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
|_| 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 Rule 14a-11(c) or Rule 14a-12
Drummond Financial Corporation
(Names of Registrant as Specified in Its Charter)
(Names of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check appropriate box):
|_| $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
|_| Fee computed on table below per Exchange Act rules 14a-6(i)(4)
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 computes
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:
|_| 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>
DRUMMOND FINANCIAL CORPORATION
400 Burrard Street, Suite 1250
Vancouver, British Columbia, Canada V6C 3A6
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held December 20, 1996
To Our Shareholders:
The Annual Meeting of Shareholders of Drummond Financial Corporation, a Delaware
corporation (the "Company"), will be held at Commerce Place, 400 Burrard Street,
Suite 1250, Vancouver, British Columbia, Canada, on Friday, December 20, 1996 at
10:00 a.m. local time for the purposes of:
1. Electing one Class I director of the Company to hold office until his
respective successor is elected and qualified.
2. All other matters that properly come before the meeting and any
adjournment thereof.
Shareholders of record at the close of business on November 15, 1996 are
entitled to notice of, and to vote at, the meeting and any adjournment thereof.
A list of such shareholders will be available at the time and place of the
meeting and, during the ten days prior to the meeting, at the office of the
Secretary of the Company, 400 Burrard Street, Suite 1250, Vancouver, British
Columbia, Canada V6C 3A6.
By Order of the Board of Directors
Roy Zanatta
Secretary
Vancouver, British Columbia
October 28, 1996
If you do not expect to be present at the meeting, please fill in, date and sign
the enclosed proxy and return it promptly in the enclosed return envelope.
<PAGE>
DRUMMOND FINANCIAL CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 20, 1996
SOLICITATION AND REVOCATION OF PROXIES
The enclosed Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Drummond Financial Corporation (the "Company") of
proxies to be used at the Annual Meeting of Shareholders to be held at 10:00
a.m. on Friday, December 20, 1996, or any adjournments thereof (the "Annual
Meeting"). The accompanying Notice of Annual Meeting, this Proxy Statement and
the accompanying proxy are being first sent to Shareholders on or about November
18, 1996. Any shareholder giving a proxy has the power to revoke it by giving
notice to the Company in writing, or in open meeting before any vote is taken.
The shares represented by the enclosed proxy will be voted if the proxy is
properly signed and received by the Company prior to the time of the Annual
Meeting. The expense of making the solicitation will consist of preparing and
mailing the proxies and proxy statements and the charges and expenses of
brokerage houses and other custodians, nominees, or fiduciaries for forwarding
documents to security owners.
Please sign, date and return your proxy to Drummond Financial Corporation,
Attention: Michael J. Smith, 400 Burrard Street, Suite 1250, Vancouver, B.C.,
Canada V6C 3A6, using the pre-addressed envelope.
VOTING RIGHTS
The shareholders of record of the Company's outstanding $0.01 par value common
shares (the "Common Stock"), and Series 1, Preferred Stock (the "Preferred
Stock") at the close of business on November 15, 1996 (the "Record Date"), are
entitled to vote on matters to come before the meeting. On that date, there were
issued and outstanding 2,718,600 shares of Common Stock held by approximately
___ shareholders of record. Each share of Common Stock is entitled to one vote
on each matter submitted to vote.
As of the Record Date, there were 3,000,000 shares of Preferred Stock
outstanding, all of which was owned by Arbatax International Inc. ("Arbatax").
The Preferred Stock has variable voting rights which entitle the holders thereof
to votes per share of Preferred Stock, so that the total voting power of the
holders of the Preferred Stock plus any Common Stock they own will equal an
aggregate of 47.9% of the outstanding shares entitled to vote at the Annual
Meeting. Arbatax, the sole owner of the Preferred Stock, also controls 940,900
shares of Common Stock through its ownership of Ballinger Corporation.
Accordingly, based on the number of outstanding shares of Common Stock on the
Record Date, holders of the Preferred Stock will be entitled to an aggregate of
693,491 votes, or .2312 votes per share of Preferred Stock.
A quorum of the shareholders is constituted by the presence, in person or by
proxy, of holders of record of Common Stock representing a majority of the
number of votes entitled to be cast. A plurality of the votes present in person
or represented by proxy is required for the election of directors. Stockholders
do not have cumulative voting rights in the election of directors. The officers
and directors of the Company and the Company's largest shareholder, Ballinger
Corporation ("Ballinger"), who own in the aggregate approximately 35.3% of the
outstanding Common Stock, and Arbatax intend to vote their shares of Common
Stock and Preferred Stock (which together constitute 48.6% of the votes eligible
to be cast at the Annual Meeting) in favor of the nominee for director.
A majority of the stockholders present or represented at the Annual Meeting,
whether or not a quorum is present, may vote to adjourn the Annual Meeting
without notice other than as announced at the Annual Meeting. If the adjournment
is for more than 30 days, or if after the adjournment a new record date is fixed
for the adjourned
<PAGE>
meeting, a notice of the adjourned meeting shall be given to each shareholder of
record entitled to vote at the meeting.
If the enclosed proxy is properly executed and received by the Company, the
shares represented thereby will be voted in accordance with the instructions
specified therein. If no specific instructions are given, the shares represented
by the proxy will be voted for the election of the nominee for director as
described in this Proxy Statement.
ELECTION OF DIRECTOR
The Board of Directors is divided into three classes. Initially, Class I
directors were elected to serve for one year, Class II directors for two years
and Class III directors for three years. Successors to the class of directors
whose term expires at any annual meeting shall be elected for three year terms.
The one nominee for director at the Annual Meeting is a member of Class I, and
is to be elected to the Board of Directors for a three-year term to serve until
the annual meeting of stockholders in 1999, or until his successor is elected
and qualified. The nominee, Leonard Petersen, is currently a director of the
Company.
Mr. Peterson has indicated that he is willing and able to serve as a director.
If for any unforeseen cause he should decline or be unable to serve, the proxies
will be voted to fill such vacancy so arising in accordance with the
discretionary authority of the persons named in the proxy, unless contrary
instructions are given.
Directors
The following table sets forth information regarding each nominee for election
as director and each director whose term of office will continue after the
Annual Meeting:
<TABLE>
<CAPTION>
To Be Elected to
Serve Until the
Name Position with the Company Age Annual Meeting in
<S> <C> <C> <C>
Leonard Petersen Director 40 1999
(1)(3)
Michael J. Smith President, Chief Executive Officer, Chief 47 1997
(2)(4) Financial Officer and Director
Lawrence E. Beard Director 58 1997
(1)(2)(3)
Jimmy S.H. Lee Chairman of the Board and Director 38 1998
(3)(4)
Rene Randall (3) Director 46 1998
(1) Member of Audit Committee
(2) Member of Loan Committee
(3) Member of Stock Option and Compensation Committee
(4) Member of Executive Committee
</TABLE>
<PAGE>
Leonard Petersen. Mr. Petersen was appointed as a director in May 1995.
Since 1990 he has served as a director and senior officer of Pemcorp Management,
Inc. From 1987 to 1990 he was a chartered accountant with Davidson & Company.
Mr. Petersen has also served as a director of Similkansen Hydro-Power Ltd. and
of SGI Capital Corporation since 1993 and of Vincent Resources Ltd. from 1988 to
1993.
Michael J. Smith. Mr. Smith was appointed as a director in March 1995, and
served as Chairman of the Board until May 26, 1995, at which time he was
appointed President and Chief Executive Officer. In June 1995, Mr. Smith also
assumed the duties of Chief Financial Officer. He is officer and director of
Ballinger, the Company's largest shareholder. He is also a Trustee of Mercer
International, Inc. ("MII") and has been the Executive Vice President, Chief
Financial Officer and Secretary of MII since 1988. Mr. Smith was one of the
founders of Prentiss Howard Group, a company organized in 1979 which assists
domestic and international companies with investments, mergers and acquisitions.
Mr. Smith is also President and a director of Arbatax International, Inc.
("Arbatax"), which owns all of the outstanding shares of Ballinger and all of
the outstanding shares of Preferred Stock of the Company.
Lawrence E. Beard. Mr. Beard was elected a director of the Company in June
1993. He has been the owner since 1970 of a Southern California based, worldwide
operating, rigging and construction firm, Coast Machinery Movers; a commercial
and industrial construction firm, CB Construction; an equipment leasing,
purchase and sale firm, Beard Equipment Company; and a major shareholder of a
magnet manufacturing firm, AZ Industries. Mr. Beard serves on the Board of
Directors of all of the above companies. Mr. Beard served as a director of
Conversion Industries Inc. ("Conversion") from 1987 to 1991.
Jimmy S.H. Lee. Mr. Lee has been a director of the Company since March
1995, and was elected Chairman of the Board of Directors on May 26, 1995. Mr.
Lee has been the Chairman and President of MII since 1992 and a Trustee and
officer of MII since 1985, becoming its Chairman in 1988 and, in addition, its
President in 1992. Since 1989, Mr. Lee has also been the Chairman and a Director
of Arbatax, which owns all of the outstanding shares of Ballinger and all of the
outstanding shares of Preferred Stock of the Company.
Rene Randall. Mr. Randall was elected to the Board of Directors of the
Company in September 1996. Mr. Randall has held various administrative and
executive positions with MII and its affiliated companies since 1985. He is a
director of Conqueror Holdings Ltd., a British Columbia merchant banking
company.
There are no material relationships between any companies of which Messrs.
Smith, Lee or Randall are an officer or director and any company of which Mr.
Beard or Mr. Petersen is an officer or director.
Meetings of the Board
The Board held one meeting in fiscal 1996 at which all of the active directors
attended. The Board also formally acted 12 times in fiscal year 1996 through
written consents. Non-employee directors receive an annual retainer of $6,000
and do not receive additional compensation for attending meetings of the Board.
Employee directors receive no compensation for attending meetings of the Board.
The directors also receive periodic grants of stock options issued under the
Company's 1993 Stock Option Plan.
Committees of the Board
Audit Committee. Directors Beard and Petersen currently comprise the Audit
Committee, which oversees the financial controls of the Company and interfaces
with the Company's outside auditors to monitor the compliance by the Company
with financial disclosure laws and regulations. This committee did not meet
during fiscal year 1996.
Stock Option and Compensation Committee. Directors Beard, Lee and Petersen
comprised the Stock Option and Compensation Committee during the 1996 fiscal
year and are charged with developing and monitoring the
<PAGE>
Company's executive compensation and stock option activities. This
committee did not meet during fiscal year 1996. Mr. Randall replaced Mr. Lee on
this committee in September 1996.
Executive Committee. Directors Lee and Smith comprise the Executive Committee.
The Executive Committee is authorized to exercise all the powers and authority
of the Board of Directors in the management of the business and affairs of the
Company during intervals between meetings of the Board. Mr. Zanatta, the
Company's Vice President and Secretary, is also invited to sit in on meetings of
the committee. This committee did not meet or act during fiscal year 1996.
Executive Officers
The following individuals are executive officers of the Company who are not
directors. Pertinent information relating to these individuals is set forth
below. There are no family relationships between any of the officers. All of the
following officers hold their respective offices at the pleasure of the Board of
Directors.
<TABLE>
<CAPTION>
With the
Name Age Company Position and Offices Company Since
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
L.P. "Roy" McCann 60 Executive Vice President 1993
Roy Zanatta 31 Vice President and Secretary 1995
</TABLE>
Background of Officers
L.P. "Roy" McCann. Mr. McCann was elected as a director and appointed
President and Chief Executive Officer of the Company upon its formation in June
1993. He commenced full-time employment with the Company on July 1, 1993. On May
26, 1995, Mr. McCann resigned as director, President and Chief Executive Officer
and assumed his current duties as Executive Vice President. From July 1985 to
June 1993 Mr. McCann was employed by South Bay Bank, 2200 Sepulveda Boulevard,
Torrance, California.
Roy Zanatta. Roy Zanatta first joined the Company as Secretary in March
1995 and became a Vice President in May 1995. Mr. Zanatta is also currently an
independent consultant, and has been associated with MII in various capacities
since 1993. During 1992 and 1993 he was employed as a management consultant by
the British Columbia Hydro and Power Authority, a major electric utility. From
1991 to 1992 he was employed as a project manager with the Canadian Standards
Association. Mr. Zanatta earned a B.A.Sc. degree in 1987 from the University of
British Columbia, and an M.B.A. from McGill University in 1991. Mr. Zanatta was
appointed Secretary of Arbatax in April 1996 and a director of Arbatax in
October 1996.
Compliance with Section 16(a) of the Exchange Act
Based solely upon the Company's review of the reports filed with the Securities
and Exchange Commission ("SEC") by the Company's current and former officers,
directors and 10 percent shareholders for the period July 1, 1995 to June 30,
1996, the Company believes that all such required reports were filed on a timely
basis.
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table sets forth information concerning total compensation earned
or paid during the 1996 fiscal year to each of the Chief Executive Officer, the
Company's current executive officers who received in excess of $100,000 in
salary and bonus in fiscal 1996 and the Company's Chief Executive Officer
(collectively, the "Named Executive Officers").
Summary Compensation Table
<TABLE>
<CAPTION>
Options
Name and Principal Position Year Salary Number of Shares
<S> <C> <C> <C>
Michael J. Smith (1) 1996 --- ---
President, Chief Executive Officer and Chief 1995 --- ---
Financial Officer 1994 --- ---
Roy Zanatta (2) 1996 125,000 ---
Vice President and Secretary 1995 --- ---
L.P. "Roy" McCann 1996 130,000 ---
Executive Vice President (3) 1995 130,000 50,000 (4)
1994 130,000 50,000
- -------------
(1) Mr. Smith did not receive any compensation from the Company for
services as an executive officer in fiscal 1995 and 1996. Mr. Smith did however
receive the $6,000 annual fee for service as a director in each of these years.
Mr. Smith declined to accept the grant of stock options for 25,000 shares of
Common Stock which are automatically granted to each nonemployee director upon
appointment to the Board of Directors.
(2) Mr. Zanatta's compensation is paid to a company controlled by him for
consulting fees and expense reimbursements.
(3) Mr. McCann entered into a five year employment agreement with the
Company commencing July 1, 1993. The agreement provides that Mr. McCann will
receive an annual base salary of $130,000 and will participate in the Company's
stock option and profit sharing plans. The employment agreement provides that
amounts payable to Mr. McCann pursuant to the Company's Profit Sharing Plan will
be determined by the Board of Directors based on the profitability of the
Company but in no event will such amount exceed 300% of Mr. McCann's base
salary. On May 26, 1995, Mr. McCann resigned as a director, President and Chief
Executive Officer and assumed the position of Executive Vice President, on a
part time basis.
(4) The 50,000 stock options previously granted in fiscal 1994 to Mr.
McCann were repriced by the Stock Option and Compensation Committee to $1.81 on
July 21, 1994, due to the decline in the market price of the Common Stock.
</TABLE>
<PAGE>
Grants of Stock Options
The following table sets forth information concerning the award of stock
options to the Named Executive Officers during the year ended June 30, 1996.
Option Grants in the Last Fiscal Year
<TABLE>
<CAPTION>
Number of % of Total
Securities Options/SAR
Underlying Granted to Exercise or
Options/SAR Employees in Base Price Expiration
Name Granted Fiscal Year ($/Sh) Date
<S> <C> <C> <C> <C>
Michael J. Smith 0 0 N/A N/A
L.P. "Roy" McCann 0 0 N/A N/A
</TABLE>
Fiscal Year End Option Table
The table below sets forth information regarding unexercised options held
by each of the Named Executive Officers as of June 30, 1996.
Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Number of Options Value of In-the-Money
at Fiscal Year End Options at Fiscal Year End
Name Exercisable/Unexercisable Exercisable/Unexercisable(1)
<S> <C> <C>
Michael J. Smith ---/--- ---/---
L.P. "Roy" McCann 50,000/0 $0/$0
- -------------
(1) The calculation of the value of in-the-money options at fiscal year end
was based on the closing price of the Common Stock on June 28, 1996 of $1.31.
</TABLE>
Profit Sharing Plan
As an incentive to key employees who contribute to the success of the Company,
the Board of Directors adopted a profit sharing plan ("Profit Sharing Plan") to
enable key employees and directors to participate in the Company's success as
reflected by its earnings. The Board of Directors recently amended the Profit
Sharing Plan to provide that it is to be funded by crediting the Incentive Fund
under the Profit Sharing Plan with 10% of pre-tax earnings for fiscal 1996, 7.5%
for fiscal 1997 and 5.0% for each fiscal year thereafter. The Plan is
administered by the Stock Option and Compensation Committee of the Company's
Board of Directors. Selection to participate in the Profit Sharing Profit
Sharing Plan and the amount to be awarded under the Plan is determined by the
Committee upon the recommendation of the Company's Chairman and the President
and Chief Financial Officer. For the fiscal year ended June 30, 1996, no
payments were made by the Company pursuant to the Profit Sharing Plan.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth, as of October 28, 1996, the information
with respect to Common Stock and Preferred Stock ownership of each person known
by the Company to own beneficially more than 5% of the shares of the Common
Stock or Preferred Stock, each of the Named Executive Officers, each director,
and all officers and directors as a group. This does not include holders holding
in "street" and "nominee" name. Except as noted, the persons named have sole
voting and investment power with respect to all of the shares of Common Stock
and Preferred Stock owned by them.
<TABLE>
<CAPTION>
Number of Shares
Beneficially Owned
Name and Address Directly or Indirectly (1) Percent of Class (2)
---------------- -------------------------- --------------------
Preferred Common
<S> <C> <C> <C>
Gibralt Holdings Ltd. 414,150 11.8%
1177 West Hastings Street, Suite 2000
Vancouver, British Columbia V6E 2K3
Ballinger Corporation 940,900 26.8
700 West Georgia Street, Suite 1900
Vancouver, British Columbia V7Y 1G5
Arbatax International, Inc. 3,000,000 940,900(3) 47.9
64 Brandschenke Strasse
Zurich, Switzerland
Michael J. Smith 3,000,000(4) 940,900(4) 47.9
400 Burrard Street, Suite 1250
Vancouver, British Columbia V6C 3A6
L.P. "Roy" McCann 62,100 1.8
2121 Avenue of the Stars, 22nd Floor
Los Angeles, California 90067
Rene Randall 0 0
400 Burrard Street, Suite 1250
Vancouver, British Columbia V6C 3A6
Jimmy S.H. Lee 3,000,000(4) 940,900(4) 47.9
64 Brandschenke Strasse
Zurich, Switzerland
Leonard Petersen 25,000 0.7
609 Granville Street, Suite 1270
Vancouver, British Columbia V7Y 1G6
Lawrence E. Beard 33,000 0.9
2431 Chico Avenue
South El Monte, California 91733
Roy Zanatta 3,000,000 940,900(4) 47.9
400 Burrard Street, Suite 1250
Vancouver, B.C. V6C 3A6
All Directors and Officers as a group 3,000,000 1,061,000(4) 50.0
(7 persons)
- -------------
(1) Includes shares subject to outstanding stock options exercisable within
60 days of October 28, 1996, as follows: L.P. "Roy" McCann (50,000), Lawrence
E. Beard (25,000), Leonard Petersen (25,000), and directors and officers as a
group (100,000).
(2) Percentage ownership is based on shares owned (including shares subject
to outstanding stock options exercisable within 60 days of October 28, 1996),
divided by total shares outstanding plus, for each person, the shares that
person has the right to acquire within 60 days of October 28, 1996, adjusted to
give effect to the voting power attributable to the Preferred Stock.
(3) Arbatax is the sole shareholder of Ballinger and, pursuant to the rules
of the SEC, is deemed to be the indirect beneficial owner of all of the shares
owned by Ballinger.
(4) Includes the 940,900 shares of Common Stock owned directly by
Ballinger, for which Mr. Smith serves as an officer and sole director, and
indirectly by Arbatax, and the 3,000,000 shares of Preferred Stock owned
directly by Arbatax, for which Mr. Smith serves as President and a director, Mr.
Zanatta serves as Secretry and a director and Mr. Lee serves as Chairman and a
director, and of which shares Mr. Smith, Mr. Zanatta and Mr. Lee are deemed to
be the indirect beneficial owners pursuant to the rules of the SEC. Mr. Smith,
Mr. Zanatta and Mr. Lee each disclaim beneficial ownership of all of such
shares.
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Agreements with Ballinger Corporation
On March 22, 1995, MII and the Company entered into a Stock Purchase Agreement
in which MII agreed to purchase 715,000 shares of Common Stock for $1,673,000.
The transaction was completed and the shares issued to MII on March 27, 1995. In
June 1995, the Company reimbursed MII approximately $79,000 for certain
transaction expenses incurred in connection therewith. Prior to completion of
the sale of the 715,000 shares to MII, MII owned 225,900 shares of the
outstanding Common Stock, representing approximately 11.3% of the total shares
outstanding. The issuance of the 715,000 shares increased such ownership to
approximately 34.6%.
As part of the Stock Purchase Agreement, MII agreed to make available to the
Company a line of credit to be used exclusively for restructuring, refinancing
or repurchasing the Company's outstanding Bonds. Advances under the credit line
may be made in MII's sole discretion. The Stock Purchase Agreement provides that
MII would be issued stock purchase warrants in the event the credit line were
drawn down upon by the Company. As of the date hereof, the Company has not drawn
on the credit line and no warrants have been issued to MII. The Company does not
believe that MII is presently willing to approve any advances under the credit
line.
In addition, as provided under the terms of the Stock Purchase Agreement, the
Company appointed two persons designated by MII to the Board: Jimmy S.H. Lee,
Chairman, President and a Trustee of MII, and Michael J. Smith, Executive Vice
President, Chief Financial Officer, Secretary and a Trustee of MII. On May 26,
1995, Mr. Lee became Chairman of the Board of Directors of the Company and Mr.
Smith became President and Chief Executive Officer. Mr. Smith also currently
serves as the Company's Chief Financial Officer. Mr. Smith also serves as an
officer and as the sole director of Ballinger. Both MII and Arbatax are publicly
held companies with securities registered under Section 12(g) of the Securities
Exchange Act of 1934.
As part of a plan to reduce its financial services activities, in July 1995 MII
sold all of its 940,900 shares of Common Stock to Ballinger for the aggregate
purchase price of $2,245,420. The purchase price was paid with a promissory note
with a term of one year bearing interest at the prime rate of Bank of America as
published from time to time plus two percentage points. Ballinger paid this note
in full in December 1995. As part of the agreement with Ballinger, MII agreed
that Michael Smith would remain involved with the Company so long as Ballinger
retains its ownership interest in the Company. There are no other relationships
between MII and Ballinger or Mr. Frederick Wong, Ballinger's former sole
shareholder, nor are there any relationships between Jimmy S.H.
<PAGE>
Lee and either Ballinger or Mr. Wong. Mr. Wong sold all of his shares in
Ballinger for cash to Arbatax International, Inc. in June 1996.
Agreements with Arbatax and MII
During the year ended June 30, 1996, the Company paid an aggregate of
$456,000 in fees to Arbatax, MII and a third affiliate for accounting and
administrative services provided to the Company and reimbursement for office
expenses.
Arbatax purchased 3,000,000 shares of Preferred Stock from the Company for
$6,000,000 cash.
The Company purchased 60,000 shares of preferred stock of Logan
International Corp. for $6,000,000 cash. Arbatax owns 49.9% of the outstanding
Common Stock of Logan International Corp.
ANNUAL REPORT
The Company's Annual Report which contains audited financial statements for the
fiscal year ended June 30, 1996 accompany or have preceded the mailing of this
Proxy Statement. Upon the written request of any person who represents in such
request that such person is an owner of record of the Company's shares on the
Record Date, the Company will send such person, without charge, a copy of the
Annual Report on Form 10-KSB for the fiscal year ended June 30, 1996, including
financial statements, which the Company has filed with the SEC. Upon written
request and payment of a copying charge of $0.20 per page, the Company will also
furnish to any such shareholder a copy of the exhibits to the Annual Report on
Form 10-KSB. The written request must be directed to the attention of Roy
Zanatta, Corporate Secretary of the Company, 400 Burrard Street, Suite 1250,
Vancouver, British Columbia, Canada V6C 3A6. Such reports are not part of the
Company's soliciting material.
OTHER MATTERS
The Company has received no notice of any other items submitted for
consideration at the meeting except for reports of operations and activities by
management, which are for informational purposes only and require no action of
approval or disapproval. The Board of Directors neither knows of, nor
contemplates, any other business to be presented for action by the shareholders
at the meeting.
The next annual meeting is expected to be held during December, 1997. Any
shareholder proposal intended to be presented at the next annual meeting of
shareholders must be received by the Company for inclusion in the Company's
proxy materials by June 30, 1997.
By Order of the Board of Directors
Roy Zanatta
Secretary
Vancouver, British Columbia
October 28, 1996
Please complete, date, and sign the enclosed proxy and return it promptly in the
enclosed reply envelope. No postage is required if mailed in the United States.
