<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 sec. 240.14a-11(c) or sec. 240.14a-12
STELAX INDUSTRIES LTD
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than 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)(l) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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:
[ ] 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> 2
STELAX INDUSTRIES LTD.
#1710-1177 West Hastings Street
Vancouver, B.C. Canada, V6E 2L3
NOTICE OF ANNUAL GENERAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 12, 1997
To the Holders of Common Stock of
STELAX INDUSTRIES LTD.:
Notice is hereby given that the Annual General Meeting of Stockholders
of Stelax Industries Ltd., a British Columbia corporation (the "Company"), will
be held at Harvey Hotel, 14315 Midway Road, Dallas, Texas on Friday, December
12, 1997 at 10:00 a.m. (local time), for the following purposes:
(1) To elect three persons to serve as directors of the Company
until the 1998 Annual General Meeting of Stockholders or until their successors
are duly elected and qualified.
(2) To act upon a proposal to ratify the appointment of
independent public accountants.
(3) To transact any other proper business brought before the
meeting or any adjournments or postponements thereof.
The Board of Directors has fixed October 31, 1997, at the
close of business, as the record date for the determination of stockholders
entitled to notice of, and to vote at, the meeting and any adjournment or
postponement thereof. Only holders of record of the Company's common stock on
that date are entitled to vote on matters coming before the meeting or any
adjournment or postponement thereof. A complete list of stockholders entitled
to vote at the meeting will be maintained in the Company's offices at
#1710-1177 West Hastings Street, Vancouver, British Columbia, V6E 2L3 for 21
days prior to the meeting and will be open to the examination of any
stockholder during ordinary business hours of the Company.
Please advise the Company's transfer agent, Signature Stock Transfer,
Inc., 14675 Midway Road, Suite 221, Dallas, Texas 75244 of any change in your
address.
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING
IN PERSON, PLEASE MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE
ENVELOPE PROVIDED.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ HARMON S. HARDY, JR.,
-------------------------
Harmon S. Hardy, Jr.,
Secretary
Dallas, Texas
November 10, 1997
<PAGE> 3
STELAX INDUSTRIES LTD.
#1710-1177 West Hastings Street
Vancouver, B.C. Canada, V6E 2L3
------------
PROXY STATEMENT
-----------------
PROXY STATEMENT FOR
ANNUAL GENERAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 12, 1997
The accompanying proxy, which has been mailed together with the Notice
of Annual General Meeting and this Proxy Statement to stockholders on or about
November 10, 1997, is solicited by management and the Board of Directors of
Stelax Industries Ltd. (the "Company") in connection with the Annual General
Meeting of Stockholders to be held at the Harvey Hotel, 14315 Midway Road,
Dallas, Texas on December 12, 1997 at 10:00 a.m., local time. The proxy may be
revoked by the stockholder at any time prior to its exercise by executing and
returning a proxy bearing a later day, by giving written notice of revocation
to the Secretary of the Company, or by attending the meeting and voting in
person.
As stated in the Notice to which this Proxy Statement is attached,
matters to be acted upon at the meeting include: (i) the election to the Board
of Directors of three directors to serve as directors until the 1998 Annual
General Meeting of Stockholders or until their successors are duly elected and
qualified and (ii) the ratification of the appointment of independent public
accountants. No director or officer of the Company has any interest in the
matters to be acted upon at the meeting.
All properly executed, unrevoked proxies received before the meeting
will be voted in accordance with the directions contained therein. When no
direction has been given by a stockholder returning a proxy, the proxy will be
voted FOR the election as directors of the nominees named in this Proxy
Statement and FOR the ratification of Deloitte & Touche as independent public
accountants of the Company, and in the discretion of persons named in the proxy
with respect to any other business which may properly come before the meeting.
Votes will be tabulated by inspectors of election appointed by the Company. An
abstention from voting on a proposal will be tabulated as a vote withheld on
the proposal, but will be included in computing the number of shares present
for purposes of determining the presence of a quorum for the meeting.
The close of business on October 31, 1997 has been set as the record
date for determination of stockholders entitled to notice of, and to vote at,
the meeting. Holders of the common stock are entitled to one vote per share on
all matters which come before the meeting.
On the record date, there were outstanding and entitled to vote
31,869,285 shares of common stock. The presence, in person or by proxy, of a
majority of the outstanding shares of common stock entitled to vote at the
meeting will constitute a quorum.
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<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of October 15, 1997, the number and
percentage of outstanding shares of common stock beneficially owned by (i) each
person known by the Company to be a beneficial owner of more than 5% of the
Company's common stock, (ii) each of the executive officers of the Company,
(iii) each director of the Company, and (iv) all officers and directors as a
group.
<TABLE>
<CAPTION>
Shares of
Common Stock
Names and Address Beneficially Percentage
of Beneficial Owner(1) Owned of Class
------------------- ----------- ----------
<S> <C> <C>
Harmon S. Hardy, Jr. 4,652,700(2) 13.77%
4004 Belt Line Road
#107
Dallas, Texas 75244
Ruben Grubner 50,000(3) *
William D. Alexander 100,000(4) *
All officers and directors 4,802,700(234) 14.15%
as a group (3 persons)
</TABLE>
* Represents less than one percent
(1) The persons named in the table have sole voting and investment power with
respect to all shares of common stock shown as beneficially owned by them,
subject to community property laws, where applicable, and the information
contained in the footnotes to the table.
(2) Includes options to purchase 1,572,000 shares.
(3) Includes options to purchase 50,000 shares of common stock.
(4) Includes options to purchase 100,000 shares of common stock.
ELECTION OF DIRECTORS
Three directors are to be elected at the Annual General Meeting, to
hold office until the next annual general meeting or until their successors
have been elected and qualified, or they have sooner resigned or been removed.
The Board of Directors proposes the election of the persons listed below, all
of whom are currently directors. It is not contemplated that any of the
nominees will be unable or unwilling to serve as a director; however, if that
should occur, the proxies will be voted for the election of such other person
or persons as are nominated by the board of
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<PAGE> 5
directors, unless the board reduces the number of directors. The three
nominees for director receiving a majority of the votes cast at the Annual
General Meeting in person or by proxy shall be elected. Proxies cannot be
voted for a greater number of persons than the number of nominees named below.
The following table sets forth certain information as to the nominees
for director.
<TABLE>
<CAPTION>
Name and Age Position Served In Office Since
- ------------ -------- ----------------------
<S> <C> <C>
Harmon S. Hardy, 68 Chairman of the Board, 1987
President and Secretary
Ruben Grubner, 41 Director 1995
William D. Alexander, 48 Director 1996
</TABLE>
Harmon S. Hardy has been the President of the Company since its inception in
May, 1987. Additionally, Mr. Hardy is Chairman of Austin Friars Securities
Limited, a London-based investment banking firm, and is Chairman and President
of various other entities. Mr. Hardy devotes a substantial portion of his time
to the matters and business of the Company.
Ruben Grubner has been President of Altec Travel, a travel service firm in
Vancouver, B.C., Canada since 1978.
William D. Alexander has been a Vice-President since 1987 with Bank of Nova
Scotia in Toronto, Canada.
Directors did not receive any compensation, other than reimbursement of
direct expenses, for services rendered as a director during the year ended
March 31, 1997.
The Company does not have a standing audit, nominating or compensation
committee or any committee performing similar functions. The Company held one
board meeting during the year ended March 31, 1997. All other actions at the
board level were taken by unanimous consent.
MANAGEMENT
The sole officer of the Company as of October 15, 1997 is Harmon S.
Hardy, Jr., President and Secretary. See "Election of Directors" above for
biographical information regarding Mr. Hardy.
EXECUTIVE COMPENSATION
The following table sets forth information with respect to the
compensation to the Company's chief executive officer at March 31, 1997 for
services rendered during the fiscal years ended March 31, 1997, 1996 and 1995.
No officer of the Company received compensation during the fiscal year ended
March 31, 1997 in excess of $100,000.
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<PAGE> 6
<TABLE>
<CAPTION>
Annual Compensation(1)
----------------------
Stock Options All Other
Name Year Salary Bonus Other (Shares) Compensation
---- ---- ------ ----- ----- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
HARMON S. HARDY, 1997 $ 72,000 ---- ---- ---- $ ----
Chairman of the Board of 1996(2) $ ---- ---- ---- ---- ----
Director, President and 1995(2) $ ---- ---- ---- ---- ----
Chief Financial Officer
</TABLE>
(1) The compensation described in the table does not include the cost to
the Company of benefits furnished to certain officers, including
premiums for health insurance, and other personal benefits provided to
such individuals that are extended in connection with the conduct of
the Company's business. No executive officer names above received
other compensation in excess of the lesser of $50,000 or 10% of such
officer's salary and bonus compensation.
(2) Does not include consulting fees paid to affiliates of Mr. Hardy during
these years. See "Certain Relationships and Related Transactions",
below.
1997 OPTION GRANTS
The following table sets forth the number, percent of total options
granted to named employees, exercise price and duration of options granted to
the named executive officers, and the hypothetical gain that would result from
assumed annual rates of stock price appreciation over the term of the options.
<TABLE>
<CAPTION>
PERCENT OF
TOTAL POTENTIAL REALIZABLE
OPTIONS VALUE AT ASSUMED ANNUAL
GRANTED TO RATES OF APPRECIATION
EMPLOYEES IN FOR OPTION TERM
OPTIONS FISCAL YEAR EXERCISE EXPIRATION
NAME GRANTED 1997 PRICE DATE 5% 10%
---- ------- ---- ----- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Harmon S. Hardy 500,000 50.0% $1.00 1/31/02 $638,141 $805,255
</TABLE>
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<PAGE> 7
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Through June 30, 1996 the Company had general administrative functions
handled by another company, High Speed Technologies, Inc., which is one hundred
percent (100%) owned by Harmon S. Hardy, the President of the Company. In
addition, the Company accrued consulting fees to the President of the Company
for services performed. As of March 31, 1997 and 1996, funds were due to the
President and High Speed Technologies, Inc. totaling $20,228 and $542,538,
respectively.
STOCK PERFORMANCE CHART
The following chart compares the yearly percentage change in the
cumulative total stockholder return on the Company's common stock during the
three years ended March 31, 1997 with the cumulative total return of (i) NASDAQ
Market Index, and (ii) an SIC Code Index for companies operating steel works
and rolling mills. The Company's common stock traded sporadically prior to
March 31, 1995. The comparison assumes $100 was invested on March 31, 1995 in
the Company's common stock and in each of the other indices and assumes
reinvestment of dividends. The Company paid no dividends during the three year
period.
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<PAGE> 8
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors of the Company has selected the firm of Deloitte
& Touche as the independent accountants and auditors to examine the financial
statements and books and records of the Company for the year ending March 31,
1998 and recommends to the shareholders that such selection be ratified and
approved at the meeting. The firm of Deloitte & Touche examined the financial
statements of the Company for the year ended March 31, 1997 and is considered
by the Board of Directors to be well qualified.
Representatives of Deloitte & Touche will be present at the meeting
with the opportunity to make a statement if they desire to do so and to be
available to respond to appropriate questions.
The Board of Directors recommends a vote FOR ratification of the
selection of Deloitte & Touche as independent public accountants of the
Company.
On March 20, 1997, the Company's prior accountant for the 1996 fiscal
year, Ernst & Young LLP, (the "1996 Accountant") was dismissed as a result of
the engagement on that date of Deloitte & Touche located in the United Kingdom.
The 1996 Accountant's report on the financial statements for the prior year did
not contain an adverse opinion nor a disclaimer of opinion nor was such report
qualified or modified as to uncertainty, audit scope or accounting principles
except as follows: the 1996 Accountant's report on the financial statements
for the year ended March 31, 1996 contained an emphasis paragraph as to the
Company's ability to continue as a going concern due to recurring losses from
operations and a working capital deficiency as of such date. The decision to
change accountants from the 1996 Accountant to Deloitte & Touche was approved
by the Board of Directors of the Company.
During the Company's 1996 fiscal year and any subsequent interim
reporting period preceding the date of dismissal of the 1996 Accountant, there
were no disagreements with the 1996 Accountant on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure, which disagreements, if not resolved to the satisfaction of the 1996
Accountant, would have caused it to make reference to the subject matter of the
disagreements in connection with its report.
On May 2, 1996, the Company's accountant for the 1995 fiscal year, Ray,
Dahl & Associates, L.L.P., (the "1995 Accountant") was dismissed as a result of
the engagement on that date of Ernst & Young LLP. The 1995 Accountant's report
on the financial statements for the prior two years did not contain an adverse
opinion nor a disclaimer of opinion nor was such report qualified or modified
as to uncertainty, audit scope or accounting principles except as follows: the
1995 Accountant's report on the financial statements for the year ended March
31, 1995 contained a qualification as to the Company's ability to continue as a
going concern due to recurring losses and a net capital deficiency as of such
date. The decision to change accountants from the 1995 Accountant to Ernst &
Young LLP was approved by the Board of Directors of the Company.
During the Company's two most recent fiscal years and any subsequent
interim reporting period preceding the date of dismissal of the 1995
Accountant, there were no disagreements with the 1995 Accountant on any matter
of accounting principles or practices, financial statements disclosure or
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of the 1995 Accountant, would have caused it to make reference to
the subject matter of the disagreements in connection with its report.
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<PAGE> 9
STOCKHOLDER PROPOSALS
In order for stockholder proposals to receive consideration for
inclusion in the Company's 1998 Proxy Statement, such proposals must be
received at the Company's offices at 4004 Belt Line Road, #107, Dallas, Texas
75244, Attention: Secretary by September 15, 1998.
SOLICITATION OF PROXIES
The Company will pay the expense of this proxy solicitation. In
addition to solicitation by mail, some of the officers and regular employees of
the Company may solicit proxies personally or by telephone, if deemed
necessary. The Company will request brokers and other fiduciaries to forward
proxy soliciting material to beneficial owners of shares which are held of
record by the brokers and fiduciaries, and the Company may reimburse them for
reasonable out-of-pocket expenses incurred by them in connection therewith.
The Company has retained Signature Stock Transfer, Inc. to solicit proxies for
the meeting from brokers, banks and nominees. For such services the Company
has agreed to pay Signature Stock Transfer, Inc. a fee of $500.
OTHER BUSINESS
The Board of Directors is not aware of any matter, other than the
matters described above, to be presented for action at the meeting. However,
if other proper items of business should come before the meeting, it is the
intention of the person or persons acting under the enclosed form of proxy to
vote in accordance with their best judgment on such matters.
By Order of the Board of Directors
/s/ HARMON S. HARDY, JR.,
-------------------------
Harmon S. Hardy, Jr.,
Secretary
Dallas, Texas
November 10, 1997
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<PAGE> 10
STELAX INDUSTRIES LTD.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby (1) acknowledges receipt of the Notice of Annual General
Meeting of Stockholders of Stelax Industries Ltd. (the "Company") which will be
held at the Harvey Hotel, 14315 Midway Road, Dallas, Texas on Friday, December
12, 1997, at 10:00 a.m. local time, and the Proxy Statement in connection
therewith and (2) appoints Harmon Hardy and Patrick V. Stark, and each of them,
his proxy with full power of substitution for and in the name, place and stead
of the undersigned, to vote upon and act with respect to all of the shares of
Common Stock of the Company standing in the name of the undersigned, or with
respect to which the undersigned in entitled to vote and act, at the meeting
and at any adjournment thereof.
This proxy will be voted as specified on the reverse side. If no
specification is made, this proxy will be voted FOR the election of directors
as contemplated in the Proxy Statement and FOR the appointment of Deloitte &
Touche as independent auditors.
The undersigned hereby revokes any proxy heretofore given to vote or
act with respect to the Common Stock of the Company and hereby ratifies and
confirms all that the proxies, their substitutes, or any of them may lawfully
do by virtue hereof.
If more than one of the proxies named shall be present in person or by
substitute at the meeting or at any adjournment thereof, the majority of the
proxies so present and voting, either in person or by substitute, shall
exercise all of the powers hereby given.
Please date, sign and mail this proxy in the enclosed envelope. No
postage is required.
(Continued and to be dated and signed on the other side)
1. To act upon a proposal to elect the following three persons as
directors of the Company to serve in such capacities until the 1998 Annual
General Meeting:
Harmon S. Hardy, Jr., Ruben Grubner and William D. Alexander
FOR [ ] AGAINST [ ] WITHHOLD AUTHORITY [ ]
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(IF YOU DO NOT WISH TO VOTE FOR ALL NOMINEES, PLEASE PRINT NAME
OF NOMINEE WITH RESPECT TO WHOM AUTHORITY TO VOTE IS WITHHELD)
2. To act upon a proposal to ratify the appointment of Deloitte &
Touche as independent public accountants for the Company.
FOR [ ] AGAINST [ ] WITHHOLD AUTHORITY [ ]
3. IN THE DISCRETION OF THE PROXIES, ON ANY OTHER MATTER WHICH MAY
PROPERLY COME BEFORE THE MEETING.
Please date this proxy and sign your
name exactly as it appears hereon.
Where there is more than one owner,
each should sign. When signing as an
attorney, administrator, executor,
guardian or trustee, please add your
title as such. If executed by a
corporation, the proxy should be
signed by a duly authorized officer.
Dated: , 1997
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Signature of Stockholder
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Signature of Stockholder
PLEASE MARK, DATE, SIGN AND MAIL YOUR PROXY PROMPTLY IN THE ENVELOPE PROVIDED.
