<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A-1
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________ to ________
Commission file Number 000-19182
Nord Pacific Limited
(Exact name of registrant as specified in its charter)
Bermuda Not Applicable
------- --------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
22 Church Street,
Hamilton HM FX, Bermuda Not Applicable
- ----------------------- --------------
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (441) 292-2363
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $.05 Par Value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes /X/ No / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. /X/
Aggregate market value of voting stock held by non-affiliates based on the
average of NASDAQ bid and asked ADR quotations as of March 14, 1997, was
$39,500,000.
The number of common shares outstanding as of March 14, 1997 was 9,515,654.
DOCUMENTS INCORPORATED BY REFERENCE
NONE
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Each director holds office until the next annual meeting of stockholders
and until their successors are elected and qualified. There are no family
relationships among any nominees or directors or among them and any officer
of the Corporation or any of its subsidiaries.
Set forth below is certain information for each nominee for election as
director and each executive officer named in the Summary Compensation Table.
Nominees for Director
Election as Directors Age Since
--------------------- --- -----
Edgar F. Cruft 64 1988
W. Pierce Carson 54 1988
Terence H. Lang 60 1988
Leonard Lichter 69 1988
John C.R. Collis 38 1988
Michel J. Drew 61 1988
Lucile Lansing 68 1990
John B. Roberts 61 1994
Other Named Executive Officer
Officers Age Since
-------- --- -----
Mark R. Welch 58 1990
Dr. Cruft is the Chairman and Chief Executive Officer of the Corporation
and has been so since its inception. He is also a founder of Nord Resources
Corporation and has served as its Chairman, President, Chief Executive
Officer and a director since its inception in 1968. He holds a Bachelors
Degree in Geology from Durham University, England and a Ph.D. in Geochemistry
from McMaster University, Canada.
Dr. Carson is a director and the President of the Corporation and has
been so since its inception. He was previously Senior Vice President of
Exploration for Nord Resources Corporation and has 30 years experience in the
mining industry. Between 1980 and April 1990, he was responsible for closely
directing exploration and mining activities for the Corporation's predecessor
while under the employment of Nord Resources Corporation. Dr. Carson holds
a Bachelors Degree in Geology from Princeton University and a Ph.D. in
Economic and Structural Geology from Stanford University. Dr. Carson has
been a director of Nord Resources Corporation since January 1994.
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Mr. Lang is a director, Vice President and the Treasurer of the
Corporation and has been so since its inception. He is and has been a
director and employee of Nord Resources Corporation since 1978 and holds a
degree in business administration. He is Senior Vice President-Finance and
Treasurer of Nord Resources Corporation.
Mr. Lichter is a director of the Corporation and has been so since its
inception. He is an attorney and a Certified Public Accountant and since
1971 has been a principal in the law firm of Spitzer & Feldman P.C., New
York, New York, which is counsel to the Corporation. He is also a director
of Nord Resources Corporation.
Mr. Collis, a director of the Corporation since its inception, is, and
has been employed for more than the past five years at Conyers, Dill &
Pearman, Barristers and Attorneys, Hamilton, Bermuda, where he is a partner
and which firm is special Bermuda counsel to the Corporation. Mr. Collis
received a Bachelor of Commerce degree from McGill University, Canada, and a
Bachelor of Arts (Jurisprudence) from Oxford University, England. He is a
member of the Bar of England and Wales and of the Bar of Bermuda. The
registered office of the Corporation is located at the offices of Conyers,
Dill & Pearman.
Mr. Drew, a director of the Corporation since its inception, is
President and a majority stockholder of International Services Limited, a
management services company based in Bermuda which provides services to the
Corporation. He is a director of Old Mutual South Africa Trust and Old
Mutual Equity Growth Assets South Africa Fund. He is a member of the
Institutes of Chartered Accountants of Canada, Ontario and Bermuda and of the
executive committee of the International Companies Division of the Bermuda
Chamber of Commerce. The executive offices of the Corporation are located at
the offices of International Services Limited.
Ms. Lansing, a director of the Corporation since May 1990, is, and has
been since 1979, President of Lansing Financial Group, Inc., the general
partner of a venture capital fund and also a registered securities principal
which provides general administrative services to registered representatives.
She is also Chief Executive Officer of Ceracon, Inc., a technology company
and a director of Octus, Inc. of San Diego, California.
Mr. Roberts became a director of the Company in January 1994. He has
over 39 years of mining related experience and was Chairman of Australian
Resources Limited from August 1993 to February 1997 and is presently a
director. Australian Resources Limited is a public company producing gold and
copper in Australia. Mr. Roberts was previously Managing Director of
Homestake Gold of Australia Limited, which he served in various capacities in
Australia and the United States. He holds a Bachelor of Science degree in
Geology from University of Adelaide, South Australia and is a Fellow of the
Australian Institute of Mining and Metallurgy, among other professional
association memberships.
Mark Welch, 58, was appointed Vice President-Development of the
Corporation in February 1990. Mr. Welch was Chief Engineer of Ranchers
Exploration and Development Corporation from 1974-1984 where he had major
responsibility for development and operation of various gold, silver, copper,
uranium and industrial minerals projects. From 1984 to 1990 he was Vice
President of
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Western Resources Corporation, a mining industry company. He holds the
degree of B.S. Mining Engineering from Washington State University.
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Corporation's directors, executive officers and
beneficial holders of more than 10% of the Corporation's Common Stock to file
with the United States Securities and Exchange Commission ("SEC) initial
reports of ownership and reports of changes in ownership of Common Stock of
the Corporation. Based solely upon the Corporation's review of copies of
forms it receives from executive officers, directors and beneficial holders
owning more than 10% of the outstanding shares of Common Stock of the
Corporation and on written representations from certain of such persons, the
Corporation believes that during the fiscal year ended December 31, 1996 all
filing requirements under Section 16(a) of the Exchange Act were made by such
persons on a timely basis.
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth compensation earned in fiscal years ended
December 31, 1996, 1995 and 1994 by (hereinafter collectively "Named
Executive Officers") (i) the Chief Executive Officer of the Corporation and
(ii) the Corporation's other most highly compensated executive officers,
whose aggregate salary and dollar value of bonus for the fiscal year ended
December 31, 1996 exceeded $100,000.
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
--------------------------- ------------------------
Awards
------------------------
Other Securities
Annual Underlying,
Name & Principal Salary Bonus Compensation Options/SARs
Position Year ($) ($) ($) Options (#)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Edgar F. Cruft - 1996 166,810 20,760(1) 48,000(3)
CEO2 1995 158,840 20,760(1) 60,000(6)
1994 150,432 72,000
- -------------------------------------------------------------------------------------------
W. Pierce Carson - 1996 230,475 79,408(4) 48,000(3)
President 1995 218,705 77,302(4) 60,000(6)
1994 197,558 55,041(4) 72,000
- -------------------------------------------------------------------------------------------
Mark R. Welch - 1996 125,500 61,293(4) 25,600(5)
Vice President 1995 118,422 55,264(4) 32,000(7)
Development 1994 100,058 29,780(4) 32,000
- -------------------------------------------------------------------------------------------
</TABLE>
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(1) Represents the Company's contribution to Dr. Cruft's 401(k) plan.
(2) Dr. Cruft devotes approximately 25% of his working time to the
activities of the Corporation.
(3) Subject to a one year restriction on exercise from February 2, 1996 for
24,000 shares and two years for 24,000 shares.
(4) Includes additional cash compensation of $50,300, $47,600 and $49,700
to Dr. Carson and $43,100, $40,800 and $28,400 to Mr. Welch for 1996,
1995 and 1994 respectively paid as a living allowance since the
Company's business requires these officers to spend a significant portion
of their time in Australia. Also includes $20,760 to Mr. Carson in 1996
and 1995 and $16,390 to Mr. Welch in 1996 as the Company's contribution
to each individual's 401(k) plan.
(5) Subject to a one year restriction on exercise from February 2, 1996 for
12,800 shares and two years for 12,800 shares.
(6) Subject to a one year restriction on exercise from January 31, 1995 for
30,000 shares and two years for 30,000 shares.
(7) Subject to a one year restriction on exercise from April 6, 1995 for
16,000 shares and two years for 16,000 shares.
- ------------------------------------------
The following table shows as to each Named Executive Officer for the
1996 calendar year (i) the number of shares with respect to which options
were granted by the Corporation (ii) the percentage of total options granted
to employees, (iii) the per share exercise price for such options, (iv) the
expiration date of the options, and (v) potential realized value of the
options.
OPTION GRANTS IN 1996
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------------------------------------
Potential Realizable
Value at Assumed
Number of % of Total Annual Rates of Stock
Securities Options Price Appreciation for
Underlying Granted to Exercise or Option Term(2)
Options Employees in Base Price Expiration
Name Granted (#) 1996(1) ($/SH) Date 5% 10%
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Edgar F. Cruft 48,000 13.8 4.50 Feb. 2, 2001 $59,677 $131,870
- ------------------------------------------------------------------------------------------------
W. Pierce Carson 48,000 13.8 4.50 Feb. 2, 2001 $59,677 $131,870
- ------------------------------------------------------------------------------------------------
Mark Welch 25,600 7.4 4.50 Feb. 2, 2001 $31,828 $ 70,331
- ------------------------------------------------------------------------------------------------
</TABLE>
(1) The Corporation granted options to purchase 347,200 shares in 1996.
(2) Dollar amounts under these columns are the result of calculations based
on assumed annualized rates of stock appreciation of 5% and 10% as
prescribed by the SEC. The assumed rates are not intended by the
Corporation to forecast possible future appreciation, if any, of its
stock price, which will be determined by future events and unknown
factors.
The following table presents information concerning options exercised
during 1996 and the value of unexercised options at December 31, 1996 for
each Named Executive Officer.
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AGGREGATED OPTION EXERCISES IN 1996
AND YEAR-END OPTIONS VALUES
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised In-the-
Shares Acquired Options at December 31, Money Options at December
Name on Exercise 1996 (#) 31, 1996(1) ($)
- ------------------------------------------------------------------------------------------------
Exercisable/Unexercisable Exercisable/Unexercisable
------------------------- -------------------------
<S> <C> <C> <C> <C> <C>
Edgar F. Cruft None 238,000 78,000 599,658 153,938
W. Pierce Carson None 238,000 78,000 599,658 153,938
Mark R. Welch None 111,200 41,600 253,115 82,100
</TABLE>
- ------------------------------
(1) Based upon the closing price of the Corporation's Common Stock on
December 31, 1996 of $6.2813 per share as quoted on NASDAQ and after
giving effect to the 5 for 1 reverse stock split effective March 10, 1997.
RETIREMENT AND CHANGE IN CONTROL AGREEMENTS
FOR NAMED EXECUTIVE OFFICERS
The Corporation has a severance agreement with Dr. Carson to pay him two
years of his salary and bonuses, if any, should his employment be terminated
within two years of acquisition of control of the Corporation by a group
other than Nord Resources Corporation. In such event, Dr. Carson would also
be paid the "spread" or difference between the market price and exercise
price of any unexercised stock options he holds at that time. The
Corporation has a severance agreement with Mr. Welch to pay six months of
salary and bonus, if any, should his employment be terminated within two
years of acquisition of control of the Corporation by a group other than Nord
Resources Corporation. These agreements are intended to insure the
establishment and maintenance of a sound and vital management, essential to
protecting and enhancing the best interests of the Corporation and its
stockholders.
Prior to joining the Corporation full-time in April 1990, Dr. Carson had
a separate retirement agreement with Nord Resources Corporation which
provided annual payments to Dr. Carson for a period of 15 years commencing at
age 62, or on termination of employment, whichever is later (or age 55 in the
event the provisions of the agreement with respect to early retirement are
satisfied). The payments were based on a percentage of his average annual
compensation over his final three years of employment. The percentage is
equal to 5% plus 1-1/2% for each year of service that Dr. Carson has with
Nord Resources Corporation to a maximum of 30 years. At December 31, 1996,
Dr. Carson had 16 years of service. The agreement also provided for payment
of certain death benefits. The Corporation assumed the agreement and Dr.
Carson's years of service under the agreement includes the years he was
employed by Nord Resources Corporation. For the years ended December 31,
1996, 1995 and 1994, the Corporation accrued $68,000, $59,000 and $76,000,
respectively, relating to the retirement benefits expected to be paid to Dr.
Carson.
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The following table illustrates the estimated annual retirement benefit
that would be payable for 15 years to Dr. Carson at specified levels of
compensation and years of service to the Corporation. In 1992, however, the
agreement was amended to provide that the net present value of his future
retirement benefits at the time of his retirement would be paid to him within
three years of his retirement, reduced by his share of the cash value of a
certain insurance policy which the Corporation transferred to him in 1992.
Years of Service
FINAL AVERAGE
COMPENSATION 10 15 20 25 30
- -----------------------------------------------------------------------
$100,000 $20,000 $27,500 $35,000 $42,500 $50,000
$125,000 $25,000 $34,375 $43,750 $53,125 $62,500
$150,000 $30,000 $41,250 $52,500 $63,750 $75,000
$175,000 $35,000 $48,125 $61,250 $74,375 $87,500
$200,000 $40,000 $55,000 $70,000 $85,000 $100,000
$225,000 $45,000 $61,875 $78,750 $95,625 $112,500
$250,000 $50,000 $68,750 $87,500 $106,250 $125,000
Directors who are not otherwise employed by the Corporation receive $1,000
per calendar quarter and $500 for attending each in-person meeting of the
Board. Mr. Lichter does not receive any fees for his membership on the
Board. Mr. Lichter bills his time through Spitzer & Feldman P.C., of which
he is a principal, and which is counsel to the Corporation. Mr. Collis also
does not receive any fees for his membership on the Board. He bills his time
through Conyers, Dill & Pearman, of which he is a partner and which is
special counsel to the Corporation in Bermuda. Mr. Drew is employed by
International Services Limited, which receives payment under contract from
the Corporation for corporate services, including his time as a director,
therefore he also does not receive fees for his membership on the Board. Mr.
Roberts, in addition to his Board fees, receives a fee as a consultant to the
Corporation.
During 1996 the Board held six meetings. All Board members attended at
least 75% of the Board meetings and Committee meetings except for Mr. Drew
who attended three of the Board meetings and Ms. Lansing who attended four of
the Board meetings in 1996.
The Board has a Compensation Committee, composed of Dr. Cruft, Mr. Drew
and Mr. Collis, and an Audit Committee composed of Mr. Lichter and Mr. Drew.
The Audit Committee meets independently with the internal auditing staff,
with representatives of the Corporation's independent accountants and with
representatives of senior management. The Audit Committee reviews the
general scope of the Corporation's annual audit, the fee charged by the
independent accountants and other matters relating to internal control
systems. In addition, the Audit Committee is responsible for recommending
the engagement or discharge of the Corporation's independent accountants.
The Compensation Committee is responsible for approving and reporting to the
Board on the annual compensation for all officers, including salary and stock
options. The Compensation
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Committee also is responsible for granting stock options and other awards to
be made under the Corporation's existing compensation and bonus plans. The
Compensation Committee did not meet during 1996 and matters of compensation
and the granting of stock options were addressed by the full Board. The
Audit Committee met once during the year to review the audited financial
statements for 1995. The Corporation does not have a nominating committee.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Dr. Cruft is Chairman and CEO of the Corporation and a member of the
Compensation Committee. Dr. Cruft is also Chairman and CEO of Nord Resources
Corporation, which entity owns approximately 35% of the issued and
outstanding shares of common stock of the Corporation. Dr. Carson is
President of the Corporation. Dr. Carson is also a Director of Nord
Resources Corporation and a member of that company's Compensation Committee.
Mr. Collis is a member of the law firm of Conyers Dill & Pearman, special
Bermuda counsel to the Corporation. During 1996 Conyers Dill & Pearman was
paid $ 8,400 for legal services. Mr. Drew is a principal in International
Services Limited, which provides corporate services for the Corporation in
Bermuda. International Services Limited was paid $13,900 by the Corporation
in 1995 to perform such services.
BOARD COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
PHILOSOPHY
The Corporation applies a consistent philosophy to compensation for all
employees, including senior management. This philosophy is based on the
premise that the achievements of the Corporation result from the coordinated
efforts of all individuals working toward common objectives. The Corporation
strives to achieve those objectives through teamwork that is focused on
meeting the periodic goals established by the Corporation and the
expectations of stockholders. The compensation program goals are to enable
the Corporation to attract, retain and reward key personnel who contribute to
the long-term success of the Corporation and to align compensation with
business objectives and performance. The Corporation's compensation program
for executive officers is based on the same principles applicable to
compensation decisions for all employees of the Corporation. Through the
grant of stock options, stock bonuses and restricted stock, the Corporation
intends to relate compensation to overall corporate performance as reflected
in the price of its stock.
COMPENSATION AND PERFORMANCE
Executive officers are rewarded based upon corporate performance and
individual performance. Corporate performance is evaluated by reviewing the
extent to which strategic and specific goals are met, including such factors
as demonstrating measurable progress in the exploration, development and
operation of the Corporation's properties and acquiring new properties
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for exploration and development. Individual performance is evaluated by
reviewing organizational and management development progress and the degree
to which the employee has contributed to the success of the Corporation.
The Corporation applies its compensation philosophy worldwide. The
Corporation strives to achieve a balance of the compensation paid to a
particular individual and the compensation paid to other executives both
inside the Corporation and at comparable companies.
COMPENSATION TO CEO AND PRESIDENT
Matters relating to compensation of executives officers were addressed by
the full Board of Directors in 1996. The Board approved a 5% increase in the
salaries of Dr. Cruft and Dr. Carson for fiscal year 1996. The Board also
approved a contribution to the 401(k) plan of $20,760 each for Dr. Cruft and
Dr. Carson.
COMPENSATION VEHICLES
The Corporation has a history of using a program that consists of cash
and equity based compensation. Having a compensation program that allows the
Corporation to successfully attract and retain key employees permits it to
explore and develop mines and produce its minerals at expected competitive
levels of production and costs, to enhance stockholder value, motivate
technological innovation, foster teamwork and adequately reward employees.
The compensation vehicles are:
(a) Cash Based Compensation - The Corporation sets base salary for
employees by reviewing the aggregate of base salary and annual bonus for
competitive positions in the market and by reviewing the employee's
historical compensation and the effect of inflation on such compensation.
(b) Stock Bonus Plan - The Corporation has the 1990 Bonus Plan under
which awards of stock are made from time to time for outstanding performance
and as an incentive for future performance. Directors and officers who are
directors are not eligible for awards under the 1990 Bonus Plan.
(c) Restricted Stock - Awards of stock can be made under this plan to
reward prior service and as an incentive for future service. Recipients of
restricted stock awards must continue in the employ of the Corporation for
specified periods or the stock is forfeited.
(d) Stock Option Program - The purpose of this program is to provide
additional incentive to employees to work to maximize stockholder value. The
option program also utilizes vesting periods to encourage all employees to
continue in the employ of the Corporation. The Corporation grants stock
options annually to most, and sometimes all, of its employees.
8
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(e) Deferred Compensation for Senior Executives - The Corporation has
entered into a retirement agreement with its President. The agreement
provides benefits to this senior executive upon retirement based on several
factors, including the number of years of service to the Corporation. The
purpose of this retirement agreement is to provide incentive to that senior
executive to continue to provide his services to the Corporation. Deferred
compensation may be made available in the future to other senior executives.
(f) 401(k) Plan - The Corporation provides a retirement and savings
plan for its salaried U.S. employees pursuant to Section 401(k) of the
Internal Revenue Code. Each employee may contribute up to 15% of his or her
salary to this plan, to a maximum of $9,500 in 1996 and defer taxes on that
contribution. In 1995 the Corporation made a contribution to the respective
401(k) plans of employees. This plan helps the Corporation to attract and
retain employees upon whom the Corporation relies in operating its business.
Compensation Committee:
Edgar F. Cruft
John C.R. Collis
Michel J. Drew
STOCKHOLDER RETURN ON COMMON STOCK
The following graph compares the total annual return on the
Corporation's Common Stock with the annual return of the CRSP Total Return
Index for the NASDAQ Stock Market (U.S. and Foreign Companies) for the period
December 31, 1991 to December 31, 1996, and with the CRSP Index for NASDAQ
stocks with SIC codes 1000-1099 (metal mining companies).
Comparison of Five Year - Cumulative Total Returns
Performance Graph for Nord Pacific Limited
December 31, 1991 to December 31, 1996
The performance graph contains the following information plotted in a
line graph with the December 31, 1996 values indicated beside the plotted
number
<TABLE>
<CAPTION>
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Nord Pacific Limited 100.0 83.2 122.8 110.9 85.5 163.1
Nasdaq Stock Market (U.S. & Foreign 100.0 116.0 134.3 130.3 183.0 224.1
Nasdaq Stocks Metal Mining 100.0 71.9 166.9 151.6 144.1 163.2
</TABLE>
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS & MANAGEMENT
Set forth below is certain information for each nominee for election as
director and each executive officer named in the Summary Compensation Table.
Common Stock Beneficially
Owned as of April 21, 1997(1)
-----------------------------
Nominees for
Election as Directors Number Percent of Class
- --------------------- ------ ----------------
Edgar F. Cruft 3,808,012(2) 38.8%
W. Pierce Carson 3,808,012(2) 38.8%
Terence H. Lang 3,488,012(3) 36.2%
Leonard Lichter 3,473,312(3) 36.2%
John C.R. Collis 81,602(4) *
Michel J. Drew 81,602(4) *
Lucile Lansing 81,600(4) *
John B. Roberts 54,600(5) *
Other Named Executive
Officers Number Percent of Class
- -------- ------ ----------------
Mark R. Welch 152,800(6) 1.6%
All Named Executive Officers
and Directors as a Group
(9 persons) -- -- 4,985,515(7) 46.4%
- ------------------------------------------
* Represents less than 1% 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 April 21, 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 April 21, 1997.
(2) Includes options to purchase 72,000 shares under 1991 Stock Option Plan.
Includes options to purchase 60,000 shares under the 1995 Stock Option Plan.
Includes non-plan options to purchase 160,000 shares. Includes 3,348,012
shares of Common Stock 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 12,000 shares under the 1991 Stock Option
Plan and non-plan options to purchase 64,000 shares for Mr. Lang and
45,600 shares for Mr. Lichter. Includes option to purchase 40,000 shares
for Mr. Lang and 24,000 shares for Mr. Lichter under the 1995 Stock Option
Plan. Includes 3,348,012 shares of Common Stock 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 6,000
shares owned by his wife for which shares he disclaims beneficial ownership.
(4) Includes options to purchase 12,000 shares under the Corporation's 1991
Stock Option Plan, options to purchase 24,000 shares under the 1995 Stock
Option Plan, and non-plan options to purchase 45,600 shares.
(5) Also includes options to purchase 12,000 shares under the Corporation's
1991 Stock Option Plans and options to purchase 24,000 shares under the
1995 Stock Option Plan and non-plan options to purchase 17,600 shares.
(6) Includes options to purchase 12,000 shares under the 1989 Stock Option
Plan and options to purchase 83,200 shares under the Corporation's 1991
Stock Option Plan and options to purchase 44,800 shares under the 1995
Stock Option Plan.
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(7) Includes options to purchase 1,220,000 shares. Also includes 3,348,012
shares owned by Nord Resources Corporation of which Messrs. Cruft, Carson,
Lang and Lichter are directors and Messrs. Cruft and Lang are executive
officers.
- ------------------------------------------
The following table sets forth the only person known by the Board to be the
beneficial owner of more than 5% of the outstanding shares of Common Stock of
the Corporation as of April 21, 1997.
Common Stock Beneficially
Owned as of April 21, 1997
---------------------------
Name and Address of Beneficial Owner Number Percent of Class
- ------------------------------------ ------ ----------------
Nord Resources Corporation 3,348,012(1) 35.2%
8150 Washington Village Drive
Dayton, Ohio 45458
- ------------------------------------------
(1) On April 2, 1990, Nord Resources Corporation received 1,915,200 shares
of Common Stock in connection with an Exchange Offer (as defined below).
Subsequent to April 2, 1990, and up to April 1, 1993, Nord Resources
Corporation purchased in market transactions on the National Association
of Securities Dealers Automated Quotation System ("NASDAQ") a total of
142,476 shares of the Corporation's Common Stock at an average purchase
price of $4.10 per share. On September 3, 1993 Nord Resources Corporation
converted $2.5 million of debt owed it by the Corporation into 592,592
shares of Common Stock of the Corporation at the then prevailing market
price. On February 15, 1994, Nord Resources Corporation received 697,744
additional shares of the Corporation's Common Stock in exchange for
converting an additional $2.9 million of debt owed it by the Corporation.
In April 1990, the Corporation issued shares of its Common Stock to Nord
Australex Limited Partnership and Hicor Mineral Exploration Series-I in
exchange for all of their respective assets and liabilities (the "Exchange
Offer"). Nord Resources Corporation was the general partner of each
partnership.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On April 2, 1990, the Corporation entered into a management agreement
(the "Management Agreement") with Nord Resources Corporation ("Resources").
The Management Agreement provides that Resources will make available to the
Corporation the services of Terence H. Lang, on a part-time basis, to serve
as the Chief Financial and Accounting Officer and Treasurer of the
Corporation and that Resources will provide such corporate and administrative
services as the Corporation shall request. In exchange, the Corporation will
pay Resources an amount equal to the fair and equitable allocation of
Resources expenses. The Management Agreement is cancelable by either party
on thirty (30) days' prior written notice. As of March 1, 1997, the
Corporation owed Resources $205,000 under the Management Agreement. In 1996,
1995 and 1994 the Corporation paid Resources, $161,000, $277,000 and
$221,000, respectively, under the Management Agreement.
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In October 1996, Resources agreed to make available to the Company, at
Resources' discretion, up to $1,000,000 in the form of an operating loan and
up to an additional $1,000,000 to satisfy the requirements of the Company's
debt service reserve account with the Girilambone lender. The loans are
payable upon demand and bear interest at the prime rate plus 1%. The amount
owed to Resources under the operating loan at December 31, 1996, was $947,000.
The Corporation has retained International Services Limited, a Bermuda
entity of which Michel J. Drew, a director, is a principal shareholder, to
maintain the executive offices of the Corporation in Bermuda and to render
additional services that may be required in Bermuda. The minimum annual fee
for such services is $6,000 and additional fees may be payable based on the
time expended with respect to such required services. In the fiscal year
ended December 31, 1996 the Corporation paid International Services Limited
$13,900 for such fees and services.
Spitzer & Feldman P.C., of which Mr. Lichter is a principal, performs
certain legal services for the Corporation. Conyers, Dill & Pearman, of
which John C.R. Collis is a partner, also performs certain legal services for
the Corporation.
In February 1994, the Corporation entered into a consulting agreement
with John Roberts for approximately $14,000 per year for twenty-four days of
consulting per year. The agreement may be terminated at any time by notice
from either party after December 31, 1994. This agreement was in effect in
1997.
Any future transactions with officers, directors or their affiliates
will be on terms at least as favorable as those available from unaffiliated
parties.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
NORD PACIFIC LIMITED
/s/ TERENCE H. LANG
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Senior Vice President of Finance
April 29, 1997
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