<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
SMARTIRE SYSTEMS INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
SMARTIRE SYSTEMS INC.
Suite #150, 13151 Vanier Place
Richmond, British Columbia, Canada V6V 2J1
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
On Friday, January 14, 2000, SmarTire Systems Inc. (the "Company") will hold its
1999 Annual General Meeting of Shareholders (the "Meeting") at the Hilton
Vancouver Airport Hotel, 5911 Minoru Boulevard, Richmond, British Columbia,
Canada. The Meeting will begin at 10:00 a.m., Vancouver time.
At the Meeting, the shareholders will be asked:
1. To receive and consider the Report of the Directors to the Members;
2. To receive and consider the financial statements of the Company together
with the auditor's report thereon for the fiscal year ended July 31, 1999;
3. To appoint the auditor for the Company to hold office until the next annual
general meeting of the Company;
4. To authorize the directors to fix the remuneration to be paid to the
auditors;
5. To consider and, if thought fit, to approve an ordinary resolution to set
the number of directors at seven (7);
6. To elect directors to hold office until the next annual general meeting of
the Company; and
7. To transact such further or other business as may properly come before the
Meeting and any adjournments thereof.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THE PROPOSALS
OUTLINED IN THIS PROXY STATEMENT AND INFORMATION CIRCULAR.
At the Meeting, the Company will also report on its 1999 business results and
other matters of interest to shareholders.
A Proxy Statement and Information Circular and Proxy Form accompany this Notice
of Meeting. These documents provide additional information relating to the
matters to be dealt with at the Meeting and form part of this Notice of Meeting.
The share transfer books of the Company will not be closed, but the Board of
Directors has fixed December 3, 1999 as the record date for the determination of
shareholders entitled to notice of and to vote at the Meeting and at any
adjournment or postponement thereof. Each registered shareholder at the close of
business on
<PAGE> 3
that date is entitled to such notice and to vote at the Meeting in the
circumstances set out in the accompanying Proxy Statement and Information
Circular.
Your vote is important. If you are unable to attend the meeting in person,
please complete, sign and date the enclosed Proxy Form and return the same in
the enclosed return envelope provided for that purpose. If you receive more than
one Proxy Form because you own shares registered in different names or
addresses, each Proxy Form should be completed and returned. The completed form
of proxy must be received by Pacific Corporate Trust Company not later than 48
hours prior to the commencement of the Meeting (or if adjourned or postponed,
any reconvening thereof), at Suite 830, 625 Howe Street, Vancouver, British
Columbia, V6C 3B8, or by fax at (604) 689-8144. However, the Chairman of the
Meeting has the discretion to accept proxies filed less than 48 hours prior to
the commencement of the Meeting (or, if adjourned or postponed, any reconvening
thereof).
DATED at Vancouver, British Columbia, this 3rd day of December, 1999.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ ROBERT V. RUDMAN
- ---------------------------------------
ROBERT V. RUDMAN,
CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
<PAGE> 4
SMARTIRE SYSTEMS INC.
#150, 13151 VANIER PLACE,
RICHMOND, BRITISH COLUMBIA, CANADA V6V 2J1
PROXY STATEMENT AND INFORMATION CIRCULAR
IN CONNECTION WITH THE ANNUAL GENERAL
MEETING TO BE HELD ON JANUARY 14, 2000
(As at November 15, 1999 except as otherwise indicated)
MANAGEMENT SOLICITATION
This Proxy Statement and Information Circular is furnished to the members (the
"Shareholders") by the Board of Directors of SmarTire Systems Inc. (the
"Company") in connection with the solicitation of proxies to be voted at the
Annual General Meeting (the "Meeting") of the Shareholders to be held at 10:00
a.m. (Vancouver time) on Friday, January 14, 2000 or at any adjournment or
postponement thereof, for the purposes set forth in the accompanying Notice of
Annual General Meeting of Shareholders (the "Notice of Meeting").
The solicitation will be conducted by mail and may be supplemented by telephone
or other personal contact to be made without special compensation by regular
officers and employees of the Company. The Company does not reimburse
Shareholders, nominees or agents for the cost incurred in obtaining from their
principal 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.
References in this Proxy Statement and Information Circular to "member" or
"Shareholder" or "Shareholders" are references to the holder or holders of
record of shares of common stock without par value of the Company (the "Common
Shares").
This Proxy Statement and Information Circular and the accompanying Proxy Form
are being delivered to Canadian and United States intermediaries holding Common
Shares on behalf of another person or company and are being mailed to registered
Shareholders on or about December 10, 1999.
The principal executive offices of the Company are located at Suite #150, 13151
Vanier Place, Richmond, British Columbia, Canada, V6V 2J1.
All references in this Proxy Statement and Information Circular to dollars or $
are to Canadian dollars, unless otherwise specified.
<PAGE> 5
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CURRENCY EXCHANGE RATES
On October 29, 1999, the noon rate of exchange quoted by the Federal Reserve
Bank of New York was $1.47 Canadian dollar per one United States dollar.
The following table reflects the rate of exchange quoted by the Federal Reserve
Bank of New York for Canadian dollars per one United States dollar in effect at
the end of the following periods and the average, high and low rates of exchange
during such periods.
<TABLE>
<CAPTION>
Average Close High Low
------- ----- ---- ---
<S> <C> <C> <C> <C>
Fiscal Year Ended 7/31/99 1.51 1.51 1.58 1.45
Fiscal Year Ended 7/31/98 1.43 1.51 1.51 1.37
Fiscal Year Ended 7/31/97 1.37 1.38 1.40 1.33
Fiscal Year Ended 7/31/96 1.35 1.37 1.38 1.33
Fiscal Year Ended 7/31/95 1.38 1.37 1.42 1.34
</TABLE>
VOTING AND REVOCABILITY OF PROXIES
The persons named as proxyholders (the "designated persons") in the enclosed
form of proxy were designated by the Directors of the Company. A SHAREHOLDER HAS
THE RIGHT TO APPOINT A PERSON (WHO NEED NOT BE A SHAREHOLDER) (WHICH MAY BE A
COMPANY) TO ATTEND AND ACT FOR AND ON BEHALF OF THAT SHAREHOLDER AT THE MEETING,
OTHER THAN THE DESIGNATED PERSONS IN THE ENCLOSED FORM OF PROXY. TO EXERCISE
THIS RIGHT, THE SHAREHOLDER MAY DO SO BY STRIKING OUT THE PRINTED NAMES AND
INSERTING THE NAME OF SUCH OTHER PERSON AND, IF DESIRED, AN ALTERNATE TO SUCH
PERSON IN THE BLANK SPACE PROVIDED IN THE FORM OF PROXY.
In order to be voted, the completed form of proxy must be received by Pacific
Corporate Trust Company not later than 48 hours prior to the commencement of the
Meeting, at Suite 830, 625 Howe Street, Vancouver, British Columbia, V6C 3B8, or
by fax at (604) 689-8144. However, the Chairman of the Meeting has the
discretion to accept proxies filed less than 48 hours prior to the commencement
of the Meeting.
A proxy may not be valid unless it is dated and signed by the Shareholder who is
giving it or by that Shareholder's attorney-in-fact duly authorized by that
Shareholder in writing or, in the case of a corporation, dated and executed by
any duly authorized officer of, or attorney-in-fact for, the corporation. If a
form of proxy is executed by an attorney-in-fact for an individual Shareholder
or joint Shareholders or by an officer or attorney-in-fact for a corporate
Shareholder, the instrument so empowering the officer or attorney-in-fact, as
the case may be, or a notarial copy thereof, should accompany the form of proxy.
A Shareholder who has given a proxy may revoke it at any time, before it is
exercised, by an instrument in writing (a) executed by that Shareholder or by
that
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Shareholder's attorney-in-fact authorized in writing or, where that Shareholder
is a corporation, by a duly authorized officer of, or attorney-in-fact for, the
corporation; and (b) delivered either (i) to the registered office of the
Company at Suite 800 - 885 West Georgia Street, Vancouver, British Columbia, V6C
3H1 (Attention: Bernard Pinsky) at any time up to and including the last
business day preceding the day of the Meeting or, if adjourned or postponed, any
reconvening thereof, or (ii) to the Chairman of the Meeting prior to the vote on
matters covered by the proxy on the day of the Meeting or, if adjourned or
postponed, any reconvening thereof; or in any other manner provided by law.
Attendance at the Meeting and participation in a poll (ballot) by a Shareholder
will automatically revoke the proxy. A revocation of a proxy does not affect any
matter on which a vote has been taken prior to the revocation.
IN THE ABSENCE OF ANY INSTRUCTIONS, THE DESIGNATED PERSONS OR OTHER PROXY AGENT
NAMED ON THE PROXY FORM WILL CAST THE SHAREHOLDER'S VOTES ON ANY POLL (BALLOT)
FOR THE APPROVAL OF ALL THE MATTERS IN THE ITEMS SET OUT IN THE FORM OF PROXY
AND IN FAVOR OF EACH OF THE NOMINEES NAMED THEREIN FOR ELECTION AS DIRECTORS.
The enclosed Proxy Form confers discretionary authority upon the persons named
therein with respect to other matters which may properly come before the
Meeting, including any amendments or variations to any matters identified in the
Notice of Meeting and with respect to other matters which may properly come
before the Meeting. At the date of this Proxy Statement and Information
Circular, management of the Company knew of no such amendments, variations, or
other matters to come before the Meeting.
In the case of abstentions from or withholding of the voting of shares on any
matter, the shares which are the subject of the abstention or withholding
("non-voted shares") will be counted for determination of a quorum, but will not
be counted as affirmative or negative on the matter to be voted upon.
No person has been authorized to give any information or to make any
representation other than those contained in the Proxy Statement and Information
Circular in connection with the solicitation of proxies and, if given or made,
such information or representations must not be relied upon as having been
authorized by the Company. The delivery of this Proxy Statement and Information
Circular shall not create, under any circumstances, any implication that there
has been no change in the information set forth herein since the date of this
Proxy Statement and Information Circular. This Proxy Statement and Information
Circular does not constitute the solicitation of a proxy by anyone in any
jurisdiction in which such solicitation is not authorized or in which the person
making such solicitation is not qualified to do so or to anyone to whom it is
unlawful to make such offer or solicitation.
<PAGE> 7
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As used in this section, the term beneficial ownership with respect to a
security is defined by Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, as consisting of sole or shared voting power (including the power to
vote or direct the vote) and/or sole or shared investment power (including the
power to dispose of or direct the disposition of) with respect to the security
through any contract, arrangement, understanding, relationship or otherwise,
directly or indirectly.
The authorized capital of the Company consists of: 199,818,749 Common Shares
without par value; and 20,000 Preferred Shares with a par value of $1,000 per
share. The Company effected a 1 for 8 reverse split of its Common Shares
effective December 24, 1997. As of November 15, 1999, there were 12,547,447
issued and outstanding Common Shares and no issued or outstanding Preferred
Shares. The record date for determining the names of Shareholders entitled to
receive the Notice of Meeting and to vote at the Meeting is the close of
business on December 3, 1999.
Holders of Common Shares and Preferred Shares are entitled to vote at the
Meeting. A Shareholder is entitled to one vote for each Common Share or
Preferred Share that such Shareholder holds on the record date on the proposals
to be acted upon at the Meeting and any other matter to come before the Meeting.
Members personally present, being not less than two and who hold or represent by
proxy in the aggregate not less than one-tenth of the issued capital of the
Company entitled to vote, constitutes a quorum. Abstentions are considered
present for purposes of determining whether the quorum requirement is met. All
proposals, other than a special resolution, require the affirmative vote by a
simple majority of the votes cast in person or by proxy at the Annual General
Meeting.
To the knowledge of the Company, the following beneficially own, directly or
indirectly, shares carrying more than five percent (5%) of the voting rights
attached to all shares of the Company:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
NAME AND ADDRESS OF AMOUNT AND NATURE OF
TITLE OF CLASS BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Shares TRW Inc. 1,800,000(1) 14.3%(1)
1900 Richmond Rd.
Cleveland, OH
44124
- --------------------------------------------------------------------------------------
</TABLE>
(1) 900,000 of these shares represent currently exercisable share purchase
warrants.
The following table shows: (i) the number of Common Shares beneficially owned by
each of the directors and the Named Executive Officers (as defined herein) and
all directors and executive officers as a group as of November 15, 1999
(excluding shares which such persons have the right to acquire within 60 days of
November 15, 1999 but do not actually own), (ii) the number of Common Shares
which each of
<PAGE> 8
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such persons has the right to acquire within 60 days of November 15, 1999 but
does not actually own, (iii) the total number of Common Shares which each of
such persons owns as of November 15, 1999 and has the right to acquire within 60
days of November 15, 1999, and the percent of class.
<TABLE>
<CAPTION>
Name Total Number of Shares Percent of Class
Beneficially Owned
Directors:
- ---------------------------------------- ---------------------- ----------------
<S> <C> <C>
Lawrence Becerra (1) 102,000 0.81%
John Bolegoh (2) 134,056 1.07%
Kevin Carlson (3) 13,070 0.10%
Mark Desmarais (4) 25,000 0.20%
Bernard Pinsky (5) 25,000 0.20%
Robert Rudman (6) 203,524 1.62%
Dana Stonerook nil nil
Named Executive Officers who are not
Directors or Nominees
Ian Bateman (7) 30,000 0.24%
Shawn Lammers (8) 21,519 0.17%
Gary Schlachter (9) 22,766 0.18%
Total Directors/ Executive Officers
(10 persons) 576,935 4.60%
</TABLE>
(1) Mr. Becerra has incentive stock options for the right to purchase up to an
aggregate of 25,000 Common Shares and a warrant for the right to purchase
up to an aggregate of 37,500 Common Shares. The options and warrants are
immediately exercisable.
(2) Includes 60,362 Common Shares owned by Mr. Bolegoh's wife and children.
Mrs. Bolegoh has sole voting and dispositive power with respect to her
shares, and Mr. Bolegoh disclaims beneficial ownership of such shares. Mr.
Bolegoh has incentive stock options for the right to purchase up to an
aggregate of 12,500 Common Shares. All options are immediately exercisable.
(3) Mr. Carlson has incentive stock options for the right to purchase an
aggregate of 50,000 Common Shares. The options vest over time and currently
12,500 options are immediately exercisable.
(4) Mr. Desmarais has incentive stock options for the right to purchase an
aggregate of 75,000 Common Shares. The options vest over time and currently
15,000 options are immediately exercisable.
(5) Mr. Pinsky has incentive stock options for the right to purchase an
aggregate of 25,000 Common Shares. The options are immediately exercisable.
(6) Mr. Rudman has incentive stock options for the right to purchase an
aggregate of 157,500 Common Shares. The options are immediately
exercisable.
(7) Mr. Bateman has incentive stock options for the right to purchase an
aggregate of 30,000 Common Shares. The options are immediately exercisable.
(8) Mr. Lammers has incentive stock options for the right to purchase an
aggregate of 20,000 Common Shares. The options are immediately exercisable.
(9) Includes 266 Common Shares owned by Mr. Schlachter's wife. Mrs. Schlachter
has sole voting and dispositive power with respect to her shares, and Mr.
Schlachter disclaims beneficial ownership of such. Mr. Schlachter has
incentive stock options for the right to purchase an aggregate of 17,500
Common Shares. Mr. Shlachter also holds a warrant for the right to purchase
up to an aggregate of 2,500 Common Shares. The options and warrants are
immediately exercisable.
(10) Based on beneficial shares owned, directly or indirectly, or over which
control or direction is exercised at November 15, 1999. The issued and
outstanding Common Shares of the Company at November 15, 1999 were
12,547,447.
<PAGE> 9
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CHANGES IN CONTROL
The Company is unaware of any contract or other arrangement, the operation of
which may at a subsequent date result in a change of control of the Company.
ELECTION OF DIRECTORS
The directors of the Company are elected at each annual general meeting and hold
office until the next annual general meeting or until their successors are
appointed. In the absence of instructions to the contrary, the enclosed proxy
will be voted for the nominees herein listed.
The Board of Directors of the Company presently consists of seven (7) members.
Advance notice of the Meeting inviting nominations for directors of the Company
was published in The Province newspaper in Vancouver, British Columbia, on
November 15, 1999 in accordance with Section 111 of the Company Act (British
Columbia), and delivered to the British Columbia Securities Commission on
November 1, 1999 in accordance with National Policy No. 41. The Shareholders
will be asked to pass an ordinary resolution to set the number of directors of
the Company at seven (7). Management of the Company proposes to nominate each of
the following persons for election as a director. Information concerning such
persons, as furnished by the individual nominees, is as follows:
<PAGE> 10
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<TABLE>
<CAPTION>
Name, Country of Ordinary Principal Occupation or Employment Age as at Date on Which
Residence and Position And, if not an Elected Director, October 31, The Nominee
Held with the Company Occupation During the Past Five Years 1999 Became a
(1) Director of the
Company
- ---------------------------- --------------------------------------------- ----------------- ----------------
<S> <C> <C> <C>
LAWRENCE BECERRA * Principal and founder of West Sussex 47 March 30/98
United Kingdom Trading, Inc.
DIRECTOR
JOHN BOLEGOH Vice President, Operations, SmarTire 55 Dec. 2/93
Canada Systems Inc.
VICE-PRESIDENT OF
OPERATIONS and DIRECTOR
KEVIN CARLSON Chief Financial Officer and Corporate 38 Dec 17/98
Canada Secretary, SmarTire Systems Inc.
CHIEF FINANCIAL OFFICER,
CORPORATE SECRETARY and
DIRECTOR
MARK DESMARAIS ** President and Chief Operating Officer, 45 Aug. 19/98
United States SmarTire Systems Inc.
PRESIDENT, CHIEF OPERATING
OFFICER, AND DIRECTOR
BERNARD PINSKY * Lawyer and partner at Clark, Wilson. 45 Aug. 19/98
Canada
DIRECTOR
ROBERT RUDMAN * Chairman and Chief Executive Officer, 52 Sept. 22/93
Canada SmarTire Systems Inc.
CHAIRMAN, CHIEF EXECUTIVE
OFFICER and DIRECTOR
DANA STONEROOK Vice President, Customer Development 42 June 4/99
United States TRW Automotive Electronics
DIRECTOR
</TABLE>
* Member of the Audit Committee
** Member of the Compensation Committee
(1) Principal occupations or employment within the five preceding years can be
found in the following section "Business Experience and Principal
Occupation of Directors, Executive Officers and Significant Employees."
BUSINESS EXPERIENCE AND PRINCIPAL OCCUPATION OF DIRECTORS, EXECUTIVE OFFICERS
AND SIGNIFICANT EMPLOYEES
The present and principal occupations of the Company's directors and executive
officers during the last five years are set forth below:
IAN BATEMAN:
Mr. Bateman is the Managing Director for SmarTire (Europe) Limited. He is a
U.K. resident and has extensive sales, marketing and senior managerial
experience in a variety of facets of European automotive industries. From
1966 to 1973 he was a manager with Mid Bucks Automotive Limited. During
1973 to 1979 Mr. Bateman was a manager with Renault U.K. Limited, and was
instrumental in the formation of a direct sales company in the U.K. with a
<PAGE> 11
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sales budget of pound sterling 100 million per year. Between 1979 and 1991
he operated his own marketing company which expanded to supply every
European car manufacturer/importer, with the exception of just three, with
an overall turnover of pound sterling 10 million per year. From 1991 and
prior to joining SmarTire (Europe) Limited, Mr. Bateman carried out
independent consulting services, most importantly with Otter Controls
Limited, which was implementing a marketing program for a tire-monitoring
system.
LAWRENCE BECERRA:
Mr. Becerra has an extensive background in international finance. Since
1996, he has been the principal and founder of West Sussex Trading, Inc.
which is involved in corporate finance activities. Between 1992 and 1996
Mr. Becerra was the Senior Proprietary Trader promoted from the position of
Manager of European Money Market Trading for Goldman Sachs International in
London, England. Between 1987 and 1992 Mr. Becerra was the Managing
Director for Czarnikow Financial Futures. Between 1984 and 1987, he held
the position of Senior Trader with TransMarket Group, Inc. Between 1976 and
1984, Mr. Becerra worked for Continental Bank in London and ended his
tenure as the Executive Director representing all trading activities for
the company. He attended Middlebury College in Middlebury, Vermont between
1970 and 1974 and Hackley School in Tarrytown, New York between 1968 and
1970.
JOHN BOLEGOH:
Mr. Bolegoh has an extensive background in tire product engineering,
including twenty years with Michelin Technical Services Canada Limited in
positions of increasing responsibility. Mr. Bolegoh joined the Company in
1991. His responsibilities include defining necessary product capabilities
and designs for entering various markets; establishing contacts to promote
awareness of the Company's technologies; locating and exploring business
possibilities with potential distributors; and providing customer
relations, problem solving, training and sales assistance. Mr. Bolegoh
specialized in mechanical technology at the Hamilton Institute of
Technology in Hamilton, Ontario.
KEVIN CARLSON:
Mr. Carlson joined the Company in November 1998. Mr. Carlson is responsible
for Finance, Treasury, Accounting, Taxation, Legal, Management Information
Systems and Administration. Prior to joining the Company, Mr. Carlson was
Chief Financial Officer of a publicly traded biotechnology company.
Previously, he was Chief Financial Officer for three other publicly
<PAGE> 12
-9-
traded companies. Mr. Carlson spent eight years with KPMG in Calgary,
Alberta. In addition to his Chartered Accountancy designation, Mr. Carlson
holds a Bachelor of Commerce Degree from the University of Calgary.
MARK DESMARAIS:
Mr. Desmarais joined the Company as President and Chief Executive Officer
of SmarTire USA, Inc. in March 1999. In June 1999 Mr. Desmarais was
appointed to the additional role of President and Chief Operating Officer
of the Company. Prior to joining the Company, Mr. Desmarais has served as
Director, Product Planning, North America, for TRW Automotive Electronics
Group since September 1995. Mr. Desmarais joined TRW in 1991 at the
company's Marshall, Illinois, electronics plant, where he served as
manufacturing manager, manufacturing engineering manager and then advanced
manufacturing engineering manager over a four-year period. Mr. Desmarais'
more than 21 years of business experience spans a variety of industries,
including tire technology, consumer products, defense, industrial control
systems and automotive electronics. Mr. Desmarais holds a master's degree
in management from the Kellogg Graduate School of Management at
Northwestern University, Evanston, Illinois, and a master's degree in
materials engineering and a bachelor's degree in mechanical engineering
from Worcester Polytechnic Institute, Worcester, Massachusetts. He is a
member of the Society of Automotive Engineers.
SHAWN LAMMERS:
Mr. Lammers is the Vice President, Engineering. Mr. Lammers is a
professional engineer, with a Bachelor of Applied Science degree from the
University of British Columbia, specializing in computer engineering. He
has developed software for MS-DOS, Windows, UNIX Workstations and Amiga
platforms. Mr. Lammers has been with the Company since its inception and is
responsible for the development of the patented remote sensing technology
utilized in SmarTire's products. He has been the chief engineer in respect
to the design, development and production of the Company's passenger car
TMS, the commercial vehicle TMS and the industrial equipment TMS.
BERNARD PINSKY:
Mr. Pinsky is a partner practicing corporate and securities law at Clark,
Wilson, one of Vancouver's most established and respected law firms. Mr.
Pinsky was called to the bar in 1980 and has advised a variety of public
and private companies on legal matters related to acquisitions, mergers,
takeovers, initial public offerings, secondary financings, public company
disclosure requirements and stock exchange practice. Mr. Pinsky has been
corporate and securities counsel for the Company since 1993.
<PAGE> 13
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ROBERT RUDMAN:
Mr. Rudman is a Chartered Accountant with 15 years of experience assisting
public companies, especially on the VSE. Mr. Rudman joined the Company in
March 1993 as the Chief Financial Officer after serving as an independent
financial consultant for several months. He became the President and Chief
Executive Officer of SmarTire Systems on January 19, 1996. Prior to joining
the Company, Mr. Rudman was manager of a California based sales contract
financing firm. Previously, he was a partner in a consulting firm providing
professional assistance to publicly traded companies. Mr. Rudman became a
Chartered Accountant in 1974 and worked with Laventhol & Horwath and Price
Waterhouse & Co. in Winnipeg, Manitoba. In addition to his Chartered
Accountancy designation, Mr. Rudman holds a Bachelor of Arts degree and
graduate business diploma from Lakehead University in Thunder Bay, Ontario.
GARY SCHLACHTER:
Mr. Schlachter joined the Company on April 21, 1997 as the Executive Vice
President, Sales and Marketing for SmarTire USA. Mr. Schlachter is
responsible for developing and directing the sales and marketing program of
the Company's passenger car and commercial vehicle TMS product lines for
North America. He has over fifteen years management and marketing
experience in the tire industry. Prior to joining SmarTire, Mr. Schlachter
was Business Development Manager, responsible for retail development
programs, for Continental General Tire. Previously, he served in several
management posts at Michelin North America including Business Development
Manager, Eastern United States, Manager Special Accounts Training Program,
and Manager, Product Training and Dealer Program. Mr. Schlachter is a
graduate of Central Michigan University.
DANA STONEROOK:
Mr. Stonerook has been Vice President, Customer Development, TRW Automotive
Electronics since January 1999. The group, a unit of TRW Inc., is a leading
producer of electronic safety, security and convenience systems for the
global automotive electronics market. Mr. Stonerook has an extensive
background in international customer relations, electrical engineering and
program management. Mr. Stonerook was working for Eagle Monitor Systems,
Inc. as manager of design development when TRW Inc. acquired the company in
1981. He has held a number of posts of increasing responsibility within TRW
since that time. Mr. Stonerook was named Vice President, Sales, North and
South America, for TRW Automotive Electronics Group in September 1995. He
was appointed Vice President, Sales and Marketing, Automotive Electronics,
North America, for the group in April 1996 and held the position until his
present assignment. Mr. Stonerook holds a
<PAGE> 14
-11-
Bachelor of Science degree in electrical engineering from DeVry Institute
of Technology, Chicago.
SECTION 16(a) REPORTING
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the
Company's directors, executive officers and beneficial owners of more than 10%
of the outstanding Common Shares (collectively, "reporting persons") to file
with the U.S. Securities and Exchange Commission reports of ownership and
changes in ownership of equity securities of the Company. Based solely upon its
review of such reports and written representations from the reporting persons
that Forms 5 were either filed or not required to be filed by such reporting
persons, the Company believes that all of the reporting persons (10 persons
total) complied with the Section 16(a) filing requirements during the year ended
July 31, 1999.
BOARD AND COMMITTEE MEETINGS
The Board of Directors of the Company held three formal meetings during the year
ended July 31, 1999. All other proceedings of the Board of Directors were
conducted by resolutions consented to in writing by all the directors and filed
with the minutes of the proceedings of the directors. Such resolutions consented
to in writing by all the directors are, according to the Company Act (British
Columbia) and the Articles of the Company, as valid and effective as if they had
been passed at a meeting of the directors duly called and held.
Pursuant to the requirements of the Company Act (British Columbia), the Company
also has an Audit Committee of its Board of Directors presently consisting of
Lawrence Becerra, Bernard Pinsky and Robert Rudman. The function of the Audit
Committee is to review financial statements with the auditors and to report
thereon to the Board of Directors. During fiscal 1999, there were no formal
meetings of the Audit Committee. The business of the Audit Committee was
conducted by resolutions consented to in writing by all the members and filed
with the minutes of the proceedings of the Audit Committee.
The Company has a Compensation Committee made up of Ian Bateman, William Cronin
(Director, SmarTire USA, Inc.), Mark Desmarais and Al Page (Director, SmarTire
(Europe) Limited). The function of the Compensation Committee is to investigate
and recommend to the directors appropriate levels and types of compensation for
directors, officers and employees of the Company. During fiscal 1999, there were
several meetings held by this Committee.
The Company does not have a standing Nominating Committee.
During 1999, each incumbent director attended at least 75% of the aggregate of
(i) the total number of meetings of the Board of Directors held during the
period for which he was a director and (ii) the total number of meetings held by
all committees of the Board of Directors during the period on which he served.
<PAGE> 15
-12-
CERTAIN RELATIONSHIPS AND TRANSACTIONS
The services of Robert Rudman, Director, Chairman and Chief Executive Officer of
the Company, are provided to the Company pursuant to a Management Agreement
dated February 1, 1998. See "Management Agreements and Termination of Employment
and Change in Control Arrangements."
The services of Mark Desmarais, Director, President and Chief Operating Officer
of the Company, are provided to the Company pursuant to a Management Agreement
dated June 1, 1999. See "Management Agreements and Termination of Employment and
Change in Control Arrangements."
The services of Gary Schlachter, Director and Executive Vice-President Sales and
Marketing of SmarTire USA Inc., are provided to the Company pursuant to a
Management Agreement dated April 15, 1997. See "Management Agreements and
Termination of Employment and Change in Control Arrangements."
The services of Ian Bateman, Managing Director of SmarTire (Europe) Limited, are
provided to the Company pursuant to a Management Agreement dated February 16,
1998. See "Management Agreements and Termination of Employment and Change in
Control Arrangements."
The services of Bernard Pinsky, Director, are provided through the law firm of
Clark, Wilson of which Mr. Pinsky is a partner. Clark, Wilson sends accounts to
the Company for Mr. Pinsky's time expended.
FAMILY RELATIONSHIPS
There are no family relationships among directors, executive officers, or
persons nominated or chosen by the Company to become directors or executive
officers.
INVOLVEMENT IN LEGAL PROCEEDINGS
The Company was not involved in any legal proceedings as at November 15, 1999.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The Company has no formal plan for compensating its directors for their services
in their capacity as directors although such directors have received from time
to time and are expected to receive in the future incentive stock options to
purchase Common Shares as awarded by the Board of Directors in consultation with
the Compensation Committee. Directors are entitled to reimbursement for
reasonable travel and other out-of-pocket expenses incurred in connection with
attendance at meetings of the Board of Directors. The Board of Directors may
award special remuneration to any director undertaking any special services on
behalf of the Company other than services ordinarily required of a director.
Other than indicated below, no director received and/or accrued any compensation
for his services as a director, including committee participation and/or special
assignments. A director
<PAGE> 16
-13-
who is a professional consultant, such as a lawyer, charges the Company for time
expended to attend meetings at an agreed hourly rate. Mr. Pinsky is a lawyer
with Clark, Wilson which receives fees for legal services provided to the
Company. Mr. Becerra is a principal of West Sussex Trading, Inc., which has
received commissions pursuant to financings arranged by the Company.
There are no arrangements or plans in which the Company provides pension,
retirement or similar benefits for directors or executive officers.
Other than the management agreements and advisory agreements discussed herein,
the Company presently has no material bonus or profit sharing plans pursuant to
which cash or non-cash compensation is or may be paid to the Company's directors
or executive officers, except that stock options have been and may be granted at
the discretion of the Board or a committee thereof.
SUMMARY OF EXECUTIVE COMPENSATION
Particulars of compensation awarded to, earned by or paid to:
(a) the Company's chief executive officer (the "CEO");
(b) each of the Company's four most highly compensated executive officers
who were serving as executive officers at the end of the most recently
completed financial year and whose total salary and bonus exceeds
$100,000 per year; or
(c) any additional individuals for whom disclosure would have been
provided under (b) but for the fact that the individual was not
serving as an executive officer of the Company at the end of the most
recently completed financial year;
(the "Named Executive Officers") are set out in the summary compensation table
below. Except as indicated, all dollar amounts set forth below with respect to
the applicable year ended July 31, are expressed in Canadian dollars (see
"Currency Exchange Rates").
During 1999, nine (9) individuals served as executive officers of the Company at
various times: Robert Rudman, Mark Desmarais, Kevin Carlson, Kenneth Morgan,
John Bolegoh, Shawn Lammers, Joseph Merback, Gary Schlachter, and Ian Bateman.
<PAGE> 17
-14-
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION(1)
-------------------------------- ---------------------------------------------------
AWARDS PAYOUTS
- ---------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL YEAR SALARY BONUS OTHER SECURITIES RESTRICTED LTIP ALL OTHER
POSITION ANNUAL UNDERLYING SHARES OR PAYOUTS COMPEN-
COMPEN- OPTIONS/SARS RESTRICTED SATIONS
SATION GRANTED SHARE
(1) UNITS
- ------------------ ---- -------- ------- ------------ ------------ ----------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert V. Rudman 1999 $247,301 $90,000 Nil Nil Nil Nil Nil
Chairman and Chief 1998 $161,058 Nil $41,000(2) 220,000 Nil Nil Nil
Executive Officer
1997 $101,785 Nil Nil 62,500 Nil Nil Nil
Gary Schlachter 1999 $142,695 Nil Nil Nil Nil Nil Nil
Executive 1998 $118,250 $28,600 Nil Nil Nil Nil Nil
Vice-President
Sales and 1997 $29,077 Nil Nil 25,000 Nil Nil Nil
Marketing,
SmarTire USA
Inc.
Joseph Merback 1999 $165,301 Nil Nil Nil Nil Nil $283,434(3)
Former 1998 $129,869 $35,750 $42,900(2) 118,750 Nil Nil Nil
President and CEO
USA Inc. 1997 Nil Nil $76,000(2) 37,500 Nil Nil Nil
of SmarTire
Mark Desmarais(4) 1999 $81,244 $66,093 Nil 75,000 Nil Nil $ 66,667
President and
Chief Operating
Officer,
President and CEO
of SmarTire
USA Inc.
Ian Bateman (5) 1999 $135,351 $37,032 Nil 10,000 Nil Nil Nil
Managing Director
SmarTire (Europe)
Limited
</TABLE>
(1) The value of perquisites and other personal benefits, securities and
property for the Named Executive Officers that do not exceed the lesser of
$50,000 or 10% of the total of the annual salary and bonus is not reported
herein.
(2) Amounts relate to advisory fees paid to Mr. Rudman and Mr. Merback.
(3) Pursuant to a separation agreement, Mr. Merback received 100,000 shares of
the Company's common stock valued at $283,343.
(4) Mr. Desmarais commenced employment with the Company on March 29, 1999. Mr.
Desmarais received a signing bonus of US$25,000 (CDN$37,750) and 10,000
shares of the Company's common stock valued at $28,343. The Company also
reimbursed Mr. Desmarais US$44,151 (CDN $66,667) for relocation costs.
(5) Mr. Bateman commenced employment with the Company on February 2, 1998.
<PAGE> 18
-15-
The following table sets out the details of all stock options granted to the
Named Executive Officers during the most recently completed fiscal year:
OPTION/SAR GRANTS DURING THE MOST RECENTLY COMPLETED FINANCIAL YEAR
<TABLE>
<CAPTION>
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/
UNDERLYING SARS GRANTED
OPTIONS/ TO EMPLOYEES EXERCISE
SARS IN FISCAL PRICE EXPIRATION
NAME GRANTED(#) YEAR ($/SHARE) DATE
- -------------------- ------------- -------------- ----------- -----------
<S> <C> <C> <C> <C>
Robert Rudman -- -- --
Gary Schlachter -- -- -- --
Joseph Merback -- -- -- --
Mark Desmarais(1) 75,000 25.2% US$4.00 March 29,
2004
Ian Bateman 10,000 3.4% $6.60 January 8,
2004
</TABLE>
- ----------
(1) Mr. Desmarais' options vest over time with 15,000 options currently
exercisable.
The following table sets out the details of all stock options exercised during
the most recently completed financial year by the Named Executive Officers and
the financial year end values of the stock options held by the Named Executive
Officers.
<PAGE> 19
-16-
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
SHARES AGGREGATE NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
ACQUIRED ON VALUE UNEXERCISED OPTIONS/SARS AT IN-THE-MONEY OPTIONS/SARS AT
NAME EXERCISE(#) REALIZED FY-END(#) FY-END($)(1)
- --------------- ----------- --------- ------------------------------- -------------------------------
EXERCISEABLE UNEXERCISEABLE EXERCISEABLE UNEXERCISEABLE
<S> <C> <C> <C> <C> <C> <C>
Robert Rudman 17,500 $149,450 157,500 Nil $6,400 Nil
Gary Schlachter Nil Nil 17,500 Nil Nil Nil
Joseph Merback Nil Nil Nil Nil Nil Nil
Mark Desmarais Nil Nil 15,000 60,000 Nil Nil
Ian Bateman Nil Nil 30,000 Nil Nil Nil
</TABLE>
(1) The closing price of the Common Shares on July 30, 1999 on NASDAQ Small Cap
Market was US $1.94 per share.
There were no options held by the Named Executive Officers that were re-priced
during the most recently completed financial year.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
No management functions of the Company are performed to any substantial degree
by a person other than the directors or senior officers of the Company.
Effective February 1, 1998, the Board of Directors of the Company approved a new
management agreement with Robert Rudman, regarding his position with the
Company. The management agreement calls for payment of a base salary of
US$150,000 per annum and a bonus payable in the Company's Shares based on
achieving certain gross revenue levels. The term of the agreement is for five
years.
The agreement with Mr. Rudman requires the Company to pay a termination
allowance in the event of the termination by the Company of Mr. Rudman's
employment except for just cause. The termination allowance is twice the annual
salary and bonuses. A change of control of the Company is deemed to be a
termination for the purposes of the agreements.
Effective April 15, 1997, the Board of Directors of the Company approved a
management agreement with Gary Schlachter, regarding his position as Executive
Vice President Sales and Marketing of SmarTire USA Inc., the Company's marketing
subsidiary. The management agreement calls for payment of a base salary of
US$90,000 per annum and a bonus based on achieving certain gross revenue
<PAGE> 20
-17-
levels. The term of the agreement is for two years. The agreement with Mr.
Schlachter requires the Company to pay a termination allowance in the event of
the termination by the Company of such individual's employment except for just
cause. The termination allowance is six months salary and bonuses.
Effective February 16, 1998, the Board of Directors of the Company approved a
management agreement with Ian Bateman, regarding his position as Managing
Director of SmarTire (Europe) Limited, the Company's European subsidiary. The
management agreement calls for payment of a base salary of pounds sterling
48,000 per annum and a bonus based on achieving certain business plan
objectives. The term of the agreement is for two years. The agreement with Mr.
Bateman requires the Company to pay a termination allowance in the event of the
termination by the Company of such individual's employment except for just
cause. The termination allowance is six months salary and bonuses.
Effective June 1, 1999, the Board of Directors of the Company approved a
management agreement with Mark Desmarais, regarding his position as President,
and Chief Operating Officer of the Company. The management agreement calls for
payments of a base salary of US$160,000 per annum and a bonus based on achieving
certain business plan objectives. There is no fixed term of the agreement and
Mr. Desmarais must provide ninety days notice of his intention to terminate the
agreement. The agreement with Mr. Desmarais requires the Company to pay a
termination allowance in the event of the termination by the Company of such
individual's employment except for just cause. The termination allowance is six
months base salary.
Other than as discussed above, the Company has no plans or arrangements in
respect of remuneration received or that may be received by Named Executive
Officers of the Company in fiscal 1999 to compensate such officers in the event
of termination of employment (as a result of resignation, retirement, change of
control) or a change of responsibilities following a change of control, where
the value of such compensation exceeds $100,000 per Named Executive Officer.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's compensation program for its executive officers is administered
and reviewed by the Compensation Committee of the Board of Directors, made up of
Mark Desmarais, William Cronin, Al Page and Ian Bateman.
<PAGE> 21
-18-
STOCK INCENTIVE PROGRAM
The Company grants, and has in the past granted, to directors, officers and
employees of the Company options to purchase Common Shares subject to and in
accordance with the prevailing policies of the stock exchange on which the
Company's shares were then listed. Options are granted based on the assessment
by the Company's Board of Directors and/or Compensation Committee of the
optionee's past and present contribution to the success of the Company. The
Company's shares are presently listed for trading on the Nasdaq Small Cap
Market. These options are not transferable and are exercisable from the date
granted until the earliest of (i) such number of years (up to ten years) from
the date of the grant, (ii) 30 days after the option holder leaves his position
with the Company, and (iii) such number of days following the death of the
optionee as is specified in each optionee's option agreement.
The Company has adopted two formal stock incentive plans (collectively, the
"Stock Incentive Plans") which were approved by the Shareholders at the 1998
Annual General Meeting of the Company. One of the Stock Incentive Plans (the
"1998 US Stock Incentive Plan") provides for Awards to Eligible Employees of the
Company or of any Related Entity who are resident in the United States and/or
subject to taxation in the United States; the other (the "1998 Stock Incentive
Plan") provides for Awards to all other Eligible Employees of the Company of any
Related Entity.
The maximum number of common shares of the Company issuable pursuant to all
Awards granted under the Stock Incentive Plans is 900,000 shares, comprised of
600,000 common shares under the 1998 Stock Incentive Plan and 300,000 common
shares under the 1998 US Stock Incentive Plan. The maximum number of common
shares with respect to which Options and SARs may be granted to any Eligible
Employee in any fiscal year of the Company is 300,000 shares, subject to
adjustment in certain circumstances.
Copies of the Stock Incentive Plans are available for review during normal
business hours at the Company's principal executive office at #150-13151 Vanier
Place, Richmond, British Columbia, Canada, V6V 2J1, telephone (604) 276-9884.
INTEREST OF CERTAIN PERSONS AND OTHERS IN MATTERS TO BE ACTED UPON
Save and except the foregoing, or as disclosed elsewhere in this Proxy Statement
and Information Circular, since August 1, 1998, being the commencement of the
Company's last completed fiscal year, none of the following persons has any
material interest, direct or indirect, in any transaction or proposed
transaction which has materially affected or will materially affect the Company
or any of its subsidiaries:
(a) any director or senior officer of the Company;
(b) any proposed nominee for election as a director of the Company;
<PAGE> 22
-19-
(c) any Shareholder holding, directly or indirectly, more than 10% of the
voting rights attached to all the shares of the Company; and
(d) any associate or affiliate of any of the foregoing persons.
INDEBTEDNESS TO COMPANY OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS
As at the end of the most recently completed fiscal year, there were two amounts
owing to the Company by Directors. Mr. William Cronin (Director of SmarTire USA
Inc.) was indebted to the Company in the amount of $25,619. This amount was
repaid subsequent to year-end. Mr. John Bolegoh is indebted to the Company in
the amount of $87,454. The debt is secured by 16,818 common shares of the
Company. The debt is non-interest bearing and has no fixed terms of repayment.
APPOINTMENT OF AUDITOR
Unless otherwise instructed, the proxies given pursuant to this solicitation
will be voted for the appointment of KPMG LLP, Chartered Accountants, of
Vancouver, British Columbia, as the auditor of the Company to hold office for
the ensuing year at a remuneration to be fixed by the Directors.
KPMG LLP were first appointed auditors of the Company on April 29, 1994.
Representatives of KPMG LLP are expected to be present at the Meeting but not
expected to make a statement. However, they are expected to be available to
respond to appropriate questions.
SHAREHOLDER PROPOSALS FOR FUTURE ANNUAL MEETINGS
Any Shareholder who intends to present a proposal for inclusion in the Company's
Proxy Statement and Information Circular for the 2000 Annual General Meeting of
Shareholders must submit such proposal by September 20, 2000.
OTHER MATTERS
To the best of the knowledge, information and belief of the Directors, there are
no other matters which are to be acted upon at the Meeting. If such matters
arise, the form of proxy provides that discretionary authority is conferred on
the designated persons in the enclosed form of proxy to vote with respect to
such matters.
AVAILABLE DOCUMENTS
A COPY OF EACH OF THE FOLLOWING DOCUMENTS IS AVAILABLE ON REQUEST FROM THE
CORPORATE SECRETARY OF THE COMPANY AT THE COMPANY'S PRINCIPAL EXECUTIVE OFFICE
AT #150 - 13151 VANIER PLACE, RICHMOND, BRITISH COLUMBIA, CANADA, V6V 2J1,
TELEPHONE (604) 276-9884:
<PAGE> 23
-20-
(1) the Company's latest Annual Report on Form 10-KSB required under
the United States Securities Exchange Act of 1934 which report is
also filed with the British Columbia Securities Commission and
serves as an annual information form pursuant to British Columbia
securities laws and policies;
(2) the comparative financial statements of the Company for the
Company's most recently completed fiscal year in respect of which
such financial statements have been issued together with the
accompanying report of the auditors and any interim financial
statements of the Company required by law and issued subsequent
to such comparative financial statements; and
(3) the Information Circular of the Company dated as of October 29,
1998 in connection with the Annual General Meeting of
Shareholders held on December 17, 1998;
subject to (i) in the case of persons who are not securities holders of the
Company, the payment of a reasonable charge and (ii) in any event, that the
Company may require payment of a reasonable charge for exhibits to the annual
Report on Form 10-KSB.
APPROVAL OF THE BOARD OF DIRECTORS
The contents of this Proxy Statement and Information Circular have been approved
and the mailing thereof to the Shareholders of the Company has been authorized
by the Board of Directors of the Company.
ANNUAL REPORT
The Annual Report to the Shareholders of the Company for the fiscal year ended
July 31, 1999, is being mailed to the Shareholders concurrently herewith, but
such report is not incorporated into this Proxy Statement and Information
Circular and is not deemed to be part of the proxy solicitation materials.
DATED at Richmond, British Columbia this 3rd day of December, 1999.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ ROBERT V. RUDMAN
- -------------------------------------
ROBERT V. RUDMAN
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
<PAGE> 24
-21-
PROXY
ANNUAL GENERAL MEETING OF SHAREHOLDERS OF SMARTIRE SYSTEMS INC., TO BE HELD AT
THE HILTON VANCOUVER AIRPORT HOTEL, 5911 MINORU BOULEVARD, RICHMOND, BRITISH
COLUMBIA, CANADA ON FRIDAY, JANUARY 14, 2000, AT 10:00 O'CLOCK IN THE FORENOON
THE UNDERSIGNED SHAREHOLDER OF THE COMPANY HEREBY APPOINTS ROBERT RUDMAN, the
Chairman, CEO and a Director of the Company, or failing this person, BERNARD
PINSKY, a Director of the Company, or in the place of the foregoing,
______________________, (Print the Name) as proxyholder for and on behalf of the
Shareholder with the power of substitution to attend, act and vote for and on
behalf of the Shareholder in respect of all matters that may properly come
before the Meeting of the Shareholders of the Company and at every adjournment
thereof, to the same extent and with the same powers as if the undersigned
Shareholder were present at the said Meeting, or any adjournment thereof.
The Shareholder hereby directs the proxyholder to vote the securities of the
Company registered in the name of the Shareholder as specified herein.
RESOLUTIONS (For full details of each item, please see the enclosed Notice of
Meeting and Information Circular)
<TABLE>
<CAPTION>
For Against
<S> <C> <C> <C>
1. To authorize the Directors to fix the remuneration to
be paid to the auditor of the Company _____ _____
2. To determine the number of Directors at seven (7) _____ _____
For Withhold
3. Appointment of Auditor _____ _____
4. To elect LAWRENCE BECERRA as a Director _____ _____
5. To elect JOHN BOLEGOH as a Director _____ _____
6. To elect KEVIN CARLSON as a Director _____ _____
7. To elect MARK DESMARAIS as a Director _____ _____
8. To elect BERNARD PINSKY as a Director _____ _____
9. To elect ROBERT RUDMAN as a Director _____ _____
10. To elect DANA STONEROOK as a Director _____ _____
</TABLE>
================================================================================
THE UNDERSIGNED SHAREHOLDER HEREBY REVOKES ANY PROXY PREVIOUSLY GIVEN TO ATTEND
AND VOTE AT SAID MEETING.
SIGN HERE:
--------------------------------------
PLEASE PRINT NAME:
--------------------------------------
DATE:
--------------------------------------
THIS PROXY MAY NOT BE VALID UNLESS IT IS SIGNED AND DATED. SEE IMPORTANT
INFORMATION & INSTRUCTIONS ON REVERSE.
<PAGE> 25
INSTRUCTIONS FOR COMPLETION OF PROXY
1. THIS PROXY IS SOLICITED BY THE DIRECTORS OF THE COMPANY.
2. This form of proxy ("Instrument of Proxy") MAY NOT BE VALID UNLESS IT IS
SIGNED by the Shareholder or by his attorney duly authorized by him in
writing, or, in the case of a corporation, by a duly authorized officer or
representative of the corporation; and IF EXECUTED BY AN ATTORNEY, OFFICER,
OR OTHER DULY APPOINTED REPRESENTATIVE, the original or a notarial copy of
the instrument so empowering such person, or such other documentation in
support as shall be acceptable to the Chairman of the Meeting, must
accompany the Instrument of Proxy.
3. IF THIS INSTRUMENT OF PROXY IS NOT DATED in the space provided, authority
is hereby given by the Shareholder for the proxyholder to date this proxy
on the date on which it is received by Pacific Corporate Trust Company.
4. A SHAREHOLDER WHO WISHES TO ATTEND THE MEETING AND VOTE ON THE RESOLUTIONS
IN PERSON, may do so as follows:
(a) IF THE SHAREHOLDER IS REGISTERED AS SUCH ON THE BOOKS OF THE COMPANY,
simply register the Shareholder's attendance with the scrutineers at
the Meeting.
(b) IF THE SECURITIES OF A BENEFICIAL SHAREHOLDER are HELD BY A FINANCIAL
INSTITUTION, (i) cross off the management appointees' names and insert
the shareholder's name in the blank space provided; (ii) indicate a
voting choice for each resolution or, alternatively, leave the choices
blank if you wish not to vote until the Meeting; and (iii) sign, date
and return the Instrument of Proxy to the financial institution or its
agent. At the Meeting, a vote will be taken on each of the resolutions
set out on this Instrument of Proxy and the Shareholder's vote will be
counted at that time.
5. A SHAREHOLDER WHO IS NOT ABLE TO ATTEND THE MEETING IN PERSON BUT WISHES TO
VOTE ON THE RESOLUTIONS, may do either of the following:
(a) TO APPOINT ONE OF THE DESIGNATED PERSONS (MANAGEMENT APPOINTEES) named
on the Instrument of Proxy, leave the wording appointing him as is,
and simply sign, date and return the Instrument of Proxy. Where no
choice is specified by a Shareholder with respect to a resolution set
out on the Instrument of Proxy, a designated person acting as
proxyholder will vote the securities as if the Shareholder had
specified an affirmative vote.
(b) TO APPOINT ANOTHER PERSON, who need not be a Shareholder of the
Company, to vote according to the Shareholder's instructions, cross
off the designated persons' names and insert the Shareholder's
appointed proxyholder's name in the space provided, and then sign,
date and return the Instrument of Proxy. Where no choice is specified
by the Shareholder with respect to a resolution set out on the
Instrument of Proxy, this Instrument of Proxy confers discretionary
authority upon the Shareholder's appointed proxyholder.
6. THE SECURITIES REPRESENTED BY THIS INSTRUMENT OF PROXY WILL BE VOTED OR
WITHHELD FROM VOTING IN ACCORDANCE WITH THE INSTRUCTIONS OF THE SHAREHOLDER
ON ANY POLL of a resolution that may be called for and, if the Shareholder
specifies a choice with respect to any matter to be acted upon, the
securities will be voted accordingly. Further, if so authorized by this
Instrument of Proxy, the securities will be voted by the appointed
proxyholder with respect to any amendments or variations of any of the
resolutions set out on the Instrument of Proxy or matters which may
properly come before the Meeting as the proxyholder in its sole discretion
sees fit.
7. If a registered Shareholder has returned the Instrument of Proxy, THE
SHAREHOLDER MAY STILL ATTEND THE MEETING and may vote in person should the
Shareholder later decide to do so. However, to do so, the Shareholder must
record his/her attendance with the scrutineers at the Meeting and revoke
the Instrument of Proxy in writing.
- --------------------------------------------------------------------------------
TO BE REPRESENTED AT THE MEETING, THIS INSTRUMENT OF PROXY MUST
BE RECEIVED AT THE OFFICE OF "PACIFIC CORPORATE TRUST COMPANY" BY MAIL OR BY
FAX AT LEAST 48 HOURS PRIOR TO THE COMMENCEMENT OF THE MEETING (OR, IF
ADJOURNED OR POSTPONED, ANY RECONVENING THEREOF); THE CHAIRMAN HAS THE
DISCRETION TO ACCEPT INSTRUMENTS OF PROXY FILED LESS THAN 48 HOURS PRIOR
TO THE COMMENCEMENT OF THE MEETING (OR, IF ADJOURNED OR POSTPONED,
ANY RECONVENING THEREOF). The mailing address of Pacific
Corporate Trust Company is #830 - 625 Howe Street, Vancouver,
B.C., V6C 3B9, and its fax number is (604)689-8144
- --------------------------------------------------------------------------------
