SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [X] Definitive Proxy Statement
[ ] Definitive Additional Materials [ ] Soliciting Materials
[ ] Confidential, for use of the Pursuant to S.240.14a-11(c)
Commission Only (as permitted or S.240.14a-12
by Rule 14a-6(e)(2))
American Eco Corporation
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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
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:
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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
amount on which the filing fee is calculated and
state how it was determined):
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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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4) Date Filed:
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1
<PAGE>
AMERICAN ECO CORPORATION
NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual and Special Meeting of Shareholders (the
"Meeting") of American Eco Corporation (the "Corporation") will be held at Royal
York Hotel, Toronto, Ontario, on Thursday, May 20, 1999 at 4:00 in the afternoon
(Toronto time), for the following purposes:
(a) To receive and consider the annual report of management to the shareholders
and the consolidated financial statements of the Corporation for the year
ended November 30, 1998 and the report of the auditors thereon;
(b) To elect directors of the Corporation for the ensuing year;
(c) To appoint PricewaterhouseCoopers L.L.P., Certified Public Accountants, as
auditors of the Corporation for the current year and to authorize the
directors to fix their remuneration;
(d) To consider and if deemed advisable, approve and confirm with or without
variation, a resolution of the directors of the Corporation amending the
Corporation's stock option plan;
(e) To consider and if deemed advisable, pass with or without variation, a
resolution authorizing the Corporation to enter into private placement
agreements with arm's length subscribers during the ensuing 12 month
period; and
(f) To transact such other business as may properly come before the Meeting or
any adjournments thereof.
This notice is accompanied by a form of proxy, a management information circular
and the consolidated financial statements of the Corporation for the year ended
November 30, 1998.
Shareholders who are unable to attend the Meeting are requested to complete,
date, sign and return the enclosed form of proxy so that as large a
representation as possible may be had at the Meeting.
The Board of Directors has fixed the close of business on April 15, 1999 as the
record date for the determination of holders of common shares entitled to notice
of the Meeting and any adjournments thereof.
The Board of Directors has by resolution fixed the close of business on the
second business day preceding the day of the Meeting (excluding Saturdays,
Sundays and holidays) and any adjournments thereof as the time before which
proxies to be used or acted upon at the Meeting or any adjournments thereof
shall be deposited with the Corporation or its transfer agent.
DATED at Houston, Texas this 16th day of April, 1999.
By Order of the Board of Directors
/s/ J.C. Pennie
----------------------------------
J.C. PENNIE
Chairman of the Board
2
<PAGE>
AMERICAN ECO CORPORATION
MANAGEMENT INFORMATION CIRCULAR
SOLICITATION OF PROXIES
THIS MANAGEMENT INFORMATION CIRCULAR (THE "CIRCULAR") IS FURNISHED IN
CONNECTION WITH THE SOLICITATION OF PROXIES BY THE MANAGEMENT OF AMERICAN ECO
CORPORATION (THE "CORPORATION") FOR USE AT THE ANNUAL AND SPECIAL MEETING OF
SHAREHOLDERS (THE "MEETING") OF THE CORPORATION TO BE HELD AT THE TIME AND PLACE
AND FOR THE PURPOSES SET FORTH IN THE ACCOMPANYING NOTICE OF MEETING. References
in this Circular to the Meeting include any adjournment or adjournments thereof.
It is expected that the solicitation will be primarily by mail, but proxies may
also be solicited personally by officers and regular employees of the
Corporation.
APPOINTMENT AND REVOCATION OF PROXIES
The persons named in the enclosed form of proxy are 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 48 hours (exclusive of Saturdays, Sundays and holidays) before the time of
the Meeting.
The board of directors (the "Board") of the Corporation has fixed April 15,
1999 as the record date, being the date for the determination of the registered
holders of securities entitled to receive notice of the Meeting and entitled to
vote at the Meeting, except that a transferee of common shares acquired after
the record date shall be entitled to vote the transferred common shares at the
Meeting if he produces properly endorsed certificates for such common shares or
otherwise establishes that he owns such common shares and demands by written
request, delivered to the Corporation's transfer agent, CIBC Mellon Trust
Company, no later than ten days before the Meeting, that his name be included in
the list of shareholders entitled to vote at the Meeting.
A shareholder forwarding the enclosed proxy may indicate the manner in
which the appointee is to vote with respect to any specific item by checking the
appropriate space. If the shareholder giving the proxy wishes to confer a
discretionary authority with respect to any item of business then the space
opposite the item is to be left blank. The shares represented by the proxy
submitted by a shareholder will be voted in accordance with the directions, if
any, given in the proxy.
A proxy given pursuant to this solicitation may be revoked by instrument in
writing, including another proxy bearing a later date, executed by the
shareholder or by his attorney authorized in writing, and deposited either at
the registered office of the Corporation or its transfer agent at any time up to
and including the last business day preceding the date of the Meeting or with
the Chairman of the Meeting on the day of the Meeting or in any other manner
permitted by law.
EXERCISE OF DISCRETION BY PROXIES
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 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 proxies.
The affirmative vote of a majority of the common shares represented in
person or by proxy at the Meeting is required for the election of directors, the
appointment of the auditors and the approval of the proposed resolutions.
SECURITIES AND PRINCIPAL HOLDERS THEREOF
As at April 15, 1999, 21,710,180 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.
3
<PAGE>
To the knowledge of the directors and officers of the Corporation, no
person, firm or corporation beneficially owns, directly or indirectly, or
exercises control or direction over voting securities of the Corporation
carrying more than 5% of the voting rights attached to any class of voting
securities of the Corporation. As at April 15, 1999, the directors beneficially
owned an aggregate of 527,240 common shares, or approximately 2.4% of the
outstanding shares.
STATEMENT OF EXECUTIVE COMPENSATION
The following table presented in accordance with Ontario Regulation 638/93
made under the Securities Act, Ontario sets forth all annual and long term
compensation for services in all capacities to the Corporation and its
subsidiaries for the fiscal year ended November 30, 1998 to the extent required
by the Regulation in respect of each of the individuals who were Executive
Officers of the Corporation, as that term is defined therein (the "Named
Executive Officers"). Disclosure of compensation is provided for comparative
purposes notwithstanding that such disclosure is not required where such Named
Executive Officer received salary and bonuses totalling less than $100,000. All
dollar amounts information in this table and elsewhere herein is presented in
U.S. dollars, unless otherwise indicated. Specific aspects of the compensation
of the Named Executive Officers are dealt with in further detail in subsequent
tables.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM ALL OTHER
ANNUAL COMPENSATION COMPENSATION COMPENSATION
----------------------------------------------- ------------ ------------
SECURITIES
OTHER ANNUAL UNDERLYING
NAME AND POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($) OPTIONS (#)
----------------- ---- ---------- --------- ---------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Michael E. McGinnis 1998 300,000 (1) 0 11,676 (2) 40,000 0
Chairman of the Board, 1997 279,166 (1) 0 10,885 (2) 150,000 0
President and 1996 252,276 (1) 0 6,439 (2) 20,000 0
Chief Executive
Officer
Frank J. Fradella 1998 125,577 168,912 4,000 (2) -0- 0
President(3)
David L. Norris 1998 151,443 (1) 0 5,709 (2) -0- 89,250 (6)
Senior Vice President 1997 161,538 4,900 (2) 70,000 0
and Chief Financial 1996 0 0 0 25,000
Officer (4)
Bruce D. Tobecksen 1998 186,115 0 6,000 (2) 75,000 750,000 (6)
Vice President and
Treasurer(5)
J. C. Pennie 1998 0 0 303,000 (7) 40,000 0
Vice-Chairman 1997 0 0 112,885 (7) 100,000 0
of the Board 1996 0 0 109,140 (7) 0 0
</TABLE>
- ---------------------
(1) Includes $1,056, $1,600 and $1,138 of deferred compensation contributed by
the Corporation to Mr. McGinnis' 401(k) Plan in fiscal 1998, 1997 and 1996,
respectively, and includes $1,916 of deferred compensation contributed by
the Corporation to Mr. Norris' 401(k) Plan in fiscal 1998.
(2) Represents automobile lease payments paid by the Corporation.
(3) Mr. Fradella served as President from July 1998 to December 1998 and
remained as a consultant through January 1999.
(4) Mr. Norris became an employee in August 1996. From August 1996 to February
1997, he had been an executive officer of US Industrial Services, Inc.
("USIS"), a subsidiary of the Corporation, and the Corporation reimbursed
USIS for compensation amounts paid by USIS to Mr. Norris. Mr. Norris
resigned in July 1998.
(5) Mr. Tobecksen became Vice-President and Treasurer in January 1998 and was
terminated in September 1998. (6) Represents severance payment pursuant to
his employment agreement. (7) Represents fees paid to Windrush Corporation,
50% of which is owned by Mr. Pennie, for executive and secretarial services
for the Corporation's Toronto office.
4
<PAGE>
LONG-TERM COMPENSATION PLANS
OPTIONS GRANTS IN 1998
The following table provides information with respect to stock options
granted to the Named Executive Officers during fiscal 1998 under the terms of
the Corporation's stock option plan.
<TABLE>
<CAPTION>
MARKET VALUE
% OF TOTAL OF SECURITIES
SECURITIES OPTIONS UNDERLYING
UNDER GRANTED TO OPTIONS ON THE
OPTIONS EMPLOYEES IN EXERCISE PRICE DATE OF GRANT
NAME GRANTED (#) FINANCIAL YEAR (CDN$) (CDN$) EXPIRATION DATE
- ---- ----------- -------------- ------ ------ ---------------
<S> <C> <C> <C> <C> <C>
Michael E. McGinnis 40,000 5.6% 9.75 390,000 6/18/03
Frank J. Fradella -0- -- -- -- --
David L. Norris -0- -- -- -- --
Bruce D. Tobecksen 75,000 10.5% 9.75-16.50 1,068,750 9/25/99
J.C. Pennie 40,000 5.6% 9.75 390,000 6/18/03
</TABLE>
Options Exercised and Aggregate Remaining
The following table provides information with respect to stock options
exercised by the Named Executive Officers during the fiscal year ended November
30, 1998 and the balance of stock options remaining after such exercises.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY STOCK
AT FISCAL OPTIONS AT FISCAL
YEAR-END (#) YEAR-END (CDN$)
----------------------------------------------
SECURITIES
ACQUIRED
UPON EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) VALUE REALIZED (US$) UNEXERCISABLE UNEXERCISABLE
---- ----------- -------------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Michael E. McGinnis 100,000(1) $421,431 80,000/130,000 0/0
Frank J. Fradella 0 -- 30,000/20,000 0/0
David L. Norris 0 -- 33,000/52,000 0/0
Bruce Tobecksen 0 -- 75,000/-0- 0/0
J.C. Pennie 0 -- 48,000/92,000 0/0
</TABLE>
- -----------------------------------
(1) Options exercised to provide shares to offset margin calls, which margin
calls resulted in losses to Mr. McGinnis.
OTHER COMPENSATION MATTERS
There were no long-term incentive awards made to Named Executive Officers
of the Corporation during the fiscal year ended November 30, 1998.
The Corporation has instituted for its US branch employees a 401(k) Plan
that enables its employees to save for retirement with tax deferred
contributions. The Plan may be summarized as follows:
Employees become eligible to participate upon attaining age 21 and
completing six months of service. Employees may elect to defer between 1%
and 15% of their current compensation into the Plan, subject to an IRS
limitation of a maximum of 15% of their annual compensation (up to the
first $160,000 of annual compensation) or $10,000, whichever is lower. The
Corporation may make a contribution to the Plan, known as a 401(k) matching
contribution, on behalf of those participants who have made salary deferral
contributions. The Corporation's contribution, if any, will be an amount
not to exceed 50% of the first 4% and if any matching 401(k) contributions
remain, they will be allocated to each such participant in an amount not to
exceed 50% of the next 4% of their compensation contributed as salary
deferral contributions. The Corporation may make a profit sharing
contribution to the Plan for all participants. The amount of these
contributions, if any, will be determined by the Board. The employees'
share of the Corporation's profit sharing contribution will be allocated to
their accounts based on the ratio that their compensation bears to the
total compensation of all participants eligible for a share of such
contribution.
During the fiscal year 1998, the Corporation's matching contribution under
the 401(k) Plan for Mr. McGinnis was $1,056.
5
<PAGE>
EMPLOYMENT CONTRACTS
The Corporation and Michael E. McGinnis have entered into an employment
agreement pursuant to which Mr. McGinnis receives an annual base salary of
$300,000, an automobile allowance of $750 per month plus any operating and
maintenance expenses associated with such vehicle, and is entitled to
participate in an annual bonus program determined by the level of basic earnings
per share of the Corporation for each fiscal year of the term of the employment
agreement. The agreement provides for up to five years compensation if he is
terminated without cause, or upon his death or disability, subject to certain
limitations. The employment agreement terminates on May 1, 2002.
The Corporation and David L. Norris entered into a three year employment
agreement effective May 1, 1997 pursuant to which Mr. Norris was to be paid an
annual base salary of $225,000, an automobile allowance of $750 per month plus
any operating and maintenance expenses associated with such vehicle, and to
participate in an annual bonus program determined by the level of basic earnings
per share of the Corporation for each fiscal year of the term of the employment
agreement. The agreement provided for up to three years compensation if Mr.
Norris was terminated by the Corporation without cause subject to certain
limitations. Mr. Norris' employment terminated on July 21, 1998, and upon
termination Mr. Norris received $89,250 for acting as a consultant to the
Corporation.
The Corporation and Bruce D. Tobecksen entered into a three year employment
agreement effective January 1, 1998 pursuant to which Mr. Tobecksen was to
receive an annual base salary of $250,000, an automobile allowance of $750 per
month plus any operating and maintenance expenses associated with such vehicle,
and be entitled to participate in an annual bonus program determined by the
level of basic earnings per share of the Corporation for each fiscal year of the
term of the employment agreement. The agreement provided for up to three years
compensation if Mr. Tobecksen was terminated by the Corporation without cause
subject to certain limitations. Mr. Tobecksen's employment with the Corporation
terminated as of September 25, 1998. Pursuant to a Termination Agreement, he
received a lump sum payment of $750,000, his options to purchase 75,000 common
shares became fully vested and exercisable for one year and his benefits were to
be continued through the earlier of (i) December 31, 2000 or (ii) the date on
which he became eligible for comparable benefits by reason of subsequent
employment.
COMPOSITION OF THE COMPENSATION COMMITTEE AND AUDIT COMMITTEE
Messrs. William A. Dimma and Donald R. Getty comprised the Corporation's
Compensation Committee during fiscal 1998. None of the members of the
Compensation Committee performed similar functions with other public companies
during fiscal 1998 other than Mr. Dimma who serves on the compensation committee
of several other companies. Francis J. Sorg, Jr. had served on the Compensation
Committee and the Audit Committee until his resignation as a director in July
1998.
Messrs. Barry Cracower and William A. Dimma comprised the Corporation's
Audit Committee during 1998.
REPORT ON EXECUTIVE COMPENSATION
It is the responsibility of the Compensation Committee to determine the
level of compensation in respect of the Corporation's senior executives with a
view to providing such executives with a competitive compensation package having
regard to performance. Performance is defined to include achievement of the
Corporation's strategic objective of growth and the enhancement of shareholder
value through increases in the stock price resulting from a stronger balance
sheet and increased earnings.
Compensation for executive officers is composed primarily of three
components; namely, base salary, performance bonuses and the granting of stock
options. Performance bonuses are considered from time to time having regard to
the above referenced objectives.
In establishing the levels of base salary, the award of stock options and
performance bonuses, the Compensation Committee takes into consideration
individual performance, responsibilities, length of service and levels of
compensation provided by industry competitors.
The Compensation Committee is also responsible for reviewing the
Corporation's manpower and succession plans to ensure that adequate plans are in
place.
6
<PAGE>
COMPENSATION OF DIRECTORS
The directors of the Corporation who are not otherwise employees or
consultants of the Corporation receive CDN$20,000 per year. In addition, the
directors of the Corporation receive CDN$1,000 per Board or committee meeting
attended and all reasonable expenses incurred by the directors in respect of
their duties are reimbursed by the Corporation. None of the directors of the
Corporation receives compensation in his capacity as a director pursuant to any
other arrangement or in lieu of any standard arrangement except through the
granting of stock options.
During fiscal 1998, Hon. Donald R. Getty performed various consulting and
advisory services for the Corporation on the two projects for which he received
fees in the aggregate amount of $38,500.
INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS
In August 1998, the Board of Directors authorized the Corporation to loan
up to $100,000 to each Director for the purpose of using the proceeds to
purchase the Corporation's Common Shares in the open market. These loans are to
be repaid in three years, bear interest at the rate of 9-5/8% per annum, and are
unsecured. Messrs. Fradella, Getty and Pennie each took a loan for $100,000 and
Mr. Cracower took a loan for $50,000. As of November 30, 1998, the following
Director loans were outstanding: Mr. Fradella - $102,874, Mr. Getty - $102,847,
Mr. Pennie - $102,874 and Mr. Cracower - $51,437.
During fiscal 1997, the Corporation loaned $84,100 to Michael E. McGinnis
for the purpose of purchasing Common Shares of the Corporation in the open
market. The loan increased his indebtedness to the Corporation to $630,057. The
loan was to mature on May 7, 1998, and the maturity was extended to May 31,
1999, bearing interest at the rate of 10.0% per annum and is collateralized by
the purchased shares. The outstanding balance of the loan, including interest,
as of November 30, 1998 was $687,502.
In May 1997, the Corporation loaned $305,000 at 8.5% interest per annum to
David L. Norris for the purchase of a home in connection with his relocation to
the Corporation's headquarters in Houston, Texas. The loan was to mature in May
1998 and was extended to February 1, 2003, and is unsecured. The outstanding
balance of the loan, including interest, as of November 30, 1998 was $319,806.
In June 1997, the Corporation loaned $60,105 to J. C. Pennie. The loan was
to mature in June 1998, and was extended to May 31, 1999 bears interest at the
rate of 8.5% per annum and is unsecured. The outstanding balance of the loans,
including interest, as of November 30, 1998 was $64,878.
In September 1998, the Corporation loaned $100,000 to Besim Halef, an
executive officer, repayable over three years with prepayments from future
bonuses, together with interest at the rate of 6% per annum.
TRANSACTIONS WITH MANAGEMENT OR AFFILIATES OF MANAGEMENT
Pursuant to an agreement between the Corporation and Windrush Corporation
("Windrush"), dated December 1, 1997, Windrush receives a fee of $10,000 per
month in consideration for executive services for administration, strategic and
marketing planning provided to the Corporation plus fees which are negotiated on
a project-by-project basis for other specific services rendered. This agreement
expires on December 1, 2002, and has a five-year renewable term. J.C. Pennie,
the Chairman of the Board of Directors of the Corporation, owns 50% of Windrush.
As of August 31, 1997, the Corporation sold its subsidiaries Eco
Environmental Inc. and Environmental Evolutions Inc. to Eurostar Interests Ltd.
("Eurostar") for an aggregate purchase price of $11.0 million payable in a
one-year promissory note (the "EcoNote"), which was to be collateralized by all
of the capital stock of Eurostar. Eurostar assigned its interest in Eco
Environmental and Environmental Evolutions to UKStar (Canada) Inc. ("UKStar"),
which in turn transferred its interest in Eco Environmental and Environmental
Evolutions to Eco Technologies International Inc. ("ETI"), a Canadian company.
UK Star owns 85.5% of ETI. Windrush owns 3.2% of UKStar's parent company and
1.4% of ETI. From January 15, 1999 until March 31, 1999, Mr. Pennie served as
the Secretary of UKStar. From April 27, 1998 until March 31, 1999, Mr. Pennie
was the Chairman of ETI, and Barry Cracower, a director of the Corporation, was
a director of ETI. In February 1998, UKStar paid $603,000 to the Corporation for
reimbursement of monies advanced by the Corporation for the operating expenses
of Eco Environmental and Environmental Evolutions from September 30, 1997 to
November 30, 1997. In October 1998, UKStar paid $3.0 million on the Eco Note,
and the remaining $9,313,975 is to be repaid on September 30, 2000 with
quarterly interest installments of $227,028, which obligations are
collateralized by 500,000 shares of ETI Common Stock and a $3.0 million
performance bond.
In July 1998, a subsidiary of the Corporation entered into a 15 year lease
for an office, shop and warehouse in Edmonton, Alberta from a company in which
Donald R. Getty, a director of the Corporation, is President and has a 25%
interest. The annual lease payments are $474,000. Management believes the lease
terms are at commercially reasonable rates.
7
<PAGE>
ELECTION OF DIRECTORS [PROPOSAL 1]
Five directors will be elected at the Meeting. Each nominee currently
serves as a member of the Board. Management does not contemplate that any of the
nominees will be unable to serve as a director but if that should occur for any
reason prior to the Meeting, it is intended that discretionary authority shall
be exercised by the persons named in the enclosed form of proxy to vote the
proxy for the election of any other person or persons in place of any nominee or
nominees unable to serve. The term of office of each of the following proposed
nominees will expire at the next meeting of shareholders of the Corporation when
a successor is duly elected or appointed unless his office is earlier vacated in
accordance with the Corporation's by-laws. The information as to the shares of
each nominee beneficially owned, or over which control is exercised, has been
furnished by the respective nominee.
The following table sets forth certain information pertaining to the
persons proposed to be nominated for election as directors.
<TABLE>
<CAPTION>
============================================================================================================
NUMBER OF SHARES
BENEFICIALLY OWNED,
DIRECTLY OR
INDIRECTLY, OR OVER
WHICH CONTROL OR
POSITION WITH YEAR FIRST DIRECTION IS
NAME PRINCIPAL OCCUPATION THE CORPORATION BECAME A DIRECTOR EXERCISED *(1)
============================================================================================================
<S> <C> <C> <C> <C>
Barry Cracower President, Pharmx Director 1992 to 1993 and 82,000(4)
Rexall Drug Stores, 1997
Ltd.
- ------------------------------------------------------------------------------------------------------------
William A. Dimma Chairman of the Director 1997 68,000(4)
Board, Swiss
Reinsurance Company
Canada Ltd.
- ------------------------------------------------------------------------------------------------------------
Hon. Donald R. Getty(3) President, Sunnybank Director 1997 93,000(4)
Investments Ltd.
- ------------------------------------------------------------------------------------------------------------
Michael E. McGinnis President and Chief President and 1993 188,840(2)
Executive Officer of Chief Executive
the Corporation Officer
- ------------------------------------------------------------------------------------------------------------
J. C. Pennie Chairman of the Chairman of the 1992 95,400(3)
Corporation and Board
President of Windrush
Corporation
============================================================================================================
</TABLE>
*Unless otherwise indicated, all persons have sole voting and investment power
over the common shares.
(1) Unless otherwise indicated, the Corporation has been advised that each
person above has sole voting and investment power over the common shares
indicated above. The number of common shares beneficially owned includes
common shares which each beneficial owner has the right to acquire within
60 days of April 15, 1999.
(2) Includes 114,000 common shares underlying stock options.
(3) Includes (i) 68,000 common shares underlying stock options, (ii) 700 common
shares owned by his wife and (iii) 26,700 common shares owned by a
corporation of which he is a 50% owner.
(4) Includes 68,000 common shares underlying stock options.
BARRY CRACOWER (age 60) has been a director of the Corporation since
December 1996. Mr. Cracower has been the President of Pharmx Rexall Drug Stores
Ltd., a drug store chain based in Concord, Ontario, since 1990. Prior to 1990,
he held senior executive positions at several major Canadian corporations. Mr.
Cracower served on the Board of Directors of the predecessor corporation to the
Corporation, ECO Corp., in 1992 during its restructuring. He also is as a
director of Algonquin Mercantile Corporation, a Canadian company.
WILLIAM A. DIMMA (age 70) has been a director of the Corporation since
January 1997. Mr. Dimma has served as the Chairman of the Board of Canadian
Business Media Ltd since 1992, and York University since 1991. For more than
five years through 1993, Mr. Dimma served as the Deputy Chairman and also as the
President and Chief Executive Officer of Royal LePage Limited, a Canadian real
estate company. In addition to the companies mentioned above, Mr. Dimma is a
director of the Greater Toronto Airport Authority, Magellan Aerospace
Corporation, IPL Energy Inc., a pipeline and gas distribution company, London
Life Insurance Company, Sears Canada Inc. and Trilon Financial Corporation, a
financial services company.
8
<PAGE>
HON. DONALD R. GETTY (age 65) has been a director of the Corporation since
January 1997. Mr. Getty has been the President and Chief Executive Officer of
Sunnybank Investments Ltd., an investment and consulting company located in
Edmonton, Alberta, since December 1992. Mr. Getty has held elected and
appointive offices in Canadian government, most recently as the Premier of the
Province of Alberta from 1985 to 1992 and as the Minister of Energy and Natural
Resources for the Provincial Government of Alberta between 1971 and 1979. Mr.
Getty currently serves on the boards of directors of Guyanor Resources S.A., a
mining company in French Guyana; and Nationwide Resources, Mera Petroleum, an
oil and gas company, Cen Pro Technologies, an engineering company and Eclipse
Investments, all located in Canada. Mr. Getty is also a director and Vice
Chairman of the Alberta Racing Corporation, which is responsible for all forms
of horse racing in Alberta, Canada.
MICHAEL E. MCGINNIS (age 49) has been the Chief Executive Officer of the
Corporation since 1993, the President since December 1998 having served as
President from 1993 to July 1998, a director since 1994 and was Chairman from
May 1997 to December 1998. He was the President and Chief Executive Officer of
Eco Environmental, when it was acquired by the Corporation in 1993. Prior to
joining Eco Environmental, in 1992, Mr. McGinnis was employed with The Brand
Companies, Inc., one of the largest asbestos abatement contractors in the United
States. Mr. McGinnis joined The Brand Companies in 1965 and served in various
operational and administrative capacities for over 27 years. Mr. McGinnis has
been a director of USIS since February 1996, having served as its Chairman of
the Board from June 1996 to October 1997, and was President of USIS from March
1996 to August 1996.
J.C. PENNIE (age 59) has been a director of the Corporation since February
1992, the Chairman of the Board of Directors since December 1998 and was the
Vice-Chairman from October 1993 to December 1998. Mr. Pennie served as the
Corporation's President and Chief Executive Officer in 1992 in order to execute
the downsizing and reorganization of the Corporation. Prior to joining the
Corporation, Mr. Pennie was a business consultant with over 25 years of
experience in assisting turnaround and start-up companies. He is the Chairman of
Imark Corporation, a Canadian company.
STATEMENT OF CORPORATE GOVERNANCE PRACTICE
In accordance with the disclosure requirements of The Toronto Stock
Exchange (the "TSE") and using the corporate governance guidelines set out in
Section 474 of the TSE Company Manual as a reference, the Board has adopted the
following statement of corporate governance practices:
The Board implicitly and explicitly acknowledges its responsibility for the
stewardship of the Corporation:
(i) The Board participates in strategic planning as the acceptor and/or adopter
of the strategic plans proposed and developed by management. The strategic
planning process has been the responsibility of management. The Board will
undertake periodic reviews of the strategic planning process.
(ii) The Board has considered and in its deliberations considers the principal
risks of the Corporation's business and receives periodic reports from
management of the Corporation's assessment and management of those risks.
(iii)The Board has, from time to time, considered succession issues and takes
responsibility for appointing and monitoring officers of the Corporation.
(iv) The Board has discussed and considered how the Corporation communicates
with its various shareholders and periodically reviews and approves the
Corporation's communications with the public but has no formal
communications policy.
(v) The Board, directly and through its Audit Committee, assesses the integrity
of the Corporation's internal control and management information systems.
Given the extensive experience of senior management of the Corporation in
the Corporation's principal business, it has not been necessary for the Board to
encourage senior management to participate in appropriate professional and
personal development activities, courses and programs. However, the Board does
support management's commitment to the training and development of all permanent
employees.
The Board currently comprises five members of whom three are unrelated
directors. The Board has considered the relationship of each current director.
Two current directors, namely J. C. Pennie and Michael E. McGinnis, are related
by virtue of their positions in the Corporation. Messrs. Cracower, Dimma and
Getty who are currently directors of the Corporation, are unrelated.
The Board has not constituted a formal nominating committee to be
responsible for proposing new nominees to the Board and for assessing directors
on an ongoing basis. Nominations for the Board have been the result of
recruitment efforts by several directors and have been discussed informally with
several directors before being brought to the Board as a whole.
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The Corporation has combined the Corporate Governance Committee and the
Audit Committee. The Corporate Governance Committee expressly assumes
responsibility for developing the Corporation's approach to governance issues
and is responsible for the responses to governance guidelines. The Corporation
has not developed position descriptions for the Chairman of the Board and the
Chief Executive Officer. Any responsibility which is not delegated to management
or a Board committee remains with the Board.
Board members who are not otherwise employees or consultants are presently
compensated on the basis of CDN$20,000 per year, paid quarterly. Board members
receive CDN $1,000 per meeting and all reasonable expenses incurred by them in
respect of their duties are reimbursed by the Corporation. In addition, Board
members have been granted stock options under the Corporation's stock option
plan.
The Board has functioned, and is of the view that it can continue to
function, independently of management, as required. The Board has not appointed
a chair of the Board who is an unrelated director. However, unrelated directors
are free to add items to agendas or to request the calling of Board meetings
where deemed necessary and all members of the Board are invited to raise issues
not on the agenda at Board meetings.
The Board has not met without management present. If the Board believed it
was appropriate and meaningful it would formalize the process by which the Board
would meet without management and for handling the Board's overall relationship
with management.
The Audit Committee is currently composed of two directors, both of whom
are unrelated. The Compensation Committee is currently composed of two
directors, both of whom are unrelated.
The Audit Committee's mandate includes a review of the annual and quarterly
financial statements, material investments and transactions that could
materially affect the financial position of the Corporation. The Audit Committee
establishes and monitors procedures to resolve conflicts of interest and reviews
audit and financial matters. Through meetings with external auditors and senior
management, the Audit Committee discusses, among other things, the effectiveness
of internal control procedures established for the Corporation.
The Board has not constituted a committee comprised 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
contribution of individual directors. This task has been assigned to the Audit
Committee.
The Corporation does not have a formal process of orientation and education
for new members of the Board. This process is handled informally by members of
the Board.
PERFORMANCE GRAPH
The performance graph compares the total cumulative shareholder return for
$100 invested in common shares of the Corporation during the period from
December 1, 1993 through November 30, 1998 with the cumulative total return of
The Toronto Stock Exchange 300 Company Index and publicly traded companies which
constitute the Engineering and Construction industry group on Standard & Poor's
S&P 500 Index. The shareholder return shown below for the historical periods may
not be indicative of future performance.
INDEXED SHAREHOLDER RETURN
YEARS ENDING DEC 31ST
Engineering &
Year American Eco TSE 300 Construction
S&P 500
---- ------------ ------- -------------
1993 100 100 100
1994 56 132 96
1995 83 151 136
1996 162 193 126
1997 281 222 104
1998 45 219 88
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APPOINTMENT OF AUDITORS [PROPOSAL 2]
Unless such authority is withheld, the persons named in the accompanying
proxy intend to vote for the appointment of PricewaterhouseCoopers L.L.P.,
Certified Public Accountants, as auditors of the Corporation for the 1999 fiscal
year and to authorize the directors to fix their remuneration.
PricewaterhouseCoopers L.L.P. were first appointed the Corporation's auditors on
May 7, 1997. A representative of PricewaterhouseCoopers L.L.P. is expected to be
present at the Meeting, and he will have an opportunity to make a statement if
he desires and will be available to respond to appropriate questions.
AMENDMENT TO STOCK OPTION PLAN [PROPOSAL 3]
The Corporation has a stock option plan for the grant of options to its
directors, officers, employees and consultants for the purchase of the
Corporation's common shares (the "Plan"). The Plan as well as the rules of the
TSE provide that any amendment to a stock option plan must be pre-cleared with
the TSE and provide that if there is a proposal to increase the maximum number
of shares issuable under the Plan, the same must be approved by a majority of
the votes cast at a shareholders meeting.
The Plan currently provides that 3,504,369 common shares are to be reserved
for issuance pursuant to the exercise of options granted thereunder. As of March
1, 1999, an aggregate of 2,247,025 options to purchase common shares have been
granted under the Plan. No options or other entitlements under the Plan have
been granted subject to shareholder ratification. The proposed amendment will
increase the number of common shares under the Plan by 837,667 common shares.
As the Corporation currently has 21,710,180 issued and outstanding common
shares and seeks to grant stock options from time to time as part of executives'
and employees' compensation based on merit and to assist in the further growth
of the Corporation, the Board is of the view that it is appropriate to authorize
an amendment to the Plan to provide that the maximum number of common shares in
the capital of the Corporation that may be reserved for issuance for all
purposes thereunder shall be increased from 3,504,369 common shares to 4,342,036
common shares, subject to adjustment or increase of such number pursuant to the
provisions of Article 8 of the Plan. Any common shares subject to a share option
which for any reason is canceled or terminated without having been exercised
shall again be available for grant under the amended Plan. Given that the
Corporation has 21,710,180 issued and outstanding common shares, the rules of
the TSE would allow the Plan to be amended to provide that the maximum number of
common shares in the capital of the Corporation that may be reserved for
issuance for all purposes thereunder be increased to 4,342,036 common shares. At
this time, management of the Corporation has determined to increase the maximum
number of common shares in the capital of the Corporation that may be reserved
for issuance thereunder by 837,667 common shares.
The Plan, as amended, provides that the maximum number of common shares
which may be reserved for issuance to any one insider pursuant to share options
under the amended Plan or any other share compensation arrangement may not
exceed 5% of the common shares outstanding at the time of grant (on a
non-diluted basis). The maximum number of common shares that may be reserved for
issuance to insiders of the Corporation in the aggregate under the amended Plan
or any other share compensation arrangement is limited to 10% of the common
shares outstanding at the time of the grant (on a non-diluted basis).
The Corporation will not provide financial assistance to participants under
the Plan to facilitate the purchase of common shares, except on an ad hoc basis,
as and when determined appropriate by the Board.
The Corporation has no other share compensation plans or share arrangements
in place and none are currently contemplated.
The resolution approving the amendment to the Plan requires confirmation by
a majority of the votes cast thereon at the Meeting. Additionally, the amendment
to the Plan is subject to the prior approval of the TSE.
The text of the resolution to be submitted to Shareholders is set forth
below.
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NOW THEREFORE BE IT RESOLVED THAT:
1. Subject to receipt of requisite regulatory approval, including without
limitation, the approval of The Toronto Stock Exchange, the Corporation's
stock option plan for directors, officers, employees and consultants be and
the same is hereby amended to delete Article 4 therefrom and substitute
therefor the following:
4. Shares Subject to the Plan
4.1 Options may be granted in respect of authorized and unissued Shares
provided that, subject to increase by the Board, the receipt of the
approval of the Exchange and the approval of shareholders of the
Corporation, the maximum aggregate number of Shares reserved by the
Corporation for issuance and which may be purchased upon the exercise
of all Options shall not exceed 4,342,036 being the sum of: (i)
2,095,011 Shares granted under this Plan, subject to adjustment or
increase of such number pursuant to the provisions of Article 8; plus
(ii) such number of Shares as are subject to outstanding Options under
Share Compensation Arrangements as of the date of adoption of this
Plan (as amended) which are canceled or otherwise terminated without
exercise provided such number of Shares shall not exceed 2,247,025
Shares. Shares in respect of which Options are not exercised shall be
available for subsequent Options under the Plan. No fractional Shares
may be purchased or issued under the Plan."
2. Any one director or officer of the Corporation be and he is hereby
authorized and directed to do all such acts and things and to execute and
deliver under the corporate seal or otherwise all such deeds, documents,
instruments and assurances as in his opinion may be necessary or desirable
to give effect to this resolution.
APPROVAL OF PRIVATE PLACEMENTS [PROPOSAL 4]
In order for the Corporation to raise funds to expand its business
services, the Corporation may require further funding which would be raised
pursuant to one or more private placements.
Shareholders are being asked to approve a resolution authorizing the Board
to enter into one or more private placements in the 12 month period following
the Meeting to issue additional securities to subscribers who are at arm's
length to the Corporation. Pursuant to the rules adopted by the TSE (and in
particular, paragraph 620 of the TSE Company Manual) shareholder approval is
required for issuances of securities by private placement of more than 25% of
the number of shares which are currently outstanding (on a non-diluted basis) in
any six month period. Accordingly, it is prudent to have authority for such
private placements at the present time to save the time and expense of seeking
shareholder approval at future special meetings of shareholders.
It is not the intention of management to issue the entire number of
securities authorized pursuant to the proposed resolution. Private placements
will be negotiated only if management believes the subscription price is
reasonable in the circumstances and if funds are required by the Corporation to
expand its activities. The issuance of securities pursuant to these private
placements will not materially affect control of the Corporation, however, such
issuances may be anti-dilutive to current shareholders and could have an
anti-takeover effect. Each such private placement will be made in accordance
with applicable laws and rules of the TSE, which require the approval of the TSE
prior to completion of each individual private placement. These rules provide
that private placements must be priced at the closing price of the common shares
on the day of the notice of private placement, subject to prescribed discounts.
Warrants may accompany common shares issued under the private placement,
where such warrants are priced at or above market and do not exceed the number
of common shares issued under the private placement.
The Nasdaq rules requiring shareholder approval of certain private
placements by Nasdaq National Market issuers, such as the Corporation, apply
only on a transaction specific basis. Therefore, approval of this proposal will
not also constitute approval of those future private placements by the
Corporation which are subject to Nasdaq shareholder approval rules.
Shareholders are being asked to pass a resolution authorizing additional
private placements which would take place within one year of the date of this
Circular. Such future private placements will be subject to the following terms:
1. All of the private placement financings will be carried out in accordance
with the guidelines-of the TSE and specifically in accordance with
paragraphs 619 and 622 of the Manual, copies of which are annexed hereto as
Schedule "A".
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2. Such future private placements would not result in additional shares of the
Corporation being issued in an amount exceeding the current number of
issued and outstanding shares (in the aggregate) of the Corporation.
3. Any of the future private placements would be substantially at arm's length
and would not materially affect control of the Corporation.
The resolution approving future private placements requires confirmation by
a majority of the votes cast thereon at the Meeting.
The text of the resolution to be submitted to shareholders is set forth
below.
NOW THEREFORE BE IT RESOLVED THAT:
1. The directors of the Corporation be and they are hereby authorized and
directed to arrange from time to time, additional private placements in the
capital of the Corporation, subject to the following terms:
(a) All private placement financings will be carried out by the
Corporation in accordance with the guidelines of The Toronto Stock
Exchange and specifically paragraphs 619 and 622 of The Toronto Stock
Exchange Company Manual.
(b) The future private placements will not result in additional shares of
the Corporation being issued in an amount exceeding the current number
of issued and outstanding shares in the aggregate of the Corporation
(i.e. 21,710,180 common shares).
(c) Any of the future private placements would be substantially at arm's
length and would not materially affect control of the Corporation.
2. Any one director or officer of the Corporation be and he is hereby
authorized and directed to execute and deliver under the corporate seal or
otherwise all such deeds, documents, instruments and assurances and to do
all such acts and things as in his opinion may be necessary or desirable to
give effect to this resolution.
SHAREHOLDER PROPOSALS
December 20, 1999 is the date by which proposals of shareholders pursuant
to the Securities and Exchange Commission proxy rules intended to be presented
at the 2000 Annual and Special Meeting of Shareholders must be received by the
Corporation for inclusion in the Corporation's management information circular
relating to the 2000 Meeting.
EXPENSES OF SOLICITATION
The total cost of this solicitation will be borne by the Corporation. In
addition to use of the mails, proxies may be solicited by officers and regular
employees of the Corporation personally and by telephone or facsimile, and by a
proxy soliciting firm retained by the Corporation. The Corporation may reimburse
persons holding shares in their own names or in the names of the nominees for
expenses they incur in obtaining instructions from beneficial owners of such
shares.
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OTHER MATTERS
A copy of the Annual Report of the Corporation for the fiscal year ended
November 30, 1998 including financial statements, is enclosed herewith. THE
CORPORATION WILL PROVIDE WITHOUT CHARGE TO ANY PERSON SOLICITED HEREBY, UPON THE
WRITTEN REQUEST OF SUCH PERSON, A COPY OF THE CORPORATION'S ANNUAL REPORT ON
FORM 10-K FOR THE YEAR ENDED NOVEMBER 30, 1998 FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION. SUCH REQUESTS SHOULD BE DIRECTED TO INVESTMENT RELATIONS
DEPARTMENT AT THE CORPORATION, AT 11011 JONES ROAD, HOUSTON, TEXAS 77070.
The Board knows of no other business to be presented at the Meeting, but if
other matters do properly come before the Meeting, it is intended that the
persons named in the proxy will vote on such matters in accordance with their
best judgment.
DIRECTORS' APPROVAL
The contents of this Circular and the sending thereof have been approved by
the Board.
By order of the board of directors
/s/ J.C. Pennie
----------------------------------
J.C. Pennie
Chairman of the Board
April 16, 1999
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SCHEDULE "A"
PRICE
619. The Exchange will not accept an issuance of securities by way of private
placement unless all of the following conditions are met: (For the purposes of
this Section, a private placement of unlisted convertible securities shall be
deemed to be a private placement of the underlying listed securities at a price
equal to the lowest possible conversion price.)
(a) The listed company must give the Exchange's Listings & Distributions
Division written notice of the proposed private placement. The notice
should be in the form of a Notice of a Proposed Private Placement
(APPENDIX D-29 TO D-31), accompanied by a covering letter. The date on
which notice shall be deemed to be given (the "Date of Notice") shall
be, in the case of a notice that is mailed, the date on which the
notice is deposited in a post office or public letter box. During
periods of postal disruption, listed companies shall be expected to
use alternative means of effecting prompt delivery.
(b) The price per security must be lower than the closing market price of
the security on The Toronto Stock Exchange on the trading day prior to
the Date of Notice (the "Market Price"), less the applicable discount
as follows:
MARKET PRICE MAXIMUM DISCOUNT THEREFROM
$0.50 or less 25%
$0.51 to $2.00 20%
Above $2.00 15%
(c) Subject to paragraph (e), within 30 days from the Date of Notice, the
listed company must file with the Exchange's Listings & Distributions
Division a Private Placement Questionnaire and Undertaking (Form P1 -
Appendix D-2 and D-3) completed by each proposed purchaser, and all
other documentation requested by the Exchange.
(d) The transaction must not close and the securities must not be issued
prior to acceptance thereof by the Exchange and, subject to paragraph
(e), not later than 45 days from the Date of Notice.
(e) An extension of the time period prescribed in paragraph (c) or (d) may
be granted in justifiable circumstances, provided that a written
request for an extension is filed with the Exchange's Listings &
Distributions Division in advance of the expiry of the 30-day or
45-day period, as the case may be.
(f) The listed company must give the Exchange immediate notice in writing
of the closing of the transaction.
WARRANTS
622. Warrants to purchase listed securities may be issued to a private placement
purchaser if:
(a) the listed company satisfies the Exchange that the warrants and the
provisions attaching to them are essential to the proposed financing;
and
(b) all of the following conditions are met:
(i) If the securities purchased initially by the private places are
listed securities, the warrants must not entitle the holder to
purchase a greater number of listed securities than the number of
securities purchased initially. If the securities purchased
initially are convertible into listed securities, the warrants
must not entitle the holder to purchase a greater number of
listed securities than the number of securities issuable upon
conversion of the securities purchased initially. If the
securities purchased initially are neither listed securities nor
convertible into listed securities, the warrants must not entitle
the holder to purchase a greater number of listed securities than
the number obtained by dividing the initial proceeds of the
private placement by the Market Price per security as defined in
Section 619.
(ii) The warrant exercise price must not be less than the Market
Price, as defined in Section 619 (i.e. with no discount). The
procedure set out in paragraphs (a), (c), (d), (e) and (f) of
Section 619 must be followed in this regard, the "price" being
the warrant exercise price for this purpose.
(iii)The warrants must be exercisable during a period not extending
beyond five years from the date of the closing of the private
placement transaction.
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FORM OF PROXY SOLICITED BY THE MANAGEMENT
OF AMERICAN ECO CORPORATION
FOR USE AT AN ANNUAL AND SPECIAL MEETING
OF SHAREHOLDERS TO BE HELD ON
THURSDAY, MAY 20, 1999
The undersigned shareholder of AMERICAN ECO CORPORATION (the "Corporation")
hereby appoints Michael E. McGinnis, the President and Chief Executive Officer
of the Corporation, or J.C. Pennie, the Chairman of the Corporation, or in lieu
of the foregoing, ___________________________ to attend and vote on behalf of
the undersigned at the Annual and Special Meeting of Shareholders of the
Corporation to be held on the 20th day of May, 1999 and at any adjournments
thereof.
The undersigned specifies that all of the voting shares owned by him and
represented by this form of proxy shall be:
(1) VOTED FOR ( )
WITHHELD FROM VOTING ( )
in respect of the election of all nominees; Barry Cracower,
William A. Dimma, Hon. Donald R. Getty, Michael E. McGinnis
and J. C. Pennie;
----------------------------------
(Instruction: to withhold authority to vote for any nominee
or nominees, write such nominee's name on the space provided
above.)
(2) VOTED FOR ( )
WITHHELD FROM VOTING ( )
in respect of the appointment of auditors and authorizing
the directors to fix their remuneration;
(3) VOTED FOR ( )
AGAINST ( )
the approval of an amendment to the Corporation's stock
option plan;
(4) VOTED FOR ( )
AGAINST ( )
the approval of the issuance of additional common shares in
the capital of the Corporation by way of private placements,
as may be deemed necessary by the directors, from time to
time; and
(5) VOTED on such other business as may properly come before the
Meeting or any adjournments thereof;
hereby revoking any proxy previously given.
DATED this day of , 1999.
--------- -------------
---------------------------------------
SIGNATURE OF SHAREHOLDER
---------------------------------------
NAME OF SHAREHOLDER (PLEASE PRINT)
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IF ANY AMENDMENTS OR VARIATIONS TO MATTERS IDENTIFIED IN THE
NOTICE OF MEETING ARE PROPOSED AT THE MEETING OR ANY
ADJOURNMENTS THEREOF OR IF ANY OTHER MATTERS PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENTS THEREOF, THIS PROXY
CONFERS DISCRETIONARY AUTHORITY TO VOTE ON SUCH AMENDMENTS
OR VARIATIONS ON SUCH OTHER MATTERS ACCORDING TO THE BEST
JUDGEMENT OF THE PERSON VOTING THE PROXY AT THE MEETING OR
ANY ADJOURNMENTS THEREOF.
Notes:
1. This form of proxy must be dated and signed by the appointor or his
attorney authorized in writing or, if the appointor is a body corporate,
this form of proxy must be executed by an officer or attorney thereof duly
authorized.
2. A SHAREHOLDER HAS THE RIGHT TO APPOINT A PERSON (WHO NEED NOT BE A
SHAREHOLDER) TO ATTEND AND ACT FOR HIM AND ON HIS BEHALF AT THE MEETING OR
ANY ADJOURNMENTS THEREOF OTHER THAN THE PERSONS DESIGNATED IN THE ENCLOSED
FORM OF PROXY. SUCH RIGHT MAY BE EXERCISED BY STRIKING OUT THE NAMES OF THE
PERSONS DESIGNATED THEREIN AND BY INSERTING IN THE BLANK SPACE PROVIDED FOR
THAT PURPOSE THE NAME OF THE DESIRED PERSON OR BY COMPLETING ANOTHER FORM
OF PROXY AND, IN EITHER CASE, DELIVERING THE COMPLETED AND EXECUTED PROXY
TO THE REGISTERED OFFICE OF THE CORPORATION OR ITS TRANSFER AGENT PRIOR TO
THE CLOSE OF BUSINESS ON THE SECOND BUSINESS DAY PRECEDING THE DAY OF THE
MEETING OR ANY ADJOURNMENTS THEREOF.
3. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
INSTRUCTIONS OF THE SHAREHOLDER ON ANY BALLOT THAT MAY BE CALLED FOR AND
SUBJECT TO SECTION 114 OF THE BUSINESS CORPORATIONS ACT, ONTARIO WHERE A
CHOICE IS SPECIFIED, THE SHARES SHALL BE VOTED ACCORDINGLY AND WHERE NO
CHOICE IS SPECIFIED, THE SHARES SHALL BE VOTED FOR THE MATTERS REFERRED TO
IN ITEMS (3) AND (4). WHERE NO SPECIFICATION IS MADE TO VOTE OR WITHHOLD
FROM VOTING IN RESPECT OF THE ELECTION OF DIRECTORS OR THE APPOINTMENT OF
AUDITORS, THE SHARES WILL BE VOTED FOR.
4. Proxies to be used at the Meeting or any adjournments thereof must be
received at the registered office of the Corporation or its transfer agent
prior to the close of business on the second business day preceding the day
of the Meeting or any adjournments thereof.
5. Please date the proxy. If not dated, the proxy shall be deemed to be dated
on the date on which it is mailed.
6. This proxy ceases to be valid one year from its date.
7. If your address as shown is incorrect, please give your correct address
when returning this proxy.
PLEASE RETURN THE FORM OF PROXY,
IN THE ENVELOPE PROVIDED FOR
THAT PURPOSE TO:
THE CIBC MELLON TRUST COMPANY
200 Queen's Quay East
Unit 6
Toronto, Ontario
M5A 4K9
Attention: Proxy Department
Fax No.: (416) 368-2502
17
