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
Goran Capital Inc.
_______________________________________________________________________________
(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)(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 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>
GORAN CAPITAL INC.
FORM OF PROXY
PROXY SOLICITED BY MANAGEMENT OF THE CORPORATION FOR THE
ANNUAL OF SHAREHOLDERS TO BE HELD ON TUESDAY, JUNE 15, 1999
1. The undersigned shareholder of Goran Capital Inc. (the "Corporation") hereby
appoints G. Gordon Symons, Chairman of the Board, whom failing Alan G.
Symons, CEO, or instead of either of them..................as Proxy for the
undersigned, to attend, vote and act for and on behalf of the undersigned at
the Annual and Special Meeting of the Shareholders of the Corporation (the
"Meeting") to be held at the City of Toronto on Tuesday, June 15, 1999, and
at any adjournment thereof, in the same manner, to the same extent and with
the same power as if the undersigned were present at the Meeting or any
adjournment thereof, and the undersigned hereby revokes any former
instrument appointing a Proxy for the undersigned at the Meeting or at any
adjournment thereof.
The Shares represented by this Proxy are to be:
1. VOTED FOR__ OR WITHHELD FROM VOTING___ in the election of Directors.
2. VOTED FOR__ OR WITHHELD FROM VOTING___ in the appointment of the
auditor.
3. VOTED FOR__ OR VOTED AGAINST___ a resolution apprvoing the re-
pricing certain options to
purchase shares of the
Corporation to a maximum price
of $14.70 (Cdn.) per share.
DATED this ______ day of _____________________, 1999.
.....................................
Signature of Shareholder
Notes:
1. THE PERSONS NAMED IN THE ENCLOSED FORM OF PROXY ACCOMPANYING THIS
CIRCULAR ARE DIRECTORS AND OFFICERS OF THE CORPORATION. A SHAREHOLDER
OF THE CORPORATION HAS THE RIGHT TO APPOINT A PERSON OTHER THAN THE
PERSONS SPECIFIED IN SUCH FORM OF PROXY AND WHO NEED NOT BE A
SHAREHOLDER OF THE CORPORATION TO ATTEND AND ACT FOR HIM AND ON HIS
BEHALF AT THE MEETING. SUCH RIGHT MAY BE EXERCISED BY STRIKING OUT THE
NAMES OF THE PERSONS SPECIFIED IN THE FORM OF PROXY, INSERTING THE NAME
OF THE PERSON TO BE APPOINTED IN THE BLANK SPACE PROVIDED IN THE FORM
OF PROXY, SIGNING THE FORM OF PROXY AND RETURNING IT IN THE REPLY
ENVELOPE IN THE MANNER SET OUT IN THE ACCOMPANYING NOTICE OF MEETING.
2. If this Form of Proxy is to be utilized, it should be dated and must be
signed by the shareholder or his attorney authorized in writing. If
this Form of Proxy is not dated in the space provided, it will be
deemed to bear the date on which it was mailed to shareholders.
3. If it is desired that the shares represented by this Proxy are to be
withheld from voting in the election of Directors or the appointment of
the auditor or against the resolution approving the re-pricing of
certain options, the appropriate box or boxes above must be marked.
If no specification has been made with respect to voting or
withholding from voting in the election of directors or appointment of
Auditor, the Proxy nominees are instructed to vote the shares
represented by this Proxy for such matters.
4. If any amendments or variations to the matters referred to above or to
any other matters identified in the Notice of Meeting are proposed at
the Meeting or any adjournment or adjournments thereof, or if any
other matters which are not known to management should properly come
before the Meeting or any adjournment or adjournments thereof, this
Proxy confers discretionary authority on the person voting the Proxy to
vote on such amendments or variations or such other matters in
accordance with the best judgment of such person.
5. This Proxy should be voted, dated and signed and returned in the
enclosed envelope to CIBC Mellon Trust Company, 320 Bay Street, P.O.
Box 1, Toronto, Ontario M5H 4A6 or presented in person at the meeting
to be held June 15, 1999, at 181 University Avenue, Suite 1101,
Toronto, Ontario, at 10:00 a.m.
<PAGE>
GORAN CAPITAL INC.
NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual and Special Meeting (the
"Meeting") of the Shareholders of Goran Capital Inc. (the "Corporation") will be
held at 181 University Avenue, Suite 1101, Toronto, Ontario, on Tuesday, June
15, 1999, at 10:00 a.m., Toronto time, for the following purposes:
1. To receive the annual report and financial statements of the
Corporation for the year ended December 31, 1998, and the report
of the auditor thereon;
2. To elect directors;
3. To appoint an auditor and to authorize the directors to fix the
auditor's remuneration;
4. To consider, and if thought fit, approve a repricing of certain
of the Stock Options issued by the Corporation.
5. To transact such other business as may properly come before the
Meeting or any adjournment thereof.
The accompanying management information circular provides additional
information relating to the matters to be dealt with at the Meeting and forms
part of this Notice.
Shareholders who are unable to attend the Meeting are requested to
date, sign and return the accompanying form of proxy in the envelope provided
for that purpose.
DATED at Toronto, this 13th day of April, 1999.
BY ORDER OF THE BOARD
ALAN G. SYMONS
CEO and President
<PAGE>
April 13, 1999
Dear Shareholder:
Re: Supplemental Mailing List
If you wish to have your name added to the supplemental mailing list of Goran
Capital Inc. so you may receive the Corporation's quarterly reports which
contain interim unaudited financial statements, please fill in your name and
address in the space provided below and return to our transfer agent, CIBC
Mellon Trust Company, 320 Bay Street, P.O. Box 1, Toronto, Ontario M5H 4A6.
NAME:__________________________________________________
Please print
ADDRESS:_______________________________________________
CITY:__________________________________________________
PROVINCE/STATE:___________POSTAL CODE/ZIP CODE:________
I hereby confirm that I am the owner of shares issued by the above-mentioned
Corporation.
SIGNATURE:________________________________________
DATE:_____________________________________________
<PAGE>
GORAN CAPITAL INC.
MANAGEMENT PROXY CIRCULAR
Solicitation of Proxies
This Management Proxy Circular is furnished in connection with the
solicitation of proxies by the management of Goran Capital Inc. (the
"Corporation") for use at the Annual and Special Meeting (the "Meeting") of
Shareholders of the Corporation to be held Tuesday, June 15, 1999, at 10:00
a.m., (Toronto time) or at any and all adjournments thereof, for the purposes
set forth in the accompanying Notice of Meeting. It is expected that the
solicitation will be primarily by mail, but proxies may also be solicited
personally, by telephone or by telecopier, by directors, officers or regular
employees of the Corporation. The costs of such solicitation will be borne by
the Corporation.
The Corporation will provide to any person or company, upon written request to
the Secretary of the Corporation, a copy of:
(a) its latest annual information form together with one copy of
any document, or the pertinent pages of any document,
incorporated therein by reference, filed with the applicable
securities regulatory authorities under the Prompt Offering
Qualification System;
(b) its comparative financial statements for the year ended
December 31, 1998, together with the accompanying report of
the auditor and one copy of any interim financial statements
of the Corporation subsequent to December 31, 1998; and
(c) this Circular.
Revocation of Proxies
A shareholder who has given a proxy may revoke it at any time to the
extent it has not been exercised. In addition to revocation in any other manner
permitted by law, a proxy may be revoked by instrument in writing executed by
the shareholder or his attorney authorized in writing, and deposited either at
the registered office of the Corporation at any time up to 5:00 p.m. (Toronto
time) on the last business day preceding the day of the Meeting, or any
adjournment thereof, at which the Proxy is to be used, or with the Chairman of
the Meeting prior to the beginning of the Meeting on the day of the Meeting, or
any adjournment thereof or in any other manner provided by law.
Voting of Shares Represented by Management Proxies
The persons specified in the enclosed form of proxy are directors and
officers of the Corporation and will represent management at the Meeting. Each
shareholder of the Corporation has the right to appoint a person (who need not
be a shareholder), other than the persons specified in the enclosed form of
proxy, to attend for him and on his behalf at the Meeting or any adjournment
thereof. Such right may be exercised by striking out the names of the specified
persons and inserting the name of the shareholder's nominee in the space
provided or by completing another appropriate form of proxy and, in either case,
signing, dating and delivering the form of proxy to the Corporation prior to the
holding of the Meeting.
<PAGE>
The persons named in the enclosed form of proxy will vote the shares in
respect of which they are appointed by proxy on any ballot that may be called
for in accordance with the instructions thereon. In the absence of such
specifications, such shares will be voted in favour of each of the matters
referred to herein.
The enclosed form of proxy confers discretionary authority upon the
persons named therein with respect to amendments to or variations of matters
identified in the Notice of Meeting and with respect to other matters, if any,
that may properly come before the Meeting. As of the date of this Circular,
management of the Corporation knows of no such amendments, variations or other
matters to come before the Meeting other than routine matters incidental to the
conduct of the Meeting. However, if any other matters that are not 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 proxy.
Voting Securities
The only voting securities of the Corporation currently outstanding and
entitled to be voted at the Meeting are 5,876,398 common shares as of April 12,
1999 each of which carries one vote.
The Corporation has fixed April 30, 1999 as the Record Date for the
Meeting. The Corporation will prepare a list of the holders of common shares at
the close of business on that day. Each person named in such list is entitled to
be present and vote the shares shown opposite his name on such list at the
Meeting except to the extent that he has transferred ownership of any of his
shares after that date and the transferee of those shares produces properly
endorsed share certificates or otherwise establishes that he owns the shares and
demands, not later than ten days before the Meeting, that his name be included
in the list before the Meeting, in which case the transferee is entitled to vote
his shares at the Meeting or any adjournment thereof.
Principal Holders of Voting Securities
To the knowledge of the directors and officers of the Corporation, the
following are the only persons who beneficially own or exercise control or
direction over more than 10% of the outstanding common shares of the
Corporation:
2
<PAGE>
<TABLE>
<CAPTION>
Number of Common Shares Percentage of
Beneficially Owned, Outstanding
Name Controlled or Directed 1 Common Shares
<S> <C> <C>
Symons International Group
Ltd. 2 1,646,413 28.0%
G. Gordon Symons 479,111 8.2%
Alan G. Symons 557,965 9.4%
Douglas H. Symons 251,455 4.3%
</TABLE>
1 The information as to beneficial ownership of shares not being within the
knowledge of the Corporation, has been furnished by the persons and
companies listed above. Information presented is as of March 18, 1999
and does not reflect shares under option.
2 Mr. G. Gordon Symons is the controlling shareholder of Symons
International Group LTD., a private company, and Mr. G. Gordon Symons is
the father of Alan and Douglas Symons.
Particulars of Matters to be Acted Upon
At the Meeting, shareholders will be asked to elect directors, to
appoint an auditor and to consider and, if thought fit, approve a Shareholders
Resolution approving the re-pricing of certain options to purchase shares of the
Corporation to a maximum price of $14.70 (Cdn.) per share and to deal with other
matters which may properly come before the Meeting.
Election of Directors
The Articles of the Corporation currently provide for a board
consisting of a minimum of three and a maximum of ten directors. The board
currently consists of seven Directors until otherwise determined by further
resolution of the board of directors of the Corporation.
Unless otherwise specified therein, proxies received in favour of
management nominees will be voted for the following proposed nominees (or for
substitute nominees in the event of contingencies not known at present) whose
term of office will continue until the next Annual Meeting of Shareholders or
until they are removed or their successors are elected or appointed in
accordance with the Canada Business Corporations Act and the by-laws of the
Corporation.
3
<PAGE>
<TABLE>
<CAPTION>
Year First Number of Commons
Name and Principal Position in the Became Shares of the Corporation
Occupation Corporation Director Beneficially Owned1
<S> <C> <C> <C>
G. Gordon Symons Chairman of the Board 1986 2,125,524 4
Chairman of the Board
Goran Capital Inc.
Alan G. Symons2 CEO and President 1992 557,965
CEO and President
Goran Capital Inc.
Douglas H. Symons3 COO and Vice 1989 251,455
President, Symons President
International Group,
Inc., Chief Operating
Officer, Goran Capital Inc.
J. Ross Schofield,3 President Director 1992 3,800
Schofield Insurance Brokers
David B. Shapira,2 President Director 1989 100,000
Medbers Limited
James G. Torrance, Q.C.2 Director 1995 2,000
Partner Emeritus
Smith Lyons, Barristers & Solicitors
John K. McKeating2 Director 1995 2,000
Former Owner
Vision 2120, Inc.
</TABLE>
1 Information as to the shareholdings of each nominee has been provided by the
nominee.
2 Member of the Audit Committee.
3 Member of the Compensation Committee.
4 Includes 1,646,413 shares owned by Symons International Group Ltd., a
private company of which Mr. G. Gordon Symons is the controlling shareholder.
Each of the foregoing nominees has held the principal occupation
indicated above during the past five years except: (i) David B. Shapira who
prior to 1995 was the President of Morse Jewelers Inc.
Proposed Re-Pricing of Certain Options to
Purchase Common Shares of the Corporation
On November 10, 1998, the directors of the Corporation passed, by
unanimous written consent, resolutions (the "Re-Pricing Resolutions") that
re-priced certain options to purchase common shares of the Corporation that had
been previously granted to participants in the Corporation's Share Option Plan
(the "Plan"). The Re-Pricing Resolutions specified that the new exercise price
for such options (the "New Price") was to be the closing price of the
Corporation's common shares on the Toronto Stock Exchange (the "TSE") the
4
<PAGE>
business day prior to the passage of the Re-Pricing Resolutions. The New Price
is $14.70 (Cdn.) per share. The Re-Pricing Resolutions went on to state that the
New Price shall not be effective, and no options may be exercised pursuant to
the Plan at the New Price, unless and until the disinterested shareholders of
the Corporation shall have approved the New Price.
The price of the Corporation's publicly traded shares fell dramatically
during October, 1998. As a consequence, the Exercise Price of all options to
purchase common shares of the Corporation granted pursuant to the Plan after
January 1, 1996 was above the market price of the Corporation's shares.
Options to purchase common shares of the Corporation are granted by the
directors from time to time to incentivize management and other Plan
participants to maximize shareholder value. The board has determined that the
re-pricing is very important to the Corporation's ability to retain and
incentivize key management personnel. Should the Re-Pricing Resolutions fail to
receive the necessary shareholder approval, the Corporation is at risk in that
certain key management personnel may leave the Corporation, thereby hampering
the ability of the Corporation to achieve its business objectives.
The following chart sets forth the Stock Options subject to the
Re-Pricing Resolutions and the New Price, as well as the original exercise price
and other data.
New Price 1 $14.70
Closing Price on March 3, 1999 $11.30
Total Options Outstanding 695,572
Options subject to Re-Pricing, with Original Exercise Price:
100,301 @ $16.50
180,494 @ $29.00
7,861 @ $39.00
74,970 @ $40.00
33,000 @ $41.00
256,000 @ $35.00
-------
652,626
- ----------------
1 The closing TSE price of the Company's shares on November 9, 1998.
All monetary amounts are denominated in Cdn. dollars.
5
<PAGE>
As can be seen from the above Table, almost 94% of the Corporation's
outstanding share purchase options, have an original exercise price in excess
(in some cases materially so) of the current market price of the Corporation's
shares. This situation, in the opinion of the Corporation's directors, is
undesirable in that properly incentivizing management is made extremely
difficult in these current circumstances.
A vote FOR proposal 3 would re-price the 652,626 Options in the above
schedule to a uniform price of $14.70 (Cdn.) via adoption of the following
shareholders' resolution:
RESOLVED; we the disinterested shareholders of Goran Capital Inc.
("Goran" or "Company"), being neither officers, directors, controlling
shareholders, participants in the Company's share option plan ("Plan")
or an associate of any of them, (collectively, the "Disinterested
Shareholders") hereby resolve that it is in the best interests of
the Company and its Shareholders to incentivize Company management
to maximize Shareholder value; and
FURTHER RESOLVED; that we, the Disinterested Shareholders hereby
resolve that Re-pricing the options to purchase shares of the Company's
stock outlined in Appendix I to a uniform exercise price of $14.70
(Cdn.) per share, achieves our desired result of incentivizing
management; and
FURTHER RESOLVED; that the Disinterested Shareholders hereby approve
the re-pricing of the 652,626 options to purchase shares of the
Company's common shares as set forth on Appendix I to a uniform price
of $14.70 per share; and
FURTHER RESOLVED; that the officers of the Company, or the any of them,
are hereby authorized, directed and empowered to do all things as our
necessary to accomplish the foregoing Resolutions.
Directors' and Officers' Remuneration
The aggregate remuneration paid by the Corporation and its subsidiaries
to its five highest paid employees or officers, including the three directors
who are also officers of the Corporation, during the financial year ended
December 31, 1998 was $1,974,345 all in the form of salary, bonus and consulting
fees.
In 1998, the Corporation's directors received (i) a flat annual fee of
$10,000 for each director; and (ii) a $1,000 fee for each board or committee
meeting attended. In addition, Committee Chairmen received an additional $1,000
per quarter.
6
<PAGE>
Interest of Insiders in Material Transactions
Reference is made to the 1998 Annual Report, sent to each shareholder
with this management proxy circular, and to Note 12, Related Party Transactions,
to the Corporation's financial statements as at and for the year ended December
31, 1998.
Indebtedness of Officers and Directors of the Corporation
The following directors and officers of the Corporation were indebted
to the Corporation, or its subsidiaries, in amounts exceeding $10,000 during
1998. All amounts listed in this section are denominated in U.S. Dollars.
<TABLE>
<CAPTION>
Name and
Municipality of Largest Loan
Residence Date of Loan Balance During 1998 Present Balance
<S> <C> <C> <C>
G. Gordon Symons June 30, 1986 $115,807 $115,807
February 28, 1986 $156,495 $156,495
Alan G. Symons June 30, 1986 $19,772 $6,617
February 24, 1988 $27,309 $27,309
March 19, 1998 $887,444 $0
October 15, 1998 $562,413 $0
Throughout 1998 $102,051 $0
Douglas H. Symons June 30, 1986 $15,000 $9,798
February 24, 1988 $2,219 $2,219
November 1, 1990 $68,050 $0
April 20, 1998 $260,358 $0
October 15, 1998 $594,517 $0
Throughout 1998 $22,533 $0
October, 1998 $600,000 $0
</TABLE>
The foregoing loans to G. Gordon Symons are on account of loans to
purchase common shares of the Corporation. Such loans are collateralized by
pledges of the common shares of the Corporation acquired and are payable on
demand and are interest free.
Loans made to Alan G. Symons in 1986 and 1988 were made to facilitate
the purchase of common shares of the Corporation. These loans are payable upon
demand and are interest free. The loan to Alan G. Symons dated March 19, 1998,
bears interest at the rate of 5.85% and was secured by a pledge of his options
to purchase shares in GGS Management, Inc. This loan was repaid in April, 1999.
The loan to Alan G. Symons dated October 15, 1998, bears interest at the rate of
7.25% and the proceeds were used to facilitate the exercise of options to
purchase common shares of the Corporation. This loan was repaid in April, 1999.
Symons International Group, Inc. ("SIG"), a subsidiary of the Corporation, made
7
<PAGE>
various advances to Alan G. Symons throughout 1998, primarily to facilitate the
payment of interest on a loan from an unrelated third party relating to the
purchase of SIG stock at the time of its Initial Public Offering ("IPO") in
1996. This loan was repaid in April, 1999.
The loans to Douglas H. Symons in 1986 and 1988 were to facilitate the
purchase of common shares of the Corporation. Such loans are collateralized by
pledges of the common shares of the Corporation and are payable upon demand and
are interest free. The loan to Douglas H. Symons in November, 1990, bears
interest at the rate of prime plus 1%, the proceeds being used to facilitate the
purchase of a primary residence. This loan was repaid in April, 1999. The loan
to Douglas Symons dated April 20, 1998 bears interest at the rate of 5.85%, with
the proceeds of this loan being used to help facilitate the exercise of options
to purchase stock in the Corporation. This loan was repaid in April, 1999. This
loan was secured by a pledge of options to purchase shares in GGS Management,
Inc. The loan to Douglas H. Symons dated October 15, 1998, bears interest at the
rate of 7.25%. The proceeds of this loan were used to help facilitate the
exercise of options to purchase stock of the Corporation. This loan was repaid
in April, 1999. The advances made to Douglas H. Symons throughout 1998 were used
to pay interest on a loan from an unrelated third party which was undertaken to
enable him to acquire stock of SIG at the time of its IPO. This loan was repaid
in April, 1999. In October, 1998, an affiliate of the Corporation advanced
$600,000 to Douglas H. Symons on an interest-free basis. The outstanding balance
of this advance was $300,000 at December 31, 1998 and was entirely repaid in
January, 1999.
On October 24, 1997, SIG guaranteed a loan from an unrelated third
party to Dennis G. Daggett, the President of the Corporation subsidiary, IGF
Insurance Company. The $290,000 loan is due February 10, 2001 and carries a
7.75% interest rate.
In April, 1999, the Corporation guaranteed loans from an unrelated
third party to Alan G. Symons and Douglas H. Symons in the approximate amounts
of $1,552,000 and $945,000, respectively. The Corporation's guarantee to the
unrelated third party is secured by a pledge of certain shares of stock of SIG
owned by the Corporation. In turn, Alan G. Symons and Douglas H. Symons have
executed guarantees in favor of the Corporation which are triggered in the event
the Corporation shall perform on its guarantee to such unrelated third party.
The guarantees by Alan and Douglas Symons are secured by all shares of SIG and
the Corporation and options to purchase shares of SIG and the Corporation held
respectively by Alan and Douglas Symons.
Executive Compensation
The aggregate cash compensation paid by the Corporation and its
subsidiaries to the Corporation's five most highly paid executive officers, (the
"Executive Officers"), (including officers of its subsidiaries) including
salaries, fees, commissions and bonuses, during 1998 was $1,691,374 (U.S.). The
aggregate value of compensation, other than that referred to above, paid to
executive officers during 1998 does not exceed $10,000 times the number of
Executive Officers.
8
<PAGE>
Table 1 sets forth certain compensation information, paid by the
Corporation and its subsidiaries, to the Corporation's Chief Executive Officer
and each of the Corporation's other Executive Officers during the Corporation's
three most recently completed fiscal years.
TABLE 1: SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-term
Annual Compensation Awards
Securities
Under
Salary Bonus Other Annual Options All Other
Name and US $ US $ Compensation Granted Compensation
Principal Position Year Note A Note A US$ Note B (#) Note C US$
<S> <C> <C> <C> <C> <C> <C>
G. Gordon 1998 $0 $0 Nil 34,000 $600,000 H
Symons, Chairman 1997 $0 $0 Nil 166,651 $440,000 H
1996 $171,000 $393,945 Nil 51,524 $170,799 E
Alan G. Symons 1998 $400,000 F $0 I Nil 217,920 Note B
CEO, President 1997 $378,230 $300,000 G Nil 9,650 Note B
and Secretary 1996 $242,786 $143,333 Nil 51,399 Note B
Douglas H. Symons 1998 $300,000 K $0 J Nil 20,000 Note B
Vice President and 1997 $200,000 $200,000 G Nil 9,650 Note B
COO 1996 $195,973 $50,000 Nil 54,333 Note B
Dennis G. Daggett 1998 $186,923 K $0 Nil 12,000 Note B
President, IGF 1997 $180,000 K $270,000 K Nil 1,000 Note B
Insurance Company 1996 $174,077 $150,000 Nil 0 N/R
Roger C. Sullivan 1998 $204,451 K $0 Nil 17,000 Note B
Executive Vice 1997 $169,612 K $90,176 K Nil 0 Note B
President, Superior 1996 $118,851 $27,217 Nil 0 N/R
Insurance Company
</TABLE>
N/R Not required.
Note A Salary and bonus are stated in U.S. dollars as the majority of payments
are actually made in U.S. dollars.
Note B Aggregate amounts not greater than the lesser of $50,000 and 10% of the
total of the annual salary and bonus.
Note C No stock appreciation rights (SAR's), restricted shares, or restricted
share units were granted during any of the past three completed
fiscal years. Amounts reflect stock options granted during 1998.
Note D Imputed interest on interest-free stock purchase loan.
Note E Consulting fees paid to companies owned by Mr. G. Gordon Symons
including $52,411 paid to such companies by the Company's 67% owned
subsidiary, Symons International Group, Inc.
Note F Includes $300,000 paid by Symons International Group, Inc.
Note G Includes $200,000 paid by Symons International Group, Inc.
Note H Amount paid by a subsidiary of the Company, Granite ReInsurance Company,
Ltd., a Barbados company to companies owned by Mr. G. Gordon Symons.
Note I Alan Symons received $200,000 from Symons International Group, Inc. in
1998 for bonus earned in 1997. No bonuses have been paid in respect of
1998.
Note J Douglas H. Symons received $82,971 from Symons International Group, Inc.
in 1998 for bonus earned in 1997. No bonuses have been paid in respect
of 1998.
Note K Amount paid by Symons International Group, Inc.
9
<PAGE>
Employee Share Option Plan
The Corporation has a Share Option Plan (the "Option Plan"). The terms,
conditions and limitations of options granted under the Option Plan are
determined by the board of directors of the Corporation with respect to each
option, within certain limitations. The exercise price per share is payable in
full on the date of exercise. Options granted under the Option Plan are not
assignable.
During 1998, options to purchase a total of 305,920 common shares were
granted to executive officers pursuant to the Option Plan.
TABLE 2: OPTION GRANTS DURING 1998
<TABLE>
<CAPTION>
Market Value
of Common
% of Total Shares
Securities Options Underlying
Under Granted to Exercise Options on the
Option Employees Price Date of Grant Expiration
Name Granted (#) 1998 ($/Share) 1 ($/Share) Date
<S> <C> <C> <C> <C> <C>
G. Gordon 33,000 9.1% $41.00 $41.00 Apr 1, 2008
Symons 1,000 .3% $35.00 $35.00 June 16, 2008
Alan G. 63,920 17.6% $40.00 $40.00 Jan 12, 2008
Symons 154,000 42.3% $35.00 $35.00 June 16, 2008
Douglas H. 20,000 5.5% $35.00 $35.00 June 16, 2008
Symons
Dennis G. 2,000 .5% $40.00 $40.00 Jan 12, 2008
Daggett 15,000 4.1% $35.00 $35.00 June 16, 2008
Roger C. 2,000 .5% $40.00 $40.00 Jan 12, 2008
Sullivan 15,000 4.1% $35.00 $35.00 June 16, 2008
</TABLE>
1 In November, 1998, the Goran directors passed resolutions which re-priced all
outstanding options with an exercise price in excess of $14.70 (Cdn.). This
re-pricing is subject to disinterested shareholder approval as described
herein.
10
<PAGE>
TABLE 3: AGGREGATED OPTION EXERCISES DURING 1998 AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Value of
Common Unexercised Unexercised In-
Shares Options The-Money
Acquired Aggregate at FY-End (#) Options ($)
on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable 1
<S> <C> <C> <C> <C> <C> <C>
G. Gordon Symons 31,000 $1,251,780 252,121/34,000 $509,780/30,600
Alan G. Symons 85,344 $830,390 9,650/217,920 $8,685/196,135
Douglas H. Symons 94,855 $1,113,359 9,650/20,000 $8,685/18,000
</TABLE>
1 Based on the TSE Closing Price as of December 31, 1998 of $15.60 (Cdn.) and
assumes approval of Option re-pricing to $14.70.
Composition of the Compensation Committee
During 1998, the Compensation Committee of the board of directors consisted
of John K. McKeating (Committee Chair), J. Ross Schofield and Douglas H. Symons.
Mr. Douglas H. Symons was the Corporation's Vice President and Chief Operating
Officer throughout 1998. The role of the Compensation Committee is to review the
total compensation of the Corporation's executive officers in an effort to
ensure that the Corporation attracts and retains the talent commensurate with
its business objectives.
Report On Executive Compensation
The Corporation's Executive Compensation Policy (the "Policy")
considers an individual's experience, market conditions (including industry
surveys), individual performance and overall financial performance of the
Corporation. The Corporation's total compensation program for officers includes
base salaries, bonuses and the grant of stock options pursuant to the Option
Plan. The Corporation's primary objective is to achieve above-average
performance by providing the opportunity to earn above-average total
compensation (base salary, bonus, and value derived from stock options) for
above-average performance. Each element of total compensation is designed to
work in concert. The total program is designed to attract, motivate, reward and
retain the management talent required to serve shareholder, customer and
employee interests. The Corporation believes that this program also motivates
the Corporation's officers to acquire and retain appropriate levels of share
ownership. It is the opinion of the Compensation Committee that the total
compensation earned by the Corporation's officers during 1998 achieves these
objectives and is fair and reasonable.
11
<PAGE>
Compensation is comprised of base salary, annual cash incentive (bonus)
opportunities, and long-term incentive opportunities in the form of stock
options. Individual performance is determined in relation to short and long-term
objectives that are established and maintained on an on-going basis. Performance
of these objectives is formally reviewed annually and base salary adjusted as a
result. Bonus rewards are provided upon the attainment of corporate financial
performance objectives as well as the individual's direct responsibilities and
their attainment of budget and other objectives.
The Policy also strives to establish long-term incentives to executive
officers by aligning their interests with those of the Corporation's
shareholders through award opportunities that can result in the ownership of the
Corporation's common shares.
12
<PAGE>
Comparison of 5 Year Cumulative Total Return*
Between Goran Capital Inc. and the TSE 300 Index
Bar graph
Goran Cap Inc (GNCNF)
<TABLE>
<CAPTION>
12/93 12/94 12/95 12/96 12/97 12/98
<S> <C> <C> <C> <C> <C> <C>
GORAN CAPITAL INC. 100 157 253 585 896 332
TSE 300 100 100 114 147 169 166
</TABLE>
13
<PAGE>
Appointment of Auditor
Unless otherwise instructed, the persons named in the enclosed form of
proxy intend to vote for the appointment of Schwartz Levitsky Feldman, Chartered
Accountants, as auditor of the Corporation to hold office until the next annual
meeting of shareholders. Schwartz Levitsky Feldman was first appointed auditor
of the Corporation in 1990.
Statement of Corporate Governance Practices
In February, 1995 the Toronto Stock Exchange ("TSE") announced that all
companies with a year-end on or after June 30, 1995 would be required to
describe their practices of corporate governance with reference to TSE
Guidelines previously published. Goran conforms with the majority of these
Guidelines except as noted below:
"Corporate Governance" is the process and structure used to direct and
manage the business and affairs of the Corporation to achieve shareholders'
objectives. The shareholders of the Corporation elect the directors who, in
turn, are responsible for overseeing all aspects of the operation of the
Corporation, appointing management and ensuring that the business is managed
properly, taking into account the interests of the shareholders.
The Guidelines suggest that the chairman of the board of directors not
be a member of management and state that members of the board's nominating
committee should be exclusively non-management directors. In this respect, the
Corporation does not comply. The Corporation currently does not have a
nominating or corporate governance committee. Further, the knowledge and
experience of G. Gordon Symons, the founder of the Corporation and its current
chairman, are very important to the Corporation and the board. Further, it is
believed that the best interests of the Corporation's shareholders, the
Corporation and the board would not be properly served with either Mr. Symons
relinquishing his management function or the board appointing a different
chairman. The board of the Corporation is currently comprised of seven members,
four of whom are "unrelated" within the meaning of the Guidelines and this
majority of unrelated directors allows the board the independence of management
which is a fundamental cornerstone of the TSE Guidelines.
Another Guideline states that position descriptions should be developed
for the board and for the chief executive officer which delineate and define
management's responsibilities. The segregation of duties and responsibilities
between the board and its chief executive officer have been traditionally
understood but have not been formalized.
The Corporation has a significant shareholder and the percentage of
shares held by individuals or entities who are not directly or indirectly
related to the Corporation's significant shareholder is approximately 50%. Yet,
the Corporation has a majority of its directors who are unrelated directors. The
number of such directors more than fairly reflects the investment in the
Corporation by shareholders other than the significant shareholder and those
persons or entities directly or indirectly related to the significant
shareholder. Therefore, the unrelated directors (and the board as a whole) are
in a position to fairly represent minority shareholders.
14
<PAGE>
Mandate Of The Board
The responsibility of the Corporation's board of directors is to
oversee the conduct of the Corporation's business and to supervise management.
The board discharges its responsibilities either directly or through its
committees. The board met five times during 1998 and also acted through the
medium of unanimous written consent.
The board has three committees. All of these committees (except the
executive committee) have a majority of members who are unrelated directors.
During 1998, the audit committee comprised Alan G. Symons, David B.
Shapira, and James G. Torrance. Its principal responsibilities are to review
annual audited financial statements prior to submission to the board for
approval, review the nature and scope of the annual audit, evaluate auditors'
performance, review fees and make recommendations as to the appointment of
auditors for the ensuing year and review the adequacy of internal accounting
control procedures and systems.
During 1998, the compensation committee comprised Douglas H. Symons, J.
Ross Schofield and John K. McKeating. Mr. McKeating served as Committee Chair.
The committee's role is to review the performance of the chairman and chief
executive officer as regards compensation, determine compensation practices for
the officers of the Corporation, periodically review the Corporation's
long-range plans and policies for recruiting, developing and motivating
personnel, and to make recommendations to the board concerning stock option
grants.
Decisions Requiring Prior Approval Of The Board
In general, the management of the Corporation is empowered to run the
business on a day-to-day basis. The board approves the annual business and
strategic plan and reviews performance against those plans on an interim basis
throughout the year. Any action leading to a material change in the nature of
the business of the Corporation, including any acquisition or disposition of a
significant operating unit, must be approved by the directors. The directors
must also approve key borrowing and financing decisions. The board also appoints
the officers of the Corporation, determines directors' compensation and declares
dividends (if any).
Recruitment Of New Directors
Currently, if vacancies should occur on the board, the board seeks and
receives input from individual board members and reviews the qualifications of
prospective members while taking into consideration current board composition
and the Corporation's needs.
Measures For Receiving Shareholder Feedback
The board has requested management to make it aware, on an on-going
basis, of any significant shareholder concerns which are communicated to
management.
15
<PAGE>
The Board's Expectation Of Management
The board expects management to operate the Corporation in accordance
with prudent business practices and the direction of the board. The goal of
management, the Corporation and the board is to protect and enhance shareholder
value while managing the Corporation in a prudent manner as a fiduciary for the
Corporation's shareholders. Management is expected to provide regular financial
and operating reports to the board and to make the board aware of all important
issues and major business developments, especially those which have not been
anticipated. Consistent with its previously enunciated goal, management is
expected to seek out opportunities for business acquisitions and expansion and
to forward appropriate recommendations to the board for its action.
Directors and Officers Liability Insurance
The Corporation has purchased Directors and Officers Liability
insurance from The Chubb Insurance Company of Canada (policy # 7022 9536). This
coverage expires on October 27, 2000 and contains a limit of liability of $20
million.
Directors' Approval
The contents of this information circular and the sending thereof have
been approved by the board of directors of the Corporation.
April 13, 1999
Alan G. Symons
President and CEO
16
<PAGE>
APPENDIX I
Options subject to Re-Pricing, with Original Exercise Price:
100,301 @ $16.50
180,494 @ $29.00
7,861 @ $39.00
74,970 @ $40.00
33,000 @ $41.00
256,000 @ $35.00
-------
652,626
17
<PAGE>
