<PAGE>
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, 1997
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 quotations as of March 20, 1998, was
$26,154,495.
The number of common shares outstanding as of March 20, 1998 was 12,925,203.
<PAGE>
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 director and each
executive officer named in the Summary Compensation Table.
<TABLE>
<CAPTION>
DIRECTOR
DIRECTORS AGE SINCE
- --------- --- -----
<S> <C> <C>
Edgar F. Cruft(9) 65 1988
W. Pierce Carson 55 1988
Ray W. Jenner 46 1998
Terence H. Lang(10) 61 1988
Leonard Lichter(10) 70 1988
Michel J. Drew(9, 10) 62 1988
Lucile Lansing 69 1990
John B. Roberts 62 1994
OTHER NAMED EXECUTIVE OFFICERS
OFFICER
NAME AGE SINCE
- ---- --- -----
Mark R. Welch 59 1990
</TABLE>
BACKGROUND OF DIRECTORS
Dr. Cruft is the Chairman of the Corporation and from 1988-1997 was
Chairman and Chief Executive Officer. He is also a founder of Nord Resources
and served as its Chairman, President, Chief Executive Officer and a director
from its inception in 1968 to his retirement as President and Chief Executive
Officer in 1997. He holds a Bachelors Degree in Geology from Durham
University, England and a Ph.D. in Geochemistry from McMaster University,
Canada.
Dr. Carson is the President and Chief Executive Officer and a director of
the Corporation and Nord Resources. He was previously Senior Vice President of
Exploration for Nord Resources and has 30 years' experience in the mining
industry. 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 since January
1994.
Mr. Jenner is the Chief Financial Officer of the Corporation and Nord
Resources. He has 24 years' experience in domestic and international financial
environments, and for the past 14 years was Vice President and Treasurer of
Echo Bay Mines where he was involved in raising equity and securing debt
financing both in Canada and the U.S. Prior to Echo Bay, he spent ten years
with Price Waterhouse in Canada, Australia and Indonesia. He is a chartered
accountant who holds a Bachelor of Commerce Degree in Management Science and a
Bachelor of Science Degree in Physics and Mathematics.
Mr. Lang is a director and was until his retirement in 1997, Vice
President and the Treasurer of the Corporation. From 1978 until his retirement
in 1997, Mr. Lang was also Senior Vice President - Finance and Treasurer of
Nord Resources. He was and is still a director of Nord Resources.
<PAGE>
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.
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 Corporation in January 1994. He has
over 41 years of mining related experience and was Chairman of Australian
Resources Limited from August 1993 to February 1997 and is currently a
director. Australian Resources Limited is a public company producing gold and
copper in Australia. He is also chairman of Ballarat Goldfields N.L., a public
company developing gold resources 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 Australasian Institute of Mining and Metallurgy, among other
professional association memberships.
OTHER NAMED EXECUTIVE OFFICER
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 mineral projects. From 1984 to 1990 he was Vice
President of Western Resources Corporation, a minerals company. He holds the
degree of B.S. Mining Engineering from Washington State University.
SECTION 16 (a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 shares to file
with the United States Securities and Exchange Commission ("SEC") initial
reports of ownership and reports of changes in ownership of Common Shares 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 Common Shares of the Corporation and on
written representations from certain of such persons, the Corporation believes
that during the fiscal year ended December 31, 1997 all filing requirements
under Section 16(a) of the Exchange Act were made by such persons on a timely
basis.
<PAGE>
EXECUTIVE OFFICERS COMPENSATION
Summary Compensation Table
The following table sets forth compensation earned in fiscal years ended
December 31, 1997, 1996 and 1995 by (hereinafter collectively the "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, 1997 exceeded $100,000. Specific aspects of the compensation of the named
Executive Officers are shown in the subsequent tables.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
----------------------------- ----------------------
AWARDS
------
OTHER SHARE
NAME & PRINCIPAL SALARY BONUS COMPENSATION OPTIONS
POSITION YEAR ($) ($) ($) (#)
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Edgar F. Cruft 1997 112,904 -- 20,760(1) 50,000
Chairman 1996 166,810 -- 20,760(1) 48,000(2)
1995 158,840 -- 20,760(1) 60,000(5)
W. Pierce Carson 1997 213,080 -- 62,600(3) 100,000(7)
President & CEO 1996 230,475 -- 79,408(3) 48,000(2)
1995 218,705 -- 77,302(3) 60,000(5)
Mark R. Welch 1997 153,500 20,000 57,328(3) 30,000(8)
Vice President 1996 125,500 -- 61,293(3) 25,600(4)
Development 1995 118,422 -- 55,264(3) 32,000(6)
</TABLE>
- -------------------------------------------------------------------------------
(1) Represents the Corporation's contribution to Dr. Cruft's 401(k) plan.
(2) Subject to a one year restriction on exercise from February 2, 1996 for
24,000 shares and two years for 24,000 shares.
(3) Includes additional cash compensation of $41,840, $50,300 and $47,600 to
Dr. Carson and $40,938, $43,100 and $40,800 to Mr. Welch for 1997, 1996 and
1995 respectively paid as a living allowance as the Corporation's business
requires these officers to spend a significant portion of their time in
Australia. Also includes $20,760 to Mr. Carson in 1997, 1996 and 1995 and
$17,620 and $16,390 to Mr. Welch in 1997 and 1996 as the Corporation's
contribution to each individual's 401(k) plan.
(4) Subject to a one year restriction on exercise from February 2, 1996 for
12,800 shares and two years for 12,800 shares.
(5) Subject to a one year restriction on exercise from January 31, 1995 for
30,000 shares and two years for 30,000 shares.
(6) Subject to a one year restriction on exercise from April 6, 1995 for 16,000
shares and two years for 16,000 shares.
(7) Subject to a one year restriction on exercise from June 1, 1997 on 50,000
shares and two years for 50,000 shares.
(8) Subject to a one year restriction on exercise from May 21, 1997 on 15,000
shares and two years on 15,000 shares.
- ----------------------------------------
<PAGE>
STOCK OPTION PLANS AND STOCK BONUS PLAN
As of April 30, 1998 the Corporation had a 1989 Stock Option Plan (the
"1989 Option Plan"), a 1990 Stock Bonus Plan (the "1990 Bonus Plan"), a 1991
Stock Option Plan (the "1991 Option Plan") and a 1995 Stock Option Plan (the
"1995 Option Plan"), each of which has been approved by the shareholders of the
Corporation. The Corporation has also granted non-plan stock options ("Non-
plan Options"). Each of the plans and the Non-plan Options are administered by
the Compensation Committee.
The 1989 Option Plan, the 1991 Option Plan and 1995 Option Plan
(collectively the "Option Plans") provide for the grant of options to purchase
Common Shares to officers and other key employees of the Corporation and its
subsidiaries. Directors and officers who are also directors are not permitted
to participate in the 1989 Option Plan, however such persons can participate in
the 1991 Option Plan and the 1995 Option Plan pursuant to the grant of Formula
Options ("Formula Options"), which are limited to 304,000 shares in total for
the 1995 Option Plan and 240,000 shares in total for the 1991 Option Plan.
Options granted under the Option Plans can be incentive stock options or non-
qualified stock options, as defined in the United States Internal Revenue Code
of 1986, as amended (the "Code"). For incentive options and Formula Options
the purchase price cannot be less than the fair market value of a share on the
date of grant. Non-qualified options may be granted at less than fair market
value, as determined by the Compensation Committee. The term of options
granted under the Option Plans cannot exceed 10 years.
The 1989 Option Plan provides for the grant of options to purchase up to
160,000 Common Shares. As of April 30, 1998, all options under the 1989 Option
Plan had been granted at exercise prices ranging from $1.875 to $4.375 per
share.
The 1991 Option Plan provides for the grant of options to purchase up to
480,000 Common Shares. As of April 30, 1998, all options under the 1991 Option
Plan had been granted at exercise prices ranging from $2.55 to $5.25 per share.
The 1995 Option Plan provides for the grant of options to purchase 600,000
Common Shares. As of April 30, 1998 options to purchase 551,800 shares had
been granted of which 800 have been terminated and 49,000 remain available for
grant. Options granted to April 30, 1998 under the 1995 Option Plan provide
for exercise prices ranging from $4.00 to $4.50 per share.
The 1990 Bonus Plan provides for the issuance of Common Shares of the
Corporation to officers and other key employees (other than officers who are
also directors) as incentive bonuses. The Bonus Plan provides for the issuance
of up to 80,000 shares. As of April 30, 1998, awards had been made for 76,193
shares, leaving 3,807 shares for future awards.
At April 30, 1998, Non-plan Options to acquire 1,293,600 Common Shares at
exercise prices ranging from $2.75 to $5.6875 have been granted. Non-plan
Options to purchase 448,000 shares were issued to non-officer directors at
exercise prices ranging from $2.75 to $4.50 per share. Non-plan Options to
purchase 598,000 shares were issued to directors who are also officers at
prices ranging from $2.75 to $5.6875 per share and Non-plan Options to purchase
247,600 shares have been issued to consultants at prices ranging from $2.75 to
$5.25. Shareholder approval was obtained for the grant of 264,000 Non-plan
Options and stockholder approval was not required for the balance of the Non-
plan Option grants. The Non-plan Options expire in three to ten years from the
date of grant and are issued at the market price of the stock at the date of
issue.
The following table shows as to each Named Executive Officer for fiscal
1997 year (i) the number of shares with respect to which options were granted
by the Corporation (ii) the percentage of total options
<PAGE>
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 1997
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------
% OF TOTAL POTENTIAL REALIZABLE VALUE
NUMBER OF OPTIONS AT ASSUMED ANNUAL RATES OF
SECURITIES GRANTED SHARE PRICE APPRECIATION FOR
UNDERLYING TO OPTION TERM(2)
OPTIONS EMPLOYEES EXERCISE EXPIRATION ---------------------------
NAME GRANTED IN 1997(1) PRICE DATE 5% 10%
- ---- ------- ---------- ----- ---------- -- ---
<S> <C> <C> <C> <C> <C> <C>
Edgar F. Cruft 50,000 16.9% $ 5.6875 06/01/02 $ 78,568 $173,614
W. Pierce Carson 100,000 33.8% $ 5.6875 06/01/02 $157,135 $347,228
Mark Welch 30,000 10.1% $ 5.25 05/21/07 $ 99,051 $251,014
</TABLE>
(1) The Corporation granted options to purchase 296,078 shares in fiscal 1997.
(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 share price, which
will be determined by future events and unknown factors.
The following table presents information concerning options exercised
during 1997 and the value of unexercised options at December 31, 1997 for each
Named Executive Officer.
AGGREGATED OPTION EXERCISES IN 1997
AND YEAR-END OPTIONS VALUES
<TABLE>
<CAPTION>
UNEXERCISED OPTIONS VALUE OF UNEXERCISED IN THE
SECURITIES AT MONEY OPTIONS AT
ACQUIRED AGGREGATE DECEMBER 31, 1997 DECEMBER 31, 1997(1)
ON VALUE ----------------- --------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Edgar F. Cruft None - 342,000 $ 24,000 $24,192 $-0-
W. Pierce Carson None - 416,000 $292,000 $24,192 $-0-
Mark R. Welch None - 140,000 $ 42,800 $ 4,032 $-0-
</TABLE>
(1) Based upon the closing price of the Corporation's Common Shares on
December 31, 1997 of $2.875 per share as quoted on NASDAQ and after giving
effect to the 5 for 1 reverse stock split effective March 10, 1997.
<PAGE>
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. 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. 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 shareholders.
Prior to joining the Corporation full-time in April 1990, Dr. Carson had a
separate retirement agreement with Nord Resources 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 to a maximum
of 30 years. At December 31, 1997, Dr. Carson had 17 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. For the years ended
December 31, 1997, 1996 and 1995, the Corporation accrued $0.00, $68,000 and
$59,000, respectively, relating to the retirement benefits expected to be paid
to Dr. Carson.
Effective May 15, 1997 Mr. Welch was added to this retirement plan. At
age 65, or on termination of employment, whichever is later, he will become
eligible to receive annual payments for a period of 15 years. The payments
will be 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 Mr. Welch has with the Corporation up to a maximum of 30
years. At December 31, 1997, Mr. Welch had seven years of service.
The following table illustrates the estimated annual retirement benefit
that would be payable for 15 years to Dr. Carson and Mr. Welch 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 Dr.
Carson's 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 Dr.
Carson in 1992.
<TABLE>
<CAPTION>
YEARS OF SERVICE
FINAL AVERAGE
COMPENSATION 10 15 20 25 30
- ------------ ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
$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
</TABLE>
<PAGE>
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
shareholders. 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 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 CHAIRMAN AND PRESIDENT
Matters relating to compensation of executive officers were addressed by
the full Board of Directors in fiscal 1997. The Board 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 to produce its minerals at expected competitive
levels of production and costs, to enhance shareholder 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.
<PAGE>
(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 shareholder 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.
(e) Deferred Compensation for Senior Executives - The Corporation has
entered into a retirement agreement with its President and its Vice President-
Development. The agreement provides benefits to these senior executives 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 senior executives to continue to provide 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 1997 and such employee may defer taxes on
that contribution. In 1997 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.
STOCKHOLDER RETURN ON COMMON STOCK
The following graph compares the total annual return on the
Corporation's Common Shares 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, 1992 to December 31, 1997, and with the CRSP Index for the
NASDAQ stocks with SIC codes 1000-1099 (metal mining companies).
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPH FOR
NORD PACIFIC LIMITED
[GRAPH]
LEGEND
<TABLE>
<CAPTION>
SYMBOL CRSP TOTAL RETURNS INDEX FOR: 12/31/92 12/31/93 12/30/94 12/29/95 12/31/96 12/31/97
- ---------- ----------------------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
********* NORD Pacific Limited 100.0 147.6 133.3 102.8 196.1 86.2
... ** .. Nasdaq Stock Market (US and Foreign) 100.0 115.8 112.3 157.7 193.1 236.3
* * * * * NASDAQ Stocks (SIC 1000-1099 US + Foreign) 100.0 232.1 210.9 200.5 226.8 121.7
Metal Mining
</TABLE>
NOTES: A: The lines represent monthly index levels derived from
compounded daily returns that include all dividends.
B: The indexes are reweighted daily, using the market
capitalization on the previous trading day.
C: If the monthly interval, based on the fiscal year-end, is not a
trading day, the preceding trading day is used.
D: The index level for all series was set to $100.0 on 12/31/92.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the only entity or person known by the
Board to be the beneficial owner of more than 5% of the outstanding Common
Shares of the Corporation as of April 30, 1998.
<TABLE>
<CAPTION>
Common Shares Beneficially
Owned as of April 30, 1998
--------------------------
Name and Address of Beneficial Owner Number Percent of Class
- ------------------------------------ ------ ----------------
<S> <C> <C>
Nord Resources Corporation 3,697,561(1) 28.6%
201 Third Street, NW - Suite 1750
Albuquerque, New Mexico 87102
</TABLE>
- ----------------------------------
(1) On April 2, 1990, Nord Resources Corporation ("Nord Resources") received
1,915,200 Common Shares in connection with an Exchange Offer (as defined
below). Subsequent to April 2, 1990, and up to April 1, 1993, Nord
Resources purchased in market transactions on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") a total of
142,476 Common Shares at an average purchase price of $4.10 per share.
On September 3, 1993 Nord Resources converted $2.5 million of debt owed
it by the Corporation into 592,592 Common Shares of the Corporation at
the then prevailing market price. On February 15, 1994, Nord Resources
received 697,744 additional Common Shares in exchange for converting an
additional $2.9 million of debt owed it by the
<PAGE>
Corporation. In July 1997, Nord Resources converted $1.7 million of debt
into 349,549 Common Shares. In April 1990, the Corporation issued Common
Shares 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 was the general
partner of each partnership.
Set forth below is certain information for each nominee for election as
director and each executive officer named in the Summary Compensation Table.
The statement as to the Common Shares of the Corporation beneficially
owned or over which control or direction is exercised by the nominees for
election as directors hereinafter named is in each instance based upon
information furnished by the person concerned.
<TABLE>
<CAPTION>
COMMON SHARES BENEFICIALLY
NOMINEES FOR OWNED AS OF APRIL 30, 1998(1)
ELECTION AS DIRECTORS NUMBER PERCENT OF CLASS
- --------------------- ------ ----------------
<S> <C> <C>
Edgar F. Cruft(9) 4,261,561(2) 32.8%
W. Pierce Carson 4,255,561(3) 32.6%
Ray W. Jenner -- *
Terence H. Lang(10) 3,873,561(4) 30.0%
Leonard Lichter(10) 3,863,461(4) 30.0%
Michel J. Drew(9, 10) 111,202(5) *
Lucile Lansing 113,200(5) *
John B. Roberts 84,200(6) *
OTHER NAMED EXECUTIVE OFFICERS
- ------------------------------
NAME NUMBER PERCENT OF CLASS
- ---- ------ ----------------
Mark R. Welch 180,600(7) 1.4%
ALL NAMED EXECUTIVE OFFICERS
AND DIRECTORS AS A GROUP
(9 persons) 5,449,063(8) 42.1%
- ------------------------------------------
</TABLE>
* 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 30, 1998. 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 30, 1998.
(2) Includes options to purchase 72,000 shares under the 1991 Stock Option
Plan, options to purchase 60,000 shares under the 1995 Stock Option Plan
and non-plan options to purchase 264,000 shares. Also includes 3,697,561
Common Shares owned by Nord Resources, of which Dr. Cruft is Chairman.
(3) Includes options to purchase 72,000 shares under the 1991 Stock Option
Plan, options to purchase 60,000 shares under the 1995 Stock Option Plan
and non-plan options to purchase 254,000 shares.
<PAGE>
Also includes 3,697,561 Common Shares owned by Nord Resources, of which
Dr. Carson is Chief Executive Officer and a director.
(4) Includes options to purchase 12,000 shares under the 1991 Stock Option
Plan, non-plan options to purchase 152,000 and 111,200 shares for Mr. Lang
and Mr. Lichter, respectively and options to purchase 40,060 shares for
Mr. Lang and 24,000 shares for Mr. Lichter under the 1995 Stock Option
Plan. Also includes 3,697,561 Common Shares owned by Nord Resources, of
which Mr. Lang and Mr. Lichter are directors. As to Mr. Lang, also
includes 6,000 Common Shares owned by his wife for which he disclaims
beneficial ownership.
(5) 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 75,200 shares.
(6) 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 47,200 shares.
(7) Includes options to purchase 12,000 shares under the 1989 Stock Option
Plan and options to purchase 98,200 shares under the Corporation's 1991
Stock Option Plan and options to purchase 57,600 shares under the 1995
Stock Option Plan.
(8) Includes options to purchase 1,829,800 shares. Also includes 3,697,561
Common Shares owned by Nord Resources of which Messrs. Cruft, Carson, Lang
and Lichter are directors and Dr. Cruft and Dr. Carson are executive
officers.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1997, 1996 and 1995, Nord Resources provided certain services to the
Corporation under a management agreement. Nord Resources was reimbursed for
all direct expenses and its overhead associated with the operations of the
Corporation at approximately $7,000 per month as per the management agreement.
Management believes that the costs that would have been incurred had the
Corporation obtained such services on a stand-alone basis would have
approximated the amounts paid to Nord Resources. Total amounts paid to Nord
Resources were $566,000, $399,000 and $221,000 for the years ended December 31,
1997, 1996, and 1995 respectively. In December 1997, Nord Resources closed its
office in Dayton, Ohio and moved its administrative functions to Albuquerque,
New Mexico. The Corporation currently shares office space, administrative
personnel and expenses with Nord Resources on a 50/50 basis.
In October 1996, Nord Resources agreed to make available to the
Corporation, at Nord Resources' discretion, an operating loan payable on demand
and bearing interest at the U.S. prime rate plus 1%. At December 31, 1996, the
Corporation owed Nord Resources advances of $947,000. During 1997, Nord
Resources advanced the Corporation an additional $2,800,745, net of repayments,
bringing the total indebtedness to $3,747,745. In July and August 1997, the
Corporation repaid $2,000,000 of the amount outstanding. Concurrent with the
closing of the Corporation's Canadian offering on July 3, 1997, Nord Resources,
which previously owned 35% of the outstanding Common Shares of the Corporation,
converted the remainder of the amount outstanding into 349,549 Units consisting
of one Common Share and one half of one purchase warrant at $5.00 per Unit.
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
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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, 1997 the Corporation paid International
Services Limited $15,942 for such fees and services.
Spitzer & Feldman P.C., of which Mr. Lichter is a principal, performs
certain legal services for the Corporation for which they were paid $230,669 in
1997.
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. 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.
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. 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 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.
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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/Ray W. Jenner
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Ray W. Jenner
Vice President Finance -
Authorized Officer
April 30, 1998
