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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 Section 240.14a-11(c) or Section 240.14a-12
NORD PACIFIC LIMITED
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(:)(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:
Not Applicable
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2) Aggregate number of securities to which transaction applies:
Not Applicable
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
Not Applicable
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(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
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4) Proposed maximum aggregate value of transaction:
Not Applicable
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5) Total Fee paid:
Not Applicable
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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NORD PACIFIC LIMITED
(A.R.B.N. 062 482 900)
22 CHURCH STREET
HAMILTON, HM 11
BERMUDA
NOTICE OF SPECIAL GENERAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 17, 1997
To The Stockholders of Nord Pacific Limited:
Notice is hereby given that a special general meeting of the stockholders
of Nord Pacific Limited (the "Corporation") will be held at the offices of
International Services Limited, 22 Church Street, Hamilton HM 11, BERMUDA on
November 20, 1996 at 10:00 a.m. (local time) for the following purposes:
1. To consider and act upon a proposal to approve the sale of up to
4,500,000 shares of Common Stock (after the Reverse Stock Split
proposed in Item 2 below) by the Corporation, in the aggregate, in the
Proposed Canadian Offering.
2. To consider and act upon a proposal to effect a Reverse Stock Split in
which one (1) new share of Common Stock, $.05 par value per share,
would be exchanged for every five (5) shares of Common Stock, $.01 par
value per share, presently issued and outstanding. No fractional new
shares of Common Stock will be issued and in lieu thereof, each
stockholder whose presently issued and outstanding shares of Common
Stock are not evenly divisible by five (5) will receive one (1)
additional new share of Common Stock.
3. To consider and act upon a proposal to permit the Board of Directors
of the Corporation, in its sole discretion, to delist the
Corporation's Common Stock from the Australian Stock Exchange Limited.
4. To consider and act upon such other matters as may properly come
before the special general meeting or any adjournment thereof.
The close of business on January 8, 1997 has been fixed as the record date
for the determination of stockholders entitled to notice of and to vote at the
special general meeting and any adjournment thereof.
YOUR PROXY IS IMPORTANT TO ASSURE A QUORUM AT THE SPECIAL GENERAL MEETING.
WHETHER OR NOT YOU EXPECT TO BE PRESENT, YOU ARE REQUESTED TO MARK, DATE, SIGN
AND MAIL THE ENCLOSED PROXY IN THE POSTAGE PREPAID ENVELOPE WHICH HAS BEEN
PROVIDED FOR THAT PURPOSE. THE PROXY MAY BE REVOKED BY YOU AT ANY TIME BEFORE
IT IS EXERCISED, AND THE GIVING OF YOUR PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE
IN PERSON IF YOU ATTEND THE SPECIAL GENERAL MEETING.
By the Order of the
Board of Directors,
January 13, 1997 Leo E. Dugdale III, Secretary
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NORD PACIFIC LIMITED
(A.R.B.N. 062 482 9000)
22 CHURCH STREET, HAMILTON HM 11
BERMUDA
PROXY STATEMENT
For a Special General Meeting of Stockholders
February 17, 1997
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation by
the Corporation's Board of Directors (the "Board") of proxies in the
accompanying form for a special general meeting of stockholders of Nord Pacific
Limited (the "Corporation").
Shares of Common Stock, US$.01 par value per share, of the Corporation
("Common Stock") cannot be voted at the special general meeting unless the
holder is present in person or represented by proxy. All shares of Common Stock
represented by properly executed proxies received by the Board pursuant to this
solicitation will be voted in accordance with the stockholder's directions
specified on the proxy. If no directions have been specified by marking the
appropriate squares on the accompanying proxy card, the shares of Common Stock
will be voted in accordance with the Board's recommendations. A stockholder
signing and returning the accompanying proxy has the power to revoke it at any
time prior to its exercise by delivering to the Corporation a later dated proxy
or by giving notice to the Corporation in writing or in open meeting, but
without affecting any vote previously taken.
As of the record date, January 8, 1997, there were issued and outstanding
47,578,270 shares of Common Stock of the Corporation. Only stockholders of
record at the close of business on the record date are entitled to vote at the
meeting. Each share of Common Stock is entitled to one vote and cumulative
voting is not permitted. A list of stockholders of record entitled to vote at
the meeting will be available at the special general meeting for examination by
any stockholder for any purpose germane to the special general meeting.
Under Bermuda law, an affirmative vote of a majority of the shares of
Common Stock present and voting at the meeting is required for approval of all
of the items listed in the Notice of Special General Meeting. The Australian
Stock Exchange Limited ("ASX") requires a special resolution of the stockholders
for delisting and under Australian law a special resolution for approval of Item
3 requires the affirmative vote of stockholders owning at least seventy-five
(75%) percent of the shares of Common Stock voting on the proposal. Automated
systems administered by the Corporation's transfer agents tabulate the votes.
Abstentions and broker non-votes are each included in the determination of the
number of shares of Common Stock present at the meeting. Each is tabulated
separately. Abstentions from voting on a proposal will have
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the same effect as voting against the proposal. However, broker non-votes are
not counted for purposes of determining whether a proposal has been approved.
Nord Resources Corporation ("Nord Resources"), which owns approximately 35.3% of
the Corporation's issued and outstanding shares of Common Stock, and the
directors and named executive officers of the Corporation, who in the aggregate
own approximately 40% of the Corporation's issued and outstanding shares of
Common Stock (including the shares of Common Stock owned by Nord Resources),
have advised the Corporation that they intend to vote all of their respective
shares of Common Stock in favor of the proposals listed in this Proxy Statement.
Beginning on or about January 13, 1997, copies of this Proxy Statement and
the accompanying proxy card will be mailed to all stockholders entitled to
receive notice of, and to vote at, the special general meeting.
UNLESS OTHERWISE INDICATED ALL REFERENCES HEREIN TO "DOLLARS" OR "$" ARE TO
UNITED STATES DOLLARS.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of January 8, 1997 certain information
regarding ownership of the Corporation's Common Stock by (i) the only persons
known by the Board to be the beneficial owners of more than 5%, (ii) each
director and named executive officer, and (iii) all directors and executive
officers as a group:
Common Stock Beneficially
Owned as of January 8, 1997(1)
---------------------------------
Name and Address of Beneficial Owner Number Percent of Class
- ------------------------------------ ------ ----------------
Nord Resources Corporation
8150 Washington Village Drive
Dayton, Ohio 45458 16,740,060 35.2%
Edgar F. Cruft 19,040,060(2) 38.9%
W. Pierce Carson 19,040,060(2) 38.9%
Terence H. Lang 17,440,060(3) 36.2%
Leonard Lichter 17,366,560(3) 36.2%
John C.R. Collis 408,008(4) *
Michel J. Drew 408,008(4) *
Lucile Lansing 400,000(4) *
John B. Roberts 273,000(5) *
Other Named Executive Officers
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Mark R. Welch 764,000(6) 1.6%
All Named Executive Officers
and Directors as a Group (9 Persons) 24,927,526(7) 46.4%
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* Represents less than one (1%) percent of the shares outstanding.
(1) Ownership includes sole voting and investment power except as otherwise
noted. When applicable, the number of shares beneficially owned includes
the number of unissued shares which the listed person has the right to
acquire within 60 days after January 8, 1997. In determining the number of
shares outstanding for computing the percent of class owned by the listed
person, the number of shares outstanding of the Corporation has been
increased by the number of unissued shares which the listed person has the
right to acquire from the Corporation within 60 days after January 8, 1997.
(2) Includes options to purchase 360,000 shares under the 1991 Stock Option
Plan, 300,000 shares under the 1995 Stock Option Plan, and non-plan options
to purchase 800,000 shares. Includes 16,740,060 shares which are owned by
Nord Resources Corporation, of which Dr. Cruft is Chairman, CEO and
President, and Dr. Carson is a director.
(3) Includes options to purchase 60,000 shares under the 1991 Stock Option
Plan, 200,000 shares for Mr. Lang and 120,000 shares for Mr. Lichter under
the 1995 Stock Option Plan and non-plan options to purchase 320,000 shares
for Mr. Lang and 228,000 shares for Mr. Lichter. Includes 16,740,060
shares which are owned by Nord Resources Corporation of which Mr. Lichter
is a director and Mr. Lang is a director and senior vice president. As to
Mr. Lang, also includes 30,000 shares owned by his wife for which shares he
disclaims beneficial ownership.
(4) Includes options to purchase 60,000 shares under the 1991 Stock Option
Plan, 120,000 shares under the 1995 Stock Option Plan, and non-plan options
to purchase 228,000 shares.
(5) Includes options to purchase 60,000 shares under the 1991 Stock Option Plan
and 120,000 shares under the 1995 Stock Option Plan and non-plan options to
purchase 88,000 shares.
(6) Includes options to purchase 60,000 shares under the 1989 Stock Option
Plan, 416,000 shares under the 1991 Stock Option Plan and 224,000 shares
under the 1995 Stock Option Plan.
(7) Includes options to purchase 6,100,000 shares. Also includes 16,740,060
shares owned by Nord Resources Corporation, of which Messrs. Cruft, Carson,
Lang and Lichter are directors and Messrs. Cruft and Lang are executive
officers.
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ITEM 1
PROPOSED CANADIAN OFFERING
On December 17, 1996, the Board unanimously adopted a resolution
proposing that the Board recommend to the stockholders, for approval, the
Canadian Offering (as defined below). On December 19, 1996, the Corporation
filed a preliminary prospectus (the "Prospectus") in Canada. Pursuant to the
Prospectus, Canaccord Capital Corporation ("Canaccord") proposes to underwrite
the sale by the Corporation (the "Canadian Offering") of shares of Common Stock
not to exceed 4,500,000 shares of Common Stock in the aggregate (assuming the
stockholders of the Corporation approve Item 2 below and the Corporation effects
the Reverse Stock Split (as defined below)), the exact number of such shares to
be sold and the price thereof to be determined by market conditions at the time
of sale; it is intended, however, that such price will be at or near the market
price for such shares on the date the Canadian Offering commences. The
Underwriters would receive, upon the successful completion of the Canadian
Offering, a fee of five and one-half (5-1/2%) percent of the gross proceeds of
the Canadian Offering and reimbursement of certain expenses. In addition,
Canaccord will receive, for corporate finance services, warrants to purchase
225,000 shares of Common Stock exercisable at the offering price per share of
Common Stock in the Canadian Offering, which warrants will be exercisable for
two (2) years following the closing of the Canadian Offering (the "Canaccord
Warrants"). The Canadian Offering is subject to a number of conditions,
including (i) review of and the issuance of receipts for the final version of
the Prospectus by the relevant securities regulatory authorities in Canada,
(ii) listing of the Common Stock for trading on The Toronto Stock Exchange
("TSE"); (iii) approval of the proposals contained in this Proxy Statement by
the stockholders of the Corporation; (iv) the Corporation effecting the Reverse
Stock Split as described in Item 2 below; (v) market conditions at the time of
the Canadian Offering and, therefore, the economic terms of the Canadian
Offering are subject to change to reflect such conditions. The Corporation will
issue shares of New Common Stock (as defined below) in respect of the Canadian
Offering no later than three (3) months after the date of this special general
meeting.
In the United States, the Corporation has established a program (the "ADR
Program") whereby The Bank of New York has issued American Depositary Receipts
("ADRs") in exchange for the shares of the Corporation's Common Stock. Each ADR
represents five (5) shares of Common Stock. The Corporation's Common Stock is
currently traded on the ASX. The closing bid and asked prices for the
Corporation's ADRs on January 8, 1997 as listed on the NASDAQ System was
$_______ and $_______ respectively, per ADR. The closing bid and asked prices
of the Corporation's Common Stock on January 8, 1997 as listed on ASX was
Australian $ ("A$") _______ and A$_______ respectively, per share.
In order to effectuate the Canadian Offering, eliminate the ADR Program (as
discussed below) and have the same Common Stock trading on NASDAQ, the TSE and
the ASX (unless delisted from the ASX as discussed in Item 3 below), the
Corporation has undertaken to
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recommend to its stockholders to vote in favor of the proposals as set forth in
this Proxy Statement.
If the stockholders approve the proposal contained in Item 2 below, the one
for five reverse split of the Corporation's Common Stock (the new shares of
Common Stock, $.05 par value per share, to be received upon the Reverse Stock
Split being hereinafter referred to as the "New Common Stock") will replace the
ADRs which currently represent five (5) shares of Common Stock (the "Old Common
Stock") and the Corporation will apply to NASDAQ to list the New Common Stock
and after a transitional period of time to delist the ADRs from NASDAQ.
Annexed hereto as EXHIBIT A is a Pro Forma Condensed Balance Sheet as at
September 30, 1996 and footnotes of the Corporation which discloses the effect
of the sale of an estimated 3,300,000 shares of New Common Stock of the
Corporation in the Canadian Offering and the sale of an estimated 700,000
shares of New Common Stock in the NRC Private Placement (as defined below) at
an estimated price of $6.00 per share, assuming that the Canadian Offering and
NRC Private Placement were consummated on September 30, 1996.
The Corporation currently contemplates using the net proceeds from the
Canadian Offering estimated at approximately $17,600,000 after deduction of all
costs of the Canadian Offering, and the cost of terminating the ADR Program, and
the proceeds from the NRC Private Placement estimated at $4,200,000 ($21,800,000
in the aggregate), as set forth below. No assurance can be given as to the
total amount of the actual net proceeds to be received by the Corporation from
the Canadian Offering and the proceeds from the NRC Private Placement (which in
each case may be more or less than the foregoing amount), or that these net
proceeds will be used as set forth below, as future events and conditions beyond
the control of the Corporation may affect the Corporation and its properties and
business and the price of the shares offered pursuant to the Canadian Offering
and the NRC Private Placement. Management and the Board may reallocate the use
of proceeds based upon such future events.
In Millions
Description of US Dollars
----------- -------------
(i) Simberi Island Gold Project - Feasibility, Development $9.0
(ii) Tritton Copper Project - Exploration, Feasibility 3.0
(iii) Girilambone Area - Exploration 2.0
(iv) Girilambone North Copper Project - Development 0.8
(v) Tabar Islands - Exploration 4.0
(vi) Ramu Nickel - Cobalt Project - Feasibility 0.8
(vii) North America - Exploration 0.8
(viii) Working Capital 1.4
-----
Total $21.8
-----
-----
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The Canadian Offering will be made by the Corporation and the
Underwriters in compliance with Regulation S ("Reg S"), which has been
promulgated by the United States Securities and Exchange Commission pursuant
to the Securities Act of 1933, as amended ("1933 Act"). It is further
currently contemplated that the Corporation's New Common Stock will be listed
for trading on the TSE and that the Corporation will make application to list
its New Common Stock for trading on NASDAQ and on the ASX (unless delisted
from the ASX as discussed in Item 3 below). The shares of New Common Stock
which are sold in the Canadian Offering are not permitted to be sold in the
United States or otherwise in violation of Reg S until at least forty (40)
days after the closing of the Canadian Offering. It should be noted that
after the forty (40) days, U.S. persons will be able to purchase and sell the
New Common Stock sold in the Canadian Offering.
Assuming that the Reverse Stock Split is effected and the Canadian
Offering of an estimated 3,300,000 shares of New Common Stock, the NRC Private
Placement of an estimated 700,000 shares of New Common Stock and other
transactions contemplated thereby are consummated, the purchasers of the shares
in the Canadian Offering would own, in the aggregate, approximately 24.4% of the
Corporation's then issued and outstanding shares of New Common Stock. Nord
Resources, which currently owns approximately 35.3% of the issued and
outstanding shares of Common Stock of the Corporation, has agreed with the
Corporation that concurrent with the closing of the Canadian Offering, Nord
Resources will, subject to the closing of the MIL Investment (as defined below),
in a private placement (the "NRC Private Placement") under Section 4(2) of the
1933 Act, purchase that number of shares of New Common Stock
at the same purchase price as in the Canadian Offering so that after the
completion of the Canadian Offering and the NRC Private Placement, Nord
Resources would own approximately 30% of the Corporation's issued and
outstanding shares of New Common Stock. Assuming that 3,300,000 shares of
Common Stock are sold in the Canadian Offering, Nord Resources will concurrently
purchase 700,000 shares of Common Stock in the NRC Private Placement, subject to
the closing of the MIL Investment (as defined below). The shares of New Common
Stock to be purchased by Nord Resources in the NRC Private Placement will not
be registered under the 1933 Act and, therefore, may not be sold or otherwise
transferred unless registered under the 1933 Act or unless such sale or other
transfer is effected in accordance with an exemption from registration under
the 1933 Act.
No assurance can be given that the Underwriters will proceed with the
Canadian Offering or, if they proceed, that the Canadian Offering will be
successful. Furthermore, as the Prospectus is subject to change, the amount of
funds to be raised, the number of shares of New Common Stock to be sold as well
as the other terms discussed herein may be different in the event that the
Canadian Offering is consummated. The purchasers of the shares of New Common
Stock in the Canadian Offering will be determined by the Underwriters on the
closing date of the Canadian Offering.
The Canadian Offering is contingent upon the proposals referred to in
this Proxy Statement being approved by the stockholders of the Corporation and,
as set forth above, Nord Resources and the directors and executive officers of
the Corporation who, in the aggregate own approximately 40% of the issued and
outstanding shares of Common Stock of the Corporation (including the shares of
Common Stock owned by Nord Resources), have advised the Corporation that they
intend to vote in favor of the Proposals contained in this Proxy Statement. The
text of
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the resolution to be voted upon with respect to the Canadian Offering is annexed
hereto as EXHIBIT B. In order to comply with the requirements of the ASX, the
Corporation will disregard any votes cast on this Item 1 by persons or their
associates who, at the time of the special general meeting of stockholders, are
known by the Corporation to be participants in the purchase of Shares of New
Common Stock in the Canadian Offering.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" ITEM 1, THE
PROPOSED CANADIAN OFFERING.
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ITEM 2
APPROVAL OF REVERSE STOCK SPLIT
WITH REGARD TO COMMON STOCK
On December 17, 1996, the Board unanimously adopted a resolution
proposing that the Board recommend to the stockholders for approval, a proposal
to effect a one-for-five reverse stock split (the "Reverse Stock Split") of the
presently issued and outstanding shares of the Corporation's Common Stock. The
complete text of the resolution for the Reverse Stock Split is set forth in
EXHIBIT C to this Proxy Statement. If the Reverse Stock Split is approved by
the requisite vote of the Corporation's stockholders, the Board shall determine
the date upon which the Reverse Stock Split shall be effective, which date shall
in any event be prior to the closing of the Canadian Offering (hereinafter, the
"Reverse Stock Split Effective Date"), and each certificate representing shares
of Old Common Stock, $.01 par value per share, outstanding immediately prior to
the Reverse Stock Split will be deemed automatically without any action on the
part of the stockholders to represent one-fifth the number of shares of Common
Stock after the Reverse Stock Split, or one share of New Common Stock, $.05 par
value per share; provided, however, that no fractional New Common Stock will be
issued as a result of the Reverse Stock Split. In lieu thereof, each
stockholder whose shares of Old Common Stock are not evenly divisible by five
(5) will receive one (1) additional share of New Common Stock for the fractional
share of New Common Stock that such stockholder would otherwise be entitled to
receive as a result of the Reverse Stock Split. After the Reverse Stock Split
becomes effective, stockholders will be asked to surrender certificates
representing Old Common Stock in accordance with the procedures set forth in a
letter of transmittal to be sent by the Corporation. Upon such surrender, a
certificate representing the New Common Stock will be issued and forwarded to
the stockholders; however, each certificate representing Old Common Stock will
continue to be valid and represent New Common Stock equal to one-fifth the
number of Old Common Stock (plus one additional share of New Common Stock where
such Old Common Stock held by a stockholder is not evenly divisible by five
(5)).
The authorized capital of the Corporation will not change as a result of
the proposed Reverse Stock Split; however, the par value will increase from $.01
per share to $.05 per share and the number of authorized shares of Common Stock
will be reduced from 100,000,000 to 20,000,000. The New Common Stock issued
pursuant to the Reverse Stock Split will be fully paid and nonassessable. The
voting and other rights that presently characterize the Old Common Stock will
not be altered by the Reverse Stock Split.
WITH REGARD TO ADRs
If the Reverse Stock Split is approved by the requisite vote of the
Corporation's stockholders, each ADR (which presently represents five (5) shares
of Old Common Stock) will be deemed automatically without any action on the part
of the ADR holders to represent one (1) share of New Common Stock after the
Reverse Stock Split. After the Reverse Stock Split
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becomes effective, the Corporation intends to terminate the ADR Program and ADR
holders will be asked to surrender their ADR certificates in accordance with the
procedures set forth in a letter of transmittal to be sent by the Corporation.
Upon such surrender, a certificate representing the New Common Stock will be
issued and forwarded to the ADR holder; however, each ADR will continue to be
valid and represent one (1) share of New Common Stock.
PURPOSES OF THE PROPOSED REVERSE STOCK SPLIT
As noted above in Item 1 above, the Reverse Stock Split is necessary,
amongst other requirements, to effectuate the proposed Canadian Offering. As
noted below, there should be no differential between the market price on NASDAQ
of the ADRs and the New Common Stock inasmuch as the ADRs represent five (5)
shares of Old Common Stock and the New Common Stock also represents five (5)
shares of Old Common Stock by virtue of the one-for-five Reverse Stock Split.
As noted below in Item 3, the ASX is the only market in which the Old
Common Stock is traded, such market is inactive, and the total number of shares
of Old Common Stock not owned by management and that has not been converted to
ADRs is less than ten (10%) percent of the total outstanding Old Common Stock.
Accordingly, inasmuch as the principal market for the Corporation's Common Stock
in the form of ADRs is on NASDAQ, the Board believes that the Reverse Stock
Split will not have any significant effect upon the price of the New Common
Stock if such stock continues to trade on the ASX and is not delisted as
provided in Item 3 below.
EFFECT OF THE REVERSE STOCK SPLIT
Without any further action on the part of the Corporation or the
stockholders, after the Reverse Stock Split, the certificates representing Old
Common Stock will be deemed to represent one-fifth the number of New Common
Stock (plus one (1) additional share of New Common Stock where such Old Common
Stock held by a stockholder is not evenly divisible by five (5)) and each ADR
will be deemed to represent one (1) share of New Common Stock. All outstanding
options to purchase shares of Common Stock will, after the Reverse Stock Split
Effective Date, be exercisable for one (1) share of New Common Stock for each
five (5) shares of Old Common Stock and the exercise price for the New Common
Stock will be five (5) times the exercise price per share of the Old Common
Stock prior to the Reverse Stock Split Effective Date.
Stockholders have no appraisal rights under the laws of Bermuda with
respect to the Reverse Stock Split.
The Corporation currently has authorized capital stock of 100,000,000
shares of Common Stock, $.01 par value per share, and, after the Reverse Stock
Split, will have 20,000,000 shares of Common Stock, $.05 par value per share.
The authorized capital of the Corporation will not change by reason of the
Reverse Stock Split; however, the par value will increase from $.01 per share to
$.05 per share. As of January 8, 1997, the number of issued and outstanding Old
Common Stock was 47,578,270. The following table illustrates the principal
effects (before the
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Canadian Offering and the NRC Private Placement) of the proposed Reverse Stock
Split and decrease in outstanding Common Stock assuming no additional shares of
Old Common Stock are issued prior to the Reverse Stock Split Effective Date as a
result of the exercise of any options:
Shares of Prior to Proposed After Proposed
Common Stock Reverse Stock Split Reverse Stock Split
------------ ------------------- -------------------
Authorized 100,000,000 20,000,000
Par Value $.01 $.05
Outstanding 47,578,270 9,515,654(1)
Reserved for
Issuance upon
Exercise of
Outstanding Options(2)
and Bonus Shares 9,375,427 1,875,086
Thus, after the Reverse Stock Split Effective Date, the Corporation
will have 8,609,260 additional shares of Common Stock authorized and unissued
and not otherwise reserved for issuance (the "Additional Shares"). The
Additional Shares will be available for issuance from time to time without first
offering such shares to the stockholders. Stockholders do not have pre-emptive
rights with respect to the Additional Shares. Although the Corporation has no
present intention of issuing these Additional Shares (other than in the Canadian
Offering and the NRC Private Placement), the issuance of Additional Shares in
the Canadian Offering and the NRC Private Placement will, and any such issuance
of Additional Shares thereafter may, have the effect of diluting the voting
power of existing stockholders. The Board does not intend to issue any
Additional Shares except on terms which it deems to be in the best interest of
the Corporation. The issuance of Additional Shares may adversely affect the
market price of the Common Stock. However, in the event Additional Shares are
issued in transactions whereby favorable business opportunities are provided or
that provide working capital sufficient to adequately capitalize the Corporation
and allow it to pursue its business plans, the market price may increase. The
issuance of such Additional Shares might be disadvantageous to current
stockholders in that any additional issuances would reduce per share dividends,
if any.
The Corporation has no agreement or commitment concerning the issuance
of any Additional Shares except with respect to the Canadian Offering and the
NRC Private Placement.
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(1) Does not account for shares of New Common Stock issued in lieu of
fractional shares.
(2) Includes outstanding options, both currently and not currently exercisable
and options under existing stock option plans which are available for
issuance.
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CHANGES AFFECTING CAPITAL STOCK
The Old Common Stock is currently registered under Section 12(g) of the
Securities Exchange Act of 1934, as amended (the "1934 Act") and, as a result,
the Corporation is subject to the periodic reporting and other requirements of
the 1934 Act. The Reverse Stock Split will not effect the registration of the
Corporation's Common Stock under the 1934 Act. The Reverse Stock Split also
will not affect the Corporation's registration as a foreign corporation under
applicable Australian law.
EXCHANGE OF STOCK CERTIFICATES FOR COMMON STOCK
As soon as practicable after the Reverse Stock Split Effective Date,
American Stock Transfer and Trust Company, the Corporation's Common Stock
exchange agent ("CS Exchange Agent"), will send a letter of transmittal to each
holder of record of Old Common Stock outstanding on the Reverse Stock Split
Effective Date. The letter of transmittal will contain instructions for the
surrender of certificate(s) representing such Old Common Stock to the CS
Exchange Agent. Upon proper completion and execution of the letter of
transmittal and return thereof to the CS Exchange Agent, together with the
certificate(s) representing Old Common Stock, a shareholder will be entitled to
receive a certificate representing the number of New Common Stock into which his
Old Common Stock have been reclassified and changed as a result of the Reverse
Stock Split. STOCKHOLDERS SHOULD NOT SUBMIT ANY CERTIFICATES UNTIL REQUESTED TO
DO SO. No new certificate will be issued to a stockholder until he has
surrendered his outstanding certificate(s) together with the properly completed
and executed letter of transmittal to the CS Exchange Agent.
EXCHANGE OF ADR'S
As soon as practicable after the ADR Program is terminated (which will
occur immediately after the Reverse Stock Split Effective Date), The Bank of New
York, the Corporation's ADR exchange agent ("ADR Exchange Agent") will send a
letter of transmittal to each ADR holder of record on the date of termination of
the ADR Program. The letter of transmittal will contain instructions for the
surrender of the certificates representing the ADRs. Upon proper completion,
execution and forwarding of the letter of transmittal to the ADR Exchange Agent,
together with the certificates representing the ADRs, an ADR holder will be
entitled to receive a certificate representing one (1) share of New Common Stock
for each ADR. HOLDERS OF ADRS SHOULD NOT SUBMIT ANY CERTIFICATES UNTIL
REQUESTED TO DO SO. No certificates for New Common Stock will be issued to an
ADR holder until he has surrendered his ADR certificate together with the
properly completed and executed letter of transmittal to the ADR Exchange Agent.
UNITED STATES INCOME TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT
The Corporation has not sought and will not seek an opinion of counsel or a
ruling from the United States Internal Revenue Service regarding the federal
income tax consequences of the Reverse Stock Split. The Corporation, however,
believes that because the Reverse Stock Split
-11-
<PAGE>
is not part of a plan to periodically increase a stockholder's proportionate
interest in the assets or earnings and profits of the Corporation, the Reverse
Stock Split will have the following United States income tax effects:
1. A stockholder will not recognize gain or loss on the exchange. In the
aggregate, the stockholder's basis in the New Common Stock will equal
his basis in the Old Common Stock.
2. A stockholder's holding period for the New Common Stock will be the
same as the holding period of the Old Common Stock exchanged therefor.
3. The Reverse Stock Split will constitute a reorganization within the
meaning of Section 368(a)(1(E) of the United States Internal Revenue
Code of 1986, as amended, and the Corporation will not recognize any
gain or loss as a result of the Reverse Stock Split.
AUSTRALIAN INCOME TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT
The Reverse Stock Split will cause a disposal and acquisition of Common
Stock of the Corporation that are either held by Australian residents or
registered on the Australian register for any stockholder. If the stockholder
makes the requisite election, Old Common Stock which is subject to the operation
of the capital gains tax will be deemed not to have been disposed of by the
stockholder and the New Common Stock will be deemed to have been acquired at a
cost equal to the cost base which the stockholder had in the Old Common Stock.
Where the market value of the Old Common Stock at the time of the Reverse Stock
Split is less than the indexed cost base of the Old Common Stock for a
stockholder, the Old Common Stock will be deemed to have been disposed of and
the New Common Stock acquired at the market value of the Old Common Stock at the
time of the Reverse Stock Split.
In certain circumstances stockholders may be subject to the general income
tax provisions (rather than the capital gains tax provisions) of the Income Tax
Assessment Act of Australia in relation to profits or losses arising on the
disposal of Common Stock in the Corporation, for example a person who trades in
shares. In such cases, the Old Common Stock will be deemed to have been sold at
the time of the Reverse Stock Split for market value and a taxable profit may
arise for the shareholder.
MISCELLANEOUS
The Board may abandon the proposed Reverse Stock Split at any time before
or after the Special General Meeting and prior to the Reverse Stock Split
Effective Date if for any reason the Board deems it advisable to abandon the
proposal. In addition, the Board may make any and all changes to the
Corporation's Bye-Laws that it deems necessary to give effect to the Reverse
Stock Split.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" ITEM 2, THE REVERSE STOCK SPLIT.
-12-
<PAGE>
ITEM 3
APPROVAL AUTHORIZING BOARD OF DIRECTORS,
IN ITS SOLE DISCRETION, TO DELIST
COMMON STOCK FROM THE
AUSTRALIAN STOCK EXCHANGE LIMITED
On December 17, 1996, the Board unanimously adopted a resolution proposing
that the Board recommend to the stockholders for approval, a resolution whereby
the stockholders would authorize the Board, in its sole discretion, to delist
the Corporation's Common Stock from the ASX. Pursuant to the rules of the ASX,
stockholder approval is necessary in order for the Corporation to voluntarily
delist its Common Stock from the ASX, unless otherwise permitted by the ASX in
its sole discretion. The text of the resolution authorizing the Board, in its
sole discretion, to delist the Corporation's Common Stock from the ASX is
annexed hereto as EXHIBIT D.
The Corporation listed its Common Stock on the ASX in February 1994 in
conjunction with the public offering of the Corporation's Common Stock in
Australia at that time ("Australian Offering"). In the Australian Offering, the
Corporation sold 16,000,000 shares of Common Stock or approximately 34% of the
currently issued and outstanding shares of the Corporation. Warrants to
purchase an additional 16,000,000 shares of Common Stock were also included in
the Australian Offering; however, none of such warrants were exercised prior to
their expiration. Since the Australian Offering, the percentage of shares owned
by Australians and the level of activity in shares of Common Stock on the ASX
has been significantly reduced. Currently, the market for the Corporation's
Common Stock on the ASX is inactive in that relatively few shares are traded
and such trades occur only on a few days in each month. In addition, the
Corporation believes that less than 10% of its issued and outstanding shares of
Common Stock are owned by persons resident in Australia. Further, the principal
market for the Corporation's securities is in the United States in the form of
the ADRs, which trade on NASDAQ, and represent approximately 90% of the
Corporation's outstanding shares of Common Stock. The Corporation has incurred
significant costs over the last several years regarding its listing on the ASX,
including the annual listing fees, and legal fees and expenses incurred in
connection with compliance with rules and regulations of the ASX.
In the event that the Corporation's Common Stock is delisted from the ASX,
holders of the Corporation's Common Stock resident in Australia will be able to
purchase and sell Common Stock of the Corporation on NASDAQ and, assuming that
the Canadian Offering occurs, on the TSE. Therefore, Australian residents
should not experience any material decrease in liquidity of their shares of
Common Stock of the Corporation.
-13-
<PAGE>
The Board believes that it is in the best interest of the Corporation to
authorize the Board, in its sole discretion, to cause the delisting of the
Corporation's Common Stock from the ASX for reasons set forth above. The Board
believes that such action would be taken shortly after the completion of the
Canadian Offering, but that flexibility in such decision is advisable.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" ITEM 3, AUTHORIZING THE BOARD, IN
ITS SOLE DISCRETION, TO DELIST THE CORPORATION'S COMMON STOCK FROM THE ASX.
-14-
<PAGE>
STOCKHOLDER PROPOSALS
A proposal by a stockholder intended for inclusion in the Corporation's
proxy statement for the 1997 annual meeting of stockholders must be received by
the Corporation at the address noted immediately above marked: "Attention:
Secretary," on or before an extended date of December 21, 1996, in order to be
eligible for such inclusion.
For the Board of Directors,
Leo E. Dugdale, III
Secretary
FOR ALL STOCKHOLDERS:
Please sign the proxy and return it promptly in the enclosed envelope
addressed to Ernst & Young Registry Services Pty Ltd, GPO Box 7045, Sydney, NSW
2001 to which no postage need be affixed if mailed within the Commonwealth of
Australia.
January 13, 1997 NORD PACIFIC LIMITED
22 Church Street
Hamilton HM 11
Bermuda
-15-
<PAGE>
EXHIBIT A
NORD PACIFIC LIMITED
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
(UNAUDITED)
(IN THOUSANDS OF US DOLLARS)
ASSETS
<TABLE>
<CAPTION>
Historical Pro Forma Pro Forma
Balances Adjustments Results
---------- ----------- ---------
<S> <C> <C> <C>
CURRENT ASSETS:
Cash $ 159 $ 21,800(1) $ 21,959
Accounts Receivable 1,766 1,766
Inventories 374 374
Premium on copper contracts 2,327 2,327
Prepaids 103 103
--------- --------- --------
TOTAL CURRENT ASSETS 4,729 21,800 60,485
PREMIUM CONTRACTS 559 559
UNAMORTIZED DEFERRED COSTS ASSOCIATED
WITH ORE UNDER LEACH 7,636 7,636
PROPERTY, PLANT AND EQUIPMENT - net 5,612 5,612
DEFERRED EXPLORATION AND
DEVELOPMENT COSTS 20,149 20,149
--------- --------- ---------
$ 38,685 $ 21,800 $ 60,485
--------- --------- ---------
--------- --------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable $ 2,529 $ 2,529
Accrued Expenses 261 261
Loan Payable 913 913
Deferred gain on copper contracts 2,691 2,691
Current Maturities of Long-Term Debt 3,870 3,870
--------- ---------
TOTAL CURRENT LIABILITIES 10,264 10,264
LONG-TERM LIABILITIES:
Long-Term Debt 375 375
Deferred gain on copper contracts 640 640
Deferred income tax liability 2,440 2,440
Obligation Under Purchase Agreement 791 791
Retirement Benefits 189 189
--------- - ---------
4,435 4,435
SHAREHOLDERS' EQUITY:
Common Stock 476 200 (2) 676
Additional Paid-In Capital 31,522 21,600 (3) 53,122
Deficit (8,810) (8,810)
Cumulative Foreign Currency
Translation Adjustment 798 798
--------- --------- ---------
TOTAL SHAREHOLDERS' EQUITY 23,986 21,800 45,786
--------- --------- ---------
$ 38,685 $ 21,800 $ 60,485
--------- --------- ---------
--------- --------- ---------
</TABLE>
See Notes to Pro Forma Condensed Consolidated Balance Sheet
<PAGE>
EXHIBIT A (CONTINUED)
NORD PACIFIC LIMITED
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
(UNAUDITED)
(IN THOUSANDS OF US DOLLARS)
(1) - Consists of the following:
Proceeds from the Canadian Offering $19,800
Issue costs (2,200)
-------
$17,600
Proceeds from the NRC Private Placement 4,200
-------
$21,800
-------
-------
(2) - Consists of the following:
Shares issued in the Canadian Offering 165
Shares issued in the NRC Private Placement 35
-------
$200
-------
-------
(3) - Consists of the following:
Proceeds from the Canadian Offering 19,800
Issue costs (2,200)
-------
$17,600
Proceeds from the NRC Private Placement 4,200
-------
21,800
Par value of Shares issued in the Canadian
Offering and in the NRC Private Placement (200)
-------
$21,600
-------
-------
<PAGE>
EXHIBIT B
"That the Corporation be authorized to engage in the Canadian Offering, as
described in the Corporation's Proxy Statement dated January 13, 1997, and sell
up to 4,500,000 shares of its New Common Stock, in the aggregate, the exact
number of shares to be sold, the price thereof and all other economic aspects of
the Canadian Offering to be determined by the Board of Directors based upon
market conditions at the time of sale."
<PAGE>
EXHIBIT C
"That the Corporation effect a one-for-five Reverse Stock Split of the
presently issued and outstanding shares of Common Stock of the Corporation
whereby one (1) new share of Common Stock, $.05 par value per share, be issued
in exchange for every five (5) shares of Common Stock, $.01 par value per share,
presently issued and outstanding and that no fractional shares be issued and in
lieu thereof, each stockholder whose presently issued and outstanding shares of
Common Stock are not divisible by five (5) will receive one (1) additional share
of New Common Stock, and the Board of Directors is authorized to set the
effective date of the Reverse Stock Split."
<PAGE>
EXHIBIT D
"That the Board of Directors be authorized, in its sole and absolute
discretion, to make application to The Australian Stock Exchange Limited to
delist the Corporation's Common Stock, $.01 par value per share, from The
Australian Stock Exchange Limited."
<PAGE>
PROXY - NORD PACIFIC LIMITED
PROXY FOR SPECIAL GENERAL MEETING OF STOCKHOLDERS TO BE HELD ON
FEBRUARY 17, 1997
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints W. PIERCE CARSON, LEONARD LICHTER, JOHN C.R.
COLLIS and MICHAEL J. DREW and each or any one of them (with powers of
substitution), proxies for the undersigned to vote all shares of Common Stock
held of record on January 8, 1997, of NORD PACIFIC LIMITED (the "Corporation")
which the undersigned would be entitled to vote if personally present at the
Special General Meeting of Stockholders to be held in Hamilton, Bermuda, on
February 17, 1997, and at any adjournment thereof, upon the matters set forth in
the Notice of and Proxy Statement for said meeting, copies of which have been
received by the undersigned, and in their discretion, upon all other matters
which may properly come before said meeting. Without otherwise limiting the
generality of the foregoing, said proxies are directed to vote as follows:
/X/ PLEASE MARK YOUR VOTES
AS IN THIS EXAMPLE. FOR AGAINST ABSTAIN
1. Approve the sale of up to 4,500,000 / / / / / /
shares of New Common Stock by the
Corporation in the Canadian Offering*
2. Approve a one-for-five Reverse Stock / / / / / /
Split, issue one additional share of Common
Stock instead of fractional shares and
authorize Board to set effective date
3. Approve the Board, in its sole discretion, / / / / / /
to delist the Corporation's Common Stock
from The Australian Stock Exchange
Limited
4. In their discretion to act upon such other
matters as may properly come before the / / / / / /
special general meeting or any
adjournment thereof.
This proxy, when properly executed, will be voted in the manner directed herein
by the stockholder. If no specification is made, this proxy will be voted in
favor of the above proposals.
*The Corporation will disregard any votes cast on Item 1 by persons or their
associates who, at the time of the special general meeting of stockholders, are
known by the Corporation to be participants in the purchase of shares of New
Common Stock in the Canadian Offering.
<PAGE>
Your proxy is important to assure a quorum at the special general meeting
whether or not you plan to attend the meeting in person. You may revoke this
proxy at any time, and the giving of it will not effect your right to attend the
special general meeting and vote in person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
SIGNATURE(S)_________________________DATE_____________
NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS. WHEN SHARES ARE HELD AS JOINT
TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A CORPORATION, PLEASE
SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER AUTHORIZED OFFICER AND IF A
PARTNERSHIP, PLEASE SIGN IN THE PARTNERSHIP NAME BY AUTHORIZED PERSON.
