<PAGE>
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:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
NORD PACIFIC LIMITED
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
LOGO NORD PACIFIC LIMITED
22 Church Street
Hamilton HM 11
Bermuda
4/30/98
4:30 PM
NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 25, 1998
To the Shareholders of
NORD PACIFIC LIMITED:
Notice is hereby given that the annual and special meeting of the
shareholders of Nord Pacific Limited (the "Corporation") will be held at the
Marriott Marquis, 1535 Broadway, New York, New York on June 25, 1998 at 2:30
p.m. (E.D.T.) for the following purposes:
1. To receive the Corporation's financial statements for the
financial year ended December 31, 1997 and the auditor's
report thereon (a copy of which is enclosed herewith).
2. To elect eight directors of the Corporation.
3. To consider and if thought fit, to pass, resolutions
approving the continuation of the Corporation into
New Brunswick, Canada as if it had been incorporated under the
laws of that jurisdiction and approving the discontinuance of
the Corporation in Bermuda.
4. To consider and act upon a proposal to approve Share Options
granted to directors, officers and consultants of the
Corporation.
5. To ratify the appointment of independent auditors and authorize
the Board to set their compensation.
6. To act upon such other matters as may properly come before the
meeting or any adjournment thereof.
The close of business on May 1, 1998 has been fixed as the record
date for the determination of shareholders entitled to notice of and to vote
at the annual and special meeting and any adjournment thereof.
YOUR PROXY IS IMPORTANT TO ASSURE A QUORUM AT THE MEETING. WHETHER OR NOT
YOU EXPECT TO BE PRESENT, YOU ARE REQUESTED TO MARK, DATE, SIGN AND MAIL THE
ENCLOSED PROXY IN THE POSTAGE-PAID 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 MEETING. A REPORTING PACKAGE IN ACCORDANCE WITH NATIONAL
POLICY NO. 31 WITH RESPECT TO THE CORPORATION'S CHANGE OF AUDITORS IS
ENCLOSED HEREWITH.
By the Order of the
Board of Directors,
Ray W. Jenner
Secretary
May _, 1998
<PAGE>
NORD PACIFIC LIMITED
22 Church Street
Hamilton HM 11
Bermuda
MANAGEMENT INFORMATION CIRCULAR
For the Annual and Special Meeting of Shareholders
June 25, 1998
GENERAL INFORMATION
This management information circular (the "Management Information
Circular") is furnished in connection with the solicitation by the
Corporation's Board of Directors (the "Board") of proxies in the accompanying
form for the annual and special meeting (the "Meeting") of shareholders of
Nord Pacific Limited (the "Corporation"), to be held at the time and place
and for the purpose set forth in the enclosed notice of Meeting. All
references in this Management Information Circular to the Meeting include the
Meeting and any adjournment thereof. The persons named in the enclosed form
of proxy are directors and/or directors and/or officers of the Corporation.
A SHAREHOLDER DESIRING TO APPOINT SOME OTHER PERSON WHO NEED NOT BE A
SHAREHOLDER, TO REPRESENT HIM AT THE MEETING, MAY DO SO BY INSERTING SUCH
PERSON'S NAME IN THE BLANK SPACE PROVIDED IN THE ENCLOSED FORM OF PROXY OR BY
COMPLETING ANOTHER PROPER FORM OF PROXY AND IN EITHER CASE, DEPOSITING THE
COMPLETED PROXY AT THE REGISTERED OFFICE OF THE CORPORATION OR THE
CORPORATION'S TRANSFER AGENT INDICATED ON THE ENCLOSED ENVELOPE NOT LATER
THAN THE CLOSE OF BUSINESS ON THE SECOND BUSINESS DAY PRECEDING THE DAY OF
THE MEETING (EXCLUSIVE OF SATURDAYS, SUNDAYS AND HOLIDAYS).
Shares cannot be voted at the Meeting unless the holder is present in
person or represented by proxy. All shares represented by properly executed
proxies received by the Board pursuant to this solicitation will be voted in
accordance with the shareholder's directions specified on the proxy. If no
directions have been specified by marking the appropriate squares on the
accompanying proxy card, the shares will be voted in accordance with the
Board's recommendations. A shareholder 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.
It is expected that the solicitation of proxies will be primarily by
mail, but proxies may also be solicited personally or by telephone by
employees, officers or directors of the Corporation.
The persons named in the enclosed form of proxy will vote the shares in
respect of which they are appointed in accordance with the direction of the
shareholders appointing them. IN THE ABSENCE OF SUCH DIRECTION, SUCH SHARES
WILL BE VOTED IN FAVOR OF THE PASSING OF ALL THE RESOLUTIONS DESCRIBED BELOW.
THE ENCLOSED FORM OF PROXY CONFERS DISCRETIONARY AUTHORITY UPON THE PERSONS
NAMED THEREIN WITH RESPECT TO AMENDMENTS OR VARIATIONS TO MATTERS IDENTIFIED
IN THE NOTICE OF MEETING AND WITH RESPECT TO OTHER MATTERS WHICH MAY PROPERLY
COME BEFORE THE MEETING. At the time of printing this Management Information
Circular, management knows of no such amendments, variations or other matters
to come before the Meeting. However, if any other matters which are not now
known to management should properly come before the Meeting, the proxy will
be voted on such matters in accordance with the best judgment of the named
proxyholders.
<PAGE>
All information regarding shares of common stock (the "Common Shares")
of the Corporation, including number of shares and dollars per share, reflect
the one-for-five reverse stock split effected on March 10, 1997. Unless
otherwise indicated all references herein to "dollars" or "$" are to United
States dollars.
As of the record date, May 1, 1998, there were issued and outstanding
12,925,203 Common Shares of the Corporation. Only shareholders of record at
the close of business on the record date are entitled to vote at the Meeting.
Except as indicated above, each Common Share is entitled to one vote and
cumulative voting is not permitted. A list of shareholders of record
entitled to vote at the Meeting will be available at the Meeting for
examination by any shareholder for any purpose germane to the Meeting.
The holders of a majority of the Corporation's outstanding Common
Shares, present in person or represented by proxy are entitled to vote and
constitute a quorum for the transaction of all business at the Meeting.
Automated systems administered by the Corporation's transfer agent tabulate
the votes. An affirmative vote of a majority of the Common Shares present
and voting at the Meeting is required for the election of directors and for
the transaction of all other business except that an affirmative vote of 75%
of the Common Shares present and voting at the Meeting is required for the
continuation of the Corporation under the laws of the Province of New
Brunswick, and the discontinuance of the Corporation and an affirmative vote
of the majority of the non-insider Common Shares present and voting at the
Meeting is required for the proposal to approve share options.
Beginning on or about May_, 1998, copies of this Management Information
Circular, the accompanying proxy card and the Corporation's Annual Report to
shareholders for 1997 will be mailed to all shareholders entitled to receive
notice of, and to vote at, the Meeting.
PRINCIPAL SHAREHOLDERS
As at May 1, 1998, 12,925,203 Common Shares of the Corporation were
issued and outstanding. Each Common Share entitles the holder thereof to one
vote on all matters to be acted upon at the Meeting. All holders of Common
Shares of record as of the time of the Meeting are entitled either to attend
and vote thereat in person the respective Common Shares held by them or,
provided a completed and executed proxy shall have been delivered to the
registered office of the Corporation or its transfer agent within the time
specified in the attached notice of Meeting, to attend and vote thereat by
proxy the respective Common Shares held by them.
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 May 1, 1998.
<TABLE>
<CAPTION>
COMMON SHARES BENEFICIALLY
OWNED AS OF MAY 1, 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
<PAGE>
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 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 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.
ITEM 1
ELECTION OF DIRECTORS
Eight directors are to be elected to hold office until the next annual
meeting of shareholders or until their successors are elected or appointed and
qualified. The Board has nominated for election as directors the eight persons
named below, seven of whom presently serve as members of the Board. The shares
represented by the proxy, unless the giver of the proxy indicates otherwise,
will be voted at the Meeting in favor of the election of the nominees named
below.
Each of the nominees named below is, at present, available for election.
If any such nominees should for any reason become unavailable for election,
proxies in the accompanying form will be voted for a substitute nominee
designated by the Board. 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.
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 DIRECTOR OWNED AS OF MAY 1,1998(1)
ELECTION AS DIRECTORS AGE SINCE NUMBER PERCENT OF CLASS
- --------------------- --- -------- ------------- ----------------
<S> <C> <C> <C> <C>
Edgar F. Cruft(9) 65 1988 4,261,561(2) 32.8%
W. Pierce Carson 55 1988 4,255,561(3) 32.6%
Ray W. Jenner 46 1998 -- *
Terence H. Lang(10) 61 1988 3,873,561(4) 30.0%
Leonard Lichter(10) 70 1988 3,863,461(4) 30.0%
Michel J. Drew(9)(10) 62 1988 111,202(5) *
Lucile Lansing 69 1990 113,200(5) *
John B. Roberts 62 1994 84,200(6) *
<CAPTION>
OTHER NAMED EXECUTIVE OFFICERS
- ------------------------------
OFFICER
NAME AGE SINCE NUMBER PERCENT OF CLASS
- ---- --- ------- ------------ ----------------
<S> <C> <C> <C> <C>
Mark R. Welch 59 1990 180,600(7) 1.4%
<PAGE>
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 May 1, 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 May 1, 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. 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.
(9) Member of the Compensation Committee.
(10) Member of the Audit Committee.
- ---------------------------------------------
<PAGE>
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 is still Chairman and a director of Nord Resources. 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 and President and Chief Executive Officer since 1997.
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.
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.
<PAGE>
INFORMATION CONCERNING THE BOARD OF DIRECTORS
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.
During fiscal 1997 the Board held nine meetings. All Board members
attended at least 75% of the Board meetings and Committee meetings.
The Board has a Compensation Committee composed of Dr. Cruft and Mr. Drew
and an Audit Committee composed of Mr. Lichter, Mr. Drew, and Mr. Lang. 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 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
1997 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 1996. The Corporation does not
have a nominating committee.
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.
OTHER EXECUTIVE OFFICERS
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 Western Resources Corporation, a minerals company. He holds
the degree of B.S. Mining Engineering from Washington State University.
CERTAIN TRANSACTIONS WITH MANAGEMENT AND OTHERS
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
<PAGE>
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 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 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.
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.
<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 $100,000. Specific aspects of the compensation of
the named Executive Officers are shown in the subsequent tables.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL COMPENSATION -----------------------
--------------------------------- AWARDS
-----------------------
OTHER SHARE
NAME & PRINCIPAL SALARY BONUS COMPENSATION OPTIONS
POSITION YEAR ($) ($) ($) (#)
- ---------------- ---- ------- ----- ------------ ----------
<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 May 1, 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"). Reference is made to the heading "Item 3 - Proposal To
approve Share 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 the 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 May 1, 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 May 1, 1998, all options under the 1991 Option
Plan had been granted at exercise prices ranging from $2.54 to $5.25 per
share.
The 1995 Option Plan provides for the grant of options to purchase
600,000 Common Shares. As of May 1, 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 May 1, 1998 under the 1995 Option
Plan provide for exercise prices ranging from $2.75 to $5.25 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 May 1, 1998, awards had been made for
76,193 shares, leaving 3,807 shares for future awards.
At May 1, 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 shareholder 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
Common Shares at the date of issue.
The following table shows as to each Named Executive Officer for fiscal
1997 (i) the number of shares with respect to which options were granted by
the Corporation (ii) the percentage of total options granted to
<PAGE>
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 06/01/00 $ 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.
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
<PAGE>
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 include the years he was employed by Nord Resources. For the
years ended December 31, 1996 and 1995, the Corporation accrued $68,000 and
$59,000, respectively, relating to the retirement benefits expected to be
paid to Dr. Carson. No such accrual was necessary for the year ended
December 31, 1997.
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>
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
<PAGE>
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.
(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
<PAGE>
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.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Compensation Committee:
Edgar F. Cruft
Michel J. Drew
Dr. Cruft is Chairman of the Corporation and a member of the Compensation
Committee. Dr. Cruft is also Chairman of Nord Resources, which entity owns
approximately 29% of the issued and outstanding Common Shares of the
Corporation. Dr. Carson is President and a Director of Nord Resources and a
member of that company's Compensation Committee. Mr. Lichter is a principal
in the law firm Spitzer & Feldman, P.C., general counsel to the Corporation
and a director of Nord Resources. During fiscal 1997, Spitzer & Feldman,
P.C., were paid $230,669 by the Corporation 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 $15,942 by the Corporation in 1997 to perform such services.
CORPORATE GOVERNANCE
The Toronto Stock Exchange (the "TSE") has adopted Corporate Governance
Guidelines as set out in section 474 of its company manual and this statement
of corporate governance has been prepared with reference thereto. The
Corporation's corporate governance framework and procedures are structured
such that the Board of Directors explicitly assumes responsibility for the
stewardship of the Corporation including review by the Board of the following
matters:
- - the Corporation's strategic planning procedures
- - the identification and management of the principal risks of the
Corporation's business; and
- - the integrity of the Corporation's internal control and management
information systems.
The Board takes responsibility for succession and for appointing
officers of the Corporation. The Board encourages senior management to
participate in personal development activities and supports management's
commitment to the training and development of all employees.
The Board is comprised of eight directors, two of whom, Dr. Carson and
Mr. Jenner, are members of management of the Corporation and four of whom,
Dr. Cruft, Dr. Carson, Mr. Lang and Mr. Lichter, are also directors of Nord
Resources. The other directors are unrelated outside directors.
<PAGE>
This representation by unrelated directors is adequate to present a point of
view independent of management and to represent the interests of minority
shareholders.
Dr. Carson personally retains responsibility for the monitoring of
senior management and for the Corporation's external communications policy.
Given Dr. Carson's close involvement in day to day operations of the
Corporation, the Board has not considered it necessary to evolve a formal
policy on expectations of management.
The committees of the Board are comprised primarily of unrelated
directors and function as follows:
The Audit Committee meets at least annually and reviews the annual
financial statements, matters relating to the securities commissions,
investments and transactions that could adversely affect the well being of
the Corporation. The Audit Committee also establishes and monitors
procedures to resolve conflicts of interest and for reviewing audit and
financial matters. Through meetings with external auditors and senior
management, the Audit Committee discusses, among other things, the
effectiveness of the internal control procedures established for the
Corporation.
The Compensation Committee reviews compensation practices and management
succession and recommends the approval of the remuneration of the
Corporation's senior executives including the Chief Executive Officer to the
Board.
The Board has not constituted a formal Nominating Committee, comprising
the unrelated directors, to be responsible for proposing new nominees to the
Board and for assessing directors on an ongoing basis. To date, nominations
have been the result of recruitment efforts by the Chairman and have been
discussed informally with several directors before being brought to the Board
as a whole. The Corporation does not have a formal process of orientation and
education for new members of the Board.
To date, due to the size and nature of the Corporation, the Board has
not constituted a committee composed exclusively of outside directors, a
majority of whom are unrelated directors to assess the effectiveness of the
Board as a whole, the committees of the Board and the contributions of
individual directors. In the future, this task may be assigned to the Audit
Committee.
The Board has considered its size with a view to the impact of size upon
its effectiveness and has concluded that the number of directors as presently
constituted is appropriate for a company of the size and complexity of the
Corporation. The Board as presently constituted brings together a mix of
skills, background, ages and attitudes that the Board considers appropriate
to the stewardship of the Corporation.
Since June, 1997 the Chairman has been other than an officer of the
Corporation.
The Board has not adopted a system which would enable an individual
director to engage an outside adviser at the expense of the Corporation in
appropriate circumstances. If such an engagement were appropriate it would
be subject to the approval of the Board and would require advice to senior
management of any such action.
Given the considerations noted above, the Corporation's approach to
corporate governance differs in certain respects from the TSE Guidelines.
The Board of Directors however believes that the existing corporate
governance structure is appropriate in the circumstances and the Corporation
is in the process of examining its own requirements and procedures in order
to further comply with the Guidelines.
<PAGE>
YEAR 2000 COMPLIANCE
The Corporation initiated the process of preparing its computer systems
and applications for the Year 2000 in January, 1998. This process involves
modifying or replacing certain hardware and software maintained by the
Corporation as well as communicating with external service providers to
ensure that they are taking the appropriate action to remedy their Year 2000
issues. Management expects to have substantially all of the system and
application changes completed by the end of 1998 and believes that its level
of preparedness is appropriate.
The Corporation estimates that the total cumulative cost of the project
will be approximately $50,000, which includes both internal and external
personnel costs related to modifying the systems as well as the cost of
purchasing or leasing certain hardware and software. The costs of the project
and the expected completion dates are based on management's best estimates.
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 2
PROPOSAL TO DISCONTINUE FROM BERMUDA AND CONTINUE IN THE PROVINCE OF NEW
BRUNSWICK, CANADA
THE CONTINUANCE
OVERVIEW
The Corporation is currently undergoing a corporate reorganization (the
"Reorganization"). As part of the Reorganization, the Corporation seeks to
discontinue from Bermuda and seeks to be continued in to the Province of New
Brunswick (collectively, the Continuance"). The effect of the Continuance
will be that the Corporation shall cease to be a company within the meaning
of the COMPANIES ACT, 1981 of Bermuda (the "Bermuda Company Act") and the
Corporation will become a company continued under the BUSINESS CORPORATIONS
ACT, New Brunswick (the "New Brunswick Corporations Act") as if incorporated
thereunder.
The Corporation has selected the Province of New Brunswick as the
Canadian province into which the Corporation will continue because unlike
other Canadian provincial business corporations statutes, the New Brunswick
Corporations Act does not contain a requirement that a majority of the Board
of the Corporation be Canadian residents. The New Brunswick Corporations Act
provides that meetings of the Board may be held at any place inside or
outside the Province of New Brunswick and that meetings of shareholders shall
be held at the place in the Province of New Brunswick provided in the by-laws
or, in the absence of such provision, at a place within the Province of New
Brunswick that the directors determine. However, if the articles so provide,
meetings of shareholders may be held outside the Province of New Brunswick at
one or more places specified in the articles.
The Board of the Corporation believes that the Continuance will enhance
the Corporation's exposure to the investment community in Canada as that
community is oriented to mining. The change of domicile to the Province of
New Brunswick is hoped to expand the pool of funds available for investment
in the Corporation and should result in more thorough analyst coverage and
market recognition.
RECOMMENDATIONS OF THE BOARD OF DIRECTORS
FOR THE REASONS PROVIDED UNDER THE HEADING "OVERVIEW", THE DIRECTORS OF
THE CORPORATION UNANIMOUSLY BELIEVE THAT THE CONTINUANCE IS FAIR TO AND IN
THE BESTS INTERESTS OF THE CORPORATION AND THE SHAREHOLDERS AND THEREFORE
UNANIMOUSLY RECOMMEND A VOTE FOR APPROVAL OF THE CONTINUANCE.
<PAGE>
SHAREHOLDER APPROVAL
Under the Bermuda Company Act the Continuance must be approved by a
majority vote of 75% of the shareholders voting in person or by proxy at the
Meeting, a quorum being two persons present in person or by proxy holding more
than 50% of the issued and outstanding shares of the Corporation. If the
Continuance does not receive such approval, the Corporation will continue to be
a Bermuda corporation. If the Continuance is approved by the shareholders, the
Corporation will seek all necessary regulatory approvals and once the same are
obtained, the Corporation will complete the Continuance. It is currently
anticipated that the Continuance will be completed within two months of the
Meeting date.
Under the New Brunswick Corporations Act the Continuance must be approved
by not less than two-thirds of the votes cast by the shareholders voting in
respect of the Continuance with respect to any amendments to the original
Articles of Incorporation of the Corporation.
REGULATORY APPROVALS
The Minister of Finance (the "Minister of Finance") under the Bermuda
Company Act must approve the Continuance. After requisite shareholder approval
is obtained and at least 14 days prior to applying to the Minister of Finance
for consent, the Corporation must publish a notice in a newspaper in Bermuda and
in national newspapers in all jurisdictions within which the Corporation carries
on a substantial part of its business activities, stating that the Corporation
intends to effect the Continuance. Once the Corporation has obtained the
consent of the Minister of Finance to the Continuance, the Corporation may
proceed to be continued under the laws of the Province of New Brunswick.
The Continuance in to the Province of New Brunswick requires the filing of
Articles of Continuance with the Director under the New Brunswick Corporations
Act. The Articles of Continuance may amend the original charter documents of
the Corporation.
The Continuance may be deemed to constitute the issuance and sale of
securities within the meaning of the U.S. Securities Act of 1933, as amended
(the "U.S. Securities Act"). The securities will not be registered under the
U.S. Securities Act and the deemed issuance thereof will be effected in reliance
on the exemption provided by section 3(a)(10) of the U.S. Securities Act. [As a
basis for such exemption and prior to the Continuance becoming effective, the
terms and conditions of the Continuance must be approved by a court or by a
governmental authority expressly authorized by law to grant such approval as
fair to the Corporation's shareholders following a hearing at which all of the
shareholders of the Corporation are entitled to appear.]
The Continuance is also subject to the consent of the TSE. As of the date
of this Management Information Circular, the TSE has granted its approval to the
Continuance subject only to the fulfillment of certain standard conditions.
CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
After giving effect to the Continuance, the Corporation will become a
resident of Canada for income tax purposes. The Continuance from Bermuda in to
the Province of New Brunswick will have no Canadian tax impact except to
Canadian corporate shareholders who hold their Common Shares of the Corporation
as portfolio investment, who after the Continuance will receive more beneficial
tax treatment in Canada on any dividends paid to them. Under current
legislation, after the Corporation is continued in to the Province of New
Brunswick, its shares will no longer be foreign property for a deferred profit
sharing plan, a registered
<PAGE>
savings plan or a registered retirement income fund (the "Retirement Plans").
As a result, the shares of the Corporation will
become qualified investments for Retirement Plans.
After giving effect to the Continuance:
(a) The Corporation will be deemed to have ended its taxation year immediately
before the date of the Articles of Continuance and to have begun a new
taxation year immediately thereafter.
(b) The Corporation will be deemed to have disposed of its assets other than
taxable Canadian property (i.e. Canadian real estate property, shares of a
private Canadian company, shares of a public company in which the
Corporation or any related party has at least a 25% stake), for proceeds
equal to the fair market value of the property and to have acquired the
property at the same amount.
(c) The paid up capital (i.e. stated capital for Canadian tax purposes) of the
Corporation may not exceed the cost of its assets, determined under
Canadian tax rules, minus the amount of its liabilities.
(d) The cost of a share of the Corporation to a non-resident shareholder will
be equal to the lesser of the cost and the paid up capital in respect of
the share determined immediately after the Corporation became a resident of
Canada. For Canadian resident shareholders, the cost of a share of the
Corporation continues to be the cost of the share to the Canadian resident
shareholder.
COMPARISON OF THE BERMUDA COMPANY ACT TO THE NEW BRUNSWICK CORPORATIONS ACT
The Corporation is currently subject to the Bermuda Company Act. Set forth
below is a summary of the material differences between the Bermuda Company Act
and the New Brunswick Corporations Act. THE FOLLOWING COMPARISON OF
SHAREHOLDERS' RIGHTS AS BETWEEN A BERMUDA COMPANY AND A NEW BRUNSWICK COMPANY IS
A BRIEF SUMMARY AND IS NOT AN EXHAUSTIVE REVIEW OF THE TWO STATUTES. REFERENCE
IS MADE TO THE FULL TEXT OF BOTH STATUTES FOR FURTHER PARTICULARS.
(a) APPROVAL FOR MERGERS, CONSOLIDATIONS, AMALGAMATIONS, CONTINUANCES AND
ARRANGEMENTS. In relation to mergers and amalgamations, under the Bermuda
Company Act, the resolution of the shareholders must be approved by a
majority of 75% of those voting, unless the provisions of the Corporation's
by-laws provide otherwise. In relation to consolidations, a simple
majority of votes by the shareholders in a general meeting is needed to
approve a consolidation or sub-division of the Corporation's share
capital. In relation to schemes of arrangement, a majority in number
representing 75% in value of the creditors or members present and
voting either in person or by proxy may approve any compromise or
arrangement, which must be sanctioned by the Court in order to be binding
on all the creditors or on the members and on the company. Under the
New Brunswick Corporations Act, amalgamations must be approved by
shareholders of each amalgamating company representing not less than
two-thirds of the votes cast by shareholders voting in respect of the
resolution. A consolidation must be approved by shareholders representing
not less than two-thirds of the votes cast by shareholders voting in
respect of the resolution. In relation to schemes of arrangement
generally, a majority of at least two-thirds of the votes
cast by shareholders voting on the arrangement and a majority in number of
creditors representing at least two-thirds of the amount of their claims is
necessary. The Court may however make an order approving an arrangement as
proposed by a company or as amended in any manner the Court may direct.
(b) APPROVAL FOR EXTRAORDINARY TRANSACTIONS. Generally, under the Bermuda
Company Act, the management of a company's business is the responsibility
of its board of directors, and except as expressly provided for in the
company's by-laws, the shareholders' only control over the
<PAGE>
management of the company is through their power to appoint and remove
directors. Hence, shareholder approval is not generally required for
extraordinary transactions, such as sales, leases or exchanges of all
or substantially all of the company's assets. However, the directors
of the company owe a duty to the company to ensure that transactions
of the company are for the purposes of the company even where they are
clearly within its corporate capacity. The directors also have a
fiduciary duty to act honestly and in good faith in what they consider
to be the best interests of the company. In relation to the winding up
or liquidation of a company under the Bermuda Company Act, a company
may be wound up by one of two methods: (a) by the
Court, on an application presented either by the company itself, its
creditors or its contributories, or (b) voluntarily when the company
resolves in general meeting that the company be wind up voluntarily. Under
the New Brunswick Corporations Act, subject to the articles, the by-laws
and a unanimous shareholder agreement, the business and affairs of the
company shall be managed by the directors. The approval of a majority of
at least two-thirds of the shareholders is required for fundamental
changes, such as a sale, lease or exchange of all or substantially all the
property of a company other than in the ordinary course of business of the
company. The directors also have a fiduciary duty to act honestly and in
good faith and to exercise the care, due diligence and skill that a
reasonable prudent person would exercise in comparable circumstances in the
best interests of the company.
(c) OFFER BY AN ISSUER TO REPURCHASE COMMON SHARES. Under the Bermuda Company
Act, dependent upon the provisions of the by-laws of the company, the board
of directors may approve an offer by an issuer to repurchase common shares
of such company. Under the New Brunswick Corporations Act, and subject to
its articles, a company may purchase or otherwise acquire, shares issued by
it provided that there are reasonable grounds for believing that the
company is and after payment would be able to pay its liabilities as they
become due and the realizable value of the company's assets after payment
would be more than the aggregate of its liabilities and stated capital of
all classes of shares.
(d) DISSENTER'S APPRAISAL RIGHTS. Under the Bermuda Company Act, dissenters'
appraisal rights are allowed under certain circumstances, including an
amalgamation or compulsory acquisition of shares. Under the New Brunswick
Corporations Act, a dissenting shareholder is entitled to be paid by the
company the fair value of the shares held by such shareholder in respect of
which he or she dissents. In the event that the shareholder does not agree
with the determination of the fair value by the company, a dissenting
shareholder may apply to the Court for determination of the fair value for
such shares.
(e) INTERESTED SHAREHOLDER TRANSACTIONS. Under the Bermuda Company Act,
shareholders are generally free to vote their shares as they please.
Subject to its articles, by-laws or a unanimous shareholder agreement,
under the New Brunswick Corporations Act, shareholders are free to vote
their shares as they please.
(f) OPPRESSION REMEDY. Under the Bermuda Company Act, the oppression remedy is
available to members if the affairs of the company are being conducted in a
manner which is oppressive or prejudicial to the interests of some part of
the members. Under the New Brunswick Corporations Act, the oppression
remedy is available to members if the affairs of the company are being
conducted in a manner which is oppressive or prejudicial to the interests
of the members.
(g) DIRECTOR LIABILITY. Under the Bermuda Company Act, there are no
limitations placed on the liability of directors. However, there is
provision for limited indemnification to be given to directors, in respect
of or from any liability for negligence, default, breach of duty of trust
in the Corporation's by-laws or by contract. Under the New Brunswick
Corporations Act there are no limitations placed on liability of
directors. However, there is a provision which permits a company to
indemnify a
<PAGE>
director against all costs, charges and expenses reasonably incurred by him
in respect of any civil, criminal or administrative action or proceeding to
which he is made a party by reason of being a director of that company, if
he acted honestly and in good faith with a view to the best interests of
the company and in the case of a criminal or administrative action that is
enforced by a monetary penalty that he had reasonable grounds for believing
that his conduct was lawful.
DISSENT RIGHTS
Shareholders of a company which is subject to the provisions of the New
Brunswick Corporations Act are entitled to exercise dissent rights and to be
paid the fair value of their shares in connection with certain matters,
including a continuance under the laws of another jurisdiction, an amalgamation
with another company, amending the company's articles to add, change or remove
restrictions on the transfer of shares, amending the company's articles to add,
change or remove any restriction upon the business or businesses that the
company may carry on, the sale, lease or other disposition of the whole or
substantially the whole of the undertaking of the company and the sale of a
company's assets for shares on a winding up. Under the New Brunswick
Corporations Act, a shareholder may, in addition to exercising dissent rights,
seek an oppression remedy for any act or omission of a company which is
oppressive or unfairly prejudicial to a shareholder.
OPPRESSION REMEDY
The New Brunswick Corporations Act contains an oppression remedy which
provides that the court may make any order, both interim and final, to rectify
the matter in question if satisfied upon application by a shareholder that; (i)
the affairs of the company are being conducted or the powers of the directors of
the company are being exercised, in a manner oppressive to one or more of the
shareholders, including the applicant; or (ii) that an act of the company has
been done or is threatened or that a resolution of the shareholders has been
passed or is proposed, that is unfairly prejudicial to one or more shareholders,
including the applicant. As a result of the breadth of conduct which can be the
subject matter of a complaint and the scope of the court's remedial powers, the
oppression remedy is very flexible and frequently is relied upon to safeguard
the interests of a person with a substantial interest in the company. A
"shareholder" includes a beneficial owner of shares and any other person who in
the discretion of the court is a proper person to make such application.
MEMORANDUM AND ARTICLES OF CONTINUANCE
The text of the Articles of Continuance is attached to this Management
Information Circular as Schedule "A". The rights, privileges and restrictions
which currently attach to the shares of the Corporation are substantially the
same as the rights, privileges and restrictions that will attach to the shares
after the Continuance.
In anticipation of the Continuance, the Board of the Corporation has
approved a new general by-law (the "By-Laws") for the Corporation in keeping
with the New Brunswick Corporations Act, which By-Laws are conditional upon the
Continuance becoming effective and which are further conditional upon the
ratification of the By-Laws by the shareholders of the Corporation. The text of
the By-Laws is attached to this Management Information Circular as Schedule "B".
EXCHANGE OF SHARE CERTIFICATES
Following completion of the Continuance, the Corporation will issue to
shareholders new share certificates in a form approved by the New Brunswick
Corporations Act. The Corporation will mail letters of transmittal to
shareholders containing instructions with respect to the exchange of old share
certificates for
<PAGE>
new share certificates and indicating that the Corporation has been continued
pursuant to the laws of the Province of New Brunswick. Upon return of a
properly completed letter of transmittal together with original old share
certificate(s), the Corporation will forward to shareholders replacement
certificates for the appropriate number of Common Shares in the capital of
the Corporation, without charge. It is currently anticipated that new share
certificates will be available immediately after the completion of the
Continuance.
FORM OF SHAREHOLDERS' RESOLUTION
Set forth below is the text of the special resolution which must be
approved by the shareholders at the Meeting.
NOW THEREFORE BE IT RESOLVED AS A SPECIAL RESOLUTION AS FOLLOWS:
1. That the Corporation discontinue in Bermuda and continue in the Province of
New Brunswick and that the directors of the Corporation be and they are
hereby authorized and directed to make applications pursuant to; (i)
section 132G of the Companies Act 1981 of Bermuda (the "Bermuda Company
Act") to discontinue the Corporation from Bermuda; and (ii) section 36 of
the Business Corporations Act, New Brunswick (the "New Brunswick Business
Corporations Act") to the Director to continue the Corporation as if it had
been incorporated under the New Brunswick Business Corporations Act.
2. The Corporation adopt the Articles and By-Laws in the form attached hereto
as Schedule "A" and Schedule "B" respectively, in substitution for the
existing Memorandum of Association and Bye-Laws and other constating
documents of the Corporation, such Articles and By-Laws to come into effect
when the proper officer of the Registrar of Companies appointed under the
New Brunswick Corporations Act issues a certificate of continuance
continuing the Corporation as if it had been incorporated under the New
Brunswick Corporations Act.
3. Any one officer or director of the Corporation be and he is hereby
authorized and directed to take all such acts and proceedings and to
execute and deliver all such applications, authorizations, certificates,
documents and instruments in the forms prescribed by the New Brunswick
Corporations Act, as in his opinion may be necessary or desirable to effect
the discontinuance of the Corporation from Bermuda and the continuance of
the Corporation under the New Brunswick Corporations Act.
4. The Board of Directors of the Corporation be and they are hereby authorized
and directed, in their absolute discretion to abandon the application to
discontinue the Corporation under the Bermuda Company Act and the
continuance of the Corporation under the New Brunswick Corporations Act at
any time without further approval of or notice to the shareholders.
<PAGE>
ITEM 3
PROPOSAL TO APPROVE SHARE OPTIONS
Shareholders are next being asked to consider and if thought fit, to
confirm with or without variation, the resolutions of the Board of Directors of
the Corporation dated March 5, 1998, granting the following Non-Plan options to
purchase an aggregate of 335,000 Common Shares at an exercise price of US$2.75
per share, to the following directors, officers and/or consultants in the
numbers set forth below:
<TABLE>
<CAPTION>
OPTIONEE NO. OF SHARES
<S> <C>
Edgar F. Cruft 30,000
W. Pierce Carson 70,000
Ray W. Jenner 35,000
Terence H. Lang 20,000
Leonard Lichter 20,000
Michel J. Drew 20,000
Lucile Lansing 20,000
John B. Roberts 20,000
Mark Welch 30,000
John C. Collis 20,000
James E. Taets 10,000
Erland A. Anderson 8,000
Michael J. Binns 8,000
Wamu Tamu 6,000
William Shearson 5,000
Rex Berthelsen 4,000
Paul Lahari 4,000
Amy Moody 3,000
Nicole Martinez 2,000
</TABLE>
All of the aforesaid options expire on March 5, 2008 and were issued at the
market price of the Common Shares as reported by the NASDAQ at the close of
business on March 5, 1998.
In each case no consideration was paid by the recipient of the option for
the option granted to him. All of the aforesaid options are non-assignable.
The Corporation currently has 12,925,203 Common Shares issued and
outstanding. The Corporation has granted options to purchase 1,191,000 Common
Shares under its various stock option plans and has granted options to purchase
1,293,600 Common Shares as and by way of Non-plan Options, inclusive of the
options to purchase 335,000 Common Shares described above. As a result of the
grant of the options to purchase such 335,000 Common Shares, insiders of the
Corporation hold options to purchase an aggregate of 1,698,600 Common Shares,
representing 13.14% of the issued and outstanding Common Shares.
The rules of the TSE require that a resolution of shareholders confirming
the grant of options to insiders as a group that exceeds 10% of the issued and
outstanding Common Shares of the Corporation must be approved by shareholders of
the Corporation excluding the insiders of the Corporation as well as their
associates and affiliates. The Corporation has therefore ascertained, based
upon information provided to the Corporation by such insiders, that Nord
Resources and Messrs. Cruft, Carson, Jenner, Lang, Lichter, Drew, Roberts and
Welch and Ms. Lansing and together with their associates and affiliates
(collectively, the
<PAGE>
"Insiders"), holding directly and/or indirectly (registered or unregistered)
an aggregate of 4,125,063 issued and outstanding Common Shares of the
Corporation, must refrain from voting on the confirming resolution set forth
below.
The resolution confirming the grant of Non-plan Options to purchase Common
Shares to certain directors, officers, and/or consultants of the Corporation
must be approved by a majority of the votes cast thereon in person or by proxy
at the meeting or any adjournment, exclusive of Insiders.
Set forth below is the text of the resolution that is to be submitted to
shareholders at the Meeting or any adjournment thereof, the Insiders to refrain
from voting thereon.
NOW THEREFORE BE IT RESOLVED AS FOLLOWS:
1. The grant by the directors of the Corporation of non-plan options to
purchase an aggregate of 344,000 Common Shares of the Corporation at an
exercise price of US$2.75 per share, expiring on March 5, 2008 to
directors, officers and/or consultants as more fully described in the
Corporation's Management Information Circular dated May_, 1998, be and the
same is hereby ratified, confirmed, authorized and approved.
2. Any one officer or director of the Corporation be and he is hereby
authorized and directed to do all acts and things and to execute under the
corporate seal or otherwise, all such deeds, documents, instruments and
assurances as he shall deem is necessary in order to give full force and
effect to these resolutions.
ITEM 4
APPOINTMENT OF INDEPENDENT AUDITORS AND AUTHORIZATION
OF BOARD TO SET THEIR COMPENSATION
The Board has recommended the appointment of ____________(the "New
Auditors") to act as independent auditors to audit the financial statements of
the Corporation for the fiscal year ending December 31, 1998. The Board also
requests that shareholders authorize the Board to set the compensation for the
independent auditors for the fiscal year ending December 31, 1998. It is
intended that proxies in the accompanying form will be voted at the meeting in
favor of such appointment and authorization unless otherwise indicated on the
proxy. A representative is expected to be present at the Meeting. The
financial statements and report of the auditors for 1997 have been provided to
the shareholders and will be set out for the Meeting, with the balance sheet
signed by at least two directors.
The relationship with the Corporation's predecessor auditors, Deloitte &
Touche (the "Former Auditors") was terminated with the approval of the audit
committee and at the request of the Corporation on April 27, 1998 and
effective April 27, 1998. The reports of D&T for the years ended December 31,
1997 and 1996, contained no adverse opinions, disclaimers of opinion or
qualified or modified opinions as to uncertainty, audit scope or accounting
principals. During the two year period ended December 31, 1997, and the
interim period from that dated to April 27, 1998, there were no disagreements
with the Former Auditors on any matter of accounting principals or practices,
financial statement disclosure, or auditing scope or procedures, which
disagreement, if not resolved to the satisfaction of the Former Auditors,
would have caused it to make reference in connection with its report to the
subject matter disagreement. The New Auditors were appointed auditors of the
Corporation on May _, 1998 following the termination of the Former Auditors.
In accordance with National Policy No. 31, the Corporation issued a notice
of change of auditors (the "Notice"), has received letters in reply to the
Notice from the Former Auditors and the New Auditors (together, the "Replies")
and the Notice and the Replies have been reviewed by the directors of the
<PAGE>
Corporation. A copy of each of the Notices and the Replies are attached hereto
as the reporting package pursuant to National Policy No. 31.
OTHER MATTERS
Management is not aware of any matters not referred to in the enclosed form
of proxy that will be presented for action at the Meeting. If any such matter
properly comes before the Meeting, the proxies in the accompanying form will be
voted with respect thereto in accordance with the judgment of the person or
persons voting such proxies.
Management is soliciting, or plans to solicit, by mail the proxies of the
holders of all Common Shares. The Corporation's Transfer Agent, American Stock
Transfer & Trust Company in the United States, is to perform certain services in
connection with this solicitation, including tabulation of proxies and personal
or telephone inquiries to shareholders and brokers, banks or others acting as
custodians. For these services the Transfer Agent will receive fees at
customary rates and reimbursement of certain out-of-pocket expenses. Brokers,
banks and other persons acting as custodians may be reimbursed for certain
expenses incurred by them in obtaining instructions from beneficial owners of
the Corporation's Common Shares. Directors and officers of the Corporation may,
without compensation other than their regular compensation, solicit proxies from
shareholders by telephone, telegraph or personal interview. All costs of
solicitations will be borne by the Corporation.
THE CORPORATION WILL PROVIDE, WITHOUT CHARGE, TO EACH SHAREHOLDER WHOSE
PROXY IS BEING SOLICITED HEREBY, A COPY OF THE CORPORATION'S ANNUAL REPORT TO
THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION FOR 1997 ON FORM 10-K,
INCLUDING THE FINANCIAL STATEMENTS AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, UPON WRITTEN REQUEST DIRECTED TO RAY W. JENNER, SECRETARY, NORD
PACIFIC LIMITED, 201 THIRD STREET, NW - SUITE 1750, ALBUQUERQUE, NEW MEXICO
87102.
SHAREHOLDER PROPOSALS
A proposal by a shareholder intended for inclusion in the Corporation's
Management Information Circular for the 1998 annual meeting of shareholders must
be received by the Corporation at the address noted immediately above marked:
"Attention: Secretary", on or before January 13, 1999, in order to be eligible
for such inclusion.
For the Board of Directors,
Ray W. Jenner
Secretary
FOR UNITED STATES AND OTHER
NON-AUSTRALIAN SHAREHOLDERS:
Please sign the proxy and return it promptly in the enclosed envelope
addressed to American Stock Transfer & Trust Company to which no postage need be
affixed if mailed within the United States.
FOR AUSTRALIAN SHAREHOLDERS:
<PAGE>
Please sign the proxy and return it promptly in the enclosed envelope to
which no postage need be affixed if mailed within the Commonwealth of Australia.
May_, 1998
NORD PACIFIC LIMITED
22 Church Street
Hamilton HM 11
Bermuda
<PAGE>
NORD PACIFIC LIMITED
201 Third Street, NW - Suite 1750
Albuquerque, New Mexico 87102
PROXY CARD
NORD PACIFIC LIMITED
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS ON JUNE 25, 1998
The undersigned hereby appoints Edgar F. Cruft and Ray W. Jenner, or either
of them, attorneys and proxies with full power of substitution in each of them,
in the name, place and stead of the undersigned to vote as proxy all the stock
of the undersigned in Nord Pacific Limited.
The close of business on May 1, 1998 has been fixed as the record date for
the determination of stockholders entitled to notice of and to vote at the
annual meeting and any adjournment thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR ALL THE PROPOSALS IF NO
INSTRUCTION TO THE CONTRARY IS INDICATED OR IF NO INSTRUCTION IS GIVEN.
(To be Signed on Reverse Side)
- ----------------------------------------
/X/ Please mark your
votes as in this
example.
1. Election of Nominees For Against Nominees:
\ \ \ \ W. Pierce Carson
\ \ \ \ Edgar F. Cruft
\ \ \ \ Michel J. Drew
\ \ \ \ Ray W. Jenner
\ \ \ \ Terence H. Lang
\ \ \ \ Leonard Lichter
\ \ \ \ Lucile Lansing
\ \ \ \ John B. Roberts
For, except vote withheld from the following nominee(s):
- ----------------------------------------
2. To consider and act upon a proposal to discontinue from Bermuda and
continue in the Province of New Brunswick, Canada. - FOR - AGAINST -
ABSTAIN
3. To consider and act upon a proposal to approve share options. - FOR -
AGAINST - ABSTAIN
4. To ratify the appointment of independent auditors and authorize the Board
to set their compensation. - FOR - AGAINST - ABSTAIN
<PAGE>
5. This transaction of such other business as may come before the meeting.
YOUR PROXY IS IMPORTANT TO ASSURE A QUORUM AT THE MEETING. WHETHER OR NOT
YOU EXPECT TO BE PRESENT, YOU ARE REQUESTED TO MARK, DATE, SIGN AND MAIL
THE ENCLOSED PROXY IN THE POSTAGE-PAID 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 MEETING.
SIGNATURES_______________________________________________DATE_____________
Note: Please sign exactly as your name appears hereon. Executors,
administrators, trustees, etc., should so indicate when signing, giving full
title as such. If signer is a corporation, execute in full corporate name by
authorized officer. If shares held in the name of two or more persons all should
sign.
