<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:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
SHARON ENERGY LTD.
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
SHARON ENERGY LTD.
NOTICE OF EXTRAORDINARY GENERAL MEETING
TAKE NOTICE that the board of directors of Sharon Energy Ltd. (the "Company")
has called an extraordinary general meeting of the shareholders of the
Company for 2:00 p.m. on May 8, 1997, in the Prince of Wales Room at the
Hyatt Regency Hotel, 655 Burrard Street, Vancouver, British Columbia.
At the meeting, the shareholders will:
(a) consider and, if thought fit, pass a special resolution to increase
the authorized capital of the Company, as more particularly set out
in the accompanying Information Circular/Proxy Statement; and
(b) consider and, if thought fit, approve an Incentive Share Option Plan
(the "Plan"), the details of which Plan are described in and a copy of
which Plan is attached to the accompanying Information Circular/Proxy
Statement.
The shareholders may also transact any other business properly brought before
the meeting.
All registered shareholders are entitled to attend and vote at the meeting in
person or by proxy. The board of directors requests all shareholders who
will not be attending the meeting in person to read, date and sign the
accompanying proxy and deliver it to Montreal Trust Company of Canada at 510
Burrard Street, Vancouver, British Columbia V6C 3B9. If a shareholder does
not deliver a proxy to Montreal Trust Company of Canada before the close of
business on May 6, 1997 or to the presiding officer of the extraordinary
general meeting before the commencement of the meeting, then the shareholder
will not be entitled to vote at the meeting by proxy.
An Information Circular/Proxy Statement and a form of proxy accompany this
notice.
Dated on April 3, 1997.
By order of the board of directors
/s/ JACK S. STEINHAUSER
------------------------------------
Jack S. Steinhauser,
President & Chief Executive Officer
<PAGE>
SHARON ENERGY LTD.
INFORMATION CIRCULAR/PROXY STATEMENT
SOLICITATION OF PROXIES
This Information Circular/Proxy Statement (the "Circular") is provided in
connection with the solicitation of proxies by the management of Sharon Energy
Ltd. (the "Company"). The form of proxy which accompanies this Circular (the
"Proxy") is for use at the extraordinary general meeting of the shareholders of
the Company to be held on May 8, 1997 (the "Meeting"), at the time and place set
out in the accompanying notice of meeting. The Company will bear the cost of
this solicitation. The solicitation will be made by mail, but may also be made
by telephone.
APPOINTMENT AND REVOCATION OF PROXY
The persons named in the Proxy are directors and officers of the Company. A
shareholder who wishes to appoint some other person to represent him at the
Meeting may do so by striking out the printed names and inserting the desired
person's name in the blank space provided. The completed Proxy should be
delivered to Montreal Trust Company of Canada, 510 Burrard Street, Vancouver,
British Columbia V6C 3B9 by the close of business on May 6, 1997, or to the
presiding officer of the Meeting before the start of the Meeting.
A proxy may be revoked by:
(a) signing a proxy with a later date and delivering it at the time and
place noted above;
(b) signing and dating a written notice of revocation and delivering it at
the time and place noted above; or
(c) attending the Meeting or any adjournment of the Meeting and
registering with the scrutineer as a shareholder present in person.
PROVISIONS RELATING TO VOTING OF PROXIES
The shares represented by proxy in the enclosed form will be voted by the
designated holder in accordance with the direction of the shareholder appointing
him. If there is no direction by the shareholder, those shares will be voted
for all proposals set out in the Proxy.
The Proxy gives the person named in it the discretion to vote as he sees fit on
any amendments or variations to matters identified in the notice of meeting, or
any other matters which may properly come before the Meeting. At the time of
printing this Circular, the management of the Company knows of no other matters
which may come before the Meeting other than those referred to in the notice of
meeting.
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VOTING SECURITIES AND PRINCIPAL HOLDERS OF VOTING SECURITIES
On the date of the accompanying notice of meeting, the Company had 5,863,800
common shares outstanding and each common share carries the right to one vote.
Shareholders registered on April 3, 1997 are entitled to attend and vote at the
Meeting. Shareholders who wish to be represented by proxy at the Meeting must,
to entitle the person appointed by the Proxy to attend and vote, deliver their
proxies at the place and within the time set forth in the notes to the Proxy.
To the knowledge of the senior officers of the Company, as of the date of this
Circular, the following persons beneficially own, directly or indirectly, or
exercise control or direction over, more than 5% of the common shares of the
Company:
<TABLE>
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NAME NUMBER OF SHARES PERCENTAGE OF CLASS
-----------------------------------------------------------------------------------
<S> <C> <C>
David L. Bennington 337,000 5.7%
John W. Steinhauser 486,000 8.3%
All Directors and Officers as a Group
(8 persons) 1,240,300 21.2%
Welcome Opportunities Ltd. 300,000 5.1%
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</TABLE>
EXECUTIVE COMPENSATION
<TABLE>
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ANNUAL COMPENSATION
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SALARY STOCK ALL
& MGMT OPTION OTHER
NAME AND FISCAL FEES(1) BONUS(2) OTHER(3) GRANTS COMPENSATION(4)
PRINCIPAL POSITION YEAR ($) ($) ($) # OF SHARES ($)
- - ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
JACK S. STEINHAUSER 1996 64,800 2,700 3,279 44,000 -0-
President 1995 64,800 5,400 8,491 44,000 -0-
& Chief Exec. Officer 1994 64,800 -0- 9,850 44,000 -0-
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J. CHRIS STEINHAUSER 1996 33,600 1,400 2,561 41,000 -0-
Executive Vice President 1995 33,600 2,800 6,985 39,000 -0-
& CFO 1994 33,600 -0- 7,695 39,000 -0-
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JOBETH MCFADDEN 1996 36,600 1,525 2,561 38,000 -0-
Vice President & 1995 36,600 3,050 6,985 36,000 -0-
Corporate Sec/Treas 1994 36,600 -0- 7,695 36,000 -0-
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CLIFFORD C. CLARK 1996 60,000 2,500 -0- 35,000 -0-
Vice President of 1995 57,998 2,000 -0- -0- -0-
Exploration 1994 19,467 -0- -0- 25,000 -0-
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</TABLE>
(1) The dollar value of base salary and/or management fees (cash and non-
cash) received.
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(2) The dollar value of a year-end bonus equivalent to one-half month's
salary in fiscal 1996 was paid to all employees or consultants at the
sole discretion of the Board of Directors. A year-end bonus
equivalent to one month's salary was paid to all employees or
consultants in fiscal 1995 but none was paid in 1994.
(3) Compensation received pursuant to the Employee Royalty Pool.
(4) Compensation received pursuant to the Incentive Award Plan. Amounts
paid under this Plan are based on profits achieved in the preceding
fiscal year. No compensation has been paid during the last three
fiscal years pursuant to the Incentive Award Plan.
INDEBTEDNESS OF DIRECTORS AND SENIOR OFFICERS
None of the directors or senior officers of the Company has more than "routine
indebtedness" to the Company.
INTEREST OF INSIDERS IN MATERIAL TRANSACTIONS AND MATTERS TO BE ACTED UPON
None of the persons who are directors or officers of the Company, the insiders
of the Company or the associates or affiliates of those persons, has any
material interest, direct or indirect, by way of beneficial ownership of
securities or otherwise, in any matter to be acted upon at the Meeting other
than the approval of the Company's incentive share option plan as described
below.
OTHER MATTERS TO BE ACTED UPON
A. INCREASE IN AUTHORIZED CAPITAL
The Company is presently authorized to issue 12,500,000 shares divided into
10,000,000 common shares without par value and 2,500,000 preferred shares
without par value. As of the date of this Circular, the Company has issued
5,863,800 common shares and has reserved for issuance 2,929,000 common shares in
the event outstanding options and warrants are exercised. This leaves 1,207,200
remaining authorized common shares that may be issued for additional financing.
There are no preferred shares outstanding. Management anticipates that the
Company will require substantial additional financing in order to finance future
exploration on its properties and that such additional financing may involve the
issuance of additional common shares by the Company. In order to permit
management to be able to proceed with equity financings as opportunities arise
and without having to obtain further approval of the shareholders, management
recommends that the authorized common share capital of the Company be increased
to 100,000,000 common shares and that the authorized preferred share capital of
the Company be increased to 25,000,000 preferred shares. Accordingly, the
shareholders will be asked at the Meeting to consider and if thought fit, to
pass the following special resolution:
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"RESOLVED, AS A SPECIAL RESOLUTION, THAT:
1. the authorized capital of the Company be increased from
12,500,000 shares divided into 10,000,000 common shares
without par value and 2,500,000 preferred shares without par
value to 125,000,000 shares divided into 100,000,000 common
shares without par value and 25,000,000 preferred shares
without par value;
2. the Memorandum of the Company be altered to reflect the
increase in the authorized capital of the Company, so that
it shall be in the form set out in Schedule "A" to this
Information Circular/Proxy Statement."
Under the Company Act of British Columbia any company may, by special
resolution, alter its memorandum to increase its authorized capital. "Special
resolution" means a resolution passed by a majority of not less than 75% of the
votes cast by those shareholders of a company who, being entitled to do so, vote
in person or by proxy at a general meeting of the company.
If the special resolution authorizing the proposed increase in authorized
capital is passed, certified copies are required to be filed with the Registrar
of Companies for British Columbia and the special resolution will take effect on
the date of such filing.
B. APPROVAL OF INCENTIVE SHARE OPTION PLAN
The Company is desirous of implementing an incentive share option plan (the
"Plan") for directors, officers, and full and part-time employees and
consultants of the Company and its controlled and subsidiary companies. On
March 28, 1997, the board of directors of the Company (the "Board") approved the
Plan. Pursuant to the Plan, the Company has authorized the reservation of
1,172,760 common shares for the grant of options from time to time.
Under the Plan, the Board may from time to time grant to directors, officers,
and full and part-time employees and consultants of the Company and its
controlled and subsidiary companies, as the Board shall designate, options to
purchase from the Company such number of its common shares as the Board may
designate. Options may be granted on authorized but unissued common shares up
to but not exceeding 1,172,760 common shares of the Company under this Plan,
provided that the total number of common shares to be reserved for issuance at
any one time for any one optionee shall not exceed 5% of the issued common
shares of the Company at the time of grant. In the event the optionee is a
consultant or a director employed in an investor relations capacity or an
employee employed in an investor relations capacity, then the grant of options
shall not exceed 2% of the issued common shares of the Company at the time of
the grant. The purchase price per common share for any option granted under the
Plan shall not be less than the ten-day average of the closing prices of the
Company's common shares on the Vancouver Stock Exchange (the "VSE") prior to the
date of grant. Pursuant to the Plan, options shall be granted pursuant to an
option agreement in a form that complies with the rules and policies of the VSE,
which provide as follows:
(a) all options granted shall be non-assignable;
<PAGE>
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(b) an option must be exercisable during a period not extending beyond
10 years from the time of grant except where an option is granted to a
consultant, in which case the term may not exceed five years; and
(c) no financial assistance will be provided with respect to the exercise
of stock options.
The Plan also provides for the granting of share appreciation rights ("SARs").
SARs would permit a holder to receive at no cost to the holder common shares,
which, when multiplied by the fair market value on the day immediately prior to
the date of the exercise of the SARs, have a total value equal to the product of
the number of common shares subject to the SARs times the difference between the
fair market value on the day immediately prior to the exercise of the SARs and
the exercise price. The Board has not activated this part of the Plan and no
SARs have been granted.
The Company is seeking approval of the Plan from its disinterested shareholders
as the Plan provides that the Company may cause:
(a) insiders who are not directors or senior officers of the Company to
receive options as consultants;
(b) the number of common shares reserved for issuance pursuant to options
granted to insiders to exceed 10% of the outstanding common shares of
the Company (the "Outstanding Shares");
(c) the issuance to insiders, within a one-year period, of common shares
to exceed 10% of the Outstanding Shares; and
(d) the issuance to any one insider and such insider's associates, within
a one year period of a number of shares exceeding 5% of the
Outstanding Shares.
The full text of the Plan is attached hereto as Schedule "B".
There are 1,363,300 shares held by insiders, their associates or their
associated companies. Accordingly, the shareholders, other than insiders, their
associates or their associated companies, will be asked at the Meeting to pass
an ordinary resolution in the following terms:
"RESOLVED that, subject to disinterested shareholder
approval, the Company's Incentive Share Option Plan (the
"Plan"), as described in and attached to the Company's
Information Circular/Proxy Statement dated April 3, 1997 be
approved and the Board of Directors of the Company be
granted the discretion pursuant to the Plan to grant stock
options to directors, officers, and full and part-time
employees and consultants of the Company and its controlled
and subsidiary companies, as the Board of Directors of the
Company sees fit, provided however, that the aggregate
number of shares of the Company subject to options under
this Plan shall not exceed 1,172,760 common shares or such
greater number as may be approved from time to time by the
shareholders of the Company. Such grants shall be made
under the terms of the Plan and within the rules and
policies of the Vancouver Stock Exchange in effect at the
<PAGE>
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time of granting and the exercise of any options granted
pursuant to such authorization is hereby approved."
An ordinary resolution by disinterested shareholders requires the approval of a
simple majority (50% plus one vote) of the votes cast by those shareholders of
the Company, other than insiders and their associates and associated companies,
who, being entitled to, vote in person or by proxy at a general meeting of the
Company.
C. OTHER MATTERS
It is not known whether any other matters will come before the Meeting other
than those set forth above and in the notice of meeting, but if any other
matters do arise, the persons named in the Proxy intend to vote on any poll, in
accordance with their best judgment, exercising discretionary authority with
respect to amendments or variations of matters ratified in the notice of meeting
and other matters which may properly come before the Meeting or any adjournment.
DATED April 3, 1997.
BY THE MANAGEMENT OF SHARON ENERGY LTD.
/s/ JACK S. STEINHAUSER
- - -------------------------------
Jack S. Steinhauser,
President & Chief Executive Officer
<PAGE>
Schedule "A"
FORM 1 (Section 5)
COMPANY ACT
ALTERED MEMORANDUM
(as altered by special resolution dated May 8, 1997)
1. The name of the Company is "Sharon Energy Ltd.".
2. The authorized capital of the Company consists of 125,000,000 shares
divided into 100,000,000 Common Shares without par value and
25,000,000 Preferred Shares without par value. Each class of shares
shall have attached thereto the Special Rights and Restrictions as set
out in the Articles of the Company.
<PAGE>
SHARON ENERGY LTD.
FORM OF PROXY FOR USE AT THE EXTRAORDINARY GENERAL MEETING TO BE HELD ON
MAY 8, 1997, IN THE PRINCE OF WALES ROOM AT THE HYATT REGENCY HOTEL,
655 BURRARD STREET, VANCOUVER, BRITISH COLUMBIA, AT 2:00 P.M.
THIS PROXY IS SOLICITED ON BEHALF OF THE MANAGEMENT OF THE COMPANY.
I am the registered owner of common shares in the capital of Sharon Energy
Ltd. (the "Company") and I appoint Jack S. Steinhauser or, in this person's
absence, David L. Bennington, or
[YOU MAY FILL IN THE NAME OF ANOTHER PERSON YOU WISH TO ACT FOR YOU; SEE
NOTE (1) AT THE END OF THIS FORM]
__________________________________________________________________
__________________________________________________________________
as my proxy to attend and act for me in respect of all the common shares
registered in my name at the extraordinary general meeting of the Company to
be held on May 8, 1997 and at any and all adjournments of that meeting.
Without limiting the general powers conferred by this Proxy, I direct my
proxy to vote as follows:
(a) VOTE FOR [ ]
VOTE AGAINST [ ]
a special resolution that:
1. the authorized capital of the Company be increased from 12,500,000 shares
divided into 10,000,000 common shares without par value and 2,500,000
preferred shares without par value to 125,000,000 shares divided into
100,000,000 common shares without par value and 25,000,000 preferred shares
without par value;
2. the Memorandum of the Company be altered to reflect the increase in the
authorized capital of the company, so that it shall be in the form set out
in Schedule "A" to this information Circular/Proxy Statement.
To
SHAREHOLDER ADDRESS
CONTINUED OVER
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(b) VOTE FOR [ ]
VOTE AGAINST [ ]
a resolution that, subject to disinterested shareholder approval, the
Company's Incentive Share Option Plan (the "Plan"), as described in and
attached to the Company's Information Circular/Proxy Statement dated April 3,
1997 be approved and the Board of Directors of the Company be granted the
discretion pursuant to the Plan to grant stock options to directors,
officers, and full and part-time employees and consultants of the Company and
its controlled and subsidiary companies, as the Board of Directors of the
Company sees fit, provided however, that the aggregate number of shares of
the Company subject to options under this Plan shall not exceed 1,172,760
common shares or such greater number as may be approved from time to time by
the shareholders of the Company. Such grants shall be made under the terms of
the Plan and within the rules and policies of the Vancouver Stock
Exchange in effect at the time of granting and the exercise of any options
granted pursuant to such authorization is hereby approved.
IF I HAVE NOT SPECIFIED THAT MY PROXY VOTE IN A PARTICULAR WAY, THEN I DIRECT
MY PROXY TO VOTE FOR EACH RESOLUTION.
I AUTHORIZE MY PROXY TO ACT FOR ME AND TO VOTE AS HE OR SHE SEES FIT ON
ANY MATTER WHICH MAY PROPERLY COME BEFORE THE MEETING. I revoke any
proxy previously given by me for use at the extraordinary general meeting of
the Company.
Date: ______________________ Signature: ________________________________
PLEASE PRINT:
Name: ________________________________________________________________
Address: ________________________________________________________________
________________________________________________________________
NOTES TO SHAREHOLDER COMPLETING THIS FORM
1. YOU HAVE THE RIGHT TO APPOINT ANY PERSON (WHO NEED NOT BE A SHAREHOLDER)
OTHER THAN THE PERSON DESIGNATED IN THIS FORM TO ATTEND AND ACT FOR YOU AT
THE MEETING. If you wish to exercise this right, you should strike out the
names printed on this Proxy and insert the name of the person you wish to
act for you at the meeting.
2. If you give a proxy and the instructions in it are certain, then the
shares represented by the proxy will be voted on any poll in accordance
with your instructions, and, where you specify a choice with respect to
any matter to be acted on, the shares will be voted on any poll
accordingly.
3. You or your attorney authorized in writing must date and sign this Proxy.
If the Proxy is not dated, it will be deemed to bear the date on which it is
mailed by the person making the solicitation.
4. If you are a corporation, you must execute this Proxy under seal or by an
officer or attorney authorized in writing.
5. This Proxy is valid for one year from its date.
6. You must deposit this Proxy with Montreal Trust Company of Canada, 510
Burrard Street, Vancouver, British Columbia V6C 3B9 before the close of
business on May 6, 1997 or with the presiding officer of the extraordinary
general meeting before the commencement of the meeting.
