensation is based upon the need to provide a compensation package
that will allow the Company to attract and retain qualified and experienced
executives, balanced with a pay-for-performance philosophy.
Compensation for the 1999 and prior fiscal years has historically been salary
based, with bonuses and other incentives for senior offices where suitable. One
of the executive officers, Larry Sugar, receives the bulk of his compensation in
the form of fees earned for specific roles performed during the course of
producing the Company's film and television programs. Salaries, including that
for the CEO, are determined considering experience, industry expertise and level
of responsibility in relation to other similar companies and/or competitors.
Stock options have also been granted to the executive officers. The Company has
a stock option plan (the "Plan") in place to assist executive officers and
certain others to participate in the growth and development of the Company. The
Plan allows compensation of participants while providing additional incentive to
work toward long term Company performance. The Plan is used to provide share
purchase options which are granted in consideration of the level of
responsibility of the executive officer as well as their impact and/or
contribution on the longer-term operating performance of the Company. In
determining the number of options to be granted to the executive officers, the
Compensation Committee takes into account the number of options previously
granted to such executive officer, if any, and the exercise price of such option
in order to ensure that the grants are in accordance with the policies of the
Toronto and American Stock Exchanges, and to closely align the interests of the
executive officers with the interests of shareholders.
NAMED EXECUTIVE OFFICERS
The salary of the Named Executive Officers was determined by the Compensation
Committee and approved by the Board of Directors on the basis of the value of
the benefit derived by the Company from the input and presence of the Named
Executive Officers. In addition, the Named Executive Officers received stock
options determined on the same basis as grants of stock options to the executive
officers.
Presented by the Compensation Committee: Yad Garcha, Stephen Cheikes, Darrell
Elliott
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the cumulative
total shareholder return on the common shares of the Company, since 1993 and to
July 14, 1999, with the cumulative total return of The Toronto Stock Exchange
300 composite index.
The common share trading data is as reported by the Vancouver Stock Exchange for
the period from August 31, 1993 to August 31, 1997. The common shares of the
Company commenced trading on The Toronto Stock Exchange on November 28, 1997.
Trading prices for dates prior to February 1997 have been further revised to
reflect a 4:1 consolidation of the common shares that occurred at that time.
8
<PAGE>
Total Return on $100 Investment:
[GRAPH]
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998 14-Jul-1999
---- ---- ---- ---- ---- ---- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Common Shares $100 $ 84 $145 $268 $141 $ 71 $166
TSE 300 Composite Index $100 $101 $114 $120 $154 $129 $169
</TABLE>
On July 19, 1999, the Company's common shares ceased trading, and the Class A
Multiple Voting Shares and Class B Subordinate Voting Shares commenced trading,
on The Toronto Stock Exchange. The following graph compares the cumulative total
shareholder return on an investment of $100 in Class A Multiple Voting Shares of
the Company and an investment of $100 in Class B Subordinate Voting Shares of
the Company made on July 19, 1999 with the cumulative total shareholder return
of The Toronto Stock Exchange TSE 300 Composite Index.
[GRAPH]
<TABLE>
<CAPTION>
19-Jul-1999 31-Aug-1999
----------- -----------
<S> <C> <C>
Class A Shares $100 $65.24
Class B Shares $100 $66.67
TSE 300 Composite Index $100 $95.91
</TABLE>
<PAGE>
TERMINATION OF EMPLOYMENT, CHANGES IN RESPONSIBILITIES AND EMPLOYMENT CONTRACTS
Except as noted below under "Employment Agreements", the Company has no
compensatory plan or arrangement with respect to the Named Executive Officers
in the event of the resignation, retirement or any other termination of the
Named Executive Officers' employment with the Company and its subsidiaries or
in the event of a change of control of the Company or its subsidiaries or in
the event of a change in the Named Executive Officers' responsibilities
following a change in control, where in respect of the Named Executive
Officers the value of such compensation exceeds $100,000.
EMPLOYMENT AGREEMENTS
Each of Timothy Gamble, W.D. Cameron White and Juliet Jones have entered into
an amended employment agreement with the Company on 1st April 1999. The
agreements with Messrs. Gamble and White provide for a salary of $200,000 per
year and the agreement with Ms. Jones provides for a salary of $120,000 per
year. All agreements are to be reviewed annually and provide for bonuses
within the guidelines of the Company's compensation plan when deemed
warranted by the Board of Directors.
Under their agreements, Messrs. Gamble and White and Ms. Jones' performance
bonuses are calculated by the same formula based on the trading prices of our
shares. The formula compares the percentage increase or decrease during the
fiscal year of the trading price of our shares against the percentage of a
peer group of companies, determined by the Compensation Committee. If the
price performance of the Company's shares exceeds specified levels compared
to the peer group, the employee is eligible for an increased percentage of
the bonus. The foregoing employment agreements expire on 31st August 2002 and
provide that if they are terminated by the Company before expiration, the
Company will be obligated to pay the annual salaries and bonuses that would
be due for the remaining term of the agreement.
Larry Sugar was party to an employment agreement with Peace Arch Productions
Inc. (a wholly owned subsidiary of the Company) which expired on 31st August
1999. The agreement provided for payment and bonuses to Mr. Sugar on a
project by project basis. Under the terms of the agreement, Mr. Sugar was not
engaged, directly or indirectly, in any other business or employment during
the term of the agreement without the specific written permission of the
employer.
DIRECTORS
During the most recently completed fiscal year, the Directors of the Company
were paid a yearly retainer of $5,000. As well, Directors are paid $500 for
each Directors' or Committee Meeting attended in person and $300 for each
Directors' or Committee Meeting attended by conference call. Chairpersons of
any Directors' or Committee Meeting were paid twice that of a non-chair
member. Incentive stock options were granted pursuant to the Company's Stock
Option Plan to non-Named Executive Officer Directors of the Company during
the last completed financial year to purchase up to 20,000 Class A Shares at
a price of $9.50 per share and 20,000 Class B Shares at a price of $9.50 per
share on or before 16th February 2004, none of which were exercised. No stock
options were exercised by any non-Named Executive Officer Directors.
Set forth below is a list of all stock options granted by the Company
pursuant to the Company's Stock Option Plan to non-Named Executive Officer
directors and other "insiders" (as that term is defined in the SECURITIES ACT
(British Columbia)) of the Company, outstanding at the date of this
Information Circular.
<TABLE>
<CAPTION>
- ------------------------------ -------------- --------------- ------------- ---------------------- ----------------------
NO. OF NO. OF EXERCISE
CLASS A CLASS B PRICE PER
NAME OF OPTIONEE SHARES SHARES SHARE DATE OF GRANT EXPIRY DATE
- ------------------------------ -------------- --------------- ------------- ---------------------- ----------------------
<S> <C> <C> <C> <C> <C>
NON-NAMED EXECUTIVE
OFFICER DIRECTORS
Stephen Cheikes 5,000 5,000 $9.50 February 16, 1999 February 16, 2004
10,000 10,000 $9.50 March 23, 1998 March 23, 2003
Yad Garcha 5,000 5,000 $9.50 February 16, 1999 February 16, 2004
</TABLE>
10
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
Darrell Elliott 5,000 5,000 $9.50 February 16, 1999 February 16, 2004
Vincent Lum 5,000 5,000 $9.50 February 16, 1999 February 16, 2004
- ------------------------------ -------------- --------------- ------------- ---------------------- ----------------------
OTHER INSIDERS OF
THE COMPANY
Blair Reekie 4,000 4,000 $9.50 March 23, 1998 March 23, 2003
5,000 5,000 $13.50 October 15, 1996 October 15, 2001
- ------------------------------ -------------- --------------- ------------- ---------------------- ----------------------
</TABLE>
No pension plan or retirement benefit plans have been instituted by the
Company and none are proposed at this time.
INDEBTEDNESS OF DIRECTORS AND SENIOR OFFICERS
None of the directors or senior officers of the Company, no proposed nominee
for election as a director of the Company, and no associates or affiliates of
any of them, is or has been indebted to the Company or its subsidiaries at
any time since the beginning of the Company's last completed financial year.
APPOINTMENT OF AUDITORS
Management proposes the appointment of KPMG LLP, Chartered Accountants, as
Auditors of the Company for the ensuing year and that the directors be
authorized to fix their remuneration. KPMG LLP have been the Company's
Auditors since February 1999.
INTEREST OF INSIDERS IN MATERIAL TRANSACTIONS
No insider of the Company, no proposed nominee for election as a director of
the Company and no associate or affiliate of any of the foregoing, has any
material interest, direct or indirect, in any transaction since the
commencement of the Company's last financial year or in any proposed
transaction, which, in either case, has materially affected or will
materially affect the Company or any of its subsidiaries other than as
disclosed under the headings "Executive Compensation" and "Particulars of
Matters to be Acted Upon".
INTEREST OF CERTAIN PERSONS
IN MATTERS TO BE ACTED UPON
None of the directors or senior officers of the Company, no management
nominee for election as a director of the Company, none of the persons who
have been directors or senior officers of the Company since the commencement
of the Company's last completed financial year and no associate or affiliate
of any of the foregoing has any material interest, direct or indirect, by way
of beneficial ownership of securities or otherwise, in any matter to be acted
upon at the Meeting other than as disclosed under the headings "Executive
Compensation" and "Particulars of Matters to be Acted Upon".
CORPORATE GOVERNANCE
The Company's Board of Directors is, pursuant to the provisions of the
COMPANY ACT (British Columbia), charged with the responsibility of managing
or supervising the management of the affairs and business of the Company. In
pursuing that mandate, the Board of Directors has adopted a strategic
planning process and risk management system which the Board considers to be
appropriate for the Company's business and size. The Board of Directors
currently includes four directors who are unrelated (independent of
management under the Corporate Governance Guidelines (the "Guidelines") of
The Toronto Stock Exchange) (Stephen Cheikes, Yad Garcha, Darrell Elliott and
Vincent Lum). The Company has no shareholder with the ability to exercise a
majority of the votes for the election of the Board of Directors and there is
no Chairman of the Board of Directors of the Company. The only Directors of
the Company who are part of management are Timothy Gamble, President and W.D.
Cameron White, Chief Executive Officer. Each of the Directors has substantial
industry experience.
While the Company has nominating, audit and compensation committees, the
Board of Directors is of the view that, in light of the Company's size and
stage of development, neither an assessment nor executive committee is
required at this time. The Directors of the Company are compensated in their
capacities as directors.
11
<PAGE>
The Board of Directors as a whole is cognizant of developing the Company's
approach to corporate governance and defining the limits of management's
responsibilities. As part of that process, the current Board of Directors
meets frequently and regularly receives management reports. Currently, all
major management decisions require prior approval by the Company's Board of
Directors.
PARTICULARS OF
MATTERS TO BE ACTED UPON
APPROVAL OF PRIVATE PLACEMENTS
In order for the Company to raise funds to expand its activities, the Company
may require further funding which would be raised under one or more private
placements.
At the Meeting, shareholders will be asked to approve a resolution
authorizing the Board of Directors to enter into one or more private
placements in the 12 month period following the Meeting to issue additional
shares to subscribers who are substantially at arm's length to the Company.
Pursuant to the rules adopted by The Toronto Stock Exchange (the "TSE"),
shareholder approval is required for issuance of shares by private placement
of more than 25% of the number of shares which are currently outstanding (on
a non-diluted basis) in any six month period. Accordingly, it is prudent to
have authority for such private placements at the present time to save the
time and expense of seeking shareholder approval at future special meetings
of shareholders.
It is not the intention of management to issue the entire number of shares
authorized pursuant to the proposed resolution. The private placements will
be negotiated only if management believes the subscription price is
reasonable in the circumstances and if the funds are required by the Company
to expand its activities. The issuance of shares pursuant to these private
placements will not materially affect the control of the Company. Each such
private placement will be made in accordance with applicable by-laws and
rules of the TSE, which require the approval of the TSE prior to completion
of each individual private placement. These rules provide that private
placements be priced at the closing price on the day prior to the notice of
private placement, subject to prescribed discounts as set forth below:
<TABLE>
<CAPTION>
MARKET PRICE MAXIMUM DISCOUNT THEREFROM
<S> <C>
$0.50 or less 25%
$0.51 to $2.00 20%
Above $2.00 15%
</TABLE>
As well, warrants may accompany shares issued under the private placement,
where such warrants are priced at or above market and do not exceed the
number of shares issued under the private placement.
Paragraph 620 of the TSE Company Manual (the "Manual") provides that the
total number of shares of a listed company which are issued or subject to
issuance pursuant to private placement transactions during any six month
period must not exceed 25% of the number of shares of the Company which are
outstanding prior to giving effect to such transactions.
Shareholders are being asked, therefore, to pass a resolution authorizing
additional private placements which would take place within one year of the
date of the Meeting. Such future private placements will be subject to the
following terms:
1. All of the private placement financings will be carried out in
accordance with the guidelines of the TSE in accordance with paragraphs
619 and 622 of the Manual.
2. Such future private placements would not result in additional shares of
the Company being issued in any amount exceeding the current number of
issued and outstanding shares (in the aggregate) of the Company.
3. Any of the future private placements would be substantially at arm's
length and would not materially affect control of the Company.
The resolution with respect to private placement financings requires
confirmation by a majority of the votes cast thereon at the Meeting. In the
event the resolution is not passed, the Company will not proceed with any
private
12
<PAGE>
placement that requires shareholder approval under the rules of the TSE
unless and until such shareholder approval is received.
The text of the resolution to be submitted to the shareholders at the Meeting
is set forth below.
"NOW THEREFORE BE IT RESOLVED THAT:
1. The directors of the Company be and are hereby authorized and directed
to arrange from time to time, additional private placements in the
capital of the Company, subject to the following terms;
(a) all private placement financings will be carried out by the
Company in accordance with the guidelines of The Toronto Stock
Exchange and specifically paragraphs 619 and 622 of The
Toronto Stock Exchange Company Manual;
(b) the future private placements will not result in additional
shares of the Company being issued in an amount exceeding the
current number of issued and outstanding shares in the
aggregate of the Company; and
(c) any of the future private placements would be substantially at
arm's length and would not materially affect control of the
Company.
2. Any one director or officer of the Company be and is hereby authorized
and directed to execute and deliver under the corporate seal or
otherwise all such deeds, documents, instruments and assurances and to
do all such acts and things as in his opinion may be necessary or
desirable to give effect to this resolution."
ADDITIONAL DOCUMENTATION
The Company is a reporting issuer accountable to the securities commissions
of certain provinces of Canada and is therefore required to present financial
statements and information circulars to the various securities commissions in
such provinces. The Company files an Annual Information Form with such
securities commissions. Copies of the Company's Annual Information Form,
Information Circular and the most recent consolidated and audited financial
statements are available on request from the Company's CEO. The Company may
charge reasonable fees if the request is made by someone other than a holder
of securities in the Company.
MANAGEMENT KNOWS OF NO OTHER MATTERS TO COME BEFORE THE MEETING OTHER THAN
THOSE REFERRED TO IN THE NOTICE OF MEETING. HOWEVER, SHOULD ANY OTHER MATTERS
PROPERLY COME BEFORE THE MEETING, THE SHARES REPRESENTED BY THE PROXY
SOLICITED HEREBY WILL BE VOTED ON SUCH MATTERS IN ACCORDANCE WITH THE BEST
JUDGMENT OF THE PERSONS VOTING THE SHARES REPRESENTED BY THE PROXY.
APPROVAL OF INFORMATION CIRCULAR
The contents and the sending of this Information Circular have been approved
by the directors of the Company.
BY ORDER OF THE BOARD OF DIRECTORS
"Timothy Gamble"
President
13
<PAGE>
PEACE ARCH ENTERTAINMENT GROUP INC.
3rd Floor, 1132 Hamilton Street
Vancouver, B.C., Canada, V6B 2S2
Tel: (604) 681-9308 Fax: (604) 681-3299
THIS PROXY IS SOLICITED BY THE MANAGEMENT OF
PEACE ARCH ENTERTAINMENT GROUP INC.
PROXY FOR THE 2000 ANNUAL GENERAL MEETING OF
MEMBERS TO BE HELD ON THURSDAY, 24th FEBRUARY 2000
The undersigned member of PEACE ARCH ENTERTAINMENT GROUP INC. (hereinafter
called the "Company") hereby appoints Timothy Gamble, or failing him, W.D.
Cameron White, or _________________________, as nominee of the undersigned,
to attend and act for and on behalf of the undersigned at the 2000 Annual
General Meeting of Members of the Company to be held on Thursday, 24th
February 2000 and at any adjournment thereof and the shares represented by
this proxy are specifically directed to be voted or to be withheld from
voting as indicated below:
<TABLE>
<S> <C>
1. To appoint KPMG, Chartered Accountants, as Auditors of the Company: In favour: _____
Withhold Vote:_____
2. To authorize the directors to fix the remuneration of the Auditors: In favour:_____
Against:_____
3. To determine the number of directors at six (6): In favour:_____
Against:_____
4. (a) To elect as directors all the persons named in 4(b) below: In favour:_____
Withhold vote:_____
OR
4. (b) To elect as a director:
Stephen Cheikes In favour:_____
Withhold Vote:_____
Darrell Elliott
In favour:_____
Withhold Vote:_____
Timothy Gamble In favour:_____
Withhold Vote:_____
Yad Garcha In favour:_____
Withhold Vote:_____
Vincent Lum In favour:_____
Withhold Vote:_____
W.D. Cameron White In favour:_____
Withhold Vote:_____
5. To pass a resolution authorizing private placements in accordance with
The Toronto Stock Exchange guidelines.
In Favour:_____
Against:_____
</TABLE>
14
<PAGE>
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED OR WITHHELD FROM VOTING IN
ACCORDANCE WITH THE INSTRUCTIONS GIVEN AND, IF A CHOICE IS SPECIFIED WITH
RESPECT TO ANY MATTER TO BE ACTED UPON, THE SHARES SHALL BE VOTED OR WITHHELD
FROM VOTING ACCORDINGLY. WHERE NO CHOICE IS OR WHERE BOTH CHOICES ARE
SPECIFIED IN RESPECT OF ANY MATTER TO BE ACTED UPON, THE SHARES REPRESENTED
HEREBY SHALL BE VOTED FOR THE ADOPTION OF ALL SUCH MATTERS. THIS PROXY
CONFERS UPON THE PERSON NAMED HEREIN AS NOMINEE DISCRETIONARY AUTHORITY WITH
RESPECT TO AMENDMENTS OR VARIATIONS TO MATTERS IDENTIFIED IN THE NOTICE AND
OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING.
The undersigned hereby acknowledges receipt of the Notice of 2000 Annual
General Meeting of Members and the accompanying Information Circular dated
12th January 2000.
If this Form of Proxy is not dated by the member in the space below, it is
deemed to bear the date on which it is mailed by the Company to the member.
The undersigned hereby revokes any proxy previously given in respect of the
Meeting.
DATED this ______ day of _________________, 2000.
- ----------------------------------------
Name (Please Print) Number of Shares Held:
- ----------------------------------------
Address
- ---------------------------------------- ------------------------------
- ----------------------------------------
Signature
NOTES TO FORM OF PROXY
1. IF THE MEMBER DOES NOT WISH TO APPOINT ANY OF THE PERSONS NAMED IN THIS
FORM OF PROXY, HE SHOULD STRIKE OUT THEIR NAMES AND INSERT IN THE BLANK
SPACE THE NAME OF THE PERSON HE WISHES TO ACT AS HIS PROXY. SUCH PERSON
NEED NOT BE A MEMBER OF THE COMPANY.
2. This Form of Proxy must be signed by the member or his attorney
authorized in writing or, if the member is a corporation, under the
hand of a duly authorized officer or attorney of the corporation.
3. This Form of Proxy, and the power of attorney or other authority, if
any, under which it is signed, or a notarially certified copy thereof,
must be deposited either at the office of the Registrar and Transfer
Agent of the Company, CIBC Mellon Trust Company, Suite 1600, The
Oceanic Plaza, 1066 West Hastings Street, Vancouver, B.C., Canada, V6E
3X1 or at the Head Office of the Company at #302, 1132 Hamilton Street,
Vancouver, B.C., Canada, V6B 2S2 not less than 48 hours, Saturdays and
holidays excepted, prior to the time of the holding of the meeting or
any adjournment thereof.
15
<PAGE>
RETURN CARD
Dear Shareholder:
If you wish to have your name put on the Supplemental Mailing List of PEACE ARCH
ENTERTAINMENT GROUP INC. (the "Company"), such that you shall be mailed copies
of the Company's interim financial statements in respect of the present fiscal
year, then complete this form and return it to the Company's registrar and
transfer agent, CIBC Mellon Trust Company, whose address is 1600, 1066 West
Hastings Street, Vancouver, B.C., Canada, V6E 3X1.
NAME: (PLEASE PRINT)
----------------------------------------------
ADDRESS:
----------------------------------------------
----------------------------------------------
NUMBER AND CLASS OF VOTING
SECURITIES HELD:
----------------------------------------------
SIGNATURE:
----------------------------------------------
16
<PAGE>
Pursuant to the mail out of the Company's 2000 Annual General Meeting mail out,
this is to advise that:
1. I did, on the 18th day of January, 2000, deliver by first class ordinary
mail to each common shareholder of the Company at his or her address as
it appears on the Share Register of the Company and to the regulatory
authorities and have distributed to the Intermediaries and Service
Companies in accordance with National Policy 41, the following documents:
(a) Notice of Annual General Meeting;
(b) Information Circular;
(c) Proxy;
(d) Return Card;
(e) Audited Financial Statements for the year ended 31st August
1999; and
(f) Return Envelope;
copies of which are attached hereto.
2. I mailed the above-mentioned documents as aforesaid by causing them to be
delivered to one of Her Majesty's Post Offices with postage prepaid on
the 18th day of January, 2000.
PEACE ARCH ENTERTAINMENT GROUP INC.
Per: /s/ REBECCA PATERSON
---------------------------------
Rebecca Paterson
17
<PAGE>
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.
Peace Arch Entertainment Group Inc.
--------------------------------------
(Registrant)
Date January 20th, 2000 By /S/ JULIET JONES
------------------- --------------------------------------
(Signature)*
Juliet Jones, CFO
- -------------------------
*Print the name and title under the signature of the signing officer.
GENERAL INSTRUCTIONS
A. Rule as to Use of Form 6-K,
This form shall be used by foreign private issuers which are required to
furnish reports pursuant to Rule 13a-16 or 15d-16 under the Securities
Exchange Act of 1934.
B. Information and Document required to be Furnished,
Subject to General Instruction D herein, an issuer furnishing a report on
this form shall furnish whatever information, not required to be furnished on
Form 40-F or previously furnished, such issuer (I) makes or is required to
make public pursuant to the law of the jurisdiction of its domicile or in
which it is incorporated or organized, or (ii) files or is required to file
with a stock exchange on which its securities are traded and which was ;made
public by that exchange, or (iii) distributes or is required to distribute to
its security holders.
The information required to be furnished pursuant to (I), (ii) or (iii) above
is that which is material with respect to the issuer and its subsidiaries
concerning: changes in business; changes in management or control;
acquisitions or dispositions of assets; bankruptcy or receivership; changes
in registrant's certifying accountants; the financial condition and results
of operations; material legal proceedings; changes in securities or in the
security for registered securities; defaults upon senior securities; material
increases or decreases in the amount outstanding of securities or
indebtedness; the results of the submission of matters to a vote of security
holders; transactions with directors, officers or principal security holders;
the granting of options or payment of other compensation to directors or
officers; and any other information which the registrant deems of material
importance to security holders.
This report is required to be furnished promptly after the material contained
in the report is made public as described above. The information and
documents furnished in this report shall not be deemed to be "filed" for the
purpose of Section 18 of the Act or otherwise subject to the liabilities of
that section.
If a report furnished on this form incorporates by reference any information
not previously filed with the Commission, such information must be attached
as an exhibit and furnished with the form.
C. Preparation and Filing of Report
This report shall consist of a cover page, the document or report furnished
by the issuer, and a signature page. Eight complete copies of each report on
this form shall be deposited with the Commission. At least one complete copy
shall be filed with each United States stock exchange on which any security
of the registrant is listed and registered under Section 12(b) of the Act. At
least one of the copies deposited with the Commission and one filed with each
such exchange shall be manually signed. Unsigned copies shall be conformed.
D. Translations of Papers and Documents into English
Reference is made to Rule 12b-12(d) [17 CFR 240.12b-12(d)]. Information
required to be furnished pursuant to General Instruction B in the form of
press releases and all communications or materials distributed directly to
security holders of each class of securities to which any reporting
obligation under Section 13(a) or 15(d) of the Act relates shall be in the
English language. English versions or adequate summaries in the English
language of such materials may be furnished in lieu of original English
translations.
Notwithstanding General Instruction B, no other documents or reports,
including prospectuses or offering circulars relating to entirely foreign
offerings, need be furnished unless the issuer otherwise has prepared or
caused to be prepared English translations, English versions or summaries in
English thereof. If no such English translations, versions or summary have
been prepared, it will be sufficient to provide a brief description in
English of any such documents or reports. In no event are copies of original
language documents or reports required to be furnished.
18
