Annual Meeting of Shareholders
June 4, 1997
Dear Shareholder:
It is my pleasure to invite you to attend the 1996 Annual General
Meeting of Shareholders of Canada Southern Petroleum Ltd. which will be held at
The Georgian Court Hotel, 773 Beatty Street, Vancouver, British Columbia, Canada
V6B 2M4, Wednesday, June 4, 1997 at 9:00 A.M.
While we are aware that most of our shareholders are unable personally
to attend the Annual Meeting, proxies are solicited to insure that each
shareholder has an opportunity to vote on all matters scheduled to come before
the meeting. Whether or not you plan to attend, please take a few minutes now to
sign, date and return your proxy in the enclosed postage-paid envelope.
Regardless of the number of shares you own, your vote is important.
In addition to helping us conduct business at the annual meeting, there
is an important personal reason for you to return your proxy vote card. Under
the abandoned property law of some jurisdictions, a shareholder may be
considered "missing" if that shareholder has failed to communicate with the
Company in writing. To that end, the return of your proxy vote card qualifies as
written communication.
The Notice of Meetings and Proxy Statement accompanying this letter
describe the business to be acted on at the meeting.
As in the past, members of management will review with you the
Company's results and will be available to respond to questions.
We look forward to seeing you at the meeting.
Sincerely,
Charles J. Horne
April 28, 1997 President
<PAGE>
CANADA SOUTHERN PETROLEUM LTD.
Suite 1410, One Palliser Square
125 Ninth Avenue S.E.
Calgary, Alberta, Canada T2G 0P6
NOTICE OF MEETING
NOTICE IS HEREBY GIVEN that the Annual General Meeting of the
Shareholders of CANADA SOUTHERN PETROLEUM LTD. (the "Company") will be held at
The Georgian Court Hotel, 773 Beatty Street, Vancouver, British Columbia, Canada
V6B 2M4 on Wednesday, June 4, 1997 at 9:00 A.M., local time, to receive and
consider the report of the auditors and the financial statements for the fiscal
year 1996 and for the following additional purposes:
1. To elect one director of the Company;
2. To appoint independent auditors of the Company for the fiscal year ending
December 31, 1997 and to authorize the Board of Directors to fix the
remuneration of such auditors; and
3. To transact such other business as may properly come before the meeting
or any adjournments or postponements thereof.
This notice and proxy statement are being sent to Shareholders of
record at the close of business on April 28, 1997 together with the enclosed
proxy, to enable such Shareholders to state their instructions with respect to
the voting of the shares. Proxies should be returned in the reply envelope
provided.
By Order of the Board of Directors
Kelly B. Johnson
Secretary
Dated: April 28, 1997
- --------------------------------------------------------------------------------
RETURN OF PROXIES
WE URGE EACH SHAREHOLDER, REGARDLESS OF THE NUMBER OF SHARES HELD, WHO
IS UNABLE TO ATTEND THE ANNUAL GENERAL MEETING OF SHAREHOLDERS TO VOTE BY
PROMPTLY SIGNING, DATING AND RETURNING THE ACCOMPANYING PROXY IN THE REPLY
ENVELOPE PROVIDED.
- --------------------------------------------------------------------------------
<PAGE>
CANADA SOUTHERN PETROLEUM LTD.
Suite 1410, One Palliser Square
125 Ninth Avenue S.E.
Calgary, Alberta, Canada T2G 0P6
-------------------
PROXY STATEMENT
-------------------
GENERAL INFORMATION
THE ENCLOSED PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF CANADA
SOUTHERN PETROLEUM LTD. (the "Company") for use at the Annual General Meeting of
Shareholders to be held at The Georgian Court Hotel, 773 Beatty Street,
Vancouver, British Columbia, Canada V6B 2M4 on Wednesday, June 4, 1997 at 9:00
A.M., local time, and at any adjournments or postponements thereof. The notice
of meetings, proxy statement and proxy are being mailed to Shareholders on or
about April 28, 1997.
The Company expects to solicit proxies primarily by mail. To the extent
necessary to assure sufficient representation of shares at the Annual General
Meeting proxies may be solicited in person and by telephone at a nominal cost to
the Company, and the Company will request brokers, banks and other nominees to
forward copies of proxy material to beneficial owners or persons for whom they
hold shares and to obtain authority for the execution and delivery of proxies.
In addition, the Company has retained the firm of Morrow & Co., Inc. to assist
in the distribution of proxy solicitation materials for an estimated fee of
$7,000 plus out-of-pocket expenses. The only other expenses anticipated are the
ordinary expenses in connection with the preparation, assembling and mailing and
other distribution of the material, which will be borne by the Company.
Voting of Proxies and Record Date
Unless otherwise specified by the means provided in the enclosed proxy,
the shares represented by the proxy will be voted on any business as may
properly come before the meeting. If a choice is specified by the means provided
in the proxy, the shares represented by the proxy will be voted or withheld from
voting in accordance with the specification made. If no choice is specified, the
named Proxies will vote such shares at the Annual General Meeting of
Shareholders in favor of the election of Mr. Eugene C. Pendery as a director of
the Company; and in favor of appointing Ernst & Young as independent auditors of
the Company, and in favor of authorizing the Board of Directors to fix the
auditors' remuneration.
The proxy also confers discretionary authority with respect to
amendments or variations to matters identified in the accompanying Notice of
Meeting or other matters which may properly come before the meeting. The Board
of Directors knows of no matters which will be presented for consideration at
the meeting other than those matters referred to in this proxy statement.
<PAGE>
The total number of outstanding shares of the Company was 13,956,540
Limited Voting Shares at April 28, 1997. Two or more shareholders present in
person and holding or representing by proxy not less than 25% of the total
number of issued shares constitute a quorum. A simple majority of the votes cast
is required to approve Proposals Number 1.and Number 2 (as set forth on the form
of proxy) at the Annual General Meeting and any other regular business that
comes before the Annual General Meeting.
At each General Meeting of Shareholders, each shareholder is entitled
to one vote for each share shown as registered in his name in the list of
shareholders, subject, however, to a provision in the Company's Memorandum of
Association (Articles of Continuance) to the effect that no person shall vote
more than 1,000 shares. Article 8 of the Company's Articles of Continuance
provides as follows:
8. Voting Restrictions
With respect to any matter to be voted upon at any meeting of
Members any one person, hereinafter defined, shall be entitled to vote:
(i) with respect to shares registered in his name on the books
of the Company which are beneficially owned by him, the number of
shares, but in no event more than 1,000;
(ii) with respect to shares registered in his name on the
books of the Company which he holds as a trustee other than as a
nominee, the number of shares but in no event more than 1,000; and
(iii) with respect to shares registered in his name as nominee
and on instructions from each one person who is the owner thereof a
number of shares owned by each such one person but in no event more
than 1,000 with respect to each such one person, provided that no such
one person shall vote or give instruction as to the voting of more than
1,000 shares in the aggregate.
That for all purposes of these Articles:
(a) Any entity or group in the nature of and including:
(i) a corporation, its subsidiaries and affiliates;
or
(ii) a trust; or
(iii) two or more trusts created by one person or
having substantially the same beneficiaries or
remaindermen; or
(iv) an association, partnership, joint or common
venture; or
<PAGE>
(v) all shareholders, security holders, officers,
directors, members and employees of one person
who owns beneficially more than 10% of the
shares of the Company; shall be deemed to be
one person;
(b) One person who has shares registered in his name who is
not a beneficial owner or nominee thereof, shall be deemed to hold such
shares as a trustee;
(c) No person shall be deemed beneficially to own shares of
the Company if such shares are subject to any agreement whereunder any
other person either certainly or contingently is or may become entitled
to any interest in or right to or control over such shares other than
an agreement whereunder such shares are bona fide mortgaged, pledged or
charged to any bank, trust company or other lending institution or to
any brokerage firm to secure indebtedness;
(d) In order to determine the number of shares that any Member
is entitled to vote at any meeting of Members, the board of directors
may require in or with the notice of the meeting or an adjourned
meeting that any Member must provide as a condition precedent to his
right to vote, such evidence as the board of directors may require as
to the beneficial ownership of the shares held by him; and
(e) If the board of directors of the Company decides, or if
the chairman for the time being at any meeting of the Members believes
that it is in the best interests of the Company that any meeting of
Members be adjourned to determine the number of shares that any holder
of shares is entitled to vote at such meeting, then the chairman shall
on his own motion adjourn once such meeting for a period not exceeding
60 days.
The list of shareholders is available for inspection during usual
business hours at the offices of Daley, Black & Moreira, Suite 401,
Toronto-Dominion Bank Building, 1791 Barrington Street, Halifax, Nova Scotia and
at the Annual General Meeting of Shareholders. The list of shareholders was
prepared as of April 28, 1997, the record date fixed for determining
Shareholders entitled to notice of the Annual General Meeting of Shareholders.
If a person has acquired ownership of shares since that date, he must establish
such ownership in order to be included in the list of shareholders entitled to
vote. Abstentions and brokers no-votes will be counted neither as votes "in
favor" or votes "against" any proposition brought before the meeting.
Revocation of Proxies
Any shareholder who has given his proxy has the right to revoke the
same at any time prior to the voting thereof. In addition to revocation in any
other manner permitted by law, a proxy may be revoked by an instrument in
writing executed by the shareholder, or by his attorney authorized in writing,
and deposited at the head office of the Company in Calgary, Alberta, Canada, at
any time up to and including the last business day preceding the day of the
Annual General Meeting of Shareholders to be held on June 4, 1997, or any
adjournments thereof, or with the chairman of such meeting on the day of such
meeting, or any adjournments thereof.
<PAGE>
Nomination of Proxy Holder
A shareholder has the right to appoint a person to attend and act for
him on his behalf at the Annual General Meeting other than the person or persons
designated in the enclosed proxy. To exercise this right, the shareholder may
insert the name of the desired person in the blank space provided in the proxy
and strike out the other names.
THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER
31, 1996 FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION MAY BE
OBTAINED UPON WRITTEN REQUEST TO CANADA SOUTHERN PETROLEUM LTD., C/O G&O'D INC,
149 DURHAM ROAD, OAK PARK - UNIT 31, MADISON, CONNECTICUT 06443.
PROPOSAL 1. THE ELECTION OF ONE DIRECTOR
One director is to be elected to hold office for a term of five years
which expires at the fiscal year 2001 Annual General Meeting of Shareholders
pursuant to the Articles of Association of the Company, which established five
classes of directors to be elected on a rotating basis at each successive Annual
General Meeting of Shareholders. The named Proxies will vote the shares
represented by the proxy for the election of Mr. Eugene C. Pendery unless
otherwise directed. The following table sets forth information concerning the
nominee for election and those directors whose terms of office are to continue
after the meeting.
<PAGE>
<TABLE>
<CAPTION>
Other Offices
Date Present Term Principal Occupation Director Held with Company
Name of Office Expires during Last Five Years* Since
<S> <C> <C> <C> <C>
Eugene C. Pendery 1996 Annual Meeting Mr. Pendery has been President and a 1986 None
director of Recycled Plastic
Products, Inc., Littleton, Colorado
since 1991, a distributor of fencing
and other recycled plastic products.
He has also been associated with the
oil, gas and mining industries since
1966. Age fifty-nine.
Directors continuing in office:
Benjamin W. Heath 1997 Annual Meeting Mr. Heath is President and a director 1956 None
of Coastal Caribbean Oils & Minerals,
Ltd. ("CCO"), a director of Magellan
Petroleum Corporation ("MPC"), and
Chairman of the Board of Directors of
Magellan Petroleum Australia Limited
("MPAL"), a majority owned subsidiary
of MPC. Age eighty-two.
Charles J. Horne 1998 Annual Meeting Mr. Horne has served as President of 1984 President
the Company since 1980 and has been
associated with the Company and its
predecessor since 1950. Age
seventy-one.
M. A. Ashton 1999 Annual Meeting Mr. Ashton has served as Executive 1989 Executive Vice
Vice President since 1993. He had President
been Vice President-Exploration since
December 1988 and was elected a
director in 1989. Mr. Ashton is a
professional petroleum geologist with
more than thirty years experience in
exploration projects in western
Canada and the United States. Age
sixty-one.
Arthur B. O'Donnell 2000 Annual Meeting Mr. O'Donnell was elected on March 1997 None
13, 1997 to complete the unexpired
term of Mr. C. Dean Reasoner who
resigned. Mr. O'Donnell, a CPA, had
been an officer of the Company for
many years prior to his retirement in
1994. Until his retirement, he had
been President of G&O'D INC, a firm
that provides accounting and
administrative services to the
Company. Age seventy-two.
- ---------------------
* All of the named companies are engaged in oil, gas or mineral exploration
and/or development except where noted.
</TABLE>
<PAGE>
There are no arrangements or understandings between any director and
any other person or persons pursuant to which such director was or is to be
selected as a director. There are no family relationships between any director,
executive officer, or person nominated or chosen by the Company to become a
director.
Committees of the Board of Directors: Attendance at Meetings
The full Board of Directors of the Company serves as the Audit
Committee whose duties are: the engagement and discharge of auditors, reviewing
with the auditors the plan and results of the auditing engagement, reviewing the
independence of the auditors and reviewing the adequacy of the Company's system
of internal accounting controls. The Board of Directors acting as the Audit
Committee met once during the year ended December 31, 1996.
The Company has no standing nominating or compensation committees. The
functions that would be performed by such committees are performed by the full
Board of Directors. During the year ended December 31, 1996, all of the
directors attended at least 75% of the aggregate number of meetings of the Board
of Directors and Committees on which they serve (a total of 8 meetings).
ADDITIONAL INFORMATION CONCERNING EXECUTIVE OFFICERS
AND DIRECTORS
Unless otherwise indicated, all dollar figures set forth herein are
expressed in Canadian currency.
Executive Compensation
The following table sets forth certain summary information concerning
the compensation of Mr. Charles J. Horne, who is President and Chief Executive
Officer of the Company. No executive officer of the Company received or earned
any compensation in excess of U.S. $100,000 during the year 1996.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Summary Compensation Table
- --------------------------------------------------------------------------------------------------------------------
Long Term
Annual Compensation Compensation Award
- ------------------------------- ------------------------- ------------------------- --------------------------------
Name and Principal Position Fiscal Period Salary ($) Options/SARs(#)
- ------------------------------- ------------------------- ------------------------- --------------------------------
<S> <C> <C> <C>
Charles J. Horne, President 1996 60,000 ---
1995 61,000 ---
1994 60,275 75,000
- ------------------------------- ------------------------- ------------------------- --------------------------------
</TABLE>
<PAGE>
Stock Options
The following table provides information about stock options exercised
during the year 1996 and unexercised stock options held by the President of the
Company at the end of the year 1996.
<TABLE>
<CAPTION>
============================================================================================================================
Aggregated Option/SAR Exercises in 1996 and at December 31, 1996
Option/SAR Values Table
============== ----------------- --------------- ------------------------------------ ==================================
Shares Number of Unexercised Value of Unexercised In-The-Money
Acquired Value Options/SARs Options/SARs
On Exercise (#) Realized ($) at December 31, 1996 at December 31, 1996 ($)
============== ----------------- --------------- ----------------- ----------------- ---------------- ================
Name Exercisable Unexercisable Exercisable Unexercisable
============== ================= =============== ================= ================= ================ ================
<S> <C> <C> <C> <C> <C> <C>
Charles J. -0- -0- 125,000 - 459,500 -
Horne
============== ================= =============== ================= ================= ================ ================
</TABLE>
Defined Benefit or Actual Plan Disclosure
All employees who were eligible for a contributory pension plan have
now reached retirement age as specified in the plan and are receiving benefits.
Consequently, the plan has been discontinued. Mr. Horne receives an annual
benefit of $35,816.
Compensation of Directors
Messrs. Heath and Pendery each receive directors' fees of $25,000 per
year. Effective April 1, 1997, Mr. O'Donnell will also receive a directors' fee
of $25,000 per year.
On January 29, 1991, the Company granted interests to certain of its
officers, employees, directors, counsel and consultants amounting to an
aggregate of 7.8% of any and all benefits to the Company after expenses from the
litigation in Canada relating to the Kotaneelee field. The Company has reserved
a 2.2% interest in such net recoveries for possible future grants to persons who
may include officers and directors of the Company.
Compensation Committee and Insider Participation in Compensation Committee
The entire board of directors serves as the compensation committee.
Charles J. Horne and M. A. Ashton are directors and the President and Executive
Vice-President, respectively of the Company. Mr. C. Dean Reasoner, a director
until he resigned on March 11, 1997, was a partner in the law firm of Reasoner,
Davis & Fox which received U.S. $111,000 for legal services for the year ended
December 31, 1996.
Mr. Benjamin W. Heath, a director, and Mr. Reasoner also serve as
directors of CCO and MPC. On March 11, 1997 and March 20, 1997, Mr. Reasoner
also resigned as a director of MPC and CCO, respectively. During 1996, the firm
of Reasoner, Davis & Fox also rendered services to CCO and MPC.
<PAGE>
Board Compensation Committee Report
The Compensation Committee, consisting of the entire board of
directors, submits the following report for the year ended December 31, 1996:
The Board of Directors does not maintain specific compensation policies
applicable to the Company's executive officers, and the Board has established no
specific relationship between corporate performance and executive compensation.
Compensation has been determined based on the skills, experience and leadership
executive officers have brought to the performance of their duties, and on their
ability to protect, defend and pursue the Company's ability to realize value on
the Company's oil and gas interests.
M. A. Ashton Charles J. Horne
Benjamin W. Heath Eugene C. Pendery
Tax Deductibility of Compensation
At this time, the Company does not expect that it will comply with the
U.S. Revenue Reconciliation Act of 1993 regarding executive compensation because
it is not likely that compensation to any executive will exceed $1 million and
the Company is a Canadian company not subject to the tax laws of the United
States.
CORPORATE GOVERNANCE
In 1995, the Toronto Stock Exchange Committee on Corporate Governance
in Canada issued a report (the "TSE Report") setting out a series of guidelines
for effective corporate governance. These guidelines deal with matters such as
the constitution and independence of corporate boards, their function, the role
of board committees and the selection and education of board members. The
Toronto Stock Exchange now requires that each listed company disclose on an
annual basis its approach to corporate governance with reference to the
guidelines. The Company's approach to corporate governance is described below.
Mandate of the Board
The mandate of the board includes:
(a) approving objectives for the Company and the overall operating
and financial plans to achieve them;
(b) identifying and managing the principal risks of the Company's
business;
(c) verifying the integrity of the Company's internal financial,
control and management information systems;
<PAGE>
(d) selecting the Chief Executive Officer and approving the
selection of other senior executives; and
(e) monitoring the Company's communications with shareholders,
other stakeholders and the general public.
Composition of the Board
The TSE Report recommends that the Board of Directors be constituted
with a majority of individuals who qualify as unrelated directors. An unrelated
director is a director who is independent of management and is free from any
interest in any business or other relationship which could, or could reasonably
be perceived to, materially interfere with the director's ability to act with a
view to the best interests of the Company. Three of the Company's directors,
Messrs. Heath, O'Donnell and Pendery, are unrelated. Messrs. Horne and Ashton
are related, within the meaning of the TSE Report, because they are members of
management. The board does not believe that the factors which result in Messrs.
Horne and Ashton being related directors under the TSE Report interfere with
their ability to act with a view to the best interests of the Company.
The TSE Report recommends that every board of directors should examine
its size with respect to its effectiveness. The board believes its present size
of five directors is the most effective size at this time. The board has not
established an executive committee because of its size.
Board Committees (See also "Committees of the Board of Directors", page 6)
Audit Committee
The TSE Report recommends that an audit committee of every board be
comprised only of outside directors. The full board of directors serves as the
Audit Committee.
Nominating Committee
The TSE Report recommends that the board appoint a committee of outside
directors with responsibility of proposing new nominees to the board. The TSE
Report also recommends that the Nominating Committee or the appropriate
committee implement a process to assess the effectiveness of the board and the
contribution of the individual directors.
The board believes that the full board of directors should perform
these functions because of the relatively small size of the board.
<PAGE>
Orientation and Education of New Directors
The TSE Report recommends an orientation and education program for new
recruits to the board. The board believes that given the size and situation of
the Company, it provides and will continue to provide the necessary information
for a new board member to perform the duties of a director.
Compensation of Directors
The TSE Report recommends that the board review the adequacy and form
of compensation of directors and ensure the compensation reflects the
responsibilities and risk involved in being an effective director. The board
reviews the compensation of its members periodically, and believes that the
current compensation of directors reflects the recommendation of the TSE Report.
Management's Responsibilities
The TSE Report recommends that the board develop position descriptions
for the board and CEO with definitions of the limits of management's
responsibility. Management is responsible for the day to day operations of the
Company. Any matters which are material to the Company are discussed and
approved by the full board. The senior officers of the Company are required
(whenever practicable) to report to the board in a comprehensive manner on any
significant proposed activities and transactions of the Company, the progress
being made on activities and transactions which have been undertaken, the
abandonment of activities or transactions, and the results of all activities and
transactions being conducted or which have been concluded. Whenever practicable,
all such reports are furnished to the directors in writing and subsequently also
orally discussed, whenever their importance justifies.
Independence from Management
The TSE Report recommends that the board ensure that it can operate
independent of management. There are three nonmanagement directors and two
management directors on the Company's board; therefore, the board believes that
it can effectively operate independently of management.
The TSE Report also recommends that an individual director have the
ability to engage an outside advisor at corporate expense in appropriate
circumstances. The Board will consider that issue in the event that such a
circumstance arises.
Shareholder Relations
The Company has appointed a representative for shareholders to contact
for information, questions or concerns regarding the Company. Company personnel
and consultants report to the board on any concerns that have been expressed by
shareholders.
<PAGE>
Performance Graph
The graph below compares the cumulative total returns, including
reinvestment of dividends, if applicable, of Company Stock with companies in the
NASDAQ Index and an Industry Group Index. (Media General's Oil, Natural Gas
Production Industry Group).
The chart displayed below is presented in accordance with SEC
requirements. Shareholders are cautioned against drawing any conclusions from
the data contained therein, as past results are not necessarily indicative of
future performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
1991 1992 1993 1994 1995 1996
Canada Southern 100 83.93 146.43 132.14 185.71 178.57
NASDAQ Stock Index 100 100.96 121.13 127.17 164.96 204.98
Industry Group 100 97.98 117.34 131.76 139.98 176.14
<PAGE>
Security Ownership of Certain Beneficial Owners
The Company knows of no person or group that owns beneficially more
than 5% of the outstanding Limited Voting Shares of the Company.
Security Ownership of Management
The following table sets forth information as to the number of shares
of the Company's Limited Voting Shares owned beneficially on April 28, 1997 by
directors of the Company and by all executive officers and directors of the
Company as a group:
Amount and Nature of
Individual or Group Beneficial Ownership % of Class
Shares Options
M. A. Ashton - 90,000 *
Benjamin W. Heath 3,734 72,000 *
Charles J. Horne 11,017 125,000 1.0
Eugene C. Pendery 10,000 70,000 *
Arthur B. O'Donnell 39 16,500 *
Directors and Officers as a
Group (a total of 5) 24,790 380,700 2.8
- --------------------
* The percent of class owned is less than 1%.
Changes in Control
The Company is aware of no arrangement which may at a subsequent date
result in a change in control of the Company.
Certain Business Relationships
Reasoner, Davis & Fox
Fees paid or accrued for legal services rendered to the Company by
Reasoner, Davis & Fox, of which firm Mr. C. Dean Reasoner, a director of the
Company until his resignation on March 11, 1997, was a partner, during the year
1996 amounted to U.S.
$111,000. Mr. Reasoner did not receive a director's fee in 1996.
Royalty Interests
The following directors have royalty interests in certain of the
Company's oil and gas properties (present or past) which were received directly
or indirectly from the Company: Mr. C. Dean Reasoner, interests ranging from
1.772% to 2%; Mr. Benjamin W. Heath, interests ranging from 1.772% to 2%; and
<PAGE>
a trust (in which Mr. Heath has a 54.4% beneficial interest), interests
ranging from 7.603% to 7.8%. In each case, the applicable percentage depends on
the property on which the royalty is paid.
During 1996, the Company and third-party operators and/or owners of
properties made payments to Mr. Reasoner and Mr. Heath in the amounts of
U.S. $5,342 and U.S. $10,844, respectively.
PROPOSAL 2. APPOINTMENT OF INDEPENDENT AUDITORS
The Board has proposed that Ernst & Young, which has served the Company
since its organization in 1954, be appointed to audit the accounts of the
Company for the fiscal year ending December 31, 1997. A vote for or against the
appointment of auditors, or the abstaining from such vote may be indicated by
checking the appropriate box on the proxy. Unless otherwise specified, the named
proxies will vote the shares represented by the enclosed proxy in favor of the
appointment of Ernst & Young and to authorize the Board of Directors to fix the
remuneration of such auditors. Representatives of Ernst & Young are not expected
to be present at the Annual General Meeting.
MANAGEMENT RECOMMENDS A VOTE IN FAVOR OF THIS PROPOSAL
SHAREHOLDER PROPOSALS
Notice of Business to be Brought Before a Shareholders' Meeting
Article 76 of the Company's Articles of Association provide in
part that
At an ordinary general meeting of the members, only such
business shall be conducted as shall have been properly brought before
the meeting. To be properly brought before an annual meeting, business
must be (a) specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the board of directors, (b)
otherwise properly brought before the meeting by or at the direction of
the board of directors, or (c) otherwise properly brought before the
meeting by a member. For business to be properly brought before an
annual meeting by a member, the member must have given timely notice
thereof in writing to the Secretary of the Company. To be timely, a
member's notice must be delivered to or mailed and received at the
principal executive offices of the Company, not less than ninety (90)
days before the anniversary date of the previous annual meeting of
Shareholders.
A member's notice to the Secretary shall set forth as to each
matter the member proposes to bring before the annual meeting.
(a) a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting such business
at the annual meeting;
<PAGE>
(b) the name and address, as they appear on the Company's
books, of the member intending to propose such business;
(c) the class and number of shares of the Company which are
beneficially owned by the member;
(d) a representation that the member is a holder of record of
capital stock of the Company entitled to vote at such meeting and
intends to appear in person or by proxy at the meeting to present such
business; and
(e) any material interest of the member in such business.
Notwithstanding anything in these Articles to the contrary, no
business shall be conducted at an annual meeting except in accordance
with the procedures set forth in this Article 76. The presiding officer
of an annual meeting shall, if the facts warrant, determine and declare
to the meeting that business was not properly brought before the
meeting and in accordance with the provisions of this Article 76, and
if he should so determine, he shall so declare to the meeting and any
such business not properly brought before the meeting shall not be
transacted.
Shareholder proposals relating to the Company's 1997 Annual General
Meeting of Shareholders must be received by the Company at its principal office,
Suite 1410, One Palliser Square, 125 Ninth Avenue, S.E., Calgary, Alberta,
Canada T2G 0P6 no later than January 23, 1998. The fact that a Shareholder
proposal is received in a timely manner does not insure its inclusion in the
proxy material, since there are other requirements in the proxy rules relating
to such inclusion.
The contents and the sending of this Proxy Statement have been approved
by the directors of the Company.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY; THEREFORE,
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE ANNUAL GENERAL MEETING IN PERSON
ARE URGED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE REPLY ENVELOPE
PROVIDED.
By Order of the Board of Directors
Kelly B. Johnson
Secretary
Dated April 28, 1997
