SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<TABLE>
<CAPTION>
<S> <C>
[X] Preliminary Proxy Statement [_] Confidential, For Use of the Commission Only
(As Permitted by Rule 14a-6(e)(2))
</TABLE>
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
TALISMAN ENTERPRISES 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>
TALISMAN ENTERPRISES INC.
2330 Southfield Road, Unit 3-4
Mississauga, Ontario
Canada L5N2W8
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 12, 2000
Mississauga, Ontario, Canada
June , 2000
The Annual Meeting of Stockholders (the "Annual Meeting") of Talisman
Enterprises Inc., an Ontario, Canada corporation (the "Company"), will be held
at the offices of Aird & Berlis, Barristers & Solicitors, Suite 1800, 181Bay
Street, Toronto, Ontario M5J 2T9 on July 12, 2000 at 10:00 a.m. (local time) for
the following purposes:
1. To elect five directors to the Corporation's Board of Directors, each to
hold office until his successor is elected and qualified or until his earlier
resignation or removal (Proposal 1);
2. To amend the Company's Bylaws from "all shareholders or two
shareholders, whichever is lesser" to "a majority" of outstanding shares to
constitute a quorum at all meetings of stockholders (Proposal No. 2); and
3. To consider and act upon a proposal to ratify the Board of Directors'
selection of Ernst & Young LLP as the Corporation's independent auditors for the
fiscal year ending December 31, 2000 (Proposal 3); and
4. To transact such other business as may properly come before the Annual
Meeting and any adjournment or postponement thereof.
The foregoing items of business, including the nominees for directors,
are more fully described in the Proxy Statement, which is attached and made a
part of this Notice.
The Board of Directors has fixed the close of business on June 7, 2000
as the record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting and any adjournment or postponement thereof.
All stockholders are cordially invited to attend the Annual Meeting in
person. However, whether or not you expect to attend the Annual Meeting in
person, you are urged to mark, date, sign and return the enclosed proxy card as
promptly as possible in the postage-prepaid envelope provided to ensure your
representation and the presence of a quorum at the Annual Meeting. If you send
in your proxy card and then decide to attend the Annual Meeting to vote your
shares in person, you may still do so. Your proxy is revocable in accordance
with the procedures set forth in the Proxy Statement.
By Order of the Board of Directors,
/s/ JAMES A. OGLE
James A. Ogle
President
IMPORTANT
---------
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND RETURN THE
ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE-PREPAID
ENVELOPE. IF A QUORUM IS NOT REACHED, THE COMPANY WILL HAVE THE ADDED EXPENSE OF
RE-ISSUING THESE PROXY MATERIALS. IF YOU ATTEND THE MEETING AND SO DESIRE, YOU
MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON.
THANK YOU FOR ACTING PROMPTLY
<PAGE>
TALISMAN ENTERPRISES INC.
2330 Southfield Road, Unit 3-4,
Mississauga, Ontario
Canada L5N2W8
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors (the "Board") of Talisman Enterprises Inc., an
Ontario, Canada corporation (the "Company"), of proxies in the enclosed form for
use in voting at the Annual Meeting of Stockholders (the "Annual Meeting") to be
held at the offices of Aird & Berlis, Barristers & Solicitors, Suite 1800,
181Bay Street, Toronto, Ontario M5J 2T9 on July 12, 2000 at 10:00 a.m. (local
time), and any adjournment or postponement thereof. Only holders of record of
the Company's common stock, no par value per share (the "Common Stock") on June
7, 2000 (the "Record Date") will be entitled to vote at the Meeting. At the
close of business on the Record Date, the Company had outstanding 3,035,187
shares of Common Stock.
Any person giving a proxy in the form accompanying this Proxy Statement
has the power to revoke it prior to its exercise. Any proxy given is revocable
prior to the Meeting by an instrument revoking it or by a duly executed proxy
bearing a later date delivered to the President of the Company. Such proxy is
also revoked if the stockholder is present at the Meeting and elects to vote in
person.
The Company will bear the entire cost of preparing, assembling,
printing and mailing the proxy materials furnished by the Board of Directors to
stockholders. Copies of the proxy materials will be furnished to brokerage
houses, fiduciaries and custodians to be forwarded to the beneficial owners of
the Common Stock. In addition to the solicitation of proxies by use of the mail,
some of the officers, directors and regular employees of the Company may
(without additional compensation) solicit proxies by telephone or personal
interview, the costs of which the Company will bear.
This Proxy Statement and the accompanying form of proxy is being sent
or given to stockholders on or about June , 2000.
Stockholders of the Company's Common Stock are entitled to one vote for
each share held. Such shares may not be voted cumulatively.
Each validly returned proxy (including proxies for which no specific
instruction is given) which is not revoked will be voted "FOR" each of the
proposals as described in this Proxy Statement and, at the proxy holders'
discretion, on such other matters, if any, which may come before the Meeting
(including any proposal to adjourn the Meeting).
Determination of whether a matter specified in the Notice of Annual
Meeting of Stockholders has been approved will be determined as follows. Those
persons will be elected directors who receive a plurality of the votes cast at
the Meeting in person or by proxy and entitled to vote on the election.
Accordingly, abstentions or directions to withhold authority will have no effect
on the outcome of the vote. For each other matter specified in the Notice of
Annual Meeting of Stockholders, the affirmative vote of a majority of the shares
of Common Stock present at the Meeting in person or by proxy and entitled to
vote on such matter is required for approval. Abstentions will be considered
shares present in person or by proxy and entitled to vote and, therefore, will
have the effect of a vote against the matter. Broker non-votes will be
considered shares not present for this purpose and will have no effect on the
outcome of the vote. Directions to withhold authority to vote for directors,
abstentions and broker non-votes will be counted for purposes of determining
whether a quorum is present for the Meeting.
-------------------------
UNLESS OTHERWISE INDICATED, ALL REFERENCES TO DOLLAR ($) AMOUNTS ARE TO
U.S. DOLLARS. REFERENCES TO CDN.$ ARE TO CANADIAN DOLLARS.
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Nominees
At the Annual Meeting, the stockholders will elect five (5) directors
to serve until the next Annual Meeting of Stockholders or until their respective
successors are elected and qualified. In the event any nominee is unable or
unwilling to serve as a director at the time of the Annual Meeting, the proxies
may be voted for the balance of those nominees named and for any substitute
nominee designated by the present Board or the proxy holders to fill such
vacancy, or for the balance of the nominees named without nomination of a
substitute, or the size of the Board may be reduced in accordance with the
Bylaws of the Company. The Board has no reason to believe that any of the
persons named below will be unable or unwilling to serve as a nominee or as a
director if elected.
Assuming a quorum is present, the five nominees receiving the highest
number of affirmative votes of shares entitled to be voted for them will be
elected as directors of the Company for the ensuing year. Unless marked
otherwise, proxies received will be voted "FOR" the election of each of the five
nominees named below. In the event that additional persons are nominated for
election as directors, the proxy holders intend to vote all proxies received by
them in such a manner as will ensure the election of as many of the nominees
listed below as possible, and, in such event, the specific nominees to be voted
for will be determined by the proxy holders.
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
James A. Ogle 53 President, Chief Executive Officer & Director
Norman R. Proulx 52 Chairman of the Board
James C. McGavin 57 Director
Donald L. Matheson 50 Director
Thomas A. Fenton 39 Director
</TABLE>
The following information with respect to the principal occupation or employment
of each nominee for director, the principal business of the Company or other
organization in which such occupation or employment is carried on, and such
nominee's business experience during the past five years, has been furnished to
the Company by the respective director nominees:
JAMES A. OGLE, 53, has been the President, CEO, and a director of Talisman
since January 21, 1999. Prior thereto, from January 1998 to January 1999, Mr.
Ogle was Vice President of Operations for U.S. Industries, Inc., Elger
Plumbingware/U.S. Brass Division, a leading manufacturer of bath and kitchen
china and cast iron fixtures. From 1992 to 1997, Mr. Ogle was Senior Vice
President, Operations, for Tyco Toys, Inc., a leading international toy
manufacturer and distributor. From 1989 to 1992, Mr. Ogle was Vice President,
Operations for Wilkinson Sword, Inc., an international producer of shaving
products and disposable lighters. From 1978 to 1989, Mr. Ogle held various
positions with BIC Corporation, a leading producer of disposable pens, razors
and disposable lighters. Prior thereto, Mr. Ogle held various positions with
General Motors Corporation. Mr. Ogle obtained an Executive MBA from the
University of New Haven.
NORMAN R. PROULX, 52, is the Chairman of the Board of Talisman. Mr. Proulx
was first appointed a director of Talisman in August 1998. From December 1998
through January 1999, Mr. Proulx was the interim President and CEO of Talisman
replacing the former President and CEO, David R. Guy. Since March 1998, Mr.
Proulx has been a managing director of Spencer Trask Securities Incorporated, a
New York based venture capital investment firm that provides financial and
operational support to start-up and early-stage companies. In such position, Mr.
Proulx concentrates his efforts on consumer products and retailing. In 1997, Mr.
Proulx was a managing director of the Cortec Group ("Cortec"), a private New
York equity investment firm that makes controlling investments in middle-market
manufacturing and distribution businesses. In connection with same, Mr. Proulx
was responsible for overseeing Cortec's investment in Gemeinhardt, Inc., a US
based company, which is a market leader in the manufacture and distribution of
flutes and piccolos. Mr. Proulx was also responsible for overseeing Cortec's
investment in Manco Products, Inc., a US based company, which is a leading
designer and manufacturer of fun karts. From 1990 to 1996, Mr. Proulx was
President and CEO of Seymour Housewares Corporation of Seymour, Indiana, a
leading manufacturer of ironing boards. Prior thereto, Mr. Proulx was, from 1984
to 1990, the President, North America of Wilkinson Sword Limited. Prior thereto,
Mr. Proulx held different positions from 1969 to 1984 with Scripto/Wilkinson
Sword and The Gillette Company. Mr. Proulx obtained his Bachelor of Science,
Business Administration degree from Boston College in 1969.
<PAGE>
JAMES C. MCGAVIN, 57, is the President and a major shareholder of
Burlington Stamping Inc. of Burlington, Ontario and has been since December
1981. BSI manufacturers small deep drawn shells and stampings principally
sourcing the alkaline, rechargeable, military and OEM battery cell markets.
Prior to founding Burlington, Mr. McGavin was a partner in the public accounting
firm Ward Mallette (now BDO Dunwoody Ward Mallette) for approximately 10 years.
Mr. McGavin obtained his Chartered Accountant designation in 1970.
DONALD L. MATHESON, 50, a director of Talisman, is the President of Imark
Corporation (a Toronto Stock Exchange listed company) and has been since August
1997. Prior thereto, Mr. Matheson was, from December 1994 to July 1997, Vice
President Finance and Chief Financial Officer of Imark Corporation. Prior
thereto, Mr. Matheson was, from January 1992 to December 1994, the Director of
Finance for a heating and air-conditioning business operated through Clare
Brothers of Cambridge, Ontario. Mr. Matheson is also an officer and director of
Animazing Entertainment Inc., a children's entertainment company.
THOMAS A. FENTON, 39, a director of Talisman, is a partner in the Toronto
based law firm of Aird & Berlis and has been since June, 1997. Prior thereto,
Mr. Fenton was a partner in another Toronto based law firm and prior thereto, an
associate with such firm. His practice encompasses corporate and securities law.
Mr. Fenton acquired his LL.B. degree from the University of Western Ontario in
1986 and was called to the Bar in Ontario in 1988.
Directors serve until the next annual meeting of stockholders or until
their successors are elected and qualified. Officers serve at the discretion of
the Board of Directors.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the fiscal year ended December 31, 1999, the Board of Directors
of the Company held five (5) meetings. No director attended fewer than 75% of
the total number of meetings of the Board of Directors during the last fiscal
year.
The Board of Directors has established an Audit Committee consisting of
Donald L. Matheson, Thomas A. Fenton and James C. McGavin, all of whom are
directors who are not salaried officers of the Company. The purpose of the Audit
Committee is to review the results and scope of the audit and other services
provided by Talisman's independent accountants, and to provide general oversight
of legal compliance and potential conflict of interest matters. The Audit
Committee met four (4) times during the last fiscal year.
The Board does not have a nominating committee or a committee
performing the functions of a nominating committee. Although there are no formal
procedures for stockholders to nominate persons to serve as directors, the Board
will consider nominations from stockholders, which should be addressed to James
A. Ogle at the Company's address set forth above.
RECOMMENDATION OF THE BOARD FOR PROPOSAL NO. 1:
----------------------------------------------
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES NAMED ABOVE.
The proxy holders intend to vote the shares represented by proxies for
all of the Board's nominees, except to the extent authority to vote for the
nominees is withheld.
<PAGE>
STOCK OWNERSHIP OF MANAGEMENT
AND PRINCIPAL STOCKHOLDERS
The following table sets forth, as of March 1, 2000, certain
information concerning beneficial ownership of shares of Common Stock with
respect to (i) each person known to the Company to own 5% or more of the
outstanding shares of Common Stock, (ii) each director of the Company, (iii) the
Named Executive Officers of the Company set forth in the Summary Compensation
Table below, and (iv) all directors and officers of the Company as a group:
<TABLE>
<CAPTION>
Name and Percentage of
Address of Common Stock**
Beneficial Owner Amount Owned*
<S> <C> <C> <C>
Kevin Kimberlin 896,416 (1) 26%
New York, New York
Norman R. Proulx 74,272 (2) 2.4%
New York, New York
James A. Ogle 5,993 (3) **
Burlington, Ontario
Garry J. Syme 43,121(4) 1.4%
Mississauga, Ontario
James C. McGavin 28,046 (5) **
Burlington, Ontario
Donald L. Matheson 4,046 (6) **
Toronto, Ontario
Thomas A. Fenton 4,092 (7) **
Mississauga, Ontario
John E. Aderhold 400,000 (8) 12.2%
Atlanta, Georgia
Directors and Officers as a 168,305 (9) 5.5%
Group (10 persons)
</TABLE>
------------------
* Percentages are based upon the assumption that the named shareholder has
exercised all of the currently exercisable options he or she owns which are
currently exercisable or exercisable within 60 days and that no other
shareholder has exercised any options he or she owns. The information with
respect to shares owned beneficially by those named above not being within the
knowledge of Talisman, has been furnished by each shareholder respectively.
Unless otherwise provided herein, Talisman believes that all persons named in
the table have sole voting and investment power with respect to all shares of
common stock beneficially owned by them.
* * Less than One Percent.
(1) Includes (i) 362,332 shares owned by Kimberlin Family Partners LP and
50,876 shares owned by Spencer Trask Securities, Inc., (ii) 362,332 shares and
50,876 shares which may be issued pursuant to options owned by Kimberlin Family
Partners LP and Spencer Trask Securities, Inc., respectively, which options are
currently exercisable, and (iii) 70,000 shares of common stock which was issued
upon conversion of a $350,000 promissory note concurrently with Talisman's
Public offering.
(2) Includes 35,613 shares that may be issued pursuant to options owned by Mr.
Proulx, which options are currently exercisable.
(3) Includes 5,993 shares that may be issued pursuant to options issued to Mr.
Ogle under the 1999 Senior Executive Stock Option Plan, which options are
currently exercisable. Does not include an additional 76,961 shares that may be
issued pursuant to options issued to Mr. Ogle under the 1999 Senior Executive
Stock Option Plan, which options are not currently exercisable.
<PAGE>
(4) Includes (i) 3,902 shares which may be issued pursuant to options issued to
Mr. Syme under the 1997 Stock Option Plan, and (ii) 3,220 shares which may be
issued pursuant to options issued to Mr. Syme under the 1999 Senior Executive
Stock Option Plan, all of which options are currently exercisable. Does not
include an additional 38,257 shares that may be issued pursuant to options
issued to Mr. Syme under the 1999 Senior Executive Stock Option Plan, which
options are not currently exercisable.
(5) Includes 20,000 shares that may be issued pursuant to options owned by Mr.
McGavin, which options are currently exercisable.
(6) Includes 1,000 shares that may be issued pursuant to options owned by Mr.
Matheson, which options are currently exercisable.
(7) Includes (i) 3,046 shares of common stock own by Aird & Berlis, Barristers &
Solicitors, in which Mr. Fenton is a member, and (ii) 1,000 shares which may be
issued pursuant to options owned by Mr. Fenton, which options are currently
exercisable.
(8) Includes 200,000 shares to be issued upon the exercise of outstanding class
A common stock purchase warrants held by Mr. Aderhold.
(9) Includes 35,613 shares which may be issued pursuant to options beneficially
owned by Norman R. Proulx, which options are currently exercisable, (ii) 3,902
shares which may be issued pursuant to options owned by Garry Syme, which
options are currently exercisable, (iii) 20,000 shares which may be issued
pursuant to options owned by James C. McGavin, which options are currently
exercisable, (iv) 1,000 shares which may be issued pursuant to options owned by
Donald L. Matheson, which options are currently exercisable, (v) 1,000 shares
which may be issued pursuant to options owned by Thomas A. Fenton, (vi) 80
shares owned by Duncan C. MacFadyen and 4,644 shares which may be issued
pursuant to options owned by Duncan C. MacFadyen, (vii) 5,991 shares which may
be issued pursuant to options owned by James A.Ogle, which options are currently
exercisable, and (viii) 3,226 shares which may be issued pursuant to options
owned by Garry J. Syme, which options are currently exercisable and (ix) 1,797
shares which may be issued pursuant to options owned by Christian H. Bunger,
which options are currently exercisable, (x) 829 shares which may be issued
pursuant to options owned by Thomas O'Dowd, which options are currently
exercisable, and (xi) 1,381 shares which may be issued pursuant to options owned
by Randy O. Curtis, which options are currently exercisable. Does not include
(i) an additional 76,964 shares which may be issued pursuant to options issued
to Mr. Ogle, which options are not currently exercisable, (ii) an additional
38,251 shares which may be issued pursuant to options issued to Mr. Syme, which
options are not currently exercisable, (iii) an additional 23,089 shares which
may be issued pursuant to options issued to Mr. Bunger, which options are not
currently exercisable, (iv) 7,651 shares which may be issued pursuant to options
owned by Duncan MacFadyen, which options are not currently exercisable (v)
15,762 shares which may be issued pursuant to options owned by Thomas O'Dowd,
which options are not currently exercisable, and (vi) 23,505 shares which may be
issued pursuant to options owned by Randy O. Curtis, which options are not
currently exercisable.
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth certain summary information with
respect to the compensation paid to the Company's Chief Executive Officer, and
the executive officers whose total annual salary and bonus exceeded $100,000,
for services rendered in all capacities to the Company during each of the fiscal
periods ended December 31, 1999, 1998 and 1997. Other than as listed below, the
Company had no executive officers whose total annual salary and bonus exceeded
$100,000 for that fiscal year:
<TABLE>
<CAPTION>
Summary Compensation Table
ANNUAL COMPENSATION LONG-TERM COMPENSATION
OTHER AWARDS PAYOUTS
ANNUAL RESTRICTED SECURITIES ALL OTHER
NAME AND PRINCIPAL COMPEN- STOCK UNDERLYING LTIP PAYOUTS COMPENSATION
POSITION YEAR SALARY ($) BONUS ($) SATION($) AWARD OPTIONS/SARS(#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
JAMES A. OGLE, PRESIDENT
AND CHIEF EXECUTIVE
OFFICER 1999 $262,052(1) - 70,285 (2) - 5,069 - -
GARRY SYME, SENIOR-VICE
PRESIDENT 1999 $119,316 - 10,216 (3) - 2,765 - -
DAVID R. GUY ,
PRESIDENT (4) 1998 $104,000 - 9,351 (5) - 5,069 - -
1997 $ 33,333 - 2,245 (5) - 5,069 - 20,000 (6)
1996 - - - - 5,069 - -
NORMAN R. PROULX,
INTERIM PRESIDENT (7) 1998 - - - - - - -
1997 - - - - - - -
1996 - - - - - - -
JAMES W. GEMMELL,
PRESIDENT(8) 1998 $ 13,000(9) - - - - - -
1997 $ - - 100 (10) - - - -
</TABLE>
----------------
(1) Includes a tax gross up as per Mr. Ogle's employment agreement with
Talisman.
(2) Represents $4,357 in car allowance, $443 in car insurance and $4,071 in
insurance benefits paid to Mr. Ogle pursuant to his employment agreement with
the Company. Also includes $61,414 in moving expenses.
(3) Represents $6,752 in car allowance, $759 in car insurance and $2,705 in
insurance benefits paid to Mr. Syme pursuant to his employment agreement with
the Company.
(4) Mr. Guy became the president, CEO and a director of the Corporation on
September 26, 1997. Effective December 1, 1998, Mr. Guy ceased to be the
President, CEO and director of the Corporation. The amounts indicated above for
Mr. Guy in 1997 are for the period September 26, 1997 to December 31, 1997. All
payments made to Mr. Guy were on account of consulting fees.
(5) Paid on account of car allowance and other normal course benefits.
(6) Mr. Guy Holds warrants to acquire 20,000 common shares at an exercise
price of $16.25 per share exercisable until August 15, 2000.
(7) Mr. Proulx, now the Chairman of the Board of Directors of the
Corporation, served as the interim President and CEO of the Corporation from
December 1, 1998 to January 21, 1999. On January 21, 1999, James A. Ogle
succeeded Mr. Proulx as the Corporation's President and CEO.
(8) Mr. Gemmell resigned as the President and a director of the Corporation
on September 26, 1997 effective with the appointment of Mr. Guy as President and
a director of the Corporation.
(9) Received on account of management and consulting services rendered to
the Corporation.
(10) Received on account of director's fees.
STOCK OPTIONS GRANTS AND EXERCISES
The following table shows the option grants to the named executive
officers during fiscal year ended December 31, 1999:
<PAGE>
Option Grants in Last Fiscal Year
(Individual Grants)
<TABLE>
<CAPTION>
Percent of Total
Number of Common Stock Options Granted to
Underlying Options Employees in Exercise Price
Name Granted Fiscal Year ($/Share) Expiration Date
<S> <C> <C> <C> <C>
10 Years from
James A. Ogle 5,069 44.5% CDN$1.25 date of grant
10 years from
Garry Syme 2,765 24.3% CDN$1.25 date of grant
</TABLE>
The following table shows the value at December 31, 1999 of unexercised
options held by the named executive officers:
<PAGE>
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year
And Fiscal Year-end Option Values
Number of Securities
Shares Underlying Unexercised Value of Unexercised
Acquired Value Options at In-the-Money Options at
On Realized Fiscal Year-end (#) Fiscal Year-end ($)
Name Exercise (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
---- ------------ ----- ------------------------- -------------------------
<S> <C> <C> <C> <C>
James A. Ogle - - 5,069/77,886(1) $12,799/ $196,662(2)
</TABLE>
----------------
(1) Represents presently exercisable options to purchase 5,069 shares of common
stock at CDN$1.25 per share, and unexercisable options to purchase 77,886
shares of common stock at CDN$1.25 per share.
(2) As of December 31, 1999, there was no public market for Talisman's common
stock. On January 13, 2000, Talisman completed a public offering of its
common stock. Accordingly, the values presented assume a fair market value
of $3.375 per share of common stock that is the closing price for the
Company's common stock on March 1, 2000.
(3) Represents presently exercisable options to purchase 2,765 shares of common
stock at CDN$1.25 per share, and unexercisable options to purchase 38,712
shares of common stock at CDN$1.25 per share.
Employment Agreements
On January 4, 1999, James Ogle entered into an employment agreement
with Talisman pursuant to which Mr. Ogle has been retained as the President and
Chief Executive Officer of Talisman. The term of the employment agreement
commenced on January 21, 1999 and continues until December 31, 2002; provided,
however, that the termination date may be extended for an additional one-year
period at each anniversary of Mr. Ogle's employment agreement dated January 21,
1999. Pursuant to the employment agreement, Mr. Ogle will receive an annual
salary of $182,000 based on the exchange rate in effect on January 21, 1999. The
exchange rate upon which Mr. Ogle's annual salary is based shall be adjusted as
of June 14 and December 14 of each year during Mr. Ogle's employment by
Talisman. Mr. Ogle will also receive a bonus of a maximum of 50% of one year's
base salary, which bonus shall be payable within 30 days of the completion of
the audit of Talisman's financial statements, provided Talisman achieves
financial objectives as determined by the Talisman's board of directors. The
employment agreement also provides for additional compensation and/or benefits
to be paid or provided to Mr. Ogle as follows:
o On the first anniversary of January 21, 1999, Mr. Ogle shall receive an
additional bonus, to be paid in the form of shares of the Talisman's
common stock, in an amount equal to $45,000. The shares are to be
valued the price per share at the close of the January 20, 1999 trading
day.
o On the first anniversary of January 21, 1999, Mr. Ogle shall also be
obligated to purchase from Talisman shares of common stock having a
total market value on January 21, 1999 equal to $55,000 and Talisman
has agreed to loan Mr. Ogle the necessary funds to purchase such
shares.
o Talisman shall pay Mr. Ogle a tax adjustment in an amount equal to the
amount by which the actual income taxes to be paid by Mr. Ogle exceed
his hypothetical United States income tax (assuming certain deductions
to which he would be entitled to) if he were living in Texas.
o Mr. Ogle shall be granted options to purchase shares of
Talisman's common stock equal to 5% of Talisman's total outstanding
shares as of January 21, 1999 (on a fully diluted basis), which
options shall be exercisable at a price equal to Cdn.$1.25 (which
price is equal to 25% of the average of the high bid and low asked
prices per share on the Canadian Dealing Network on January 21, 1999).
The exercisability and vesting of such options are subject to certain
conditions, including, but not limited to (i) Mr. Ogle's continued
employment by Talisman, (ii) the achievement of specified levels of
annual performance to be established by the board of directors, and
(iii) the achievement of specified levels of investor returns. The
employment agreement also provides that in the event that Mr. Ogle
exercises any of the options while he is employed by Talisman,
Talisman shall loan him the amount of the exercise price for the
options at an interest rate equal to the applicable federal rate, such
<PAGE>
loan to be repaid within six months of the exercise of the options.
The note shall be forgiven in the event that Mr. Ogle remains in the
employment of Talisman for a period of at least six months following
the exercise of the options. or his employment is terminated as a
result of death, disability or other termination entitling Mr. Ogle to
severance under the terms of the employment agreement. o Mr. Ogle is
entitled to participate in any benefit plans extended to Talisman's
employees or executives. Mr. Ogle is entitled to receive reimbursement
for all reasonable expenses incurred by him in the course of his
employment by Talisman.
The Employment Agreement may be terminated (i) by Talisman for cause;
(ii) at any time by Talisman, without cause, by paying to the employee up to a
maximum of his then current base salary and the annual bonus to be paid in an
amount pro-rated through the date of termination calculated as if all
performance goals for the year have been achieved; or (iii) at any time by the
employee upon written notice. The employment agreement also contains a
prohibition against competing with Talisman for a period of one year after the
termination of the agreement and soliciting customers or employees from Talisman
for a period of two years after the termination of the agreement.
On January 6, 1999, Garry J. Syme entered into an employment agreement
with Talisman. Mr. Syme has been retained as the Senior Vice President,
Manufacturing of Talisman. The term of his employment agreement is until January
4, 2002, and thereafter, is renewable for successive one-year terms. Pursuant to
the employment agreement, Mr. Syme will receive an annual salary of $150,000,
which shall be reviewed annually, and Mr. Syme shall be entitled to receive a
bonus up to a maximum of 40% of his annual base salary, payable within 30 days
of the completion of the audit of Talisman's financial statements, provided
Talisman achieves financial objectives as determined by Talisman's board of
directors. The employment agreement also provides for additional compensation
and/or benefits to be paid or provided to Mr. Syme as follows:
o Syme shall be granted options to purchase shares of Talisman's
common stock equal to 2% of Talisman's total outstanding shares as of
January 21, 1999 (on a fully diluted basis), which options shall be
exercisable at a price equal to Cdn.$1.25 (which price is equal to 25%
of the average of the high bid and low asked prices per share on the
Canadian Dealing Network on January 21, 1999). The exercisability and
vesting of such options are subject to certain conditions, including,
but not limited to (i) Mr. Syme's continued employment by Talisman,
(ii) the achievement of specified levels of annual performance to be
established by the board of directors, and (iii) the achievement of
specified levels of investor returns. The employment agreement also
provides that in the event that Mr. Syme exercises any of the options
while he is employed by Talisman, Talisman shall loan him the amount
of the exercise price for the options at an interest rate equal to the
applicable federal rate, such loan to be repaid within six months of
the exercise of the options. The note shall be forgiven in the event
that Mr. Syme remains in the employment of Talisman for a period of at
least six months following the exercise of the options or his
employment is terminated as a result of death, disability or other
termination entitling Mr. Syme to severance under the terms of the
employment agreement.
o Mr. Syme is entitled to participate in any benefit plans extended to
Talisman's employees or executives.
The employment agreement may be terminated (i) by Talisman for cause;
(ii) at any time by Talisman, without cause, by paying to the employee a maximum
of one year's current annual salary; or (iii) at any time by the employee upon
written notice. The employment agreement also contains a prohibition against
competing with Talisman for a period of one year after the termination of the
agreement.
On January 7, 1999, Christian H. Bunger entered into an employment
agreement with Talisman. Mr. Bunger has been retained as Vice President,
Sales--U.S. of Talisman. The term of the employment agreement commenced on
January 25, 1999. Pursuant to the employment agreement, Mr. Bunger will receive
an annual salary of $75,000, which shall be reviewed annually, and Mr. Bunger
shall be entitled to receive a bonus up to a maximum of 35% of his annual base
salary at the end of each calendar year. The bonus award will be based on the
attainment of profitability targets and other objectives approved by the board
of directors. The employment agreement also provides for additional compensation
and/or benefits to be paid or provided to Mr. Bunger as follows:
o Mr. Bunger shall be granted options to purchase shares of
Talisman's common stock equal to 1.5% of Talisman's total outstanding
shares as of January 21, 1999 (on a fully diluted basis), which
options shall be exercisable at a price equal to Cdn.$1.25 (which
price is equal to 25% of the average of the high bid and low asked
prices per share on the Canadian Dealing Network on January 21, 1999).
The exercisability and vesting of such options are subject to certain
conditions, including, but not limited to (i) Mr. Bunger's continued
employment by Talisman, (ii) the achievement of specified levels of
annual performance to be established by the board of directors, and
<PAGE>
(iii) the achievement of specified levels of investor returns. The
employment agreement also provides that in the event that Mr. Bunger
exercises any of the options while he is employed by Talisman,
Talisman shall loan him the amount of the exercise price for the
options at an interest rate equal to the applicable federal rate, such
loan to be repaid within six months of the exercise of the options.
The note shall be forgiven in the event that Mr. Bunger remains in the
employment of Talisman for a period of at least six months following
the exercise of the options or his employment is terminated as a
result of death, disability or other termination entitling Mr. Bunger
to severance under the terms of the employment agreement. o Mr. Bunger
is entitled to receive a car allowance of $600 payable on the first
day of each month.
The employment agreement may be terminated (i) by Talisman for cause;
(ii) at any time by Talisman, without cause, by paying to the employee a maximum
of six months severance pay; or (iii) at any time by the employee upon written
notice. The employment agreement also contains a prohibition against competing
with Talisman for a period of six months after the termination of the agreement.
Compensation of Directors
Directors currently receive no cash fees for services provided in that capacity,
but are reimbursed for reasonable out-of-pocket expenses incurred in connection
with attendance at meetings of the Board or any committee thereof they attend.
Talisman has a 1997 Stock Option Plan (more particularly described below) for
which directors were previously entitled to participate. In addition, Talisman
has a 1999 Directors Stock Compensation Plan (more particularly described below)
for which directors are currently entitled to participate. To date, options
under the 1997 Stock Option Plan have been awarded to three (3) directors.
Specifically, Donald L. Matheson, James McGavin and Thomas A. Fenton each were
awarded options to acquire 1,000 shares at Cdn.$16.25 per share until November
13, 2002. In addition, Norman R. Proulx, James C. McGavin, Donald L. Matheson
and Thomas A. Fenton have each been awarded 3,046 shares under the 1999
Directors Stock Compensation Plan.
Stock Option Plans
1997 Stock Option Plan
Talisman has in place a stock option plan as an incentive for
directors, officers and key employees and other persons who provide ongoing
services to Talisman and its subsidiaries. Under the stock option plan,
non-assignable options may be granted by the board of directors of Talisman, to
directors, officers, key employees and other persons who provide ongoing
services to Talisman to purchase common shares of Talisman for a term not
exceeding five (5) years (subject to earlier termination of the optionee's
employment, upon the optionee ceasing to be a director, officer or other service
provider, as applicable, or upon the optionee retiring, becoming disabled or
dying) at an exercise price not less than the market price for common shares of
Talisman. The granting of options is subject to the further conditions under the
stock option plan that: (i) not more than 10% of the number of shares issued and
outstanding from time to time may be reserved for the granting of options to
insiders at any time or to insiders in any one-year period; (ii) that no more
than 5% of the outstanding issue may be issued to any one insider of Talisman in
a one-year period, and (iii) the maximum number of common shares issuable under
the stock option plan is 31,200 shares. The options are non-transferrable.
As of December 31, 1999, options were outstanding to acquire 9,760
common shares under the stock option plan, at exercise prices ranging between
Cdn.$16.25 and Cdn.$31.25.
1999 Senior Executive Stock Option Plan
The 1999 Senior Executive Stock Option Plan acts as an incentive to
selected senior executives and employees of Talisman and any of its subsidiary
companies by enabling such individuals to acquire a proprietary interest in
Talisman and thereby to increase their efforts on behalf of Talisman and to
promote the success of Talisman's business. The maximum number of shares that
may be granted under the 1999 Senior Executive Stock Option Plan is, initially,
not to exceed 225,000. Under the terms of the 1999 Senior Executive Stock Option
Plan, options are non-transferable, except pursuant to the laws of descent and
distribution.
<PAGE>
Any options granted under the 1999 Senior Executive Stock Option Plan
is subject to certain vesting and other requirements contained in the 1999
Senior Executive Stock Option Plan. Specifically, any options granted under the
1999 Senior Executive Stock Option Plan will vest (and therefore become
exercisable): (i) with respect to one-third of all options granted, in sixty
(60) equal monthly installments, (ii) with respect to one-third of all options
granted, upon the attainment of prescribed annual performance targets over a
five (5) year period as established by the board of directors for the
optionee(s) in question and, (iii) with respect to the remaining one-third of
all options granted, only in the event of an "Investor Sale" (as such term is
defined in the Plan).
The 1999 Senior Executive Stock Option Plan is administered by a
committee of the board of directors which consists of two (2) members who are
non-employee directors and thereby not entitled to participate under the 1999
Senior Executive Stock Option Plan.
The committee shall have all powers necessary to administer the 1999
Senior Executive Stock Option Plan including, without limitation, the authority
to grant options, to determine the type and number of options to be granted, the
number of shares of common stock to which an option may relate and the exercise
price, terms and conditions and restrictions relating to any option.
Eligible participants under the 1999 Senior Executive Stock Option Plan
shall not be entitled to participate in any other share compensation arrangement
or other plan established by Talisman.
To date, six officers and employees of Talisman have been granted
options under the 1999 Senior Executive Stock Option Plan in connection with
employment agreements entered into between Talisman and such individuals.
Specifically, James A Ogle, President and Chief Executive Officer, Garry J.
Syme, Senior Vice President of Manufacturing, Christian H. Bunger, Vise
President of Sales--U.S., Thomas O'Dowd, Vice President and Chief Financial
Officer, Randy O. Curtis, Vice President of Marketing and Canadian Sales, and
Duncan MacFadyen, Vice President of Finance and Controller have been granted
82,955, 44,477, 24,886, 16,591, 24,886 and 8,295 options, respectively under the
1999 Senior Executive Stock Option Plan. Such options vest incrementally over a
period of five years commencing on the date of their employment agreements.
1999 Directors Stock Compensation Plan
The 1999 Directors Stock Plan provides a compensation program for
non-employee directors of Talisman (currently four (4) in number) that will
allow Talisman to attract and retain highly qualified individuals to serve as
non-employee members of Talisman's board of directors. The maximum number of
shares that may be granted under the directors stock plan is, initially, not to
exceed 100,000. Under the terms of the directors stock plan, options are
non-transferrable, except pursuant to the laws of descent and distribution.
Under the 1999 Directors Stock Plan, each non-employee director of
Talisman who served as such on June 30, 1999 has the right to receive, subject
to certain conditions, 15,230 common shares of Talisman for no consideration.
For each director, 3,046 of such shares (or a total of 15,230) have been issued
while additional installments of 3,046 shares will be granted to each
non-employee director upon the first, second, third and fourth anniversary dates
of the June 30, 1999 date. In order to earn the right to receive subsequent
installment grants on the aforesaid anniversary dates, each director recipient
must have continuously served as a director for the year ending on such
anniversary.
As of the date hereof, the candidates for participation under the directors
stock plan are Norman R. Proulx, James C. McGavin, Donald L. Matheson and Thomas
A. Fenton.
The directors stock plan is administered by a committee of the board of
directors which consists of three (3) members, one of which is the President and
Chief Executive Officer of Talisman. The Committee shall have responsibility for
interpreting the directors stock plan and taking all other action necessary for
the administration of the directors stock plan.
Eligible participants under the 1999 Directors Stock Plan shall not be
entitled to participate in any other share compensation arrangement or plan
established by Talisman.
<PAGE>
Shareholders Rights Protection Plan
On September 26, 1997, the shareholders of Talisman approved a
shareholders rights protection plan. The plan applies to all common shares and
all future issues of common shares. The term of the plan is five (5) years,
subject to reconfirmation by the shareholders at the first annual meeting of
shareholders called after September 26, 2000. The Plan is intended to ensure
that, in the event of a bid which could affect control of Talisman, holders of
common shares will receive full and fair value for their shares and that there
will be sufficient time for the fairness of the bid to be properly assessed, to
negotiate with the bidder and to explore, develop and evaluate alternatives to
maximize shareholder value.
Under the terms of the plan, one right has been granted for each common
share. Each right entitles the registered holder to purchase additional shares
of common stock for Cdn.$1,500 but is not exercisable until certain events
occur. If a person or group wishes to acquire 20% or more of Talisman's common
shares, the plan effectively requires the acquiring person to (i) negotiate
terms which the Directors approve as being fair to the shareholders or,
alternatively, (ii) without board approval, make a "permitted bid" which must
contain certain provisions and which must be accepted by more than 50% of the
common shares not held by the acquiring person.
In the event that an acquiring person acquires 20% or more of
Talisman's voting shares other than as described in (i) and (ii) above, then the
rights become exercisable and will automatically allow all holders except the
acquiring person to purchase, upon payment of the exercise price, shares of
common stock with a total market value of two times (x) the exercise price
(i.e., at a 50% discount from the then current market price of the common
stock).
INDEBTEDNESS OF DIRECTORS AND OFFICERS OTHER THAN
UNDER SECURITIES PURCHASE PROGRAMS
During the fiscal year ended December 31, 1999 and for the period January
1, 2000 to June 6, 2000, none of the Corporation's directors or employees was
indebted to the Corporation except as described below.
<TABLE>
<CAPTION>
Largest Amount Amount Outstanding as of
Name and Principal Position Involvement of Issuer Outstanding during June 6, 2000
Fiscal 1999
<S> <C> <C> <C>
James A. Ogle (1) Lender Cdn.$20,864.58 -
Garry J. Syme (2) Lender Cdn.$36,200.00 Cdn.$36,200.00
</TABLE>
(1) James A. Ogle became the Corporation's President & CEO on January 21,
1999. On May 14, 1999, the Corporation advanced Mr. Ogle Cdn.$20,864.58 to
assist in the purchase of his personal residence. The advance was repaid before
its due date of June 30, 1999.
(2) On January 26, 2000, the Corporation advanced Mr. Garry J. Syme
Cdn.$36,200.00. The advance, which is currently interest free, will be repaid
commencing August 2000 at a blended rate of interest and principal of $288.46
Cdn. per bi-weekly pay deduction. Interest will be calculated a 6% per annum
commencing July 26, 2000. Mr. Syme acknowledges that in the event he is entitled
to any earned bonus under any Company Bonus Plan, the amount of such bonus shall
first be applied against any balance owing under the promissory note.
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Thomas A. Fenton, LL.B., a director of Talisman, is a partner of the
Toronto based law firm Aird & Berlis, Barristers and Solicitors, which is
Canadian legal counsel to Talisman. During the fiscal period ended December 31,
1998, Talisman paid to Aird & Berlis Cdn.$66,425 in consideration of legal
services performed, and during fiscal period ended December 31, 1999, Talisman
paid to Aird & Berlis Cdn.$118,590 in consideration of legal services performed.
James C. McGavin, a director of Talisman, is a director, officer and
shareholder of Burlington Stamping Inc., a key supplier to Talisman. During
fiscal period ended December 31, 1998, Talisman paid to Burlington Stamping an
aggregate of approximately $34,246 in consideration of battery cans manufactured
and sold by Burlington Stamping to Talisman, and during fiscal period ended
December 31, 1999, Talisman paid to Burlington Stamping an aggregate of
approximately $129,333 for battery cans. Talisman further paid to James C.
McGavin during the fiscal year ended December 31, 1998, Cdn.$6,480 in
consideration of a car allowance. During fiscal year ended December 31, 1999,
Talisman paid to James C. McGavin Cdn.$6,480 as a car allowance.
On January and March 1998, Garry J. Syme exercised warrants to acquire
16,098 common shares, in aggregate, for gross cash consideration of Cdn.$104,098
and Cdn.$160,500 in property and equipment.
On August 5, 1998, Talisman raised Cdn.$1,495,000 in connection with a
private offering of 263,504 shares of Talisman's common stock and warrants to
purchase an additional 263,504 shares of common stock at an exercise price of
Cdn.$7.50 per share, with Talisman Partners. Prior to the private offering with
Talisman Partners, there was no affiliation between Talisman and Talisman
Partners. Talisman Partners is a private investment partnership located in New
York, New York. Effective with the completion of the private offering, Norman R.
Proulx, the appointed nominee of Talisman Partners, became a director of
Talisman. Effective December 4, 1998, Mr. Proulx was appointed Talisman's
interim President and Chief Executive Officer. Mr. Proulx was a partner with a
minority interest in Talisman Partners and an employee of Spencer Trask
Securities Inc., a securities dealer based in New York, New York. Talisman
Partners was majority owned by the Kevin Kimberlin Partnership, L.P., a New York
limited partnership, which was controlled by Kevin Kimberlin, Chairman of
Spencer Trask, and minority owned by certain other Spencer Trask employees.
On October 19, 1998, Talisman raised a further Cdn.$900,000 in
connection with a private offering of 240,000 shares of Talisman's Common stock
and warrants to purchase an additional 240,000 shares of Common stock at an
exercise price of Cdn.$5.00 per share, with Talisman Partners.
<PAGE>
From December 1998 to March 1999, Talisman sold an aggregate of
$700,000 of 8% convertible promissory notes to nineteen persons. The principal
amount of the notes were converted into securities of Talisman in connection
with the completion of the first closing of Talisman's private placement
offering with Spencer Trask in March 1999. The holders of the notes, which have
now been converted into equity as a result of our January 2000 public offering,
also received warrants to acquire an aggregate of 72,465 shares of common stock
of Talisman exercisable at $7.50 per share.
During 1998, shareholders transferred 45,000 common shares to
individuals in exchange for machinery and professional services, the value of
which $309,233 was contributed to capital. This was adjusted to 40,000 common
shares with a value of $284,233 in 1999 in connection with the settlement of a
dispute.
On January 4, 1999, Talisman entered into an employment agreement with
James A. Ogle, a senior officer of Talisman. For a complete description of the
terms and conditions of the employment agreement between Talisman and Mr. Ogle,
see "Management--Employment Contracts."
On January 6, 1999, Talisman entered into an employment agreement with
Garry J. Syme, a senior officer of Talisman. For a complete description of the
terms and conditions of the employment agreement between Talisman and Mr. Syme,
see "Management--Employment Contracts."
On January 7, 1999, Talisman entered into an employment agreement with
Christian H. Bunger, an officer of Talisman. For a complete description of the
terms and conditions of the employment agreement between Talisman and Mr.
Bunger, see "Management--Employment Contracts."
In March, April and June 1999, Talisman completed three closings of a
private placement offering, with Spencer Trask Securities, Inc., as placement
agent, in which it sold an aggregate of 50.72985 units solely to U.S. investors.
The units consisted of an aggregate of (1) $5,073,135 principal amount of 8%
convertible promissory notes, and (2) 1,014,627 warrants to purchase shares of
common stock, which warrants are exercisable at $7.50 per share. In connection
with such closings, Spencer Trask received a placement fee equal to 10% of the
aggregate purchase price of the securities sold by it, plus a non-accountable
expense allowance equal to three percent of the aggregate purchase price of the
securities sold and a warrant, granted by Talisman for $1.00 consideration, to
purchase an amount of common stock equal to 20% of the common stock sold in the
offering at an exercise price equal to 120% of the price of the common stock
sold. Additionally, upon the first closing of the offering, Talisman entered
into (1) an agreement whereby Spencer Trask has the right of first refusal to
act as underwriter or agent for any proposed private or public offering of
Talisman's securities by Talisman or by any of its principal stockholders, and
(2) a non-exclusive finder's agreement pursuant to which Spencer Trask is
entitled to receive a fee based upon a percentage of the value of any business
combination or financing arrangement, including but not limited to a merger or
purchase of assets, which is introduced to Talisman by Spencer Trask. In
accordance with the non-exclusive finder's agreement, a fee in the amount of
$200,000 was paid to Spencer Trask Securities, Inc.
In November 1999, Talisman borrowed $350,000 from Kevin Kimberlin
pursuant to a promissory note in the principal amount of $350,000, bearing
interest at an annual rate of 10% and due on February 17, 2000. Such loan was
converted into 70,000 shares of common stock at $5.00 per share simultaneously
with Talisman's January 2000 public offering.
None of the transactions with officers or shareholders of Talisman and
their affiliates were made on terms less favorable to Talisman than those
available from unaffiliated parties. In future transactions of this nature,
Talisman will ensure that more favorable terms are not available to it from
unaffiliated third parties before engaging officers or shareholders of Talisman
or their affiliates. In accordance with the Nasdaq SmallCap listing
requirements, Talisman will maintain at least two independent directors on its
board of directors. Transactions Talisman entered into with its officers and
directors and their affiliates were unanimously approved by Talisman's board of
directors, which included at least two independent directors who were
uninterested with respect to each respective transaction. Such independent
directors had access to Talisman's counsel at Talisman's expense. All future
material affiliated transactions and loans will be made or entered into on terms
that are no less favorable to Talisman than those that can be obtained from
unaffiliated third parties. All future material affiliated transactions and
loans, and any forgiveness of loans, will be approved by a majority of
Talisman's independent directors who do not have an interest in the transactions
and who had access, at Talisman's expense, to Talisman's counsel or independent
legal counsel.
<PAGE>
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Proposals of stockholders intended to be presented at next year's
Annual Meeting of Stockholders must be received by James A. Ogle at Talisman
Enterprises Inc., 2330 Southfield Road, Unit 3-4, Mississauga, Ontario, Canada
L5N2W8, no later than February 1, 2001.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and persons who own more than 10% of the Company's Common
Stock (collectively, "Reporting Persons") to file with the Securities and
Exchange Commission ("SEC") initial reports of ownership and changes in
ownership of the Company's Common Stock. Reporting Persons are required by SEC
regulations to furnish the Company with copies of all Section 16(a) reports they
file. To the Company's knowledge, based solely on its review of the copies of
such reports received or written representations from certain Reporting Persons
that no other reports were required, the Company believes that during its fiscal
year ended December 31, 1999, all Reporting Persons complied with all applicable
filing requirements.
PROPOSAL NO. 2
AMEND THE COMPANY'S BYLAWS REGARDING QUORUM AT A MEETING
At the Annual Meeting, the stockholders of the Company are being asked
to approve the amendment of the Company's Bylaws to state that the holders of "a
majority" of the Company's outstanding stock entitled to vote shall constitute a
quorum at all meetings of the stockholders.
The proposed change in quorum requirements is being made as a
result of the Company having to undertake to make such change in connection with
its listing application on the Nasdaq SmallCap Market.
The Board of Directors believes that the Company's listing on
the Nasdaq SmallCap Market is important, as it gives the Company greater
visibility in the North American Securities Markets. Accordingly, the Board of
Directors believes that it is in the best interests of the Company to increase
the quorum requirement to a majority of outstanding shares to ensure that
matters brought before the stockholders can be acted upon.
Paragraph 59 of the By-Laws currently provides as follows:
59. Quorum. All of the shareholders or two shareholders, whichever
number be the lesser, personally present or represented by proxy,
shall constitute a quorum of any meeting of any class of
shareholders. No business shall be transacted at any meeting
unless the requisite quorum be present at the time of the
transaction of such business. If a quorum is not present at the
time appointed for a meeting of shareholders or within such
reasonable time thereafter as the shareholders present may
determine, the persons present and entitled to vote may adjourn
the meeting to a fixed time and place but may not transact any
other business and the provisions of paragraph 59 of this by-law
with regard to notice shall apply to such adjournment.
The Company's Board of Directors has approved the following amendment
to Paragraph 59 of the By-Laws subject to approval of such amendment by the
holders of the Company's Common Stock as specified below:
59. Quorum. Except as otherwise provided by law, the Certificate
of Incorporation or these By-Laws, the holders of a majority of
the shares of the capital stock of the corporation issued and
outstanding and entitled to vote at the meeting, present in person
or represented by proxy, shall constitute a quorum for the
transaction of business. If a quorum is not present at the time
appointed for a meeting of shareholders or within such reasonable
time thereafter as the shareholders present may determine, the
persons present and entitled to vote may adjourn the meeting to a
fixed time and place but may not transact any other business and
the provisions of paragraph 59 of this by-law with regard to
notice shall apply to such adjournment.
<PAGE>
RECOMMENDATION OF THE BOARD:
THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT OF THE BYLAWS
AS DESCRIBED ABOVE.
The proxy holders intend to vote the shares represented by proxies in
favor of the amendment of the Company's Bylaws, except to the extent authority
to vote for such approval is withheld.
PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Ernst & Young LLP has served as the Company's independent auditors
since September 1997 and has been appointed by the Board to continue as the
Company's independent auditors for the fiscal year ending December 31, 2000. In
the event that ratification of this selection of auditors is not approved by a
majority of the shares of Common Stock voting at the Annual Meeting in person or
by proxy, the Board will reconsider its selection of auditors. Ernst & Young LLP
has no interest, financial or otherwise, in the Company.
Representatives from the accounting firm of Ernst & Young LLP will be
present at the Meeting will be afforded the opportunity to make a statement if
they desire to do so and will be available to respond to appropriate questions.
RECOMMENDATION OF THE BOARD:
THE BOARD RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF
ERNST & YOUNG LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR
ENDING DECEMBER 31, 2000.
The proxy holders intend to vote the shares represented by proxies to
ratify the appointment of Ernst & Young LLP as the Company's independent
auditors for the fiscal year ending December 31, 2000, except to the extent
authority to vote for such approval is withheld.
AVAILABILITY OF CERTAIN DOCUMENTS REFERRED TO HEREIN
THIS PROXY STATEMENT REFERS TO CERTAIN DOCUMENTS OF THE COMPANY THAT
ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. SUCH DOCUMENTS ARE AVAILABLE TO
ANY PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS PROXY STATEMENT IS
DELIVERED, UPON ORAL OR WRITTEN REQUEST, WITHOUT CHARGE, DIRECTED TO NORMAN
MAXWELL, TALISMAN ENTERPRISES INC., 2330 SOUTHFIELD ROAD, UNIT 3-4, MISSISSAUGA,
ONTARIO, CANADA L5N2W8, TELEPHONE NUMBER (905) 826-3995. IN ORDER TO ENSURE
TIMELY DELIVERY OF THE DOCUMENTS, SUCH REQUESTS SHOULD BE MADE BY JUNE 30, 2000.
OTHER MATTERS
The Board of Directors knows of no other business that will be
presented to the Annual Meeting. If any other business is properly brought
before the Annual Meeting, proxies in the enclosed form will be voted in respect
thereof as the proxy holders deem advisable.
It is important that the proxies be returned promptly and that your
shares be represented. Stockholders are urged to mark, date, execute and
promptly return the accompanying proxy card in the enclosed envelope.
By Order of the Board of Directors,
/s/ James A. Ogle
James A. Ogle
President
Mississauga, Ontario
Canada
June __, 2000
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PROXY PROXY
TALISMAN ENTERPRISES INC.
PROXY FOR ANNUAL MEETING TO BE HELD ON JULY 12,2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints James A. Ogle and Norman R. Proulx, or
either of them, as proxies, each with the power to appoint his substitute, to
represent and to vote all the shares of common stock of Talisman Enterprises
Inc. (the "Company"), which the undersigned would be entitled to vote, at the
Company's Annual Meeting of Stockholders to be held on July 12, 2000 and at any
adjournments thereof, subject to the directions indicated on the reverse side
hereof.
In their discretion, the Proxies are authorized to vote upon any other
matter that may properly come before the meeting or any adjournments thereof.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE,
BUT IF NO CHOICES ARE INDICATED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF
ALL NOMINEES AND FOR THE PROPOSALS LISTED ON THE REVERSE SIDE.
IMPORTANT--This Proxy must be signed and dated on the reverse side.
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THIS IS YOUR PROXY
YOUR VOTE IS IMPORTANT!
Dear Stockholder:
We cordially invite you to attend the Annual Meeting of Stockholders of
Talisman Enterprises Inc. to be held at the offices of Aird & Berlis, Barristers
& Solicitors, Suite 1800, 181Bay Street, Toronto, Ontario M5J 2T9 on July 12,
2000 at 10:00 a.m. (local time).
Please read the proxy statement, which describes the proposals and
presents other important information, and complete, sign and return your proxy
promptly in the enclosed envelope.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2
<TABLE>
<CAPTION>
1. ELECTION OF DIRECTORS -- For Withhold
Nominees:
<S> <C> <C> <C>
James A. Ogle [_] [_]
Norman R. Proulx [_] [_]
James C. McGavin [_] [_]
Donald L. Matheson [_] [_]
Thomas A. Fenton [_] [_]
2 Proposal to amend the Company's Bylaws from For Against Abstain
"all shareholders or two shareholders, whichever is [_] [_] [_]
lesser" to "a majority" of outstanding shares to
constitute a quorum at all meetings of stockholders
For Against Abstain
3.Proposal to ratify Ernst & Young LLP [_] [_] [_]
as independent auditors.
</TABLE>
If you plan to attend the Annual Meeting please mark this box [_]
Dated: June , 2000
Signature ______________________________________________________________________
Name (printed) _________________________________________________________________
Title __________________________________________________________________________
Important: Please sign exactly as name appears on this proxy. When signing
as attorney, executor, trustee, guardian, corporate officer, etc., please
indicate full title.
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