SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
Canada Southern Petroleum Ltd.
................................................................................
(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)(4) 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>
Annual Meeting of Shareholders
June 16, 1999
Dear Shareholder:
It is a pleasure for us to extend to you a cordial invitation to attend
the 1999 Annual General Meeting of Shareholders of Canada Southern Petroleum
Ltd. which will be held at The 400 Club, 710 - 4th Avenue S.W., Calgary,
Alberta, Canada T2P 0K3 (Telephone 403-265-9660), Wednesday, June 16, 1999 at
10:00 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,
/s/ M. Anthony Ashton
M. Anthony Ashton
April 30, 1999 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 400 Club, 710 - 4th Avenue S.W., Calgary, Alberta, Canada T2P 0K3 on
Wednesday, June 16, 1999 at 10:00 A.M., local time, to receive and consider the
report of the auditors and the financial statements for the year 1998 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, 1999 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 30, 1999 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 30, 1999
- --------------------------------------------------------------------------------
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 1999 Annual General
Meeting of Shareholders to be held at The 400 Club, 710 - 4th Avenue S.W.,
Calgary, Alberta, Canada T2P 0K3 on Wednesday, June 16, 1999 at 10:00 A.M.,
local time, and at any adjournments or postponements thereof. The notice of
meeting, proxy statement and proxy are being mailed to shareholders on or about
April 30, 1999.
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 U.S.
$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. Timothy L. Largay as a director of
the Company, in favor of appointing Ernst & Young LLP as independent auditors of
the Company, and in favor of authorizing the Board of Directors to fix the
remuneration of the auditors.
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 14,234,740
Limited Voting Shares at April 30, 1999. 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 Proposal Numbers 1 and 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 30, 1999, 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 non-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 16, 1999, 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, 1998 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 Annual General Meeting of Shareholders in 2004 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. Timothy L. Largay 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
Name of Office Expires during Last Five Years* Since Company
---- ----------------- ----------------------- ----- -------
<S> <C> <C> <C> <C>
Timothy L. Largay 1999 Annual Meeting Mr. Largay was elected a director on October 1997 Assistant
1, 1997 to complete the unexpired term of Secretary
Mr. Charles J. Horne who resigned. Mr. Largay
has been a partner in the law firm of Murtha,
Cullina, Richter and Pinney LLP ("Murtha
Cullina"), Hartford, Connecticut since 1974.
He served as a director and Chairman of the
Board of Raymond Engineering, Inc., a publicly
held defense contractor, from 1984-1986 and as
a director of Buell Industries, Inc., a
publicly held manufacturer from 1976-1990.
Mr. Largay is also a director of Magellan
Petroleum Corporation ("MPC"). Murtha Cullina
has been retained by the Company for more than
five years and is being retained during the
current year. Age fifty-five.
Directors continuing in office:
M. A. Ashton 2000 Annual Meeting Mr. Ashton has served as President and Chief 1989 President
Executive Officer since June 4, 1997. He had
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-three.
Arthur B. O'Donnell 2001 Annual Meeting Mr. O'Donnell was elected a director on 1997 Audit Committee
March 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-four.
Eugene C. Pendery 2002 Annual Meeting Mr. Pendery has been President and a director 1986 Audit Committee
of Recycled Plastic Products, Inc., Littleton,
Colorado, a distributor of fencing and other
recycled plastic products, since 1991. He has
also been associated with the oil, gas and
mining industries since 1966. Age sixty-one.
Benjamin W. Heath 2003 Annual Meeting Mr. Heath is President and a director of 1956 None
Coastal Caribbean Oils & Minerals, Ltd.
("CCO"), and a director of MPC. Age
eighty-four.
</TABLE>
- ------------------------
* All of the named companies are engaged in oil, gas or mineral exploration
and/or development except where noted.
<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 Audit Committee is comprised of Messrs. O'Donnell and Pendery. The
principal duties of the Audit Committee 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 two times during the year ended
December 31, 1998.
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, 1998, 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 15 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. M. A. Ashton, who is President (elected June 4, 1997)
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 or Cdn. $100,000
during the year 1998.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Summary Compensation Table
- ---------------------------------------------------------------------------------------------------------------------
Annual Compensation Long Term
Name and Compensation Award
Principal Position Year Salary ($) Options/SARs(#)
- ------------------------------------------------- ------------------- ------------------- ---------------------------
<S> <C> <C> <C>
M. A. Ashton 1998 75,000 -
President and Chief Executive Officer 1997 50,000 -
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Stock Options
The following table provides information about stock options exercised
during the year 1998 and unexercised stock options held by the President of the
Company at the end of the year 1998.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Aggregated Option/SAR Exercises in 1998 and December 31, 1998
Option/SAR Values
- -----------------------------------------------------------------------------------------------------------------------
Shares Number of Unexercised Value of Unexercised
Acquired Value Options/SARs (#) In-The-Money
On Exercise Realized ($) at December 31, 1998 Options/SARs ($)
(#) at December 31, 1998
- -----------------------------------------------------------------------------------------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
M . A. Ashton -0- -0- 70,000 - 32,000 -
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
Compensation of Directors
Messrs. Heath, Largay, O'Donnell and Pendery each received a director's
fee of $25,000 (U.S. $16,250) in 1998. Effective January 1, 1999, each of the
named directors will receive a director's fee of $30,000 (U.S. $19,500). In
addition, directors will receive $250 (U.S. $163) for each conference call
meeting and $500 (U.S. $325) for each meeting requiring travel.
Compensation Committee Interlocks and Insider Participation in Compensation
Committee
The entire board of directors serves as the compensation committee. M.
A. Ashton is a director and President of the Company.
Board Compensation Committee Report
The Compensation Committee, consisting of the entire board of
directors, submits the following report for the year 1998:
The Board of Directors does not maintain specific compensation policies
applicable to the Company's Chief Executive Officer, 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 the Chief Executive Officer has brought to the performance of his
duties, and on his ability to protect, defend and pursue the Company's ability
to realize value on the Company's oil and gas interests.
M. A. Ashton Arthur B. O'Donnell
Benjamin W. Heath Eugene C. Pendery
Timothy L. Largay
<PAGE>
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;
(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 and any business or other relationship which could, or could reasonably
be perceived to, materially interfere with the director's ability to act with a
view to the best interests of the Company. Four of the Company's directors,
Messrs. Heath, Largay, O'Donnell and Pendery, are unrelated. Mr. Largay is a
partner in a firm which provides legal services to the Company and receives fees
in amounts which are not material to the firm. Mr. Ashton is related, within the
meaning of the TSE Report, because he is a member of management. The board does
not believe that the factors which result in Mr. Ashton being a related director
under the TSE Report interfere with his 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.
<PAGE>
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 (non-management) directors. Both Messrs. O'Donnell and
Pendery are outside directors.
Nominating Committee
The TSE Report recommends that the board appoint a committee of outside
directors with the 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.
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 that 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.
<PAGE>
Independence from Management
The TSE Report recommends that the board ensure that it can operate
independent of management. There are four nonmanagement directors and one
management director (who is normally the Chairman of the Board of Directors'
Meetings) 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 Market Index and an Industry Group Index. (Media General's Independent
Oil and Gas 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
1993 1994 1995 1996 1997 1998
Canada Southern 100 90.24 124.39 136.59 162.20 95.12
Independent Oil & Gas 100 107.66 117.79 151.80 141.32 91.54
NASDAQ Market Index 100 104.99 136.18 169.23 207.00 291.96
<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 22, 1999 by
directors of the Company and by all executive officers and directors of the
Company as a group:
Amount and Nature of
Name of Beneficial Ownership
Individual Shares Held Percent of
or Group Directly Options Class
M. A. Ashton 3,000 130,000 *
Benjamin W. Heath 10,000 75,000 *
Timothy L. Largay 3,000 75,000 *
Arthur B. O'Donnell 1,039 60,000 *
Eugene C. Pendery 10,000 70,000 *
Directors and Officers as a
Group (a total of 5) 27,039 410,000 2.98%
- ------------------------
* The percent of class owned is less than 1%.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers, directors and persons who beneficially own more
than 10% of the Company's Common Stock to file initial reports of beneficial
ownership and reports of changes in beneficial ownership with the Securities and
Exchange Commission (the "SEC"). Such persons are required by the SEC
regulations to furnish the Company with copies of all Section 16(a) forms filed
by such persons. Based solely on its copies of forms received by it, or written
representations from certain reporting persons that no Form 5 was required for
those persons, the Company believes that during the year ended December 31,
1998, its executive officers and directors complied with all applicable filing
requirements.
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.
<PAGE>
Certain Business Relationships
Mr. Timothy L. Largay, a director of the Company since October 1, 1997,
is a member of the law firm of Murtha, Cullina, Richter and Pinney LLP, which
firm has been retained by the Company for more than five years and is being
retained during the current 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. The following interests were
granted directly or indirectly to the directors of the Company:
Party Interest Granted (%)
Murtha, Cullina, Richter and Pinney LLP 1.00
Arthur B. O'Donnell .33 1/3
Benjamin W. Heath .25
Royalty Interests
The following director has 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. Benjamin W. Heath, interests ranging from
1.772% to 2%; and 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 1998, the Company and third-party operators and/or owners of
properties made payments to Mr. Heath in the amount of U.S. $8,300.
PROPOSAL 2. APPOINTMENT OF INDEPENDENT AUDITORS
The Board has proposed that Ernst & Young LLP, 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, 1999. 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 LLP and to authorize the Board of Directors to
fix the remuneration of such auditors. Representatives of Ernst & Young LLP are
not expected to be present at the Annual General Meeting.
<PAGE>
MANAGEMENT RECOMMENDS A VOTE IN FAVOR OF THIS PROPOSAL
SHAREHOLDER PROPOSALS
Shareholders who intend to have a proposal included in the notice of
meeting and related proxy statement relating to the Company's 2000 Annual
General Meeting of Shareholders must submit the proposal on or before December
30, 1999.
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;
(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.
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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.
Notice by a shareholder under this provision of the Company's Articles
of Association must have been received by March 17, 1999. No shareholder has
submitted a proposal for the 1999 Annual General Meeting of Shareholders which
complied with the above requirements.
Shareholder proposals relating to the Company's 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. 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 Company's Articles of Association and 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 30, 1999
