<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/X/ Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
ALPHA PROTECH LTD.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
OPTON HANDLER GOTTLIEB FEILER & KATZ, LLP
ATTORNEYS AT LAW
52 VANDERBILT AVENUE
NEW YORK, NEW YORK 10017-3808
(212) 599-1744
October 29, 1996
BY UPS OVERNIGHT
Securities and Exchange Commission
450 Fifth Street, NW
Washington, D.C. 20549
RE: ALPHA PRO TECH, LTD.
COMMISSION FILE NO. 0-19893
ATTENTION: SHELLEY E. PARRATT, ASSISTANT DIRECTOR
Dear Ms. Parratt:
Pursuant to the Commission's Proxy Rules, in connection with a Special
Meeting of Stockholders of the above referenced Registrant anticipated to be
held on December 30, 1996, an electronic filing was made with the Commission on
the date hereof consisting of preliminary copies of proxy material as follows:
1. Notice of Special Meeting of Stockholders and Proxy Statement.
2. Form of Proxy.
3. Financial Statements contained int he Company's Annual Report to
Stockholders for the year ended December 31, 1995 and quarterly Financial
Statements as contained in previously filed Forms 10-Q for the quarters
ended March 31 and June 30, 1996.
Shareholders are being asked to approve the issuance of 2,475,000 newly
issued shares of the Company's Common Stock to certain officers and directors in
exchange for a like number of shares currently held in escrow, all as more fully
described in the Proxy Statement.
While shareholder approval is being sought, the transaction contemplated
does not require the approval of shareholders under either state or Federal law.
The Company had previously submitted preliminary proxy material in
connection with the same subject matter for a meeting to be held in August 1995.
The Company postponed its plan to hold that meeting, but did, however, receive
comments from the Staff pursuant to letter dated July 12, 1995, a copy of which
is enclosed.
The enclosed copy of the Staff's Letter of Comments have been keyed to the
enclosed marked copy of the preliminary proxy material showing where such
comments have been complied with to the extent applicable.
In addition, please note the following:
1. The new shares to be issued are no longer subject to an escrow
agreement and all reference to such New Escrow Agreement has been
eliminated.
2. The matters previously pending before the British Columbia Securities
Commission have been settled and appropriate disclosure with respect thereto
is now included in the Proxy Statement.
It is anticipated that definitive copies of the proxy material will be
mailed to stockholders on or about November 20, 1996.
<PAGE>
Proxies were solicited with respect to the Annual Meeting for 1996 and in
our opinion, such solicitation was in accordance with the Commission's Proxy
Rules.
We would appreciate your early review of the enclosed material.
<TABLE>
<S> <C> <C>
Respectfully submitted,
OPTON HANDLER GOTTLIEB FEILER & KATZ
By:
------------------------------------------
Peter Landau
</TABLE>
PL:mdy
Enclosures
<PAGE>
PRELIMINARY COPY--FOR INFORMATION OF THE SECURITIES AND EXCHANGE COMMISSION ONLY
ALPHA PRO TECH, LTD.
60 CENTURION DRIVE
SUITE 112
MARKHAM, ONTARIO
L3R 9R2
TELEPHONE: (905) 479-0654
NOTICE OF SPECIAL MEETING
TAKE NOTICE that a Special Meeting of Shareholders of Alpha Pro Tech, Ltd.,
(the "Company") will be held at the offices of the Company, 60 Centurion Drive,
Suite 112, Markham, Ontario, Canada
MONDAY, DECEMBER 30, 1996
at the hour of 10:00 o'clock a.m. (local time) for the following purposes:
1. To approve the exchange by certain officers and directors of
2,475,000 shares of the Company's Common Stock currently held in Escrow for
a like number of newly issued shares of Common Stock.
2. To transact such other business as may properly come before the
Meeting.
Accompanying this Notice is the Proxy Statement and Form of Proxy.
Only Shareholders of record at the close of business on November 15, 1996
will be entitled to vote at the meeting and any adjournments thereof.
DATED: Markham, Ontario, November , 1996
BY ORDER OF THE BOARD OF DIRECTORS
"Al Millar"
President
YOUR VOTE IS IMPORTANT
PLEASE COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY SO THAT YOUR
SHARES WILL BE REPRESENTED AT THE MEETING. IF YOU CHOOSE TO ATTEND THE MEETING,
YOU MAY REVOKE YOUR PROXY AND PERSONALLY CAST YOUR VOTES.
<PAGE>
PRELIMINARY COPY--FOR INFORMATION OF THE SECURITIES AND EXCHANGE COMMISSION ONLY
ALPHA PRO TECH, LTD.
60 CENTURION DRIVE
SUITE 112
MARKHAM, ONTARIO
L3R 9R2
PROXY STATEMENT
REVOCABILITY OF PROXY
This Proxy Statement and accompanying proxy are first being sent to
shareholders on or about November , 1996.
The accompanying proxy is solicited by the Board of Directors. It may be
revoked at any time before being voted by written notice given to the secretary
of the meeting or by the delivery of a later dated proxy. Shares represented by
properly executed proxies received by the Company prior to the meeting and not
revoked, will be voted, and where a shareholder specifies a choice with respect
to the matter to be voted upon, the shares will be voted in accordance with the
specifications so made. Where no specification is made the proxies will be voted
FOR Proposal 1. described in this Proxy Statement. The Board of Directors is not
aware at the date hereof of any other matter proposed to be presented at the
meeting, and does not believe that any matter may be properly presented other
than Proposal 1. If any other matter is properly presented, the persons named in
the enclosed form of proxy will have discretionary authority to vote thereon
according to their best judgment. Presence at the meeting does not of itself
revoke the proxy.
VOTING
The only securities of the Company entitled to be voted are shares of Common
Stock.
A quorum consisting of a majority of all shares outstanding and entitled to
vote at the meeting, present in person or by proxy, is required for the purpose
of considering the matter to come before the meeting. A quorum being present,
approval of the issuance of shares to certain officers and directors requires
the affirmative vote of a majority of shares present in person or represented by
proxy and entitled to vote.
At the meeting, abstentions and broker non-votes (as hereinafter defined)
will be counted as present for the purpose of determining the presence of a
quorum. For the purpose of computing the vote required for approval of matters
to be voted on at the meeting, shares held by shareholders who abstain from
voting will be treated as being "present" and "entitled to vote" on the matter
and, thus, an abstention has the same legal effect as a vote against the matter.
However, in the case of a broker non-vote or where a shareholder withholds
authority from his proxy to vote the proxy as to a particular matter, such
shares will not be treated as "present" and "entitled to vote" on the matter
and, thus, a broker non-vote or the withholding of a proxy's authority will have
no effect on the outcome of the vote on the matter. A "broker non-vote" refers
to shares represented at the meeting in person or by proxy by a broker or
nominee where such broker or nominee (i) has not received voting instructions on
a particular matter from the beneficial owners or persons entitled to vote and
(ii) the broker or nominee does not have discretionary voting power on such
matter.
The Company is authorized to issue 50,000,000 Common Shares, par value $.01
per share. There is one class of shares only. There are issued and outstanding
shares as of the close of business November 15, 1996, the record date for
the meeting, each of which is entitled to one vote on each matter to be voted on
at the meeting.
<PAGE>
PERSONS MAKING THE SOLICITATION
Solicitations will be made by mail and possibly supplemented by telephone or
other personal contact to be made without special compensation by regular
officers and employees of the Company. The Company may reimburse shareholder's
nominees or agents (including brokers holding shares on behalf of clients) for
the cost incurred in obtaining from their principals authorization to execute
forms of proxy. No solicitation will be made by specifically engaged employees
or soliciting agents. The cost of solicitation will be borne by the Company.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information as of November , 1996
with respect to shares of Common Stock of the Company beneficially owned by each
director of the Company, each nominee for director, each executive officer of
the Company, by all officers and directors as a group, and by persons known to
the Company to be beneficial owners of more than 5% of the Company's Stock.
<TABLE>
<CAPTION>
NUMBER OF SHARES
DIRECTORS, EXECUTIVE OFFICERS BENEFICIALLY
AND 5% SHAREHOLDERS OWNED PERCENT OF CLASS
- ------------------------------------------------------------ ----------------- -----------------
<S> <C> <C>
Cede & Co................................................... 10,348,384* 46.8%
Box 20 Bowling Green, Sta.
New York, NY
U.S.A. 10004
Al Millar, President & Director............................. 1,341,611(1 (7) 6.1%
423 Herridge Circle
Newmarket, Ontario
L3Y 7H7
Canada
Sheldon Hoffman, CEO and Director........................... 1,049,297(2 (7) 4.7%
Robert H. Isaly, Director................................... 615,613(3) 2.8%
John Ritota, Director....................................... 140,194(4) 0.6%
Lloyd Hoffman, VP & Controller.............................. 273,000(5) 1.2%
Donald E. Bennett, Jr., Pres.,
Apparel Division of Company............................... 163,334(6) 0.7%
All Directors and Officers as a Group (6 persons)........... 3,583,049 16.2%
</TABLE>
- ------------------------
* This company is nominee for beneficial owners of these shares whose identity
is unknown to the Company.
** Not standing for re-election as a director.
(1) Includes 300,000 options currently exercisable at $0.75 per share, expiring
October 27, 1998; 200,000 currently exercisable options at $1.34 per share,
expiring December 21, 2000; 46,840 currently exercisable Warrants at $1.03
per share expiring January 31, 1997; and includes 44,198 shares and
currently exercisable options to purchase 35,000 shares at $0.75 per share
owned beneficially by Mr. Millar's wife as to which Mr. Millar denies
beneficial ownership.+
(2) Includes 300,000 currently exercisable options at $0.75 per share, expiring
October 27, 1998; 200,000 options currently exercisable at $1.34 per share,
expiring December 21, 2000; Warrants to purchase 48,544 shares at $1.03 per
share expiring January 31, 1997; and includes 42,821 shares owned
beneficially by Mr. Hoffman's wife, as to which Mr. Hoffman denies
beneficial ownership. Does not include 420,051 shares held by Hoffman Family
Trust, as to which Mr. Hoffman denies beneficial ownership. The
beneficiaries of the Hoffman Family Trust are Mr. Hoffman's wife and their
two children. Mr. Hoffman does not have the power to vote or dispose of the
shares held by the Trust.+
2
<PAGE>
(3) Includes 141,523 shares owned beneficially by Mr. Isaly's wife, as to which
Mr. Isaly denies beneficial ownership; 108,000 currently exercisable options
at $0.75 per share, expiring October 27, 1998; and 50,000 options currently
exercisable at $1.34 per share expiring December 21, 2000.+
(4) Includes currently exercisable options to purchase 50,000 shares at $0.75
per share, expiring October 27, 1998; 50,000 currently exercisable options
at $1.34 per share expiring December 21, 2000; and includes 2,000 shares
held by Mr. Ritota's wife as to which Mr. Ritota denies beneficial
ownership.+
(5) Includes 135,000 options currently exercisable at $0.75 per share, expiring
October 27, 1998, 25,000 options currently exercisable at $1.34 per share
expiring December 21, 2000; and 5,000 shares beneficially owned by Mr.
Hoffman's wife, as to which Mr. Hoffman denies beneficial ownership. Mr.
Hoffman disclaims beneficial ownership with respect to any shares of the
Company held in the Hoffman Family Trust (see (2) above), except to the
extent of his pecuniary interest therein.+
(6) Includes 100,000 options currently exercisable at $1.00 per share, 50,000 of
which expire on April 29, 1999 and 50,000 of which expire on December 31,
1999; 25,000 currently exercisable options at $2.03 per share, expiring June
22, 2000; 25,000 options currently exercisable at $1.34 per share, expiring
December 21, 2000; and 6667 Warrants currently exercisable at $.75 per
share, expiring March 1, 1999.+
(7) Pursuant to an escrow agreement made in June 1989 between the National Trust
Company, the Company and certain shareholders of Alpha Pro Tech, Ltd. (the
"Escrow Agreement"), 3,150,000 of the Company's shares are held in escrow by
the National Trust Company, Vancouver, B.C., and are subject to certain
performance criteria before they are released. The Escrow Agreement provides
that the shares will be released to the shareholders, pro rata, on the basis
of one share for each $0.30 of Net Cumulative Cash Flow (as defined in the
Escrow Agreement) in any fiscal period commencing June 1, 1989. The Escrow
Agreement was a condition of an agreement relating to the purchase of
certain assets by the Company to commence the manufacturing and marketing of
its products, and a requirement of the Vancouver Stock Exchange. The
shareholders pursuant to the Escrow Agreement included the following persons
named in the foregoing table in the following amounts: Al Millar as to
675,00 shares; Sheldon Hoffman as to 337,500 shares; Hoffman Family Trust as
to 337,500 shares; Irving Bronfman as to 675,000 shares and Robert Isaly, on
behalf of various persons, as to 450,000 shares. The balance of 675,000
shares were owned by John Russell and are deemed to be cancelled. See
"Conflicts of Interest".
+ A currently exercisable option or warrant is one which is exercisable within
60 days from the date hereof.
Percentages are based on 20,237,123 Common Shares of the Company outstanding
on May 10, 1996 plus currently exercisable options and warrants for 1,920,051
shares held by directors and officers, for an aggregate total of 22,157,174
shares.
Messrs. Sheldon Hoffman, Al Millar and Lloyd Hoffman are residents of Canada
and Messrs. Ritota, Isaly and Bennett reside in the United States.
CONFLICTS OF INTEREST
No director or executive officer of the Company, none of the persons who
have been directors or executive officers of the Company since the commencement
of the Company's last completed fiscal year and no associate or affiliate of any
of the foregoing 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 as disclosed under the heading "Proposal 1. Approval
of Issuance of 2,475,000 Shares to Certain Officers and Directors in Exchange
For a Like Number of Shares Held in Escrow".
3
<PAGE>
If Proposal 1. is approved, it will be easier for those officers and
directors affected by the Proposal to obtain release of their shares from escrow
than would otherwise be the case.
PROPOSAL 1.
APPROVAL OF THE EXCHANGE BY CERTAIN OFFICERS AND DIRECTORS OF 2,475,000
SHARES OF THE COMPANY'S COMMON STOCK CURRENTLY HELD IN ESCROW FOR A LIKE NUMBER
OF NEWLY ISSUED SHARES OF COMMON STOCK.
Pursuant to an escrow agreement made in June 1989 between the National Trust
Company, the Company and certain shareholders of Alpha Pro Tech, Ltd. (the
"Escrow Agreement"), 3,150,000 of the Company's shares are held in escrow by the
National Trust Company, Vancouver, B.C., and are subject to certain performance
criteria before they are released. The Escrow Agreement provides that the shares
will be released to the depositing shareholders, pro rata, on the basis of one
share for each $0.30 of Net Cumulative Cash Flow (as defined in the Escrow
Agreement) in any fiscal period commencing June 1, 1989. The Escrow Agreement
was a condition of an agreement relating to the purchase of certain assets by
the Company to commence the manufacturing and marketing of its products, and was
a requirement of the Vancouver Stock Exchange. The shareholders participating in
the Escrow Agreement included the following persons in the following amounts: Al
Millar, President and Director of the Company as to 675,000 shares; Sheldon
Hoffman, CEO and a Director of the Company as to 337,500 shares; Hoffman Family
Trust (a trust for the benefit of members of Sheldon Hoffman's family), as to
337,500 shares; Irving Bronfman a former Director of the Company as to 675,000
shares and Robert Isaly, currently a Director of the Company, on behalf of
various persons, as to 450,000 shares. The balance of 675,000 shares were owned
by John Russell the inventor of certain products currently being manufactured by
the Company, the rights to which were purchased by the Company in June, 1989.
These 675,000 shares were cancelled pursuant to a Litigation Settlement
Agreement dated August 19, 1994, the terms of which provided for the payment by
the Company of $260,000 to Mr. Russell and the cancellation of the 675,000
shares.
The Board of Directors of the Company (including Messrs. Millar, Hoffman and
Isaly) have authorized, subject to the approval of the Shareholders of the
Company, the issuance of 2,475,000 shares of its Common Stock in exchange for
the 2,475,000 shares of Company Common Stock presently owned by Al Millar,
President, Sheldon Hoffman, CEO, the Hoffman Family Trust, Irving Bronfman and
Robert Isaly, ("Exchanging Shareholders"), and which are subject to the existing
Escrow Agreement. The Common Stock to be issued will be identical in all
respects to the Common Stock to be surrendered by the Exchanging Shareholders.
The Common Stock of the Exchanging Shareholders, as noted above is subject to
the Escrow Agreement of June 1989. There is no legal requirement for the Company
to obtain shareholder approval for this transaction.
The Escrow Agreement provides that the Exchanging Shareholders are to
receive all dividends on the shares and have the right to vote the shares. it
also provides that the shares now held in escrow would be released to the
shareholders pro rata if certain performance criteria noted above, are met, and
that any shares not so released before April 5, 1999 would be surrendered to the
Company for cancellation at that time.
The Board desires to issue the shares free of any escrow arrangement because
it is the Board's belief that the current escrow terms do not give any weight to
certain achievements the Company has attained since these conditions were
imposed, notwithstanding that the Company has failed to record profits or to
increase stockholders equity in any material amount in the last several years,
and that it wrote off $4,922,000 of intangible assets and reported a net loss of
$5,971,000 for the year ended December 31, 1995. Since the time that the escrow
conditions were imposed, it is the Board's opinion that those persons whose
shares are in escrow have made valuable contributions to the Company's
substantial and measurable growth including seeking out and consummating
suitable acquisitions of companies, assets and products; raising the working
capital necessary to fund the operations of the Company; increasing sales from
approximately $300,000 per year in 1991 to $13,000,000 as at December 31, 1995,
and $7,500,000 for the six
4
<PAGE>
months ended June 30, 1996; and expanding the business from one manufacturing
facility and 20 employees in 1989 to approximately 500 employees in six
manufacturing facilities as of September 30, 1996.
In order to implement the issuance of the 2,475,000 new shares of Common
Stock to the Exchanging Shareholders;
a. The Exchanging Shareholders will assign to the Company their rights to
shares of Common Stock subject to the June 1989 Escrow Agreement in
exchange for the same number of new shares of Common Stock.
b. The certificates for the shares held by National Trust Company would be
surrendered to the Company for cancellation no later than April 5, 1999,
although the Company intends to seek the cancellation of the shares as
soon as practicable.
On November 10, 1995, Sheldon Hoffman a Director and CEO of the Company and
Alexander Millar, a Director and President of the Company settled all
outstanding matters pending before the British Columbia Securities Commission
(the "BCSC"), which were commenced in March 1992 by the British Columbia
Superintendent of Brokers ("Superintendent"). The settlement provides that as to
each of Messrs. Hoffman and Millar: a Cease Trade Order as to sales by them of
the Company's securities in British Columbia shall remain in effect for 2 years;
each shall be prohibited from becoming or acting as a director or officer of any
British Columbia reporting issuer, other than the Company, until such time as
they have successfully completed a course of study satisfactory to the
Superintendent concerning the duties of directors and officers of reporting
issuers; full payment to the BCSC shall have been made of $29,000 as to Hoffman
and $14,500 as to Millar; and the Superintendent consents to their acting in the
capacity of a director or officer of a British Columbia reporting issuer. All
matters pending as to Robert Isaly, a Director of the Company, were dropped.
The proposed arrangement would have the effect of permitting the Escrowees
to alienate their shares at such time as they are issued to the Exchanging
Shareholders. As to Messrs. Hoffman and Millar, pursuant to the above referenced
settlement with the BCSC, they cannot sell any shares of the Company's Common
Stock in British Columbia for the two (2) year period ending November 9, 1997.
The Common Stock to be received by the Exchanging Shareholders are
"restricted securities,' as that term is defined under Rule 144 promulgated
under the Securities Act 1933. In general under Rule 144 as currently in effect,
subject to the satisfaction of certain other conditions of Rule 144, a person,
including an affiliate of the Company (or persons whose shares are aggregated),
who has owned restricted securities of the Company beneficially for at least two
years is entitled to sell, within any three-month period, a number of shares
that does not exceed the greater of 1% of the total number of outstanding shares
of the same class or, if the Common Stock is quoted on NASDAQ, a national
securities exchange or a consolidated transaction reporting system, the average
weekly trading volume during the four calendar weeks preceding the sale. A
person who has not been an affiliate of the Company for at least the
three-months immediate preceding the sale and who has beneficially owned
restricted shares of Common Stock for at least three years is entitled to sell
such shares under Rule 144 without regard to any of the limitations described
above.
The Company has agreed with the Exchanging Shareholders that, if it shall
cause to be filed with the Securities and Exchange Commission a Registration
Statement, the Exchanging Shareholders shall have the right ("piggyback right")
during the three year period commencing one year from the issuance of the shares
to the Exchanging Shareholders to include such shares in such Registration
Statement at no expense to them.
During the last three Fiscal years, each of the Escrowees would not have
been eligible to receive any shares out of Escrow applying the formula for the
Escrow Agreement.
5
<PAGE>
If this proposed transaction is approved by Shareholders, for which approval
a majority vote of those shares present at the meeting in person or by proxy is
required, there would be no effective change to the capitalization of the
Company. The number of shares issued and outstanding after the transaction would
effectively be the same as that outstanding prior to the transaction. No action
is presently contemplated to be taken by the Company in the event Proposal 1. is
not approved by the shareholders.
In considering the proposal to authorize the issuance and exchange of Common
stock, your attention is directed to the financial statements and managements's
discussion and analysis as presently appearing in the Company's (1) Annual
Report on Form 10 K for the year ended December 31, 1995, and (2) Forms 10-Q
filed with the Securities and Exchange Commission in 1996, copies of which
financial statements are enclosed herewith and incorporated herein by reference.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL OF
THIS TRANSACTION.
OTHER MATTERS
Management knows of no other matters to come before the meeting other than
those referred to in the Notice of Meeting. However, should any other matters
properly come before the meeting, the shares represented by the proxy solicited
hereby will be voted on such matters in accordance with the best judgment of the
persons voting the shares represented by the proxy.
BY ORDER OF THE BOARD OF DIRECTORS
"AL MILLAR"
President
PRELIMINARY COPY--FOR INFORMATION OF THE SECURITIES AND EXCHANGE COMMISSION ONLY
6
<PAGE>
ALPHA PRO TECH, LTD.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Al Millar, Sheldon Hoffman and Robert Isaly,
and each of them individually with the power of substitution, as Proxy or
Proxies of the undersigned, to attend and act for and on behalf of the
undersigned at the Special Meeting of Stockholders of the company to be held at
the office of the Company, 60 Centurion Drive, Suite 112, Markham, Ontario on
December 30, 1996 at 10:00 A.M. local time and at any adjournment thereof,
hereby revoking any prior Proxy or Proxies. This Proxy when property executed
will be voted as directed herein by the undersigned. If no direction is made,
shares will be voted FOR Proposal 1.
(CONTINUED, AND TO BE DATED AND SIGNED, ON OTHER SIDE)
<TABLE>
<S> <C>
1. Proposal to approve the issuance of 2,475,000 shares to certain officers and directors, in exchange
for a like number of shares:
</TABLE>
For: ____ Against: ____ Abstain: ____
<PAGE>
(Signatures should conform exactly to name
shown on the proxy. Where shares are held
by join tenants, both should sign.
Executors, administrators, guardians,
trustees, attorneys and officers signing
for corporations should give full title).
Dated:_______________________________ 1996
------------------------------------------
Signature
------------------------------------------
Signature if held jointly
Date sign and return the Proxy Card promptly using the enclosed envelope.
