<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
/x/ Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
HARISTON CORPORATION
- --------------------------------------------------------------------------------
(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):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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:
----------------------------------------------------------------------
/x/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------------------
<PAGE> 2
HARISTON CORPORATION
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN THAT the 1996 Annual Meeting (the "Meeting") of
Shareholders of Hariston Corporation ("Hariston") will be held on July 30, 1996
at Suite 1600, 925 West Georgia Street, Vancouver, British Columbia, Canada, at
10:00 a.m. (Vancouver time), for the following purposes:
(a) to receive the Annual Report of the Directors and Consolidated
Financial Statements for the period ending December 31, 1995
together with the Auditors' Report thereon, the March 31, 1996
Quarterly Report and the Interim Financial Statements for the
period ending March 31, 1996;
(b) to elect Directors for the ensuing year;
(c) to appoint Auditors for the ensuing year and to authorize the
Directors to fix the remuneration to be paid to the Auditors;
(d) to consider and, if thought fit, confirm, with or without
amendment, By-Law No. 1 (1995) and By-Law No. 2 (1995) which
replace the previous By-Laws of Hariston as described under the
section entitled "Confirmation of By-Laws" in the accompanying
Management Proxy Circular; and
(e) to transact such other business as may properly come before the
Meeting or any adjournment thereof.
The Board of Directors has specified that proxies to be used at the Meeting or
any adjournment thereof must be deposited at Vancouver, British Columbia,
Canada, with Montreal Trust Company as Transfer Agent for Hariston, not later
than 5:00 p.m. (Vancouver time), July 26, 1996.
By Order of the Board of Directors
James V. McGoodwin
Chairman, Chief Executive Officer & President
Vancouver, British Columbia
June 14, 1996
NOTE:
IF YOU ARE UNABLE TO ATTEND THE MEETING IN PERSON, PLEASE COMPLETE AND RETURN
THE ACCOMPANYING FORM OF PROXY IN THE ENVELOPE PROVIDED.
<PAGE> 3
HARISTON CORPORATION
MANAGEMENT PROXY CIRCULAR
FOR THE 1996 ANNUAL MEETING
TO BE HELD ON JULY 30, 1996
SOLICITATION OF PROXIES
This Proxy Circular is furnished in connection with the holding of the Annual
Meeting (hereinafter called the "Meeting") of HARISTON CORPORATION (hereinafter
called the "Corporation"), to be held on the 30th day of July, 1996 at 10:00
a.m. (Vancouver Time) at the offices of Lawson Lundell Lawson & McIntosh, Suite
1600, 925 West Georgia Street, Vancouver, British Columbia, Canada, V6C 3L2,
and any adjournment thereof, for the purposes set forth in the attached Notice
of Meeting and any adjournments thereof. THIS IS A MANAGEMENT PROXY CIRCULAR
AND PROXIES ARE SOLICITED BY OR ON BEHALF OF THE MANAGEMENT OF THE CORPORATION
FOR USE AT THE MEETING. It is contemplated that the solicitation of proxies
will be made primarily by mail. Should it, however, appear desirable to do so
in order to ensure adequate representation of shares at the meeting, officers,
agents and employees of the Corporation may communicate with shareholders,
banks, brokerage houses and others by telephone, facsimile or in person to
request that proxies be furnished.
All expenses incurred in connection with this solicitation will be borne by the
Corporation. In following up the original solicitation of proxies by mail, the
Corporation may make arrangements with brokerage houses and other custodians,
nominees and fiduciaries to send proxies and proxy material to the beneficial
owners of the shares and will reimburse them for their expenses in so doing.
This Proxy Circular and the accompanying form of proxy are being mailed to
shareholders on or about June 26, 1996.
APPOINTMENT AND REVOCATION OF PROXIES
The persons designated in the accompanying form of Proxy are Directors and/or
Officers of the Corporation. A SHAREHOLDER HAS THE RIGHT TO APPOINT A PROXY TO
REPRESENT HIM OR HER AT THE MEETING, OTHER THAN THE PERSONS WHOSE NAMES ARE
PRINTED AS PROXIES IN THE ACCOMPANYING FORM OF PROXY, BY STRIKING OUT THE SAID
PRINTED NAMES AND BY INSERTING THE NAME OF HIS OR HER CHOSEN PROXY IN THE BLANK
SPACE PROVIDED FOR THAT PURPOSE IN THE FORM OF PROXY. The person so named as
the proxy need not be a shareholder of the Corporation.
A shareholder who has given a proxy instrument may revoke it:
(a) by signing a proxy instrument bearing a later date and depositing it
with the Secretary of the Corporation; or
<PAGE> 4
2
(b) as to any matter on which a vote shall not have already been cast
pursuant to the authority conferred by such proxy instrument, by
signing a written notice or verification and delivering it to the
Secretary of the Meeting, or the Chair of the Meeting; or
(c) by attending the Meeting in person and personally voting the shares
represented by the proxy instrument; or
(d) in addition to revocation in any other manner permitted by law, a
proxy may be revoked under Subsection 148(4) of the Canada Business
Corporations Act (the "CBCA") by instrument in writing executed by the
shareholder or by his or her attorney in writing (or if the
shareholder is a corporation, under its corporate seal or by an
officer or attorney thereof authorized in writing), deposited either
at the registered office of the Corporation at Suite 1600, 925 West
Georgia Street, Vancouver, British Columbia, Canada, V6C 3L2, at any
time up to and including the last business day preceding the day of
the Meeting or any adjournment thereof, or with the Chair of the
Meeting on the day of the Meeting or any adjournment thereof, and upon
either of such deposits the proxy is revoked.
EXERCISE OF DISCRETION OF PROXIES
The shares represented by the enclosed form of Proxy will be voted or withheld
from voting on any ballot that may be called for in accordance with the
instructions of the shareholder executing it and if such shareholder indicates
a choice with respect to any matter to be acted on at the Meeting, the shares
will be voted accordingly. IN THE ABSENCE OF SUCH INSTRUCTIONS, SUCH SHARES
WILL BE VOTED IN FAVOUR OF THE RESOLUTIONS REFERRED TO IN ITEMS 1 TO 3 AS SET
FORTH UNDER THESE HEADINGS IN THE FORM OF PROXY.
The enclosed form of Proxy confers discretionary authority upon the person
named therein with respect to amendments to matters identified in the Notice of
Meeting, or other matters which may properly come before the Meeting. At the
time of printing this Proxy Circular, Management knows of no such amendments,
or other matters to come before the Meeting other than those matters referred
to in the Notice of Meeting.
The matters to be submitted to the shareholders, other than the election of
directors and the appointment of auditors, require a majority of the votes
cast. Since "broker non-votes" and abstentions do not constitute votes cast,
these actions or failures to act will have no effect in the voting on the
matters to be voted upon.
The mailing address of the Corporation is: Hariston Corporation, Suite
1555-1500 West Georgia Street, Vancouver, British Columbia, Canada, V6G 2Z6.
VOTING SHARES AND PRINCIPAL HOLDERS THEREOF
Only the holders of Common Shares of the Corporation of record at the close of
business on June 14, 1996 (the "Record Date") will be entitled to vote at the
Meeting. Each holder is entitled to one vote for each Common Share held. As
at the date hereof there were 11,463,113 Common Shares of the Corporation
issued and outstanding.
<PAGE> 5
3
To the knowledge of the Directors and senior officers of the Corporation, only
the following own, directly or indirectly, or exercise control or discretion
over, shares carrying more than 10% of the voting rights attached to all
outstanding shares of the Corporation as of the date hereof:
<TABLE>
<CAPTION>
PERCENTAGE OF ISSUED AND
NAME OF SHAREHOLDER NUMBER OF SHARES OUTSTANDING SHARES
------------------- ---------------- --------------------
<S> <C> <C>
CEDE & Co. 7,061,966* 61.6%
Kray & Co. 1,216,502* 10.6%
</TABLE>
* Management of the Corporation is not aware of the beneficial owners of
the shares.
The above information was supplied by the Registrar and Transfer Agent and
Management of the Corporation.
The following table sets forth certain information regarding the beneficial
ownership of the Corporation's Common Shares (constituting its only outstanding
voting securities) as of the date hereof by the Corporation's Directors and all
Directors and Officers as a group. The Management of the Corporation knows of
no person who, as of the Record Date, owned beneficially more than 5% of the
issued and outstanding shares of the Corporation's Common Shares.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED AS OF JUNE 14, 1996
---------------------------
NAME POSITIONS NO. OF SHARES PERCENT (1)
---- --------- ------------- -----------
<S> <C> <C> <C>
James V. McGoodwin Chairman, Director, Chief 500,000(2) 4.18%
Executive Officer and President
L. James Porter Director, Chief Financial Officer 109,600(3) *
and Secretary
James P. Angus Director 75,000(2) *
Nuno Brandolini Director 75,000(2) *
Neil S. MacKenzie Director 75,000(2) *
All officers and directors as a 834,600(4) 6.79%
group (5 persons)
</TABLE>
- --------------------
* Less than 1%.
(1) Based on 11,463,113 Common Shares outstanding as of
June 14, 1996, plus Common Shares issuable to that Director upon
exercise of options which are exercisable within 60 days.
(2) Consists solely of shares issuable upon exercise of options which are
exercisable within 60 days.
(3) Includes 109,500 shares issuable upon exercise of options which are
exercisable within 60 days.
(4) Includes 834,500 shares issuable upon exercise of options which are
exercisable within 60 days.
<PAGE> 6
4
ELECTION OF DIRECTORS
NOMINEES
Directors are elected at each annual meeting of shareholders and hold office
until the next annual meeting of shareholders or until their respective
successors are elected and qualified. THE BOARD OF DIRECTORS IS OF THE OPINION
THAT THE ELECTION TO THE BOARD OF DIRECTORS OF THE PERSONS IDENTIFIED BELOW,
ALL OF WHOM ARE CURRENTLY SERVING AS DIRECTORS OF THE CORPORATION AND HAVE
CONSENTED TO CONTINUE TO SERVE IF ELECTED, WOULD BE IN THE BEST INTERESTS OF
THE CORPORATION. The names of such nominees are as follows: JAMES P. ANGUS,
NUNO BRANDOLINI, NEIL S. MACKENZIE, JAMES V. MCGOODWIN AND L. JAMES PORTER.
EXCEPT WHERE AUTHORITY TO VOTE ON THE ELECTION OF DIRECTORS IS WITHHELD, THE
PERSONS NAMED IN THE ACCOMPANYING FORM OF PROXY INTEND TO VOTE FOR THE ELECTION
OF THE NOMINEES WHOSE NAMES ARE SET FORTH ABOVE. THE MANAGEMENT OF THE
CORPORATION DOES NOT CONTEMPLATE THAT ANY OF THE NOMINEES WILL BE UNABLE, OR
FOR ANY REASON WILL BECOME UNWILLING, TO SERVE AS A DIRECTOR.
INFORMATION CONCERNING NOMINEES SUBMITTED BY MANAGEMENT
Set forth below is certain information with respect to each person proposed to
be nominated by management for election as a director of the Corporation.
<TABLE>
<CAPTION>
NAME, COUNTRY OF ORDINARY PRESENT PRINCIPAL OCCUPATION AND PRINCIPAL YEAR FIRST
RESIDENCE AND OTHER POSITIONS OCCUPATION OR EMPLOYMENT DURING THE PAST FIVE BECAME A
IF ANY HELD WITH THE CORPORATION AGE YEARS DIRECTOR
<S> <C> <C> <C>
JAMES P. ANGUS(1) (2) 49 Present and Past 5 Years: 1994
West Vancouver, British Columbia President, Angroup Holdings Limited, a private
CANADA investment holding company; Director, Koala
Director Beverages, Limited, a publicly traded Canadian
company.
NUNO BRANDOLINI 42 Present: 1995
New York City, New York Chief Executive Officer, Scorpion Holdings, Inc.,
U.S.A. a financial advisory company; Chairman, Enigma
Director Productions, an entertainment production company;
Director, Sonex Research, Inc., a U.S. publicly
traded company.
Past 5 Years:
Managing Director, Rosecliff, Inc., a leverage
buy-out company; Vice-President, Corporate
Finance, Mergers and Acquisitions of Solomon
Brothers, Inc., a diversified financial services,
investment and securities brokerage company;
President, The Baltheus Group, a merchant bank.
</TABLE>
<PAGE> 7
5
<TABLE>
<S> <C> <C> <C>
JAMES V. McGOODWIN(1) 41 Present: 1994
Costa Mesa, California Chairman, Director and Chief Executive Officer,
U.S.A. Hariston Corporation; President, Hariston Corporation
Chairman, Director, President & President, McGoodwin James & Co., a private equity
Chief Executive Officer investment firm; President, Natural BodyBath Inc.
Past 5 Years:
Senior Vice President, Security Pacific Venture
Capital Group.
NEIL S. MacKENZIE(1) (2) 52 Present: 1994
Vancouver, British Columbia President, N.S. MacKenzie & Co. Ltd., a management
CANADA consulting services company; President and
Director Director, Interlearn Holdings Ltd.; Director, ATS
Wheel Inc., a Canadian publicly traded company
engaged in the manufacture and sale of advanced
automobile tire and wheel systems; Director, RTDS
Technologies Inc., a private company that
manufactures software and hardware for the
electric utility industry; Partner, Chancellor
Partners, a company engaged in management
consulting; Secretary/Treasurer, Canadian Fine
Papers (B.C.) Corp.; Director, Advanced Process
Control Ltd., a private company that manufactures
software for computer controlled industrial
processes.
Past 5 Years:
Partner, Ernst & Young, Chartered Accountants and
Management Consultants, from 1976 to 1991.
L. JAMES PORTER(2) 31 Present: 1995
West Vancouver, British Columbia Director, Hariston Corporation; Chief Financial
CANADA Officer, Hariston Corporation.
Director, Secretary & Chief Past 5 Years:
Financial Officer Chartered Accountant, in public practice with
Arthur Andersen & Co., Vancouver, B.C., most
recently as Senior Tax Manager.
</TABLE>
- --------------------------
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
The number of Common Shares of the Corporation beneficially owned, directly or
indirectly, by the above nominees is set forth in the section entitled "Voting
Shares and Principal Holders Thereof", above.
Section 16(a) of the Securities Exchange Act of 1934 (U.S.), and the
regulations thereunder, require the Corporation's Directors, Executive Officers
and persons who own more than 10% of a registered class of the Corporation's
equity securities to file with the U.S. Securities and Exchange
<PAGE> 8
6
Commission initial reports of ownership and reports of changes in ownership of
Common Shares and other equity securities of the Corporation, and to furnish
the Corporation with copies of all Section 16(a) forms they file. To the
Corporation's knowledge, based solely on review of the copies of such reports
furnished to the Corporation and written representations that no other reports
were required, during the two fiscal years ended December 31, 1995, all Section
16(a) filing requirements applicable to the Corporation's Officers, Directors
and greater than 10% beneficial owners were complied with.
MEETINGS OF BOARD AND COMMITTEES
The Board of Directors held 10 meetings during the fiscal year ended December
31, 1995. Among the incumbent nominees for membership on the Board of
Directors, no Director attended fewer than 75% of the aggregate of the meetings
of the Board and the Committees upon which he served, except for Mr.
Brandolini.
The Board of Directors has standing Audit and Compensation Committees, but does
not have a Nominating Committee. In practice, the entire Board performs the
function of a Nominating Committee.
The Audit Committee of the Board of Directors held 4 meetings during the fiscal
year ended December 31, 1995. The Committee's responsibility is to review and
act or report to the Board of Directors with respect to various audit and
accounting matters, including the selection of independent auditors, the
determination of the scope of audit procedures, the nature of the services to
be performed by and the fees to be paid to the Corporation's independent
auditors, the establishment of the accounting practices of the Corporation, and
the monitoring of all financial aspects of the Corporation's operations. The
Audit Committee is composed of Mr. James P. Angus, Mr. Neil S. MacKenzie and
Mr. L. James Porter.
The Compensation Committee of the Board of Directors held 1 meeting during the
fiscal year ended December 31, 1995. The Committee is responsible for making
recommendations to the Board concerning such executive compensation
arrangements and plans as it deems appropriate. The Compensation Committee is
composed of Mr. James V. McGoodwin, Mr. James P. Angus and Mr. Neil S.
MacKenzie.
EXECUTIVE COMPENSATION
The following table sets forth certain summary information concerning
compensation paid or accrued for services rendered to the Corporation in all
capacities during the year ended December 31, 1994 and 1995 to the
Corporation's Chief Executive Officer, who was the Corporation's sole executive
officer whose total salary and bonus for 1995 exceeded US$100,000 (the "Named
Executive Officer").
<PAGE> 9
7
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
-------------
SECURITIES ALL OTHER
ANNUAL COMPENSATION UNDERLYING COMPENSATION
-------------------
NAME AND PRINCIPAL POSITION YEAR SALARY(US$) BONUS(US$) OPTIONS(#) (US$)
--------------------------- ---- ----------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
James V. McGoodwin,
Chairman of the Board, Chief
Executive Officer and President 1994(1) $0 $0 0 $0
1995 $110,000 $0 1,000,000
$11,000(2)
</TABLE>
- -------------------
(1) Mr. McGoodwin was appointed Chief Executive Officer of the Corporation
in November, 1994 and President of the Corporation in February, 1995.
(2) Represents automobile allowance.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information with respect to options
granted to the Named Executive Officer during the fiscal year ended December
31, 1995.
<TABLE>
<CAPTION>
PERCENTAGE
NUMBER OF OF TOTAL
SECURITIES OPTIONS POTENTIAL REALIZABLE VALUE
UNDERLYING GRANTED TO EXERCISE OR AS ASSUMED ANNUAL RATES
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION OF STOCK PRICE APPRECIATION
NAME GRANTED(1) FISCAL YEAR(2) (US$/SH) DATE FOR OPTION TERM(3)(US$)
---- ---------- ------------- ----------- ------------ ---------------------------
0% 5% 10%
-- -- ---
<S> <C> <C> <C> <C> <C> <C> <C>
James V. McGoodwin 250,000 20% $2.50 8/2/02 $97,750 $436,921 $915,705
250,000 20% $3.75 8/2/02 $ 0 $124,421 $603,205
250,000 20% $5.00 8/2/02 $ 0 $ 0 $290,705
250,000 20% $6.25 8/2/02 $ 0 $ 0 $ 0
</TABLE>
- --------------------
(1) For each of the four groups of options, options to purchase 62,500
shares are exercisable immediately upon grant, and the remaining
options become exercisable at the rate of 62,500 per year at August 2,
1996, 1997 and 1998. The term of the options is seven years.
(2) Based on 1,250,000 options granted to employees during fiscal 1995.
An additional 450,000 options were granted to nonemployee directors
during such fiscal year.
(3) The potential realizable value is based on assumed rates of
appreciation of the fair market value of the underlying shares from
the date of grant. It is calculated assuming that the stock price on
the date of grant appreciates at the indicated rate compounded
annually for the entire term of the option and the option is exercised
and sold on the last day of its term for the appreciated stock price.
The 5% and 10% assumed rates are mandated by the rules of the
Securities and Exchange Commission and do not represent the
Corporation's projection of the future price of the Corporation's
Common Shares. There can be no assurance that any of the values
reflected in this table will be achieved.
<PAGE> 10
8
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
The following table sets forth information with respect to exercises of stock
options by the Named Executive Officer during the fiscal year ended December
31, 1995 and the number and value of securities underlying unexercised options
held by the Named Executive Officer as of December 31, 1995.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED OPTIONS AT IN-THE-MONEY OPTIONS AT
ON VALUE DECEMBER 31, 1995(#) DECEMBER 31, 1995(US$)(1)
NAME EXERCISE (#) REALIZED(US$) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------------ ------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
James V. McGoodwin 0 0 250,000/750,000 $46,875/$140,675
</TABLE>
- ---------------
(1) Based on the closing price of the Common Shares of $3.25 on December
29, 1995.
DIRECTOR COMPENSATION
All Directors are elected annually and hold office until the next annual
meeting of the shareholders and until their successors are duly elected and
qualified. In addition to stock options granted by the Corporation under the
1995 Stock Option Plan, Directors receive a fee from the Corporation equal to
CDN$1,000 per month plus CDN$500 per meeting attended. The Corporation may
also periodically award options or warrants to its Directors.
STOCK OPTIONS
1995 Stock Option Plan
In July 1995, the Corporation adopted the 1995 Stock Option Plan (the "1995
Plan") covering an aggregate of 3,000,000 shares of the Corporation's Common
Shares. The purpose of the 1995 Plan is to attract and retain qualified
personnel, to provide additional incentives to employees, officers, directors
and consultants of the Corporation and to promote the success of the
Corporation's business. Pursuant to the 1995 Plan, the Corporation may grant
incentive and nonstatutory (nonqualified) stock options to key employees,
officers, directors or consultants of the Corporation.
The 1995 Plan is administered by the Board of Directors which has sole
discretion and authority, consistent with the provisions of the 1995 Plan, to
determine which eligible participants will receive options, the time when
options will be granted, the terms of options granted and the number of shares
which will be subject to options granted under the 1995 Plan. The Board may
also appoint a committee to administer the 1995 Plan and, subject to applicable
law, to exercise all of the powers of the Board under the 1995 Plan. As of
December 31, 1995, 1,700,000 options were outstanding under the 1995 Plan at a
weighted average exercise price equal to $4.38 per share.
The maximum term of a stock option under the 1995 Plan is seven years. If an
optionee terminates his or her service to the Corporation, the optionee may
exercise only those option
<PAGE> 11
9
shares vested as of the date of termination and must effect such exercise
within three months, although the Board may set longer periods for exercise of
supplemental stock options. The exercise price of incentive stock options
granted under the 1995 Plan must be at least equal to the fair market value of
the Common Shares subject to the option on the date of grant. The exercise
price of incentive stock options granted to an optionee who owns stock
possessing more than 10% of the voting power of the Corporation's outstanding
Common Shares must equal at least 110% of the fair market value of the Common
Shares subject to the option on the date of grant. The exercise price of
nonstatutory stock options granted under the 1995 Plan shall be determined by
the Board. Payment of the exercise price under an option may be made in cash,
previously acquired shares of the Corporation's Common Shares or other
consideration as may be determined by the Board of Directors.
The 1995 Plan may be amended at any time by the Board of Directors, although
certain amendments would require shareholder approval. The 1995 Plan will
terminate in December 2004 unless earlier terminated by the Board.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors hereby presents to the
shareholders of the Corporation this report concerning the compensation of the
Corporation's executive officers, including the Named Executive Officer. The
Compensation Committee is responsible for setting and administering the
compensation policies of the Corporation with respect to its executive officers
and, on an annual basis, determining the compensation of each executive
officer.
The Corporation's executive compensation program is designed to align executive
compensation with the Corporation's business strategy and performance. The
goals of the executive compensation program are: (i) to attract and retain key
executives critical to the success of the Corporation; (ii) to provide levels
of compensation which are competitive with those offered by the Corporation's
competitors and by other companies of similar size; and (iii) to motivate
executives to enhance long-term shareholder value by building appropriate
ownership in the Corporation.
The annual compensation for the executive officers, including James V.
McGoodwin, the Corporation's President and Chief Executive Officer, includes
base salaries, coupled with cash bonuses and stock options. Base salaries are
the fixed component of the executive officers' compensation package. Salaries
are set and adjusted based upon competitive standards and individual
performance.
The award of cash bonuses is based upon the performance of the Corporation
during the prior year and the contribution of each individual executive officer
to the Corporation's performance. Among the factors (the "Performance
Factors") which the Committee has established to assess the Corporation's
overall performance are: the Corporation's performance against budget and
targets for sales, expenses and profits, and the successful implementation of
both short and long-term corporate strategies for enhancing shareholder value
(e.g., strategic acquisitions, divestitures, facilities expansion, productivity
improvements, etc.).
<PAGE> 12
10
A substantial portion of the compensation of executive officers is based upon
the award of stock options which rely on increases in the value of the
Corporation's Common Shares. The award of options is intended to encourage
such employees to establish a meaningful, long-term ownership interest in the
Corporation consistent with the interests of the Corporation's shareholders.
Under the Corporation's stock option plans, options are granted from time to
time to certain officers and key employees of the Corporation and its
subsidiaries at the fair market value of the Corporation's Common Shares at the
time of grant. Because the compensation element of options is dependent on
increases over time in the market value of such shares, stock options represent
compensation that is tied to the Corporation's long-term performance. The
award of stock options to executive officers is determined based upon
individual performance, level of compensation and position with the
Corporation.
The Committee has reviewed the 1995 base salaries of each of the executive
officers and is of the opinion that such salaries are not unreasonable in view
of those paid by the Corporation's competitors and by other companies of
similar size. The Committee also reviewed the stock options awarded to the
executive officers for their services in 1995 and is of the opinion that the
option awards are reasonable in view of the officers' individual performance
and positions with the Corporation.
The Committee has also reviewed Mr. McGoodwin's base salary for 1995 and is of
the opinion that his salary is not unreasonable in view of those paid to CEO's
of the Corporation's competitors and by other companies of similar size. Mr.
McGoodwin received options for the purchase of 1,000,000 shares of the
Corporation's common stock at prices approximately equal to or in excess of the
Corporation's current trading price, subject to a three year vesting schedule,
for his past and anticipated services to the Corporation, which the Committee
believes to be reasonable and appropriate in light of his individual
performance and that of the Corporation during 1995 based upon the Performance
Factors discussed above. Mr. McGoodwin was not paid a cash bonus for 1995.
COMPENSATION COMMITTEE:
James V. McGoodwin
James P. Angus
Neil S. MacKenzie
RELATED PARTY TRANSACTIONS
The Corporation's wholly owned subsidiary, Educorp Multimedia, Inc. ("Educorp")
has recently borrowed the amount of US$125,000 from Mr. James V. McGoodwin.
This loan bears interest at a rate of 10% per annum, and matures in September,
1996. The loan is secured by substantially all of the assets of Educorp, which
is engaged in the business of publishing and distributing CD-ROM multimedia
software. This transaction was approved by the independent members of the
Board of Directors of the Corporation.
COMPARISON OF TOTAL SHAREHOLDER RETURN
The following graph shows a comparison of five year cumulative total returns to
shareholders of the Corporation's Common Stock, the Nasdaq Stock Market (U.S.
and foreign companies) Index
<PAGE> 13
11
and the Nasdaq Stock Market Index for "Non-financial" companies over the same
periods (assuming an initial investment of $100 in the Corporation's Common
Stock, the Nasdaq Stock Market Index and the Nasdaq Stock Market Index for
"Non-financial" companies as of December 31, 1991 and reinvestment of all
dividends). This graph takes into account the Corporation's one-for-five
reverse stock split in September, 1992.
[GRAPH]
<TABLE>
<CAPTION>
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
<S> <C> <C> <C> <C> <C>
Hariston Common Stock $100 $480 $1,344 $512 $416
Nasdaq Stock Market Index $100 $116.03 $132.11 $129.92 $180.12
Nasdaq "Non-financial" $100 $109.30 $123.95 $120.95 $166.30
Companies Index
</TABLE>
The above performance graph shall not be deemed incorporated by reference by
any general statement incorporating by reference this Proxy Circular into any
filing under the Securities Act of 1933 (U.S.) or the Exchange Act of 1934
(U.S.), except to the extent that the Corporation specifically incorporates
this information by reference, and shall not otherwise be deemed filed under
such Acts.
<PAGE> 14
12
APPOINTMENT AND REMUNERATION OF AUDITORS
Management of the Corporation proposes that Arthur Andersen & Co., Chartered
Accountants, ("Arthur Andersen") be appointed to act as the Corporation's
auditors for the next fiscal year. Arthur Andersen are currently the
Corporation's auditors. Arthur Andersen were first appointed as the
Corporation's auditors on June 30, 1995.
Management of the Corporation recommends to its shareholders the appointment of
Arthur Andersen as the Corporation's auditors. UNLESS AUTHORITY IS WITHHELD,
THE PERSONS NAMED IN THE ENCLOSED FORM OF PROXY WILL VOTE FOR THE APPOINTMENT
OF ARTHUR ANDERSEN AS AUDITORS OF THE CORPORATION, TO HOLD OFFICE UNTIL THE
NEXT ANNUAL MEETING OF SHAREHOLDERS, AT A REMUNERATION TO BE FIXED BY THE BOARD
OF DIRECTORS.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
For the Corporation's fiscal year ended December 31, 1993, the Corporation's
financial statements were audited by the Montreal firm of Raymond, Chabot,
Martin, Pare. Following that fiscal year, the Corporation ceased to have
substantive connections with Montreal, and dismissed Raymond, Chabot, Martin,
Pare, engaging instead that firm's affiliate, Doane Raymond of Vancouver,
British Columbia, to audit its consolidated financial statements for the fiscal
year ended December 31, 1994.
Following the completion of the audit for the Corporation's fiscal year ended
December 31, 1994, and because of the increasingly international nature of the
Corporation's operations, including its acquisition of the "Educorp" group of
businesses, the Corporation has dismissed Doane Raymond, effective June 30,
1995, as its independent auditors. The Corporation has engaged Arthur Andersen
to audit its consolidated financial statements for the fiscal year ended
December 31, 1995.
The Corporation's independent auditors' reports on its financial statements for
the fiscal years ended December 31, 1994 and 1993 did not contain an adverse
opinion or disclaimer of opinion, or qualification or modification as to
uncertainty, audit scope or accounting principles, and during such period there
was no disagreement between the Corporation and its former accountants on any
matter of accounting principles or practices, financial statement disclosure,
or auditing scope of procedure which, if not resolved to the satisfaction of
such former accountant, would have caused it to make reference to the subject
matter of the disagreement in connection with its report. However, the report
on the financial statements for the year ended December 31, 1994 did refer the
reader to two footnotes to the financial statements which described
uncertainties. The report stated that no additional explanatory paragraph was
contained because the report was expressed in accordance with Canadian
reporting standards which do not permit a reference to such uncertainties when
the uncertainties are adequately disclosed in the financial statements.
The decision to change the Corporation's auditors was recommended and approved
by the Corporation's Board of Directors.
<PAGE> 15
13
CONFIRMATION OF BY-LAWS
On July 20, 1995, the Directors of the Corporation voted to repeal all existing
By-Laws of the Corporation (the "Old By-Laws") and replace them with By-Law No.
1 (1995) and By-Law No. 2 (1995) attached hereto as Schedule A (the "New
By-Laws") in substitution for, and to the exclusion of, the Old By-Laws.
The Old By-Laws have, for all intents and purposes, not undergone any
significant changes since the original incorporation of the Corporation in
January 1952. In addition, the Old By-Laws include several separate borrowing
By-Laws that were passed by the Corporation to deal with specific debt
issuances that have long since been retired. Since 1952, the corporate statute
governing the Corporation has undergone many changes and the Corporation has
evolved into a widely held entity. Many of the changes in the Canada Business
Corporations Act (the "CBCA") and the Corporation's circumstances are not
reflected in the Old By-Laws. In light of these changes, the Directors of the
Corporation determined that it was appropriate to replace the Old By-Laws of
the Corporation with those attached as Schedule A.
The New By-Laws adopted by the Directors of the Corporation conform to current
statutory requirements for internal governance where the CBCA addresses such
issues, and are generally in a form common to many CBCA corporations. Where
changes have occurred between the New By-Laws and the Old By-Laws, those
changes are not considered to be material. For example: (1) unlike the Old
By-Laws, under the New By-Laws the Chairman at a shareholders meeting does not
have a second or casting vote; (2) the Old By-Laws require a proxy holder to be
a shareholder whereas the New By-Laws provide that a proxy holder need not be a
shareholder, as is also stipulated by the CBCA; (3) the Old By-Laws specified
an order of business for shareholder meetings, while the New By-Laws delete
this provision; and (4) the Old By-Laws do not require any notice or minimum
time limit for reconvening an adjourned shareholder meeting, while the New
By-Laws provide that new notice of an adjourned meeting must be provided if it
is adjourned for more than 30 days.
Under the provisions of the CBCA, the Directors of the Corporation are entitled
to make, amend or repeal any By-Laws that regulate the business or affairs of
the Corporation. The Directors of the Corporation are required to submit any
By-Law made, amended or repealed by them to the shareholders at the next
meeting of the shareholders following the date on which such By-Law is made,
amended or repealed. The shareholders are then entitled, by ordinary
resolution, to confirm, reject or amend the By-Law made, amended or repealed.
In the event the New By-Laws are rejected by the shareholders, those By-Laws
will cease to be effective and the Old By-Laws will be reinstated.
UNLESS AUTHORITY IS WITHHELD, THE PERSONS NAMED IN THE ENCLOSED FORM OF PROXY
WILL VOTE FOR THE CONFIRMATION OF THE NEW BY-LAWS.
<PAGE> 16
14
SUBMISSION OF SHAREHOLDER PROPOSALS
Shareholders are advised that any shareholder proposal, including nominations
to the Board of Directors, intended for consideration at the 1997 Annual
Meeting of shareholders of the Corporation must be received by the Corporation
no later than February 14, 1997 to be included in the proxy material for the
1997 Annual Meeting. It is recommended that shareholders submitting proposals
direct them to the Secretary of the Corporation and utilize certified mail,
return receipt requested, in order to ensure timely delivery.
OTHER MATERIAL FACTS
The Management of the Corporation knows of no other matters to come before the
meeting other than those referred to in the Notice of Meeting. However, should
any other matters properly come before the Meeting, the accompanying form of
Proxy confers discretionary authority upon the persons named therein to vote on
such matters in accordance with their best judgment.
OTHER MATTERS; VOTE REQUIRED
MANAGEMENT RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF RESOLUTIONS 1 THROUGH
3. RESOLUTION NUMBER 3 REQUIRES APPROVAL BY A SIMPLE MAJORITY OF THE VOTES
CAST BY THE SHAREHOLDERS. FOR EACH OF THESE MATTERS, A QUORUM CONSISTS OF NO
LESS THAN TWO PERSONS PRESENT AND HOLDING OR REPRESENTING BY PROXY NOT LESS
THAN TEN PERCENT OF THE TOTAL NUMBER OF THE CORPORATION'S ISSUED AND
OUTSTANDING COMMON SHARES ENTITLED TO BE VOTED AT THE MEETING. ALL
SHAREHOLDERS ARE URGED TO COMPLETE, SIGN, AND RETURN PROMPTLY THE ACCOMPANYING
PROXY CARD IN THE ENCLOSED ENVELOPE.
APPROVAL OF CIRCULAR
The undersigned hereby certifies that the contents and the sending of this
Management Proxy Circular have been approved by the Directors of the
Corporation.
DATED at Vancouver, British Columbia this 14th day of June, 1996
BY ORDER OF THE BOARD
HARISTON CORPORATION
"James V. McGoodwin"
JAMES V. McGOODWIN, CHAIRMAN,
CHIEF EXECUTIVE OFFICER & PRESIDENT
<PAGE> 17
SCHEDULE A
HARISTON CORPORATION
BY-LAW NO. 1 (1995)
A by-law relating generally to the conduct of the affairs of HARISTON
CORPORATION.
BE IT ENACTED AND IT IS HEREBY ENACTED as a by-law of HARISTON
CORPORATION (hereinafter called the "Corporation") as follows:
1. DEFINITIONS
1.1 In this by-law and all other by-laws of the Corporation, unless the
context otherwise specifies or requires:
(a) "Act" means the Canada Business Corporations Act, Revised
Statutes of Canada 1985, c. C-44, as from time to time
amended, and every statute that may be substituted therefor
and, in the case of such amendment or substitution, any
references in the by- laws of the Corporation shall be read as
referring to the amended or substituted provisions therefor;
(b) "by-laws" means any by-law of the Corporation from time to
time in force and effect;
(c) all terms contained in the by-laws which are defined in the
Act shall have the meanings given to such terms in the Act;
(d) words importing the singular number only shall include the
plural and vice versa; words importing the masculine gender
shall include the feminine and neuter genders; words importing
persons shall include bodies corporate, corporations,
companies, partnerships, syndicates, trusts and any number or
aggregate of persons; and
(e) the headings used in the by-laws are inserted for reference
purposes only and are not to be considered or taken into
account in construing the terms or provisions thereof or to be
deemed in any way to clarify, modify or explain the effect of
any such terms or provisions.
2. REGISTERED OFFICE
2.1. The Corporation may from time to time:
(a) by resolution of the directors change the address of the
registered office of the Corporation within the place in
Canada specified in its articles; and
(b) by an amendment to its articles change the place in Canada in
which its registered office is situated.
<PAGE> 18
2
3. SEAL
3.1. The directors may provide for a seal for the Corporation, and such
duplicate seal or seals as they may determine for use in any province,
not being the province where the head office of the Corporation is
situated, or for use in any other state, territory or country, and
such duplicate seal or seals shall bear on the face thereof the
Corporation's name and such other words as the directors may
determine.
4. DIRECTORS
4.1. NUMBER AND POWERS
Whenever the Articles provide for a minimum and maximum number of
directors, the number of directors within the stipulated range shall
be as determined from time to time by resolution of the Board of
Directors. A majority of the directors shall be resident Canadians.
Subject to any unanimous shareholder agreement, the directors shall
manage the business and affairs of the Corporation and may exercise
all such powers and do all such acts and things as may be exercised or
done by the Corporation and are not by the Act, the articles, the
by-laws, any special resolution, a unanimous shareholder agreement or
by statute expressly directed or required to be done in some other
manner.
4.2. QUORUM AND VOTING
(a) A majority of directors constitute a quorum for the
transaction of business unless the shareholders by resolution
otherwise determine. Subject to the Act, no business shall be
transacted by the directors except at a meeting of directors
at which a quorum is present and at which a majority of the
directors present are resident Canadians. Questions arising
at any meeting of directors shall be decided by a majority of
votes. In the case of an equality of votes, the chairman of
the meeting shall not have a second or casting vote.
(b) Notwithstanding any vacancy among the directors, a quorum of
directors may exercise all the powers of the directors.
(c) Subject to the Act and to the Corporation's articles, where
there is a quorum of directors in office and a vacancy occurs,
the directors remaining in office may appoint a qualified
person to hold office for the unexpired term of his
predecessor.
4.3. DUTIES
Every director of the Corporation in exercising his powers and
discharging his duties shall:
(a) act honestly and in good faith with a view to the best
interest of the Corporation; and
(b) exercise the care, diligence and skill that a reasonably
prudent person would exercise in comparable circumstances.
<PAGE> 19
3
4.4. ELECTION AND REMOVAL
(a) Directors shall be elected at each annual general meeting of
the shareholders. Except for those directors elected for an
expressly stated term, all the directors then in office shall
cease to hold office at the close of the next annual meeting
following their election but, if qualified, are eligible for
re-election.
(b) Subject to the Act, the shareholders of the Corporation may,
by ordinary resolution, remove any director before the
expiration of his term of office and elect any person in his
stead for the remainder of his term. A director removed by
ordinary resolution shall vacate office forthwith on the
passing of the resolution for his removal. Subject to the
Act, if the shareholders do not fill the vacancy created by
the removal of a director the directors may do so.
(c) Whenever at any election of directors of the Corporation the
number or the minimum number of directors required by the
articles is not elected by reason of the disqualification,
incapacity or the death of any candidate the directors elected
at that meeting may exercise all the powers of the directors
if the number of directors so elected constitutes a quorum.
4.5. VALIDITY OF ACTS
An act of a director is valid notwithstanding an irregularity in his
election or appointment or a defect in his qualification.
4.6. QUALIFICATION
Every director shall be an individual eighteen or more years of age
and no one who is of unsound mind and has been so found by a court in
Canada or elsewhere or who has the status of a bankrupt shall be a
director.
4.7. TERM OF OFFICE
A director's term of office (subject to his election for an expressly
stated term) shall be from the date of the meeting at which he is
elected or appointed until the close of the annual meeting next
following, unless he sooner ceases to hold office.
4.8. VACATION OF OFFICE
The office of a director shall be vacated if the director:
(a) dies or sends to the Corporation a written resignation and
such resignation, if not effective immediately, becomes
effective in accordance with its terms;
(b) is removed from office;
(c) becomes bankrupt; or
(d) is found by a court in Canada or elsewhere to be of unsound
mind.
<PAGE> 20
4
5. MEETINGS OF DIRECTORS
5.1. PLACE OF MEETING
Meetings of directors and of any committee of directors may be held at
any place. A meeting of directors may be convened at any time by the
Chairman of the Board (if any), the President or by a Vice President
or any two directors and the Secretary shall upon direction of any of
the foregoing convene a meeting of directors.
5.2. NOTICE
(a) Notice of the time and place for the holding of any such
meeting shall be given to each director personally or by mail,
telegraph, cable or telex to each director.
(b) For the first meeting of directors to be held following the
election of directors at an annual or special meeting of the
shareholders or for a meeting of directors at which a director
is appointed to fill a vacancy in the board, no notice of such
meeting need be given to the newly elected or appointed
director or directors in order for the meeting to be duly
constituted, provided a quorum of the directors is present.
5.3. WAIVER OF NOTICE, IRREGULARITY
Notice of any meeting of directors or of any committee of directors or
any irregularity in any meeting or in the notice thereof may be waived
by any director in writing or by telegram, cable or telex addressed to
the Corporation or in any other manner, and such waiver may be validly
given either before or after the meeting to which such waiver relates.
Attendance of a director at a meeting of directors is a waiver of
notice of the meeting, except where a director attends a meeting for
the express purpose of objecting to the transaction of any business on
the ground that the meeting is not lawfully called.
5.4. TELEPHONE PARTICIPATION
Where all the directors have consented thereto (either before or after
the meeting), a director may participate in a meeting of directors or
of any committee of directors by means of such telephone or other
communications facilities as permit all persons participating in the
meeting to hear each other, and a director participating in such a
meeting by such means shall be deemed for the purposes of the Act to
be present at that meeting.
5.5. ADJOURNMENT
Any meeting of directors or of any committee of directors may be
adjourned from time to time by the chairman of the meeting, with the
consent of the meeting, to a fixed time and place and no notice of the
time and place for the holding of the adjourned meeting need be given
to any director. Any adjourned meeting shall be duly constituted if
held in accordance with the terms of the adjournment and a quorum is
present at it. The directors who formed a quorum at the original
meeting are not required to form the quorum at the
<PAGE> 21
5
adjourned meeting. If there is no quorum present at the adjourned
meeting, the original meeting shall be deemed to have terminated
forthwith after its adjournment.
6. REMUNERATION OF DIRECTORS, OFFICERS AND EMPLOYEES
6.1. The remuneration to be paid to the directors, officers and employees
of the Corporation shall be such as the directors shall from time to
time determine and such remuneration shall be in addition to the
salary paid to any officer or employee of the Corporation who is also
a director. The directors may also by resolution award special
remuneration to any director undertaking any special services on the
Corporation's behalf other than the routine work ordinarily required
of a director by the Corporation. The confirmation of any such
resolution or resolutions by the shareholders shall not be required.
The directors, officers and employees shall also be entitled to be
paid their travelling and other expenses properly incurred by them in
connection with the affairs of the Corporation.
7. SUBMISSION OF CONTRACTS OR TRANSACTIONS TO SHAREHOLDERS FOR APPROVAL
7.1. The directors in their discretion may submit any contract, act or
transaction for approval, ratification and/or confirmation at any
annual meeting of the shareholders or at any special meeting of the
shareholders called for the purpose of considering the same and any
contract, act or transaction that is approved, ratified and/or
confirmed by resolution passed by a majority of the votes cast at any
such meeting (unless any different or additional requirement is
imposed by the Act or by the Corporation's articles or any other by-
law) shall be as valid and as binding upon the Corporation and upon
all the shareholders as though it had been approved, ratified and/or
confirmed by every shareholder of the Corporation.
8. INDEMNITIES TO DIRECTORS AND OTHERS
8.1. Subject to the Act, except in respect of an action by or on behalf of
the Corporation or body corporate to procure a judgment in its favor,
the Corporation shall indemnify a director or officer of the
Corporation, a former director or officer of the Corporation or a
person who acts or acted at the Corporation's request as a director or
officer of a body corporate of which the Corporation is or was a
shareholder or creditor, and his heirs and legal representatives,
against all costs, charges and expenses, including an amount paid to
settle an action or satisfy a judgment, reasonably incurred by him in
respect of any civil, criminal or administrative action or proceeding
to which he is made a party by reason of being or having been a
director or officer of the corporation or such body corporate, if:
(a) he acted honestly and in good faith with a view to the best
interests of the Corporation; and
(b) in the case of a criminal or administrative action or
proceeding that is enforced by a monetary penalty, he had
reasonable grounds for believing that his conduct was lawful.
<PAGE> 22
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9. OFFICERS
9.1. ELECTION AND APPOINTMENT OF OFFICERS
(a) The directors shall annually or as often as may be required
appoint a President and a Secretary and if deemed advisable
may annually or as often as may be required appoint one or
more Vice Presidents, a Treasurer and one or more Assistant
Secretaries and/or one or more Assistant Treasurers. None of
such officers need be a director of the Corporation. Two or
more of such offices may be held by the same person. In case
and whenever the same person holds the offices of Secretary
and Treasurer he may but need not be known as the
Secretary-Treasurer. The directors may from time to time
appoint such other officers, employees and agents as they
shall deem necessary who shall have such authority and shall
perform such functions and duties as may from time to time be
determined by the directors.
(b) An act of an officer is valid notwithstanding an irregularity
in his election or appointment or a defect in his
qualification.
9.2. REMOVAL OF OFFICERS, ETC.
All officers, employees and agents shall be subject to removal by
resolution of the directors at any time, with or without cause but
without prejudice to their rights under any agreement with the
Corporation.
9.3. DUTIES OF OFFICERS MAY BE DELEGATED
In case of the absence or inability or refusal to act of any officer
of the Corporation or for any other reason that the directors may deem
sufficient, the directors may delegate all or any of the powers of
such officer to any other officer or to any director for the time
being.
9.4. PRESIDENT
The President shall be the chief executive officer of the Corporation
and, subject to the authority of the board and of the Managing
Director (if any), shall exercise general supervision over the
business and affairs of the Corporation. In the absence of the
Chairman of the Board (if any) and the Managing Director (if any) and
if the President is also a director of the Corporation, the President
shall, when present, preside at all meetings of the directors, any
committee of the directors and shareholders; he may sign such
contracts, documents or instruments in writing as require his
signature and shall have such other powers and shall perform such
other duties as may from time to time be assigned to him by the
directors or as are incident to his office.
9.5. VICE PRESIDENT
The Vice President or, if more than one, any Vice President shall be
vested with all the powers and shall perform all the duties of the
President in the absence or inability or refusal to act of the
President, provided, however, that a Vice President who is not a
director shall not preside as chairman at any meeting of directors or
shareholders. The
<PAGE> 23
7
Vice President or, if more than one, the Vice Presidents may sign such
contracts, documents or instruments in writing as require his or their
signatures and shall also have such other powers and duties as may
from time to time be assigned to him or them by the directors or as
are incident to his or their office.
9.6. SECRETARY
The Secretary shall give or cause to be given notices for all meetings
of the directors, any committee of the directors and shareholders when
directed to do so and shall have charge of the minute books of the
Corporation and, subject to the provisions of paragraph 12.3 hereof,
of the documents and registers referred to in the Act. He may sign
such contracts, documents or instruments in writing as require his
signature and shall have such other powers and duties as may from time
to time be assigned to him by the directors or as are incident to his
office.
9.7. TREASURER
Subject to the provisions of any resolution of the directors, the
Treasurer shall have the care and custody of all the funds and
securities of the Corporation and shall deposit the same in the name
of the Corporation in such bank or banks or with such other depositary
or depositaries as the directors may by resolution direct. He shall
prepare and maintain adequate accounting records. He may sign such
contracts, documents or instruments in writing as require his
signature and shall have such other powers and duties as may from time
to time be assigned to him by the directors or as are incident to his
office. He may be required to give such bond for the faithful
performance of his duties as the directors in their uncontrolled
discretion may require provided that no director shall be liable for
failure to require any such bond or for the insufficiency of any such
bond or for any loss by reason of the failure of the Corporation to
receive any indemnity thereby provided.
9.8. ASSISTANT SECRETARY AND ASSISTANT TREASURER
The Assistant Secretary or, if more than one, the Assistant
Secretaries and the Assistant Treasurer or, if more than one, the
Assistant Treasurers shall perform all the duties of the Secretary and
Treasurer, respectively, in the absence or inability to act of the
Secretary or Treasurer as the case may be. The Assistant Secretary or
Assistant Secretaries, if more than one, and the Assistant Treasurer
or Assistant Treasurers, if more than one, may sign such contracts,
documents or instruments in writing as require his or their signatures
respectively and shall have such other powers and duties as may from
time to time be assigned to them by the directors or as are incident
to his or their office.
9.9. MANAGING DIRECTOR
The directors may from time to time appoint from their number a
Managing Director who is a resident Canadian and may delegate to the
Managing Director any of the powers of the directors subject to the
limitations on delegation of authority provided in the Act. In the
absence of the Chairman of the Board (if any), the Managing Director
shall, when present, preside at all meetings of the directors and
shareholders. A Managing Director shall conform to all lawful orders
given to him by the directors of the Corporation and
<PAGE> 24
8
shall at all reasonable times give to the directors or any of them all
information they may require regarding the affairs of the Corporation.
Any agent or employee appointed by the Managing Director shall be
subject to discharge by the directors.
9.10. VACANCIES
If the office of President, Vice-President, Secretary, Assistant
Secretary, Treasurer, Assistant Treasurer or any other office created
by the directors pursuant to these by-laws shall be or become vacant
by reason of death, resignation or in any other manner whatsoever, the
directors shall in the case of the President or the Secretary and may
in the case of the other officers appoint an officer to fill such
vacancy.
9.11. DUTIES
Every officer of the Corporation in exercising his powers and
discharging his duties shall:
(a) act honestly and in good faith with a view to the best
interest of the Corporation; and
(b) exercise the care, diligence and skill that a reasonably
prudent person would exercise in comparable circumstances.
10. COMMITTEE OF DIRECTORS
10.1. The directors may from time to time appoint from their number a
committee of directors and may delegate to such committee any of the
powers of the directors subject to the limitations on delegation of
authority provided in the Act. A majority of the members of a
committee of directors must be resident Canadians.
11. SHAREHOLDERS' MEETINGS
11.1. ANNUAL MEETING
The annual meeting of the shareholders shall be held at the registered
office of the Corporation or at such other place within Canada (or
elsewhere, if consented to by all shareholders) as the directors may
determine, on such day in each year and at such time as the directors
may determine.
11.2. SPECIAL MEETINGS
Special meetings of the shareholders may be convened by order of the
Chairman of the Board (if any), the President or a Vice-President who
is a director or by the directors at any date and time and at any
place within Canada (or elsewhere, if consented to by all
shareholders).
11.3. NOTICE
A printed, written or typewritten notice stating the day, hour and
place of meeting and, if special business is to be transacted
thereat, stating:
<PAGE> 25
9
(a) the nature of that business in sufficient detail to permit the
shareholder to form a reasoned judgment thereon; and
(b) the text of any special resolution to be submitted to the
meeting;
shall be given in accordance with Article 15 hereof to each person who
is entitled to notice of such meeting and who on the record date for
notice appears on the records of the Corporation as a shareholder of
the Corporation not less than twenty-one days and not more than fifty
days before the date of every meeting.
11.4. MEETING HELD BY CONSENT
A meeting of shareholders may be held for any purpose at any date and
time and at any place without notice if all the shareholders entitled
to notice of such meeting are present in person or represented by
proxy at the meeting (except where a shareholder attends the meeting
for the express purpose of objecting to the transaction of any
business on the grounds that the meeting is not lawfully called).
11.5. WAIVER OF NOTICE
Notice of any meeting of shareholders or any irregularity in any such
meeting or in the notice thereof may be waived by any shareholder, the
duly appointed proxy of any shareholder, any director or the auditor
of the Corporation in writing or by telegram, cable or telex addressed
to the Corporation, and any such waiver may be validly given either
before or after the meeting to which such waiver relates.
11.6. NOTICE TO AUDITOR
The auditor of the Corporation is entitled to attend any meeting of
shareholders of the Corporation and to receive all notices and other
communications relating to any such meeting that a shareholder is
entitled to receive.
11.7. NOTICE TO DIRECTORS
Every Director of the Corporation is entitled to receive notice of and
to attend and to be heard at every meeting of shareholders.
11.8. OMISSION OF NOTICE
The accidental omission to give notice of any meeting to or the
non-receipt of any notice by any person shall not invalidate any
resolution passed or any proceeding taken at any meeting of
shareholders.
11.9. VOTES
Every question submitted to any meeting of shareholders shall be
decided in the first instance on a show of hands and in case of an
equality of votes the chairman of the
<PAGE> 26
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meeting shall not have a second or casting vote (either on a show of
hands or on a poll) in addition to the vote or votes to which he may
be entitled as a shareholder or proxy holder.
11.10. CHAIRMAN'S DECLARATION OF RESULT
At any meeting, unless a poll is demanded by a shareholder or
proxyholder entitled to vote at the meeting either before or after any
vote by a show of hands, a declaration by the chairman of the meeting
that a resolution has been carried or carried unanimously or by a
particular majority or lost or not carried by a particular majority
shall be conclusive evidence of the fact without proof of the number
or proportion of votes recorded in favor of or against the motion.
11.11. POLL
(a) If at any meeting a poll is demanded on the election of a
chairman or on the question of adjournment or termination it
shall be taken forthwith without adjournment. If a poll is
demanded on any other question or as to the election of
directors it shall be taken by ballot in such manner and
either at once or later at the meeting or after adjournment as
the chairman of the meeting directs. The result of a poll
shall be deemed to be the resolution of the meeting at which
the poll was demanded. A demand for a poll may be withdrawn.
(b) Where a person holds shares as a personal representative, such
person or his proxy is the person entitled to vote at all
meetings of shareholders in respect of the shares so held by
him.
(c) Where two or more persons hold the same share or shares
jointly, any one of such persons present at a meeting of
shareholders has the right, in the absence of the other or
others, to vote in respect of such share or shares, but if
more than one of such persons are present or represented by
proxy and vote, they shall vote together as one on the share
or shares jointly held by them.
(d) Votes at meetings of shareholders may be given either
personally or by proxy. At every meeting at which he is
entitled to vote every shareholder present in person and every
proxyholder, unless he has conflicting instructions from more
than one shareholder, shall have one vote on a show of hands.
Upon a poll at which he is entitled to vote every shareholder
present in person or by proxy shall (subject to the
provisions, if any, of the Corporation's articles) have one
vote for every share registered in his name.
11.12. CHAIRMAN
In the absence of the Chairman of the Board (if any), the Managing
Director (if any), the President and any Vice-President who is a
director, the shareholders present entitled to vote shall choose
another director as chairman of the meeting and if no director is
present or if all the directors present decline to take the chair then
the shareholders present shall choose one of their number to be
chairman.
<PAGE> 27
11
11.13. PROXIES
(a) Every shareholder, including a shareholder that is a body
corporate, entitled to vote at a meeting of shareholders may
by means of a proxy appoint a proxyholder or one or more
alternate proxyholders, who are not required to be
shareholders, to attend and act at the meeting in the manner
and to the extent and with the authority conferred by the
proxy.
(b) An instrument appointing a proxyholder shall be in writing and
executed by the shareholder or his attorney authorized in
writing and is valid only at the meeting in respect of which
it is given or at any adjournment thereof.
(c) An instrument appointing a proxyholder may be in the following
form or in any other form which complies with the requirements
of the Act:
The undersigned shareholder of
__________________________________ hereby appoints
_____________________________________________ of
_____________________________________________, or failing
him, _________________________ of
_____________________________ as the nominee of the
undersigned to attend and act for and on behalf of the
undersigned at the ________ _____________________________
meeting of the shareholders of the said Corporation to be
held on the ______ day of ______________, 19__, and at any
adjournment thereof in the same manner, to the same extent
and with the same power as if the undersigned were
personally present at the said meeting or such adjournment
thereof.
DATED the_______ day of____________ , 19__.
___________________________________________
Signature of Shareholder
This form of proxy must be signed by a shareholder or by his
attorney authorized in writing.
(d) The directors may from time to time pass regulations regarding
the lodging of instruments appointing a proxyholder at some
place or places other than the place at which a meeting or
adjourned meeting of shareholders is to be held and for
particulars of such instruments to be telegraphed, cabled,
telexed or sent in writing before the meeting or adjourned
meeting to the Corporation or any agent of the Corporation
appointed for the purpose of receiving such particulars and
providing that instruments appointing a proxyholder so lodged
may be voted upon as though the instruments themselves were
produced at the meeting or adjourned meeting and votes given
in accordance with such regulations shall be valid and shall
be counted. The chairman of any meeting of shareholders may,
subject to any regulations made as aforesaid, in his
discretion accept telegraphic, telex, cable or written
communication as to the authority of anyone claiming
<PAGE> 28
12
to vote on behalf of and to represent a shareholder
notwithstanding that no instrument of proxy conferring such
authority has been lodged with the Corporation, and any votes
given in accordance with such telegraphic, telex, cable or
written communication accepted by the chairman of the meeting
shall be valid and shall be counted.
11.14. ADJOURNMENT
The chairman of the meeting may with the consent of the meeting
adjourn any meeting of shareholders from time to time to a fixed time
and place and if the meeting is adjourned for less than thirty days no
notice of the time and place for the holding of the adjourned meeting
need be given to any shareholder or other person entitled to receive
notice of a shareholders meeting, other than by announcement at the
earliest meeting which is adjourned. If a meeting of shareholders is
adjourned by one or more adjournments for an aggregate of thirty days
or more, notice of the adjourned meeting shall be given as for an
original meeting but, unless the meeting is adjourned by one or more
adjournments for an aggregate of more than ninety days management is
not required to solicit proxies. Any adjourned meeting shall be duly
constituted if held in accordance with the terms of the adjournment
and a quorum is present at it. The persons who formed a quorum at the
original meeting are not required to form the quorum at the adjourned
meeting. If there is no quorum present at the adjourned meeting, the
original meeting shall be deemed to have terminated forthwith after
its adjournment. Any business may be brought before or dealt with at
any adjourned meeting which might have been brought before or dealt
with at the original meeting in accordance with the notice calling the
same.
11.15. QUORUM FOR MEETINGS OF SHAREHOLDERS
Two persons present and each holding or representing by proxy at least
one issued share of the Corporation shall be a quorum at any meeting
of shareholders for the choice of a chairman of the meeting and for
the adjournment of the meeting to a fixed time and place but may not
transact any other business; for all other purposes a quorum for any
meeting shall be persons present not being less than two in number and
holding or representing by proxy not less than ten percent of the
total number of the issued shares of the Corporation entitled to be
voted at such meeting. If a quorum is present at the opening of a
meeting of shareholders, the shareholders present may proceed with the
business of the meeting, notwithstanding that a quorum is not present
throughout the meeting.
11.16. QUORUM WHERE ONLY ONE SHAREHOLDER
Notwithstanding paragraph 11.15, if the Corporation has only one
shareholder, or only one shareholder of any class or series of
shares, that shareholder present in person or by proxy constitutes a
meeting and a quorum for such meeting.
12. SHARES AND TRANSFERS
12.1. ISSUANCE
Subject to the articles of the Corporation, shares in the Corporation
may be issued at such times and to such persons and for such
consideration as the directors may determine.
<PAGE> 29
13
12.2. SECURITY CERTIFICATES
Security certificates (and the form of transfer power on the reverse
side thereof) shall, subject to compliance with the Act, be in such
form, if any, as the directors may from time to time approve and such
certificates need not be under the corporate seal and shall be signed
manually by such directors and officers of the Corporation as the
directors may from time to time determine but until otherwise
determined they shall be signed by a director, or if a registrar,
transfer agent or branch transfer agent has been appointed such
security certificates shall be counter-signed by or on behalf of the
registrar, transfer agent or branch transfer agent of the Corporation.
A trustee may certify them in accordance with a trust indenture.
Notwithstanding any change in the persons holding an office between
the time of actual signing and the issuance of any certificate and
notwithstanding that the person signing may not have held office at
the date of issuance of such certificate, any such certificate so
signed shall be valid and binding upon the Corporation.
12.3. AGENT FOR MAINTAINING SECURITIES REGISTER
The directors may from time to time appoint or remove an agent to
maintain a central securities register and branch securities registers
for the Corporation.
12.4. SURRENDER OF SECURITY CERTIFICATES
No transfer of a security issued by the Corporation shall be recorded
or registered unless or until the security certificate representing
the security to be transferred has been surrendered and canceled or,
if no security certificate has been issued by the Corporation in
respect of such security, unless or until a duly executed security
transfer power in respect thereof has been presented for registration.
12.5. DEFACED, DESTROYED, STOLEN OR LOST SECURITY CERTIFICATES
In case of the defacement, destruction, theft or loss of a security
certificate, the fact of such defacement, destruction, theft or loss
shall be reported by the owner to the Corporation or its appointed
agent, with a statement verified by oath or statutory declaration as
to the defacement, destruction, theft or loss and the circumstances
concerning the same and with a request for the issuance of a new
security certificate to replace the one so defaced, destroyed, stolen
or lost. Upon the giving to the Corporation or its appointed agent of
a bond of a surety company (or other security approved by the
directors) in such form as is approved by the directors or by the
Chairman of the Board (if any), the President, a Vice-President, the
Secretary or the Treasurer of the Corporation, indemnifying the
Corporation (and the Corporation's appointed agent, if any) against
all loss, damage or expense which the Corporation and/or the
Corporation's appointed agent may suffer or be liable for by reason of
the issuance of a new security certificate to such shareholder, and
provided the Corporation or the Corporation's appointed agent does not
have notice that the security has been acquired by a bona fide
purchaser, a new security certificate may be issued in replacement of
the one defaced, destroyed, stolen or lost, if such issuance is
ordered and authorized by any one of the Chairman of the Board (if
any),
<PAGE> 30
14
the President, a Vice-President, the Secretary or the Treasurer of the
Corporation or by the directors.
13. DIVIDENDS
13.1. The directors may from time to time declare and the Corporation may
pay dividends on its issued shares, subject to the provisions (if any)
of the Corporation's articles.
13.2. The directors shall not declare and the Corporation shall not pay a
dividend if there are reasonable grounds for believing that:
(a) the Corporation is, or would after the payment be, unable to
pay its liabilities as they become due; or
(b) the realizable value of the Corporation's assets would thereby
be less than the aggregate of its liabilities and stated
capital of all classes.
13.3. Subject to the Act, the Corporation may pay a dividend in money or
property or by issuing fully paid shares of the Corporation.
13.4. In case several persons are registered as the joint holders of any
securities of the Corporation, any one of such persons may give
effectual receipts for all dividends and payments on account of
dividends, principal, interest and/or redemption payments on
redemption of securities (if any) subject to redemption in respect of
such securities.
14. VOTING SECURITIES IN OTHER BODIES CORPORATE
14.1. All securities of any other body corporate carrying voting rights held
from time to time by the Corporation may be voted at all meetings of
shareholders, bondholders, debentureholders or holders of such
securities, as the case may be, of such other body corporate and in
such manner and by such person or persons as the directors of the
Corporation shall from time to time determine. The duly authorized
signing officers of the Corporation may also from time to time execute
and deliver for and on behalf of the Corporation proxies and/or
arrange for the issuance of voting certificates and/or other evidence
of the right to vote in such names as they may determine without the
necessity of a resolution or other action by the directors.
15. NOTICES, RECORD DATES, ETC.
15.1. SERVICE
(a) Any notice or other documents required to be given or sent by
the Corporation to any shareholder or director of the
Corporation shall be delivered personally or sent by prepaid
mail or by telegram, telex or cablegram addressed to:
(i) the shareholder at his latest address as shown on the
records of the Corporation or its transfer agent; and
<PAGE> 31
15
(ii) the director at his latest address as shown in the
records of the Corporation or in the last notice
filed under the Act.
With respect to every notice or other document sent by prepaid
mail it shall be sufficient to prove that the envelope or
wrapper containing the notice or other document was properly
addressed and put into a post office or into a post office
letter box.
(b) If the Corporation sends a notice or document to a shareholder
and the notice or document is returned on three consecutive
occasions because the shareholder cannot be found, the
Corporation is not required to send any further notices or
documents to the shareholder until he informs the Corporation
in writing of his new address.
15.2. SHARES REGISTERED IN MORE THAN ONE NAME
All notices or other documents may, with respect to any shares in the
capital of the Corporation registered in more than one name, be given
to whichever of such persons is named first in the records of the
Corporation and any notice or other document so given shall be
sufficient notice or delivery of such document to all the holders of
such shares.
15.3. DECEASED SHAREHOLDER
Any notice or other document delivered or sent by post or left at the
address of any shareholder as the same appears in the records of the
Corporation shall, notwithstanding that such shareholder be then
deceased and whether or not the Corporation has notice of his decease,
be deemed to have been duly served in respect of the shares held by
such shareholder (whether held solely or with other persons) until
some other person be entered in his stead in the records of the
Corporation as the holder or one of the holders thereof and such
service shall for all purposes be deemed a sufficient service of such
notice or other document on his heirs, executors, or administrators
and all persons (if any), interested with him in such shares.
15.4. SIGNATURES TO NOTICES
The signatures of any director or officer of the Corporation to any
notice may be written, stamped, typewritten or printed or partly
written, stamped, typewritten or printed.
15.5. COMPUTATION OF TIME
Where a given number of days' notice or notice extending over any
period is required to be given under any provisions of the articles or
by-laws of the Corporation, the day of service or posting of the
notice shall, unless it is otherwise provided, be counted in such
number of days or other period and such notice shall be deemed to have
been given or sent on the day of service or posting.
<PAGE> 32
16
15.6. PROOF OF SERVICE
A certificate of any officer of the Corporation in office at the time
of the making of the certificate or of an agent of the Corporation as
to the facts in relation to the mailing or delivery or service of any
notice or other document to any shareholder, director, officer or
auditor or publication of any notice or other document shall be
conclusive evidence thereof and shall be binding on every shareholder,
director, officer or auditor of the Corporation, as the case may be.
15.7. RECORD DATES
(a) Subject to the Act, the directors may fix in advance a date as
the record date for the determination of shareholders:
(i) entitled to receive payment of a dividend;
(ii) entitled to participate in a liquidation
distribution;
(iii) entitled to receive notice of a meeting of
shareholders; or
(iv) for any other purpose but such record date shall not
precede by more than fifty days the action to be
taken.
(b) If no record date is fixed, then:
(i) the record date for the determination of shareholders
entitled to receive notice of a meeting of
shareholders shall be:
A. at the close of business on the day
immediately preceding the day on which the
notice is given; or
B. if no notice is given, the day on which the
meeting is held; and
(ii) the record date for the determination of shareholders
for any purpose other than that specified in
subparagraph 15.7(b)(i) shall be at the close of
business on the day on which the directors pass the
resolution relating thereto.
16. CHEQUES, DRAFTS, NOTES, ETC.
16.1. All cheques, drafts or orders for the payment of money and all notes,
acceptances and bills of exchange shall be signed by such director or
directors, officer or officers or other person or persons, whether or
not officers of the Corporation, and in such manner as the directors
may from time to time designate by resolution.
17. CUSTODY OF SECURITIES
17.1 All securities (including warrants) owned by the Corporation shall be
lodged (in the name of the Corporation) with a chartered bank or a
trust company or in a safety deposit box or vault,
<PAGE> 33
17
or if so authorized by the directors, with such other depositaries or
in such other manner as may be determined from time to time by the
directors.
17.2. All securities (including warrants) belonging to the Corporation may
be issued and held in the name of a nominee or nominees of the
Corporation (and if issued or held in the names of more than one
nominee shall be held in the names of the nominees jointly with right
of survivorship) and shall be endorsed in blank with endorsement
guaranteed in order to enable transfer thereof to be completed and
registration thereof to be effected.
18. EXECUTION OF INSTRUMENTS
18.1. The seal of the Corporation shall not be affixed to any instrument
except in the presence of the following persons, namely:
(a) a director or the President together with one of a
Vice-President, the Secretary, an Assistant Secretary, the
Treasurer or an Assistant Treasurer; or
(b) any two directors; or
(c) such person or persons as the directors may from time to time
by resolution appoint;
and the directors, officers, person or persons in whose presence the
seal is so affixed to an instrument shall sign such instrument. For
the purpose of certifying under seal true copies of any document or
resolution the seal may be affixed in the presence of any one of the
foregoing persons.
18.2. The signature or signatures of any officer or director of the
Corporation or any other person may, if specifically authorized by
resolution of the directors, be printed, engraved, lithographed or
otherwise mechanically reproduced upon any contracts, documents or
instruments in writing or bonds, debentures or other securities of the
Corporation executed or issued by or on behalf of the Corporation and
all contracts, documents or instruments in writing or bonds,
debentures or other securities of the Corporation on which the
signature or signatures of any of the foregoing officers, directors or
persons authorized as aforesaid shall be so reproduced pursuant to
special authorization by resolution of the directors shall be deemed
to have been manually signed by such officers, directors or persons
whose signature or signatures is or are so reproduced and shall be as
valid to all intents and purposes as if they had been signed manually
and notwithstanding that the officers, directors or persons whose
signature or signatures is or are so reproduced may have ceased to
hold office at the date of delivery or issue of such contracts,
documents or instruments in writing or bonds, debentures or other
securities of the Corporation.
19. ENFORCEMENT OF LIEN FOR INDEBTEDNESS
19.1 Subject to the Act, if the articles of the Corporation provide that
the Corporation has a lien on a share registered in the name of a
shareholder or his legal representative for a debt of that shareholder
to the Corporation, the directors of the Corporation may refuse to
<PAGE> 34
18
permit the registration of a transfer of any such share or shares
until the debt has been paid in full.
20. FISCAL YEAR
20.1. Unless otherwise determined by the directors, the fiscal year of the
Corporation shall end on the 31st day of December in each year.
MADE by the Board the 20th day of July, 1995.
James V. McGoodwin (signed)
President
L. James Porter (signed)
Secretary
CONFIRMED by the Shareholders in accordance with the Act the _____ day
of _______ 199___.
_________________________
Secretary
<PAGE> 35
HARISTON CORPORATION
BY-LAW NO. 2 (1995)
A by-law respecting the borrowing of money by HARISTON CORPORATION.
BE IT ENACTED AND IT IS HEREBY ENACTED as a by-law of HARISTON
CORPORATION (hereinafter called the "Corporation") as follows:
1. The directors may from time to time:
(a) borrow money upon the credit of the Corporation;
(b) issue, reissue, sell or pledge debt obligations of the
Corporation; and
(c) mortgage, hypothecate, pledge or otherwise create a security
interest in all or any property of the Corporation, owned or
subsequently acquired, to secure any debt obligations of the
Corporation.
The words "debt obligations" as used in this paragraph mean bonds, debentures,
notes or other evidences of indebtedness or guarantees of the Corporation,
whether secured or unsecured.
2. The directors may from time to time by resolution delegate to such one
or more of the officers and directors of the Corporation all or any of
the powers conferred on the directors by paragraph 1 of this by-law to
the full extent thereof or such lesser extent as the directors may in
any such resolution provide.
3. The powers hereby conferred shall be deemed to be in supplement of and
not in substitution for any powers to borrow money for the purposes of
the Corporation possessed by its directors or officers independently
of a borrowing by-law.
MADE by the Board the 20th day of July, 1995.
James V. McGoodwin (signed)
President
L. James Porter (signed)
Secretary
CONFIRMED by the Shareholders in accordance with the Act the ____ day
of _______ 199___.
_________________________
Secretary
<PAGE> 36
HARISTON CORPORATION
PROXY
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 30, 1996
THIS PROXY IS SOLICITED BY MANAGEMENT IN CONJUNCTION WITH THE ANNUAL MEETING OF
SHAREHOLDERS OF HARISTON CORPORATION TO BE HELD IN VANCOUVER, BRITISH COLUMBIA,
CANADA, ON JULY 30, 1996.
The undersigned shareholder of HARISTON CORPORATION (the "Corporation") hereby
appoints JAMES V. McGOODWIN, President, or failing him, L. JAMES PORTER,
Secretary, or instead of either of the foregoing,
_____________________________________________ of _____________________________
as nominee of the undersigned to attend and act for the undersigned and on
behalf of the undersigned at the Annual Meeting (the "Meeting") of the
shareholders of the Corporation to be held on the 30th day of July, 1996 and at
any adjournment or adjournments thereof in the same manner, to the same extent
and with the same power as if the undersigned were present at the said meeting
or any adjournment or adjournments thereof; provided that the undersigned
shareholder specifies and directs the persons named that the shares registered
in the name of the undersigned shall be voted
1. In respect of the election of Directors as follows:
JAMES P. ANGUS FOR ____________ WITHHELD __________
NUNO BRANDOLINI FOR ____________ WITHHELD __________
JAMES V. McGOODWIN FOR ____________ WITHHELD __________
NEIL S. MacKENZIE FOR ____________ WITHHELD __________
L. JAMES PORTER FOR ____________ WITHHELD __________
2. In respect of the appointment of Arthur Andersen, Chartered
Accountants, as the Auditors of the Corporation and authorizing the
Directors to fix the remuneration to be paid to the Auditors, as
follows:
FOR ___________ WITHHELD __________
<PAGE> 37
2
3. In respect of the resolution confirming By-Law No. 1 (1995) and By-Law
No. 2 (1995) which replace the previous By-Laws of the Corporation as
described in the Management Proxy Circular accompanying this form of
proxy, as follows:
FOR ___________ AGAINST ___________
THE UNDERSIGNED HEREBY REVOKES ANY PROXY PREVIOUSLY GIVEN.
DATED this ______ day of __________________, 1996.
_________________________________ ____________________________
NAME (PLEASE PRINT) SIGNATURE OF MEMBER
Address:_________________________
_________________________________
<PAGE> 38
NOTES TO PROXY
1. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED ON ITEMS 1 TO 3 AS
THE UNDERSIGNED MAY HAVE SPECIFIED BY MARKING AN "X" IN THE SPACES
PROVIDED FOR THAT PURPOSE. IF NO CHOICE IS SPECIFIED, THE SHARES WILL
BE VOTED AS IF THE SHAREHOLDER HAD SPECIFIED AN AFFIRMATIVE VOTE.
2. A SHAREHOLDER HAS THE RIGHT TO APPOINT A PROXY HOLDER (WHO NEED NOT BE
A SHAREHOLDER) TO ATTEND AND ACT FOR THE SHAREHOLDER ON HIS OR HER
BEHALF AT THE MEETING OTHER THAN THE PERSON DESIGNATED ABOVE. SUCH
RIGHT MAY BE EXERCISED BY STRIKING OUT THE NAMES OF THE TWO (2)
SPECIFIED PERSONS AND BY INSERTING IN THE SPACE PROVIDED THE NAME OF
THE PERSON THE SHAREHOLDER WISHES TO APPOINT INSTEAD.
3. This form of Proxy should be dated and must be executed by the
shareholder or his or her attorney duly authorized in writing or, if
the shareholder is a corporation, under its corporate seal or by an
officer or attorney thereof duly authorized. If this form of Proxy is
not dated, it will be deemed to bear the date on which it is mailed to
the shareholder.
4. The signature should agree with the name on this form of Proxy.
Executors, administrators, trustees, etc., should so indicate when
signing. Where shares are held jointly, each owner must sign.
5. To be effective, this form of Proxy must be deposited with the
Registrar and Transfer Agent of the Corporation, Montreal Trust
Company, 510 Burrard Street, Vancouver, British Columbia, Canada, V6C
3B9, not later than 5:00 p.m. (Vancouver time), July 26, 1996.
6. IN THE CASE OF REVOCATION OF A PROXY PREVIOUSLY GIVEN, THIS FORM OF
PROXY MUST BE DEPOSITED WITH THE REGISTERED OFFICE OF THE CORPORATION
AT SUITE 1600, 925 WEST GEORGIA STREET, VANCOUVER, BRITISH COLUMBIA,
CANADA, V6C 3L2, AT ANY TIME UP TO AND INCLUDING THE LAST BUSINESS DAY
PRECEDING THE MEETING OR ANY ADJOURNMENT THEREOF, OR WITH THE CHAIR OF
THE MEETING ON THE DAY OF THE MEETING OR ANY ADJOURNMENT THEREOF. The
accompanying Management Proxy Circular sets out the rights of the
shareholder to revoke a proxy previously given in greater detail.
<PAGE> 39
HARISTON CORPORATION
RETURN CARD
June 14, 1996
TO REGISTERED AND NON-REGISTERED SHAREHOLDERS:
National Policy 41 provides shareholders with the opportunity to elect annually
to have their names added to a corporation's supplemental mailing list in order
to receive quarterly financial statements of the corporation.
If you wish to receive such statements of Hariston Corporation, please complete
and return this form to:
Montreal Trust Company
510 Burrard Street
Vancouver, BC
V6C 3B9
NAME: ______________________________________________
ADDRESS: ______________________________________________
______________________________________________
POSTAL CODE: ______________________________________________
I hereby certify that I am a shareholder of Hariston Corporation.
___________________________________
Signature
Date: ____________________________
