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 Section240.14a-11(c) or
Section240.14a-12
LA TEKO RESOURCES LTD.
-------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filling Proxy Statement if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2),
or Item 22(a)(2) of Schedule 14A.
[ ] 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 by written 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:
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<PAGE>
LA TEKO RESOURCES LTD.
(the "Company")
NOTICE OF ANNUAL GENERAL MEETING OF MEMBERS
NOTICE IS HEREBY GIVEN THAT the annual general meeting of members of LA TEKO
RESOURCES LTD. (the "Company") will be held on June 2nd, 1998 at the Conference
room located on the 2nd Floor of 888 Dunsmuir St., Vancouver, British
Columbia, at the hour of 10:00 a.m., Vancouver time, for the following purposes:
1) To receive the report of the directors of the Company for the year ended
December 31, 1997.
2) To receive the comparative audited financial statements of the Company and
the auditors' report thereon for the year ended December 31, 1997.
3) To fix the number of directors at seven.
4) To elect directors for the ensuing year.
5) To appoint auditors for the ensuing year and to authorize the directors to
fix the remuneration to be paid to the auditors.
6) To consider and, if thought appropriate, approve and ratify stock options,
and amendments to stock options to purchase shares of the Company granted
to insiders which have not previously been approved by the members and to
authorize the directors in their discretion to grant stock options to
insiders and to amend stock options granted to insiders during the ensuing
year, as more fully set forth in the information circular accompanying this
notice.
7) To transact such further or other business as may properly come before the
meeting and any adjournment or adjournments thereof.
This notice and form of proxy are being first furnished to shareholders of the
Company on April 29th, 1998. The accompanying information circular provides
additional information relating to the matters to be dealt with at the meeting
and is incorporated by reference into and deemed to form part of this notice.
The board of directors has fixed the close of business on April 27, 1997 as the
record date for the determination of members entitled to notice of the meeting
or any adjournment or adjournments thereof and the right to vote thereat.
The audited comparative financial statements for the year ended December 31st,
1997, together with the auditors' report thereon are included with this notice.
Members who are unable to attend the meeting in person are requested to
complete, sign, date and return the enclosed form of proxy. A proxy will not be
valid unless it is deposited at the office of the transfer agent in accordance
with instructions contained herein before 10:00 a.m. May 29th, 1998. If your
shares are held in the name of a brokerage firm, nominee, or other institution,
only it can vote your shares. Please contact the person responsible for your
account and give instructions for your shares to be voted. Notwithstanding the
issuance of a proxy statement, members present at the meeting will be entitled
to vote their shares.
Dated this 27th day of April, 1998. FOR THE BOARD OF DIRECTORS
/s/ Gerald G. Carlson, President
<PAGE>
LA TEKO RESOURCES LTD.
(the "Company")
INFORMATION CIRCULAR
as at April 27, 1998, for the Meeting of the
Members of La Teko Resources Ltd.
to be held on June 2nd, 1998
SOLICITATION OF PROXIES
This information circular is furnished in connection with the solicitation of
proxies by the Board of Directors of the Company for use at the annual general
meeting to be held on June 2, 1998 and any adjournments thereof. The
solicitation will be conducted by mail and may be supplemented by telephone or
other personal contact to be made without special compensation by officers and
employees of the Company. The cost of solicitation will be borne by the Company.
This information circular and related proxy are first being provided to
shareholders on April 29, 1998.
VOTING OF PROXIES
A MEMBER/SHAREHOLDER HAS THE RIGHT TO APPOINT A PERSON (WHO NEED NOT BE A
MEMBER/SHAREHOLDER) TO ATTEND AND ACT FOR HIM AND ON HIS BEHALF AT THE MEETING
OTHER THAN THE PERSONS DESIGNATED IN THE ACCOMPANYING FORM OF PROXY. TO
EXERCISE THIS RIGHT, THE MEMBER/ SHAREHOLDER MAY INSERT THE NAME OF THE DESIRED
PERSON IN THE BLANK SPACE PROVIDED IN THE PROXY AND STRIKE OUT THE OTHER NAMES
OR MAY SUBMIT ANOTHER PROXY.
THE SHARES PRESENTED BY PROXIES IN FAVOR OF MANAGEMENT WILL BE VOTED ON ANY
BALLOT (SUBJECT TO ANY RESTRICTIONS THEY MAY CONTAIN) IN FAVOR OF THE MATTERS
DESCRIBED IN THE PROXY.
A shareholder or intermediary may indicate the manner in which the persons named
in the enclosed proxy are to vote with respect to any matter by checking the
appropriate space on the proxy.
If the shareholder or intermediary wishes to confer a discretionary authority
with respect to any matter, the space provided on the proxy should be left
blank. IN SUCH INSTANCE, THE NOMINEE, IF ONE IS PROPOSED BY MANAGEMENT, INTENDS
TO VOTE THE SHARES REPRESENTED BY THE PROXY IN FAVOUR OF THE MOTION. The
enclosed proxy, when properly signed, also confers discretionary authority with
respect to amendments or variations to the matters identified in the notice of
meeting and with respect to other matters which may be properly brought before
the meeting. At the time of printing this circular, the management of the
Company is not aware that any such amendments, variations or other matters are
to be presented for action at the meeting. If, however, other matters which are
not now known to the management should properly come before the meeting, the
proxies solicited will be exercised on such matters in accordance with the best
judgment of the nominees.
The proxy must be dated and signed by the shareholder or by his attorney
authorized in writing or by the intermediary. In the case of a corporation, the
proxy must be executed under its corporate seal, if not signed, or signed by a
duly authorized officer of attorney for the corporation with proof of authority
accompanying the proxy.
COMPLETED PROXIES TOGETHER WITH THE POWER OF ATTORNEY OR OTHER AUTHORITY, IF
ANY, UNDER WHICH IT WAS SIGNED OR A NOTARIALLY CERTIFIED COPY THEREOF MUST BE
DEPOSITED WITH MONTREAL TRUST COMPANY OF CANADA, 510 BURRARD STREET, VANCOUVER,
B.C., V6C 3B9 AT LEAST 48 HOURS, EXCLUDING SATURDAYS, SUNDAYS AND HOLIDAYS,
BEFORE THE TIME OF THE MEETING OR ADJOURNMENT THEREOF.
REVOCABILITY OF PROXY
The persons named as proxyholders in the enclosed form of proxy are directors or
officers of the Company.
Any member/shareholder returning the enclosed form of proxy may revoke the same
at any time insofar as it has not been exercised. In addition to revocation in
any other manner permitted by law, a proxy may be revoked by instrument in
writing executed by the member/shareholder or by his attorney authorized in
writing or, if the member/shareholder is a corporation, under its corporate seal
or by an officer or attorney thereof duly authorized, and deposited at the
registered office of the Company, at any time up to and including the last
business day preceding the day of the meeting, or any adjournment thereof.
VOTING SHARES AND PRINCIPAL HOLDERS THEREOF
The Company is authorized to issue 100,000,000 shares without par value (the
"common shares"), of which 36,878,329 common shares were issued on the record
date, April 27, 1998. Of the 36,878,329 common shares issued, 13,410,971 common
shares were held by Gateway Mining Company, which merged with the Company in
1995. Accordingly, the number of outstanding common shares of the Company which
are not held by the Company itself is 23,467,358. The holders of common shares
are entitled to one vote for each common share held. Holders of common shares
of record at the close of business on April 27, 1998 are entitled to receive
notice of and vote at the meeting. The Company has only one class of shares.
To the knowledge of the directors and senior officers of the Company, no person
beneficially owns, directly or indirectly, or exercises control or direction
over shares carrying more than 10% of the voting rights attached to all shares
of the Company except as follows:
Name Number of Shares Percentage of Issued Capital
Cede & Co. (1) 14,166,561 60%
(1) The Company is not aware of the beneficial owners of these shares which are
registered in the name of the intermediary indicated above.
AUTHORIZATIONS FOR APPROVAL
Any matter submitted at the annual general meeting for approval of the
members/shareholders shall require a majority vote of more than 50% of the
members/shareholders present at the meeting and voting either in person or by
proxy concerning said issues.
Shares that abstain or withhold from voting as to a particular matter and shares
held in "street name" through a clearing firm, brokerage firm or similar nominee
which indicates on its proxy that such nominee does not have discretionary
authority to vote such shares as to a particular matter will be counted for
purposes of determining whether sufficient shares are represented to constitute
a quorum authorized to conduct an annual general meeting of the shareholders.
Directors are elected and auditors are appointed by a plurality of the votes
cast. With respect to the election of directors, the number of nominees
equivalent to the number of directors to be elected who receive the highest
number of votes cast are elected. With respect to the appointment of auditors,
the auditors receiving the highest number of votes cast are appointed. In both
cases, shares that abstain or withhold from voting and broker non-votes are not
counted, and will have no effect on the outcome of such votes.
Ordinary resolutions, as defined by law, are adopted if approved by a majority
of the votes cast, and shares that abstain or withhold from voting and broker
non-votes are not counted. Therefore, shares that abstain or withhold from
voting and broker non-votes have the effect of a vote against such ordinary
resolutions.
RECORD DATE
Any shareholder of record at the close of business on April 27th, 1998 who
either personally attends the meeting or has completed and delivered a form of
proxy in the manner and subject to the provisions described above will be
entitled to vote or to have his shares voted at the meeting.
FINANCIAL STATEMENTS
The audited comparative financial statements of the Company for the year ended
December 31st, 1997 and the auditors' report thereon accompanying this circular
will be placed before the meeting for consideration by the members.
ELECTION OF DIRECTORS
At the meeting, shareholders will be asked to fix the number of directors at
seven. A majority of the directors must be residents of Canada. The directors
of the Company are elected at each annual general meeting and hold office until
the next annual general meeting or until their successors are appointed. In the
absence of instructions to the contrary, a properly executed and returned proxy
will be voted for the nominees herein listed.
Management of the Company proposes to nominate each of the following for
election as a director. Information concerning such persons, as furnished by
the individual nominees, is as follows:
Principal Occupation Number of
or Employment and, if Common Shares
not a Previously Beneficially
Elected Director, Previous Owned or
Name, Municipality of Occupation During the Service as a Controlled (2)
Residence and Position Past 5 Years Director
- ---------------------- --------------------- -------------- --------------
ROBERT W. GENTRY Businessman and Since May, 316,200(3)
Dallas, TX Investment Advisor 1995
Chairman of the Board
and Director
GERALD G. CARLSON (1) President and Chief Since 18,000
West Vancouver, BC Executive Officer of December, 1996
President, Chief La Teko; past
Executive Officer and President, Vice-
Director President and
Exploration
Geologist in mining
companies with
exploration
activities in
Canada, Mexico and
the Northwest
Territories
JOHN S. AUSTON (1) Mining Executive Since June, 4,000
West Vancouver, BC 1996
Director
DOUGLAS R. BEAUMONT Mining Executive, Since June, None
Toronto, ON retired 1995
Director
GORDON J. FRETWELL Lawyer through his own Since 3,000
West Vancouver, BC law firm November, 1995
Secretary and Director
JOHN R. HARDESTY (1) Businessman, Since May, 60,000
Laughlin, NV manufacturing, 1995
Director finance,
administration,
sales and business
planning
STUART HAVENSTRITE Geologist Since June, 10,000
Sandy, UT 1997
Director
- ----------
(1) Member of the Audit Committee
(2) Shares beneficially owned, directly or indirectly, or over which control or
direction is exercised, as of April 27, 1998, is based upon information
furnished to the Company by the individual directors. Unless otherwise
indicated, such shares are held directly.
(3) Includes 16,200 shares beneficially owned in the name of Mr. Gentry's minor
children.
DIRECTORS AND EXECUTIVE OFFICERS
The following is a listing of the current directors and officers of the Company:
Robert W. Gentry [50] Chairman of the Board and Director
Gerald G. Carlson [52] President, Chief Executive Officer and Director
Gordon Fretwell [45] Secretary and Director
John S. Auston [60] Director
Douglas R. Beaumont [65] Director
John R. Hardesty [58] Director
Stuart Havenstrite [65] Director
Directors have been elected to serve until the next general meeting of
shareholders. Based upon Canadian corporate regulatory provisions, a majority
of the Company's directors must be Canadian residents.
Gerald G. Carlson, John Auston and John Hardesty were appointed to serve as the
Company's audit committee. The audit committee recommends the appointment of
Bedford Curry as auditors for the Company for 1998. This committee reviews
internal accounting and auditing policies and procedures, budgets, scope of
audit and programs to comply with applicable regulatory and other accounting and
income tax requirements relating to financial matters. These functions were
accomplished during regular directors' meetings held throughout the year.
During 1997, there were 13 directors' meetings held, including 9 which were
telephone meetings. None of the directors attended fewer than 75% of the
meetings called. In addition to formal actions of the board of directors, the
directors participated in separate matters during the year which were documented
by unanimous consent forms, together with numerous informal discussions held
among the directors concerning other business matters. The directors have not
appointed a nominating committee.
BUSINESS BIOGRAPHIES
Officers and Directors
ROBERT W. GENTRY is the President, Director and co-owner of Genoa Management
Company, a certified investment advisory company specializing in asset and
portfolio management advice to 23 independent Texas community banks. He has
held several key positions with the Ford Bank Group from 1982 through 1992
including that of Senior Vice President, First National Bank, Lubbock, Texas,
President/CEO of United National Bank of Denton, Texas, President/CEO of First
National Bank of Borger, Texas, Organizing President of United National Bank of
Dallas, Texas, and Organizing Vice-Chairman of Ford Capital, Ltd., Dallas,
Texas. He is also Chairman of the Board of Lake Cities State Bank in Lake
Dallas, Texas; and President of Lake Cities Financial Corporation. Mr. Gentry is
a graduate of Texas Tech University with a B.A. degree in finance. Mr. Gentry
became a Director of La Teko in May 1995 and served as Corporate President from
February 27, 1996 to December 2, 1996.
GERALD G. CARLSON, Ph. D., P. Eng. has been involved in mineral exploration and
junior exploration company management for over 25 years. Mr. Carlson's
educational background includes the following degrees: B.A. Sc. 1969 from the
University of Toronto; M.Sc. 1974 from Michigan Technological University and Ph.
D. 1978 from Dartmouth College, New Hampshire. He is past President of ConSil
Corp., past Vice President, exploration, for Dentonia Resources Ltd. Both
positions included management of exploration activities in Mexico and the
Northwest Territories. He became President, Chief Executive Officer and a
Director of La Teko on December 2, 1996 and continues to serve as a member of
the Board of Directors of Dentonia Resources Ltd.
GORDON J. FRETWELL has been engaged for over 15 years in the private practice of
law, in the last several years through his own law firm in Vancouver, British
Columbia. Mr. Fretwell specializes in securities and mining law and acts for
several public companies engaged in the mineral resource sector. Mr. Fretwell
was appointed as a Director of the Company on November 24, 1995 and was elected
Corporate Secretary on February 27, 1996.
JOHN S. AUSTON is a geologist with 39 years of diversified world-wide experience
in the precious metals, base metals, uranium and coal mining industries in
Canada, the United States and Australia. He was involved in a senior capacity
for many years in the Canadian, U.S. and Australian exploration and mining
activities of the Selection Trust Group of London and British Petroleum. He is
past President and CEO of Granges, Inc. and HyCroft Resources of Vancouver and
is currently President, CEO and a Director of Ashton Mining of Canada Inc. of
Vancouver. Mr. Auston is a graduate of McGill University with the degrees of
Bachelor of Science and Master of Science (Applied). He became a Director of La
Teko on June 5, 1996.
DOUGLAS R. BEAUMONT is a professional engineer. His forty years of mining
experience include project development and design and operation of mineral
processing plants. He retired in 1997 from his position as Senior Vice
President - Technical for Kilborn, SNC - Lavalin, having joined the Kilborn
group of companies in 1979, and serving as Executive Vice President for
international operations. He became a Director of La Teko on June 5, 1996.
JOHN R. HARDESTY has been for over five years the owner and President of Thermo
Dynamics, Inc., Laughlin, Nevada and Chairman of Electro Dynamics Crystal
Corporation, Inc., Overland Park, Kansas. He is a previous owner of Dixson,
Inc., Grand Junction, Colorado. He is a graduate of Wayne State University with
a B.S. degree in business administration, majoring in accounting. He is a non-
practicing certified public accountant having been a past Audit Manager with
Ernst & Young, Certified Public Accountants from 1962 through 1968. From 1968
through 1986 he was involved extensively in corporate finance and sales with
other business entities. He has been an operations manager with expertise in
manufacturing, finance, administration, sales and corporate strategic planning
and acquisitions. Mr. Hardesty currently serves as a Director of Powerhouse
Technologies. He became a La Teko Director in May 1995.
STUART HAVENSTRITE has a B.S. in Geology from Stanford University. He has been
President of Havenstrite Management Services Inc. since 1990. The Company
provides consulting services in evaluation, exploration and development of
mining properties in the United States, Canada and Mexico. From 1970 until
1990, Mr. Havenstrite held several positions, including President and Director
of Silver King Mines Inc. (changed to Alta Gold Inc. in 1987).
Corporate Affairs Manager
MARK FIELDS, P.Geo., has a Bachelor of Commerce (Honours) from Queen's
University in Kingston, Ontario in 1976 and a Bachelor of Science in Geology
from the University of British Columbia in 1986. He joined the Company on
August 25, 1997 as Corporate Affairs Manager. He worked with the Rio Tinto
group from 1991 to 1997 where he participated in the successful acquisition and
development of the Lac de Gras diamond interests. From 1998 to 1991 he was
employed by First Exploration Fund which provided financing to 75 junior
Canadian exploration companies for projects across Canada.
Consulting Geologist
RICHARD A. HUGHES was the Project Manager for the Ryan Lode Mine, a position
which he held from March, 1993 to December, 1997. Mr. Hughes was President and
Mining Consultant for BTW Mining & Exploration from 1983 to 1994. From 1988 to
1989, Mr. Hughes was employed by Valdez Creek Mining Company, Inc., as the
general manager of a large open-pit placer mining and wash plant operation.
Prior to that time, from 1981 to 1987, Mr. Hughes was with ARCO Alaska, Inc., as
the quality assurance and safety Director at Prudhoe Bay, Alaska. From 1977 to
1981, Mr. Hughes worked with Exxon Minerals Company, where he was the Project
Manager of an underground project in New Mexico and assistant manager of a
uranium operation in Wyoming. Mr. Hughes has been employed in the mining
industry in various other capacities since 1960. He is a registered
professional mining engineer in Alaska and Nevada. Mr. Hughes received a
Bachelor of Science degree in Mining Engineering from the University of Nevada
in 1960.
COMPLIANCE WITH SECTION 16(a) OF THE UNITED STATES SECURITIES AND EXCHANGE ACT
OF 1934
Based solely upon a review of Forms 3, 4, and 5 and amendments thereto,
furnished to the Company during or respecting its last fiscal year, no person
who, at any time during the most recent fiscal year, was a Director, officer,
beneficial owner of more than 10% of any class of equity securities of the
Company or any other person known to be subject to Section 16 of the Exchange
Act failed to file, on a timely basis, reports required by Section 16(a) of the
Exchange Act, except that Stuart Havenstrite failed to timely file one report
regarding the acquisition of common stock and one report regarding the grant of
an option to purchase common stock.
EXECUTIVE COMPENSATION
On June 5, 1997, Robert W. Gentry was elected Chairman of the Board of
Directors. He served as President of La Teko until December 2, 1996 and
continues to serve as a Director of the Company.
Gerald G. Carlson became President and Chief Executive Officer of La Teko and
was appointed to the Board of Directors on December 2, 1996. Annual
compensation pursuant to an employment agreement dated December 2, 1996 is
approximately US$104,000 per annum.
Summary Compensation
The following table sets forth the compensation received by each person who
served as the Chief Executive Officer of the Company during 1997 (a "Named
Executive Officer"). No other executive officer received compensation in excess
of $100,000 for any such year. All monetary figures are in United States
dollars.
[CAPTION]
<TABLE>
LONG TERM COMPENSATION
---------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
----------------------------- ------------------------------
(A) (B) (C) (D) (E) (F) (G) (H) (I)
OTHER SECURITIES ALL
ANNUAL RESTRICTED UNDERLYING OTHER
NAME AND YEAR COMPEN- STOCK OPTIONS/ LTIP COMPEN-
PRINCIPAL ENDED SALARY BONUS SATION AWARD(S) SARS PAYOUTS SATION
POSITION DEC. 31, ($) ($) ($) ($) (NO.) ($) ($)
- ------------ -------- ------ ----- ------ --------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gerald G. 1997 $104,016 -- -- -- -- -- --
Carlson
President 1996 8,837 -- -- -- 500,000 -- --
(CEO)
1995 120,000 -- -- -- 100,000 -- --
</TABLE>
- -------------
(1) Includes amounts paid to the Named Executive Officer for services rendered
by such Named Executive Officer as a director of the Company.
(2) These options vested as to 200,000 upon granting, 100,000 on 12/10/97 and
will vest as to 100,000 on each anniversary date of granting for the next 2
years.
Options/SAR Grants in Last Fiscal Year
No individual grants of options and stock appreciation rights ("SARs") were made
during the last completed fiscal year to a Named Executive Officer of any other
executive officer of the Company.
Aggregate Option/SAR Exercises in Last Fiscal Year and Year End Option/SAR
Values
The following table sets forth information respecting the exercise of options
and SARs during the last completed fiscal year to a Named Executive Officer of
the Company and the fiscal year end values of unexercised options and SARs. All
figures are in United States dollars.
(A) (B) (C) (D) (E)
NUMBER OF VALUE OF
SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS/SARS AT
SHARES VALUE OPTIONS/SARS AT FY FY END
NAME ACQUIRED ON REALIZED END (NO.) ($)
EXERCISE ($) EXERCISABLE/ EXERCISABLE/
(NO.) UNEXERCISABLE(2) UNEXERCISABLE(1)
- ------------ ----------- -------- ----------------- ------------------
Gerald G. Nil Nil 300,000/200,000 $0 /$0
Carlson
- ---------
(1) Market price at December 31, 1997 was $0.69 per share.
(2) These options vested as to 200,000 upon granting, 100,000 on 12/10/97 and
will vest as to 100,000 on each anniversary date of granting for the next 2
years.
Executive Compensation and Benefits
On December 2, 1996 Gerald Carlson was elected President and CEO of the Company
to succeed Robert W. Gentry and was also appointed a director. At that time, he
was granted options to acquire 500,000 shares of La Teko stock at US$1.85 per
share, 85% of the then existing market price. Two hundred thousand shares of
the options were exercisable upon grant, 100,000 shares were exercisable on
12/10/97 and 100,000 shares each become exercisable on each successive
anniversary date following the date of grant for the next two years. Each
tranche of options are exercisable for five years following the date they
initially become exercisable.
Mr. Carlson is employed under a letter agreement dated December 2, 1996, for an
initial term of three years as President and Chief Executive Officer of the
Company. The Company pays Mr. Carlson a salary of Cdn$12,000 per month and
provides him with a leased automobile. In the event of certain change of
control transactions which result in Mr. Carlson no longer serving as President
and Chief Executive Officer, he will receive a severance package of Cdn$144,000,
and 50% of his unvested stock options will immediately vest if the change in
control occurs in the first year of employment and all unvested options will
immediately vest if the change in control occurs thereafter.
The Company has no pension, retirement or similar benefits for officers,
directors or other employees of the Company. Effective March, 1992, the Company
initiated a medical and life insurance plan for the benefit of all eligible
employees. Currently, the Company pays 85% of insurance premiums.
Compensation of Directors
Based on authority of the board of directors granted November 19, 1991, the
Company in the past has paid directors' fees at a rate of $750 per meeting
attended by each director plus travel and subsistence expenses. A similar fee
per meeting was paid to members of the board of directors serving on executive
committees of the board of directors. The Company also paid a $100 directors'
fee for director meetings held by telephone.
In December 1997, the directors decided that the directors fees be forgone until
the Company is more robust financially.
During 1997 the board of directors received the following amount for directors'
fees:
Executive Officer and
Director Amount (US$ dollars)
----------------------- ----------------------
Robert W. Gentry 4,100
Gordon J. Fretwell 4,100
John S. Auston 4,000
Douglas R. Beaumont 4,100
John R. Hardesty 4,100
Stuart Havenstrite 1,250
In addition, Gordon Fretwell received, through his law corporation, an aggregate
of C$65,793.05 as legal fees and corporate representation for acting as
solicitor of the company for 1997.
Termination of Employment or Change of Control
The employment agreement between the Company and Gerald G. Carlson dated
December 2, 1996 provides that in the event of termination or a change of
control which results in Mr. Carlson no longer serving as President and Chief
Executive Officer of the Company, Mr. Carlson will receive a severance package
of one year's salary (Cdn $144,000). In addition, 50% of Mr. Carlson's unvested
stock options will immediately vest if the change in control occurs in the first
year of employment and all of his unvested options will immediately vest if the
change in control occurs thereafter.
Indebtedness to Company of Directors and Officers
None of the directors or senior officers of the Company are indebted to the
Company.
Compensation Committee Interlocks and Insider Participation
The Company does not have a formal Compensation Committee. Compensation to
executive officers is determined by the Board of Directors. There were no
directors or executive officers that were functioning in interlocking boards or
committees of other entities.
Report on Executive Compensation
On December 2, 1996 Gerald Carlson was elected President and CEO of the Company
to succeed Robert W. Gentry and was also appointed a director. At that time, he
was granted options to acquire 500,000 shares of La Teko stock at US$1.85 per
share, 85% of the then existing market price. Two hundred thousand shares of
the options were exercisable upon grant, 100,000 shares were exercisable on
12/10/97 and 100,000 shares each become exercisable on each successive
anniversary date following the date of grant for the next two years. Each
tranche of options are exercisable for five years following the date they
initially become exercisable.
Mr. Carlson is employed under a letter agreement dated December 2, 1996, for an
initial term of three years as President and Chief Executive Officer of the
Company. The Company pays Mr. Carlson a salary of Cdn$12,000 per month and
provides him with a leased automobile.
This report is provided by the incumbent members of the board of directors that
were in office on April 27, 1998.
Stock Option Plans
(i) The Company has no plans other than as set out herein pursuant to which
cash or non-cash compensation was paid or distributed to the executive
officers during the most recently-completed financial year or is proposed
to be paid or distributed in a subsequent year.
(ii) The Company presently has a formalized stock option plan for the granting
of incentive stock options to the executive officers, employees or
directors of the Company. To date, the Company has granted stock options
to certain executive officers, employees or directors of the Company
pursuant to the policies of the Vancouver Stock Exchange. The purpose of
granting such options is to assist the Company in compensating, attracting,
retaining and motivating the executive officers, directors and employees of
the Company and to closely align the personal interests of such persons to
that of the shareholders.
STOCK OPTION PLAN
General
The Company currently has a formal stock option plan under which it issues
incentive stock options.
Under the Stock Option Plan, a total of 2,500,000 common shares have been
allotted and reserved for issuance pursuant to directors' and employees' stock
options granted by the Company, of which 1,624,000 have been previously granted
and approved, representing, in total, approximately 10% of the currently issued
and outstanding share capital of the Company.
Terms of the Stock Option Plan
The Stock Option Plan will terminate when all of the options have been granted
or when the plan is otherwise terminated by the Company. Any options
outstanding when the plan terminated will remain in effect until they are
exercised or they expire.
The Stock Option Plan provides that stock options can be issued to "Eligible
Persons" which, in summary, means a director, officer, employee, part-time
employee or consultant of the Company or any of its affiliates or subsidiaries.
The plan provides that it is solely within the discretion of the Board to
determine who should receive options and in what amounts.
Options granted under the plan will be for a term not to exceed 10 years from
the date of their grant. The options will be non-assignable except that they
will be exercisable by the personal representative of the option holder in the
event of the option holder's death.
The options will be exercisable at a price which is not less than the closing
price of the Company's shares on the Exchange on the trading day preceding the
day the options are granted.
The Company will not issue shares pursuant to options granted under the plan
until the shares have been fully paid for. The Company will not provide
financial assistance to option holders to assist them in exercising their
options.
The Plan is intended to assist the Company in attracting competent individuals
to serve as directors and ensure the retention of the services of existing
directors by permitting such individuals to participate in ownership in the
Company and to share in increases in the value which they help produce.
Current Directors and Officers Stock Options
The members/ shareholders of the Company will be asked to approve and ratify
incentive stock options, and amendments to incentive stock options, to purchase
shares of the Company granted to insiders of the Company which have not
previously been approved by members and to authorize the directors in their
discretion to grant stock options to insiders and to amend stock options granted
to insiders during the ensuing year.
To date, the Company's policy with respect to Directors' Stock Options provides
that each director of the Company, including directors that are subsequently
appointed, is to receive a Director Option to purchase common stock. Each
Director will receive Director Options that are immediately exercisable to
purchase 25,000 shares of common stock and vest on the next three anniversary
dates of their grant to purchase an additional 25,000 shares of the Company's
common stock. Director Options may be exercised, in whole or in part, for a
period of five years from the date such portion of such Directors' Options first
becomes exercisable, subject to continued service by the holder as a director of
the company. Director Options granted will be exercisable during the applicable
exercise period at an exercise price equal to the greater of the closing price
on the last trading day preceding the announcement of the granting of the stock
option. The number of shares under option from time to time and the exercise
prices of such options, and any amendments thereto, will be and have been
determined by the directors in accordance with the policies of the Vancouver
Stock Exchange.
In the event of a merger or in the case of the Company being sold, the Board of
Directors agreed to amend the vesting schedule of directors options so that a
director's 100,000 share option would be exercisable to the extent of 50,000
shares upon sale or merger during the first term of a director's participation
as a director, and that the balance, aggregating the full 100,000 shares be
exercisable upon sale or merger if such a transaction were to occur after the
first term that a director served in such capacity. In essence, if negotiations
and the consummation of a transaction extend beyond the first term of a
director's appointment, the full balance of the outstanding options would vest
upon the closing of the sale or merger or other similar corporate transaction or
reorganization.
The granting of stock options to directors of the Company is intended to assist
the Company in attracting competent individuals to serve as directors and ensure
the retention of the services of existing directors by permitting such
individuals to participate in ownership in the Company and to share in increases
in the value which they help produce.
The following table summarizes information regarding Officer/Director Stock
Options previously approved by the Board of Directors including the name of
each Optionee, the number of shares of Common Stock issuable on exercise of each
Optionee's Option ("Option Shares"), the expiration date of each Option, and the
applicable category of each Option:
Exercise Price
Name Option Shares (US$) Expiry Date
- ----------------- -------------- -------------- --------------
Gerald G. Carlson 500,000 (1) $1.85 12/10/2001-04
Robert W. Gentry 100,000 $1.60 11/16/2000-03
100,000 (2) $2.50 03/14/2001
Gordon J. Fretwell 100,000 (2) $1.60 11/16/2000-03
John R. Hardesty 100,000 (2) $1.60 11/16/2000-03
John S. Auston 100,000 (2) $2.41 06/05/2001-04
Douglas R. Beaumont 100,000 (2) $2.41 06/05/2001-04
Stuart Havenstrite 24,000 $1.60 08/17/99
100,000 (2) $1.50 07/16/2000-05
- ----------
(1) These options are exercisable as to 200,000 upon granting, 100,000 on
12/10/97 and vest as to 100,000 on each of the anniversary dates of
granting for 2 years.
(2) These options are exercisable as to 25,000 shares upon granting and vest on
the next three anniversary dates of their grant to purchase an additional
25,000 common shares.
Each of the options listed above is contingent upon the optionee's continued
employment with the Company. These options are exercisable, in whole or in
part, for a period of five years from the date such portion of such option first
becomes exercisable subject to continued service by the holder as a director of
the Company. These stock options are included under the Company's Stock Option
Plan approved by the Vancouver Stock Exchange.
Generally, in the event that an Optionee ceases to be an employee, director or
officer of the Company, as applicable, prior to the expiration date of the
Optionee's Option, such Option, to the extent it remains unexercised, shall
terminate and be deemed null and void on the earlier of the expiration date or
the date that is thirty (30) days from the date the Optionee ceases to be an
employee, director or officer of the Company, as applicable. In the event that
an Optionee dies on or prior to the expiration date while an employee, director
or officer of the Company, as applicable, the Optionee's Option, to the extent
it remains unexercised, may be exercised by the legal representative of the
Optionee at any time before the earlier of the expiration date or the date that
is one year following the date of death of the Optionee.
The Options are not assignable by the respective Optionee, or the Optionee's
legal representative, except by will or the laws of intestacy and may be
exercised during the Optionee's lifetime only by the Optionee or, after the
death, by the Optionee's legal representative as described above.
The terms of each Option may be amended only by means of a joint written
agreement between the Company and the respective Optionee.
Shareholder Approval
Approval of the grant of the Options not previously approved requires the
approval of a majority of the shares present in person or by proxy and entitled
to vote at the Annual Meeting. Abstentions will not be counted in determining
whether such options are approved by the shareholders.
Income Tax Consequences
The following discussion of the income tax consequences of the Options is only a
summary, does not purport to be complete, and does not cover, among other
things, state, provincial and local tax consequences. In addition, differences
in each Optionee's financial situations may cause Federal, state, provincial and
local tax consequences of the Options to vary.
U.S. Taxes
The following summary of the major U.S. income tax consequences of the Options
is based on the pertinent provisions of the Code, the applicable regulations
promulgated by the Treasury Department under the Code (the "Regulations"),
judicial and administrative interpretations of the Code and Regulations, the
U.S.-Canada Income Tax Convention (the "Convention"), and the current
interpretations thereof. The Optionees should be aware that the Code, the
Regulations, the Convention and interpretations are subject to change and that
such changes may be given retroactive effect. The Options have not been granted
and issued in accordance with the requirements of Section 422 of the Code and,
therefore, do not qualify as incentive stock options under the Code. The
Options also do not qualify under Section 401(a) of the Code as qualified
pension, profit sharing, or stock bonus plans.
Treatment of Non-qualified Options
Under the current provisions of the Code, the following consequences will result
from the grant and exercise of the options pursuant to the Options (assuming
there is not an active trading market for the options of the Company): (i) on
the date of grant, the Company will be entitled to deduct as compensation
expense for financial statement purposes, an amount equal to the per-share
exercise price on the date of the grant times the number of shares available for
exercise; (ii) income will not be recognized by the Optionee at the time of the
grant of the Option; however, (iii) on exercise of the Option the Optionee will
realize ordinary income in an amount equal to the excess of the fair market
value of the Option Shares acquired at the time of exercise over the Option
exercise price; (iv) upon the sale of the Option Shares acquired pursuant to the
exercise of an Option, the Optionee will realize short-term or long-term capital
gain or loss, as the case may be, in an amount equal to the difference between
the amount realized on such sale and the Optionee's tax basis in the Option
Shares (as described below); and (v) the Company will be entitled to record a
compensation expense for Federal and state income taxation purposes in an amount
equal to the ordinary income recognized by the Optionee as set forth in clause
(iii) above.
If the payment of the exercise price is made entirely in cash, the tax basis of
the Option Shares will be equal to the Option exercise price paid, if any, plus
the ordinary income recognized by the Optionee, which sum should equal the fair
market value of the shares of the Option Shares acquired on the date of
exercise, and the holding period will begin on the day after the tax basis of
the shares is so determined.
The ordinary income received by the Optionee on the exercise of an Option is
considered compensation from the Company. As with other forms of compensation,
withholding tax and other trust fund payments will be owed with respect to the
exercise of the Option. The Company may accept payment of such withholding tax
or other trust fund payments in one or more of the following ways; (i) the
Optionee may pay the required taxes to the Company together with the exercise
price of shares being acquired; (ii) the Optionee delivering shares of Common
Stock with a fair market value equal to such requirements; (iii) the Company
withholding Option Shares subject to the Option, with a fair market value equal
to such requirements; or (iv) the Company making such withholding or other trust
fund payments and the Optionee reimbursing the Company such amount paid within
10 days after written demand therefor from the Company.
Investment by a U.S. Person in a Foreign Corporation
Because the Company is a foreign corporation, the acquisition of the Option
Shares by an Optionee on exercise of an Option may subject the Optionee to
certain rules and provisions not otherwise applicable to shareholders of a
domestic corporation.
Among other things, Section 367(a) of the Code may apply to situations involving
a direct or indirect transfer of appreciated property by a U.S. person to a
foreign corporation in a transaction otherwise qualifying as a corporate
organization, reorganization, or liquidation. In such situations, the transfer
of property may be treated as a taxable exchange rather than as a tax-free
transaction to prevent U.S. persons from deferring taxes on gain by using a tax-
free transaction to transfer appreciated assets to a foreign corporation.
The Code requires U.S. shareholders of a "controlled" foreign corporation to
report currently their pro rata share of certain categories of foreign income
even though it is not distributed to them. In addition, the Code provides that
in some circumstances a shareholder's gain on a sale, exchange, or redemption of
the stock of a controlled foreign corporation or on a liquidating distribution
from the foreign corporation is taxable as ordinary dividend income rather than
as capital gain. The Company believes that it should not be treated as a
controlled foreign corporation. There can be no assurance that the Company will
not in the future be treated as a controlled foreign corporation, thereby
subjecting the U.S. shareholders to the reporting requirements described above.
U.S. persons owning an interest in the Company may also be required to recognize
gain under Section 367(b) of the Code on certain transfers by the Company to a
U.S. corporation or to another foreign corporation to prevent the permanent
avoidance of U.S. tax on the accumulated earnings and profits of the Company
attributable to the portion of its stock owned by U.S. persons.
Citizens and residents of the U.S., as well as domestic corporations, are
subject to U.S. income tax on their income from all sources, including income
from foreign sources. To avoid any income being subject to taxation both in
Canada and in the U.S., a credit against U.S. income taxes is allowed for taxes
paid to the foreign jurisdiction, subject to limitations to prevent taxpayers
from using foreign tax credits to reduce U.S. tax liability on income from
sources within the U.S.
Canadian Taxes
The following summary of the major Canadian income tax consequences of
participation in the Options is based on the pertinent provisions of the
Canadian Income Tax Act (the "Canadian Tax Act") and accompanying regulations
(the "Canadian Regulations"), the Convention, and current interpretations
thereof. The Optionees should be aware that the Canadian Tax Act, the Canadian
Regulations, the Convention and interpretations are subject to change and that
such changes may be given retroactive effect.
For Canadian residents, stock option benefits are taxable as employment income
under the Canadian Tax Act. Generally, the value of the benefit is the
difference between the cost of the shares to the optionee and their fair market
value at the time they are acquired from the Company. To prevent double
taxation of the same gain, the value of any benefit included in a taxpayers
employment income is added to the cost base of the shares acquired. Thus, any
subsequent gain or loss on the disposition of the shares will be reduced or
increased accordingly.
Non-residents are not subject to any Canadian Tax in respect of benefits
received when stock options are exercised.
Canadian resident individuals and corporations who dispose of shares must pay
tax on 3/4 of the gain realized on those shares.
Persons resident outside Canada, however, are subject to the capital gains rules
only in relation to dispositions of "Taxable Canadian Property." "Taxable
Canadian Property" generally will not include shares in companies listed on
Canadian Stock Exchanges, so long as the non-resident shareholder controls less
than 25% of the issued shares of the Company.
However, if a non-resident disposes of shares that are "Taxable Canadian
Property," he or she can proceed in two (2) ways under the Canadian Tax Act:
1) Certificates of Compliance Obtained in Advance:
The non-resident vendor may file a prescribed form of notice in advance of the
disposition. If there is an expected capital gain and the vendor pays 33 1/3%
of the gain on account of the vendor's tax liability or provides acceptable
security, Revenue Canada will issue a Certificate of Compliance.
2) No Certificate of Compliance Obtained:
If the non-resident vendor does not obtain a Certificate of Compliance, or if
the proceeds of disposition are higher than originally stated in the notice, the
purchaser may be liable to pay on account of the vendor's tax liability, an
amount equal to 33 1/3% of the purchase price of the property.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the Company's security ownership information as
of April 27, 1998 for each director and for all officers of the Company as a
group. There were no shareholders believed by the Company to own beneficially
more than 5% of the Company's common stock.
PERCENTAGE
NUMBER OF OF
NATURE OF SHARES/OPTIONS OWNERSHIP
NAME OF BENEFICIAL OWNER OWNERSHIP(1) (3) (2)
- ------------------------- ------------- -------------- ----------
Gerald G. Carlson Common Stock 18,000 --
Options 300,000 1.2%
--------- ----
Total 318,000 1.3
Robert W. Gentry Common Stock 316,200 (4) 1.3
Options 175,000 0.7
--------- ----
Total 491,200 2.0
John R. Hardesty Common Stock 60,000 0.2
Options 75,000 0.3
--------- ----
Total 135,000 0.5
Gordon J. Fretwell Common Stock 3,000 --
Options 75,000 0.3
--------- ----
Total 78,000 0.3
John S. Auston Common Stock 4,000 --
Options 50,000 0.2
--------- ----
Total 54,000 0.2
Douglas R. Beaumont Common Stock -- --
Options 50,000 0.2
--------- ----
Total 50,000 0.2
Stuart Havenstrite Common Stock 10,000 --
Options 49,000 0.2
--------- ----
Total 59,000 0.2
All Executive Officers and Common Stock 411,200 1.7
Directors
Options 774,000 3.1
--------- ----
Total 1,185,200 4.8
- ----------
(1) Unless others indicated, all securities are owned beneficially and of
record, and such record stockholder has sole voting, investment and
dispositive power.
(2) Calculations of total percentages of ownership outstanding for each
individual assumes the exercise of options held by that individual to which
the percentage relates. Percentages calculated for totals of all executive
officers and directors as a group assume the exercise of all options held
by the indicated group.
(3) These options figures only include the number of options that are
exercisable as of the date hereof. See "Current Directors and Officers
Stock Options".
(4) Includes 16,200 shares in the name of Mr. Gentry's minor children.
CERTAIN RELATIONS AND RELATED TRANSACTIONS
The Company granted stock options to officers, directors and employees in the
aggregate amount of 250,000 shares in fiscal year 1997 as explained in
"Executive Compensation" and "Interest of Insiders in Material Transactions" of
this report.
INTEREST OF INSIDERS IN MATERIAL TRANSACTIONS
No insider or proposed nominee for election as a director of the Company and no
associate or affiliate of the foregoing persons has or has had any material
interest, direct or indirect, in any transaction since the commencement of the
Company's last completed financial year or in any proposed transaction which in
either such case has materially affected or will materially affect the Company
except as follows:
Grant of Stock Options in 1997 Fiscal Year
Name of Insider Number of Options Exercise Price Date of Grant
- ------------------ ----------------- -------------- -------------
Stuart Havenstrite 100,000 (1) US$1.50 07/16/97
(1) These options are exercisable as to 25,000 upon granting and vest as to
25,000 on each anniversary date of granting for the next 3 years.
PERFORMANCE GRAPH
The graph on the following page shows the cumulative percentage change of total
shareholder return on the Company's common stock compared to the cumulative
total results of other stock market indexes. 1) A peer group of US companies;
2) Standard & Poor's Gold Precious Metals Index; 3) Nasdaq Composite index. The
time period graphed is the period from December 31, 1992 through December 31,
1997.
The peer group of small market capitalization North American gold mining
companies includes data from ten companies, all of which are listed on NASDAQ.
Peer Group: Alaska Apollo Resources, Commerce Group, Consolidated Nevada
Goldfields, Cornucopia Resources, Gold Standard, Golden Quail Resources, Inland
Resources, North Lily Mining, Pacific Sentinel Gold and Silverado Mines.
The NASDAQ Stock Market (US companies) index is an index comprising all domestic
common shares traded on the NASDAQ national market and the NASDAQ small cap
market. The Standard & Poor's Gold Precious Metals Index includes data from six
large North American gold mining companies, Barrick Gold Corporation, Battle
Mountain Gold Company, Echo Bay Mines Ltd., Homestake Mining Company, Newmont
Gold Company and Placer Dome Ltd.
The Peer Group Index is skewed inordinately upward by one company, Inland
Resources Inc., which is no longer involved in the gold exploration and
development business. Inland Resources Inc.' s business is the acquisition,
development and enhancement of oil and gas properties, and the refining and
wholesale marketing of oil and gas products. For this reason, a Modified Peer
Group Index, excluding Inland Resources Inc., is shown below.
At December 31,
-------------------------------------------------
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
La Teko performance 100 188 163 176 129 49
Peer Group 100 164 137 188 166 130
performance
Modified Peer Group 100 162 135 145 88 35
Performance
Nasdaq Comp 100 115 111 156 191 232
Performance
S&P Gold Precious 100 183 148 167 165 109
Metals Index
APPOINTMENT OF AUDITOR
Unless otherwise instructed, the proxies given pursuant to this solicitation
will be voted for the appointment of Bedford Curry, Chartered Accountants,
Vancouver, B.C., Canada as the auditor of the Company to hold office for the
ensuing year at a remuneration to be fixed by the directors. It is not
anticipated that a representative of Bedford Curry will be present at the
meeting, but if a representative is present, such representative will have the
opportunity to make a statement if they desire to do so and will be available to
respond to appropriate questions.
MANAGEMENT CONTRACTS
None other than as disclosed elsewhere herein.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Except as set herein, no director or senior officer of the Company or any
proposed nominee of management of the Company for election as a director of the
Company, nor any associate or affiliate of the foregoing persons has any
substantial interest, direct or indirect, by way of beneficial ownership or
otherwise, in matters to be acted upon at the meeting, except that directors
and senior officers of the Company may be granted incentive stock options to
acquire shares of the Company.
PARTICULARS OF OTHER MATTERS TO BE ACTED UPON
Management of the Company is not aware of any other matters to come before the
meeting other than as set forth in the notice of meeting. If any other matters
properly come before the meeting, it is the intention of the persons named in
the enclosed form of proxy to vote the shares represented thereby in accordance
with their best judgment on such matter.
If any shareholder wishes to present a proposal for action at the 1999 annual
meeting of the shareholders, the shareholder must comply with applicable
Securities and Exchange Commission regulations, including adequate notice to the
Company. Any proposal must be submitted in writing by certified mail, return
receipt requested, to La Teko Resources Ltd., 625 Howe Street, #500, Vancouver,
B.C. V6C 2T6, on or before December 30, 1998.
These proxy materials are being distributed to members/shareholders of record as
of April 27, 1998.
FOR THE BOARD OF DIRECTORS
/s/ GERALD G. CARLSON, PRESIDENT
<PAGE>
LA TEKO RESOURCES LTD.
(THE "COMPANY")
P R O X Y
ANNUAL GENERAL MEETING
June 2, 1998
THIS PROXY IS FURNISHED TO SHAREHOLDERS OF THE COMPANY for the Annual General
Meeting of the Members to be held at 10:00 a.m., Vancouver time on the 2nd day
of June, 1998 at the conference room located on the 2nd Floor of 888 Dunsmuir
Street, Vancouver, British Columbia.
The undersigned member/shareholder of the Company hereby appoints Gerald G.
Carlson, or failing him, Gordon J. Fretwell or in place of the foregoing
with full power of substitution, as
- --------------------------------------------
proxy holder for and on behalf of the undersigned to attend the annual general
meeting of the members/shareholders of the Company and at any adjournments
thereof, to act for and on behalf of and to vote the shares of the undersigned
and to cast the number of votes the undersigned would be entitled to cast if
personally present with respect to the matters specified below.
These proxy materials are being distributed to members/shareholders of record as
of April 27, 1998.
The Board of Directors have approved the foregoing proposals and recommend that
the shareholders vote for each of the proposals. Proxies solicited by the
Company will be voted FOR each of the proposals unless a vote against, or an
abstention from, one or more of the proposals is specifically indicated on the
proxy.
IF NO CHOICE IS SPECIFIED, THE SHARES WILL BE VOTED AS IF THE MEMBER HAD
SPECIFIED AN AFFIRMATIVE VOTE.
I direct my proxy to vote as follows:
1) To fix the number of directors at seven.
For ---- Against ----
2) To elect the following persons as directors of the Company for the ensuing
year.
GERALD G. CARLSON
For ---- Withhold Vote ----
ROBERT W. GENTRY
For ---- Withhold Vote ----
JOHN R. HARDESTY
For ---- Withhold Vote ----
JOHN S. AUSTON
For ---- Withhold Vote ----
DOUGLAS R. BEAUMONT
For ---- Withhold Vote ----
GORDON J. FRETWELL
For ---- Withhold Vote ----
STUART HAVENSTRITE
For ---- Withhold Vote ----
3) To appoint Bedford Curry, Chartered Accountants, Vancouver, B.C., Canada as
auditor of the Company for the ensuing year and to authorize the directors
to fix the remuneration to be paid to the auditors.
For ---- Withhold Vote ----
4) To approve and ratify stock options, and amendments to stock options, to
purchase shares of the Company granted to insiders which have not
previously been approved by the members and to authorize the directors in
their discretion to grant stock options to insiders and to amend stock
options granted to insiders during the ensuing year, as more fully set
forth in the information circular accompanying this proxy.
For ---- Against ----
THE PROXYHOLDER MAY AT HIS DISCRETION VOTE ACCORDING TO HIS BEST JUDGMENT UPON
ANY AMENDMENT OR VARIATION OF THE ABOVE MATTERS OR ANY OTHER MATTERS THAT MAY
PROPERLY BE BROUGHT BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF. THE MEMBER
MAY REVOKE THIS DISCRETION BY PLACING HIS INITIALS IN THE SPACE PROVIDED
IMMEDIATELY BELOW:
Voting Discretion:
----------------------
Dated:
--------------------------------
The undersigned hereby revokes any proxy previously given.
EXECUTED on the day of , 1998.
Signature of Member(s) Number of Shares Held
Name of Member(s)
(Please print clearly)
Address
City/Province
NOTES TO INSTRUMENT OF PROXY
1) THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS THE MEMBER/
SHAREHOLDER MAY HAVE SPECIFIED BY MARKING AN "X" IN THE SPACE PROVIDED FOR
THAT PURPOSE. IF NO CHOICE IS SPECIFIED, THE SHARES WILL BE VOTED AS IF
THE MEMBER HAD SPECIFIED AN AFFIRMATIVE VOTE.
2) A MEMBER/SHAREHOLDER HAS THE RIGHT TO APPOINT A PERSON TO REPRESENT HIM AT
THE MEETING OTHER THAN THE PERSONS DESIGNATED IN THE INSTRUMENT OF PROXY.
IF THE MEMBER/SHAREHOLDER DOES NOT WISH TO APPOINT EITHER OF THE PERSONS
NAMED IN THE INSTRUMENT OF PROXY, HE SHOULD STRIKE OUT THEIR NAMES AND
INSERT IN THE BLANK SPACE PROVIDED THE NAME OF THE PERSON HE WISHES TO ACT
AS HIS PROXYHOLDER. SUCH OTHER PERSON NEED NOT BE A MEMBER OF THE COMPANY.
3) NO MATTERS OTHER THAN THOSE STATED IN THE ATTACHED NOTICE ARE KNOWN TO BE
IN PROSPECT FOR THE MEETING, AND MANAGEMENT IS NOT AWARE AS AT THE DATE TO
THE ACCOMPANYING /PROXY STATEMENT, OF ANY AMENDMENTS OR VARIATIONS TO
MATTERS IDENTIFIED IN THE NOTICE OF MEETING OR ANY OTHER MATTERS TO BE
PRESENTED FOR ACTION AT THE MEETING. THIS PROXY CONFERS DISCRETIONARY
AUTHORITY, HOWEVER, WITH RESPECT TO AMENDMENTS OR VARIATIONS TO MATTERS
IDENTIFIED IN THE NOTICE OF MEETING AS WELL AS OTHER MATTERS WHICH MAY
PROPERLY COME BEFORE THE MEETING, AND WILL ACCORDINGLY BE VOTED IN
ACCORDANCE WITH THE DISCRETION OF THE PROXYHOLDER ON SUCH MATTERS.
4) This proxy shall not confer authority to vote
a) for the election of any person or company as a Director of the Company
unless a bona fide proposed nominee for such election is named in the
accompanying Information Circular/Proxy Statement; or
b) at any meeting other than the meeting specified in the accompanying
Notice of Meeting or any adjournment thereof.
5) The Instrument of Proxy may not be valid unless it is dated and signed by
the Member/Shareholder or by his attorney duly authorized by him in
writing, or, in the case of a corporation, is executed under its corporate
seal or by an officer or officers or attorney for the corporation duly
authorized. If the Instrument of Proxy is executed by an attorney for an
individual member/shareholder or a joint member/shareholder or by an
officer or officers or attorney of a corporate member/shareholder not under
its corporate seal, the instrument so empowering the officer or officers or
the attorney, as the case may be, or a notarial copy thereof, should
accompany the Instrument of Proxy.
6) The Proxy may not be used at the General Meeting or any adjournment thereof
unless the same is deposited at the office of the registrar and Transfer
Agent of the Company, Montreal Trust Centre, 510 Burrard Street, Vancouver,
British Columbia V6C 3B9, at least 48 hours before the time of the meeting.
The Chairman of the Meeting has the discretion to accept proxies filed less
than 48 hours before the time of the meeting.
7) Any shareholder who executes and delivers a proxy has the right to revoke
it at any time insofar as it has not been exercised. In addition to
revocation in any manner permitted by law, a proxy may be revoked by
providing the Company with an instrument in writing executed by the
member/shareholder or by his attorney authorized in writing or if a
corporation, under its corporate seal or by an officer or attorney thereof
duly authorized and deposited at the registered office of the Company at
any time up to and including the last business day preceding the day of the
meeting, or any adjournment thereof or with the chairman of the meeting on
the day of the meeting.
8) PROXIES ARE BEING SOLICITED BY THE COMPANY AND ALL COSTS AND EXPENSES
INCURRED IN CONNECTION WITH THE SOLICITATION WILL BE PAID BY THE COMPANY.
PROXIES ARE BEING SOLICITED BY MAIL BUT OFFICERS AND DIRECTORS OF THE
COMPANY MAY MAKE FURTHER SOLICITATION IN PERSON, BY TELEPHONE, FACSIMILE OR
OR OTHER PERSONAL CONTACT AS MAY BE REQUIRED.
