GORAN CAPITAL INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting (the "Meeting") of the
Shareholders of Goran Capital Inc. (the "Corporation") will be held at 2 Eva
Road, Suite 201, Toronto, Ontario, Canada on Tuesday, May 30, 2000, 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, 1999, and
the report of the auditors thereon;
2. To elect directors;
3. To appoint auditors and to authorize the directors to fix the
auditors' remuneration;
4. 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 26th day of April, 2000.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ AGS
ALAN G. SYMONS
Chief Executive Officer
and President
<PAGE>
Goran Capital Inc.
2 Eva Road, Suite 200
Toronto, Ontario, Canada
M9C 2A8
April 26, 2000
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, Proxy Department, Unit 6, P.O. Box 12005 Station BRM B,
Toronto, Ontario, Canada M7Y 2K5.
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 Meeting (the "Meeting") of Shareholders of
the Corporation to be held Tuesday, May 30, 2000, 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.
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.
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.
<PAGE>
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 20,
2000, each of which carries one vote.
The Corporation has fixed April 26, 2000 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 or senior officers of the
Corporation, the following are the only persons who beneficially own, directly
or indirectly, or exercise control or direction over more than 10% of the
outstanding common shares of the Corporation:
<TABLE>
<CAPTION>
Number of Common Shares Percentage of Outstanding
Name Beneficially Owned, Common Shares
Controlled or Directed1
<S> <C> <C>
Symons International Group 1,646,413 28.0%
Ltd.2
G. Gordon Symons 479,111 8.2%
Alan G. Symons 558,9653 9.5%
Douglas H. Symons 251,455 4.3%
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 April 20, 2000 and does not reflect shares under option.
2 Mr. G. Gordon Symons is the controlling shareholder and Chairman of the Board of Symons International Group Ltd., a private
company ("SIGL").
3 Includes 378,115 shares owned by a trust over which Alan G. Symons exercises
limited direction.
</TABLE>
<PAGE>
Particulars of Matters to be Acted Upon
At the Meeting, shareholders will be asked to elect directors, to
appoint auditors, to authorize the directors to fix the auditors' remuneration
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 six 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.
<TABLE>
<CAPTION>
Number of Common Number of Shares
Year First Shares of the of Symons
Became Corporation International
Name and Principal Occupation Position in the Director Beneficially Group, Inc.
Corporation Owned1 Beneficially
Owned1
<S> <C> <C> <C> <C>
G. Gordon Symons2 Chairman of the 1986 2,125,5245 10,000
Chairman of the Board, Goran Capital Inc. Board
and Symons International Group, Inc.
Alan G. Symons2,3 CEO and President 1992 558,9656 60,591
CEO and President, Goran Capital Inc.;
Deputy Chairman, Symons International Group,
Inc.
Douglas H. Symons2,4 COO, Vice 1989 251,455 28,500
COO, Goran Capital Inc.; CEO, Symons President and
International Group, Inc. Secretary
J. Ross Schofield3,4 Director 1992 3,800 1,000
President, Scaffold Insurance Brokers
David B. Shapira3 Director 1989 100,000 1,000
President, Medbers Limited
John K. McKeating4 Director 1995 2,000 2,000
Retired, Former President, Vision 2120, Inc.
1Information as to the shareholdings of each nominee has been provided by the nominee and does not reflect shares under
option.
2Member of Executive Committee.
3Member of Audit Committee.
4Member of the Compensation Committee
5Includes 1,646,413 shares owned by SIGL.
6Includes 378,115 shares owned by a trust over which Alan G. Symons exercises limited direction.
</TABLE>
Each of the foregoing nominees has held the principal occupation
indicated above during the past five years.
Directors' and Officers' Remuneration
The aggregate remuneration paid by the Corporation and its subsidiaries
to the Executive Officers, as defined herein, during the year ended December 31,
1999 was (U.S.) $1,596,623 all in the form of salary, bonus and consulting fees.
In 1999, the Corporation's directors received (i) a flat annual fee of
$10,000 for each director and (ii) a $1,500 fee for each board or committee
meeting attended. In addition, Committee Chairmen received an additional $2,500
per quarter.
Interest of Insiders in Material Transactions
As of December 31, 1999, Symons International Group, Ltd., a private
company ("SIGL"), was indebted to the Corporation in the amount of approximately
$1,400,000. This indebtedness does not bear interest. G. Gordon Symons is the
majority shareholder of SIGL, and Alan G. Symons and Douglas H. Symons own a
minority interest in SIGL.
The Corporation paid $3,206,222 in 1999, for consulting and other services
related to the conversion to the Corporation's nonstandard automobile operating
system. Approximately 90% of these payments were for services provided by
consultants and vendors unrelated to the Corporation. Stargate Solutions Group,
Inc. ("Stargate"), the shares of which are owned by Kirk Symons, son of G.
Gordon Symons and brother of Alan G. Symons and Douglas H. Symons, managed the
work of each of the unrelated consultants and vendors and, as compensation for
such work, retained approximately 10% of the payments referred to above in
return for management services provided. During part of 1999, Stargate
Solutions, Inc. (a subsidiary of Stargate) was owned beneficially by Kirk Symons
and G. Gordon Symons. As of May, 1999, Stargate Solutions, Inc. was owned 100%
by Stargate.
Superior Insurance Group, Inc., a wholly owned subsidiary of the
Corporation, acquired a less than 1% limited partnership interest in Monument
Capital Partners I during 1999. The amount of the investment was $100,000. Larry
S. Wechter, a director of Symons International Group, Inc., a subsidiary of the
Corporation ("SIG"), as of January 19, 2000, is Managing Director and Chief
Executive Officer of Monument Advisers, Inc. and Alan G. Symons, a director of
the Corporation, is a director of Monument Advisers, Inc. Monument Advisers,
Inc. is the general partner of Monument Capital Partners I.
<PAGE>
<TABLE>
<CAPTION>
Indebtedness of Officers and Directors of the Corporation
The following directors and officers of the Corporation and their
associates were indebted to the Corporation, or its subsidiaries, in amounts
exceeding (Cdn.) $25,000 during 1999. All amounts listed in this section are
denominated in U.S. Dollars.
Largest Loan Balance During
Name and Principal Position Date of Loan 1999 Present Balance
<S> <C> <C> <C> <C>
G. Gordon Symons Chairman of June 27, 1986 $115,8071 $115,807
the Board June 30, 1986 $156,4951 $156,495
Alan G. Symons June 30, 1986 $6,6172 $-0-
CEO and President February 25, 1988 $27,3092 $27,309
March 19, 1998 $887,4443 $-0-
October 15, 1998 $562,4134 $-0-
January 16, 1998 $102,0515 $-0-
October 28, 1999 $100,0006 $100,000
Douglas H. Symons June 30, 1986 $15,0007 $9,798
COO, Vice President and February 25, 1988 $2,2197 $2,219
Secretary November 1, 1990 $68,0508 $-0-
April 20, 1998 $260,3589 $-0-
October 15, 1998 $594,51710 $-0-
February 27, 1998 $22,53311 $-0-
April 14, 1999 $35,00012 $-0-
September 29, 1999 $100,00013 $100,000
October 20, 1999 $350,00014 $350,000
</TABLE>
1 The loans by the Corporation to G. Gordon Symons in 1986 and 1988
were made to facilitate the purchase of 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.
2 The loans by the Corporation to Alan G. Symons in 1986 and 1988 were
made to facilitate the purchase of common shares of the Corporation. The 1988
loan is collateralized by a pledge of the common shares of the Corporation
acquired and is payable on demand and is interest free. The 1986 loan was repaid
in April,1999.
3 The loan by the Corporation to Alan G. Symons on March 19, 1998 was
made to satisfy obligations to third parties. Such loan was secured by a
pledge of his options to purchase shares in Superior Insurance Group Management,
Inc. (formerly, GGS Management Holdings, Inc.), a subsidiary of the Corporation,
and bore interest at the rate of 5.85% per year. This loan was repaid in April,
1999.
4 The loan by the Corporation to Alan G. Symons on October 15, 1998 was
made to facilitate the exercise of options to purchase common shares of the
Corporation. Such loan was unsecured and bore interest at the rate of 7.25% per
year. This loan was repaid in April, 1999.
5 The advances by SIG to Alan G. Symons beginning January 16, 1998 were
primarily made to facilitate the payment of interest on a loan from an unrelated
third party relating to the purchase of shares of SIG at the time of its initial
public offering ("IPO") in 1996. Such advances were unsecured, bore no interest
and were repaid in April, 1999.
6 The loan by the Corporation to Alan G. Symons on October 28, 1999 was
made to pay third party indebtedness secured by common shares of the Corporation
and SIG. Such loan is unsecured and bears interest at the rate of 6.5% per year
and is payable on demand.
7 The loans by the Corporation to Douglas H. Symons in 1986 and 1988
were made to facilitate the purchase of common shares of the Corporation. Such
loans are collateralized by pledges of the common shares of the Corporation
acquired, are payable on demand and are interest free.
8 The loan by the Corporation to Douglas H. Symons on November 1, 1990
was made to facilitate the purchase of a primary residence. Such loan was
unsecured and bore interest at the rate of prime plus 1% per year. This loan was
repaid in April, 1999.
9 The loan by the Corporation to Douglas H. Symons on April 20, 1998
was made to facilitate the exercise of options to purchase common shares of the
Corporation. Such loan was secured by a pledge of his options to purchase shares
in Superior Insurance Group Management, Inc. and bore interest at the rate of
5.85% per year. This loan was repaid in April, 1999.
10 The loan by the Corporation to Douglas H. Symons on October 15, 1998
was made to facilitate the exercise of options to purchase common shares of the
Corporation. Such loan was unsecured and bore interest at the rate of 7.25% per
year. This loan was repaid in April, 1999.
11 The advances by SIG to Douglas H. Symons beginning February 27, 1998
were primarily made to facilitate the payment of interest on a loan from an
unrelated third party relating to the purchase of shares of SIG at the time of
its IPO in 1996. Such advances were unsecured and bore no interest. These
advances were repaid in April, 1999.
12 The advances to Douglas H. Symons by SIG beginning April 14, 1999
were primarily made for personal expenses of Douglas H. Symons. Such advances
were unsecured and bore no interest. These advances were repaid prior to
December 31, 1999.
13 The loan by SIG to Douglas H. Symons on September 29, 1999 was made
to satisfy indebtedness to third parties. Such loan is unsecured, bears interest
at the rate of 6.5% per year and is payable on demand.
14 The loan by the Corporation to Douglas H. Symons on October 20, 1999
was made to satisfy indebtedness to third parties. Such loan is unsecured, bears
interest at the rate of 6.5% per year and is due on October 20, 2000.
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 SIG owned by
the Corporation. In turn, Alan G. Symons and Douglas H. Symons have executed
guarantees in favour of the Corporation which are triggered in the event that
the Corporation is required to perform its guarantee to such unrelated third
party. The guarantees by Alan G. Symons and Douglas H. Symons are secured by all
shares of SIG and the Corporation held respectively by Alan G. Symons and
Douglas H. Symons.
On October 24, 1997, SIG guaranteed a loan from an unrelated third
party to Dennis G. Daggett, President of IGF Insurance Company, a subsidiary of
the Corporation. The loan is in the amount of $290,000, is due on February 10,
2001 and bears interest at the rate of 7.75% per year.
<PAGE>
Executive Compensation
The aggregate cash compensation paid by the Corporation and its
subsidiaries during 1999 to the Corporation's five most highly paid executive
officers (the "Executive Officers"), (including officers of its subsidiaries)
including salaries, fees, commissions and bonuses was (U.S.) $1,596,623. The
aggregate value of compensation, other than that referred to above, paid to
Executive Officers during 1999 does not exceed (Cdn.) $10,000 times the number
of Executive Officers.
Table 1 sets forth compensation 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-
Annual Term
Compensation Awards
Number
Other Annual SecuritiesUnder
Compensation Options All Other
Name and Salary Bonus US $B GrantedC Compensation
Principal Position Year US $A US $A US $ A
<S> <C> <C> <C> <C> <C> <C>
G. Gordon 1999 $-0- $-0- Nil 0 $400,000D
Symons, Chairman 1998 $-0- $-0- Nil 34,000 $600,000D
1997 $-0- $-0- Nil 166,651 $440,000D
Alan G. Symons 1999 $254,032E $-0- Nil 0 $145,968F
CEO and President 1998 $300,000E $-0- Nil 217,920 $100,000G
1997 $278,230E $200,000E Nil 9,650 $100,000G
Douglas H. Symons 1999 $375,000E $-0- Nil 0 Note B
Vice President, 1998 $300,000E $-0- Nil 20,000 Note B
COO and Secretary 1997 $200,000E $82,971E Nil 9,650 Note B
Dennis G. Daggett 1999 $189,000E $-0- Nil 0 Note B
President, IGF 1998 $198,489E $270,000E Nil 12,000 Note B
Insurance Company 1997 $195,618E $150,000E Nil 1,000 Note B
Roger C. Sullivan 1999 $232,623E $-0- Nil 0 Note B
Executive Vice President, 1998 $204,451E $-0- Nil 17,000 Note B
Superior Insurance Company 1997 $169,612E $169,612E Nil -0- Note B
</TABLE>
Note A Salary, bonus and other compensation are stated in U.S. dollars
as the majority of payments are actually made in U.S. dollars.
Note B Aggregate amounts are not greater than the lesser of $50,000
and 10% of the total of the annual salary and bonus.
Note C No stock appreciation rights (SAR's), restricted shares, or
restricted share units were granted during any of the past three
completed fiscal years. Amounts reflect stock options granted during
1998 and 1997. No stock options were granted during 1999.
Note D Amount paid by a subsidiary of the Company, Granite Reinsurance
Company, Ltd., a Barbados company, to companies owned by Mr. G.
Gordon Symons.
Note E Amount paid by the Corporation or its subsidiaries.
Note F Consulting fee paid to SIG Capital Fund, Ltd. Note G Consulting fee.
Employee Share Option Plan
The Corporation has a Share Option Plan (the "Option Plan"). The terms,
conditions and limitations of options granted under the Option Plan are
determined by the board of directors of the Corporation with respect to each
option, within certain limitations. The exercise price per share is payable in
full on the date of exercise. Options granted under the Option Plan are not
assignable. During 1999, there were no grants of options to purchase common
shares of the corporation pursuant to the Option Plan.
TABLE 2: AGGREGATED OPTION EXERCISES DURING 1999 AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Unexercised Value Of
Common Options Unexercised In-
Shares Aggregate at FY-End The-Money
Acquired Value Exercisable/ Options ($)
Name On Realized Unexercisable Exercisable/
Exercise Unexercisable1
<S> <C> <C> <C> <C> <C>
G. Gordon Symons 0 0 208,121/0 0/0
Alan G. Symons 0 0 227,570/0 0/0
Douglas H. Symons 0 0 29,650/0 0/0
1 Based on the TSE Closing Price as of December 30, 1999 of $3.00 (Cdn.).
</TABLE>
Composition of the Compensation Committee
During 1999, the Compensation Committee of the Board of Directors consisted
of John K. McKeating (Committee Chair), J. Ross Scaffold and Douglas H. Symons.
Mr. Douglas H. Symons was the Corporation's Vice President and Chief Operating
Officer throughout 1999 and was elected Secretary in November, 1999.
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 the 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 1999 achieves these
objectives and is fair and reasonable.
Compensation comprises 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.
The compensation of Alan G. Symons, Chief Executive Officer of the
Corporation, consisted of the same elements as the other senior executives,
namely base salary and stock options. In 1997, the Committee reviewed and
approved Alan G. Symons' employment agreement with Superior Insurance Group
Management, Inc., a subsidiary of the Corporation. This agreement remained in
effect through October, 1999. In November, 1999, the Corporation entered into an
arrangement with SIG Capital Fund, Ltd. for the payment of a consulting fee to
SIG Capital Fund, Ltd. with respect to the provision of services by Alan G.
Symons. During 1999, the Committee did not approve the grant of stock options or
bonuses.
COMPENSATION COMMITTEE
John K. McKeating, Chair
J. Ross Scaffold
Douglas H. Symons
Appointment of Auditors
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 auditors of the Corporation to hold office until the next annual
meeting of shareholders. Schwartz Levitsky Feldman were first appointed auditors
of the Corporation in 1990.
Statement of Corporate Governance Practices
The Board of Directors and management of the Corporation believes that
sound corporate governance practices are essential to the performance of the
Corporation. The Corporation's practices and policies have been developed over
many years. They are addressed here generally and within the framework of the
guidelines for effective corporate governance adopted by The Toronto Stock
Exchange (the "Guidelines").
<PAGE>
Board of Directors
The Board of Directors is elected by the shareholders and oversees the
conduct of the business and affairs of the Corporation, supervises its
management and ensures that all major issues affecting the Corporation are given
appropriate consideration. In fulfilling its responsibilities the Board
delegates day-to-day authorities to management, while reserving the ability to
review management decisions and to exercise final judgment on any matter. The
Board discharges its responsibilities directly and through its committees.
The directors are kept informed of the Corporation's operations at
meetings of the Board and its Committees and through discussions with
management. In addition to its primary roles of overseeing the Corporation's
performance and providing quality, depth and continuity for management to meet
the Corporation's objectives, the Board of Directors, among other things:
o reviews the development and implementation of business and strategic plans
and approves business, strategic, financial and succession plans;
o approves communications to shareholders;
o oversees financial programs and policies;
o appoints officers and reviews their performance at least annually;
o approves items such as the issue, purchase and redemption of securities,
acquisition and disposition of significant capital assets, executive
officer compensation, employee benefits, including profit sharing and
incentive award plans and dividends, if any; and
o approves changes in the by-laws of the Corporation and submits them to
shareholders for approval.
In order to carry out its responsibilities the Board of Directors meets
on a regularly scheduled basis and otherwise as required by circumstances. The
Board met six times during 1999 and took a number of actions by unanimous
written consent.
The Chairman of the Board is responsible for the functioning of the
Board including, among other things, setting the agenda for each Board meeting,
ensuring that directors are kept informed of appropriate corporate matters,
chairing the meetings and acting as a key liaison between the Board and
executive management.
Committees of the Board of Directors
The Board of Directors has established three standing committees and
has delegated certain functions to each of the Committees.
Executive Committee
The Executive Committee communicates regularly with executive management of
the Corporation. The Executive Committee reviews and approves communications
with shareholders and adds significant direction to the function of executive
management on significant issues affecting the Corporation. This Committee is
composed of G. Gordon Symons, Alan G. Symons and Douglas H. Symons.
<PAGE>
Audit Committee
This Committee meets with the financial officers of the Corporation and
the external auditors, among other things, to review and recommend presentation
to the Board of Directors of the Corporation's annual and interim consolidated
financial statements, to review disclosure documents, to monitor the adequacy of
the Corporation's internal control systems and its risks in financial and other
matters. This Committee meets with the external auditors to review the intended
audit scope, areas of special emphasis and to confirm that no management
restrictions are placed on the scope and nature of planned audits and to discuss
the results of their audit, their opinion on internal accounting controls and
the quality of financial reporting. In 1999, this Committee met twice. It is
composed of Alan G. Symons, J. Ross Scaffold and David B. Shapira.
Compensation Committee
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. In 1999, this Committee met twice. See "Composition of Compensation
Committee."
TSE Guidelines
The Guidelines require each listed company to disclose its approach to
corporate governance and, where the Corporation's system is different from the
Guidelines, to explain the differences. The Corporation's corporate governance
is substantially consistent with the objectives set out in the Guidelines. The
approach of the Corporation to matters of corporate governance referred to in
each of the fourteen Guidelines follows.
<PAGE>
The Board should explicitly assume responsibility for stewardship of
the Corporation, and specifically for:
Adoption of Strategic Planning Process.
The objectives of the Chief Executive Officer of the Corporation
include responsibility for the development of strategic plans. The
Board reviews strategic planning matters on a regular basis which
includes the approval of long term strategic plans and annual business
plans and the monitoring of performance against, and continuing
stability of, such plans.
Identification of Principal Risks and Ensuring Implementation of Risk
Management Systems.
Identification of the Corporation's principal business risks is the
responsibility of the Corporation's management. Management's plans for
risk management are subject to review by the Board.
<PAGE>
Succession Planning and Monitoring Senior Management.
The Executive Committee reviews and reports at least annually to the
Board on organizational and succession planning matters. The Chief
Executive Officer has responsibility for succession planning for senior
management and monitoring the performance of executive management.
Communications Policy.
To ensure that the rules of timely disclosure are observed, management
has put in place structures for effective communication between the
Corporation, its shareholders and the public, including having the CEO
responsible for advising on and reviewing disclosure documents and
recommending timely disclosure of material transactions and changes.
Integrity of Internal Control and Management Information Systems.
Systems and Controls. The Audit Committee reviews the Corporation's
systems and controls principally by monitoring planning and staffing of
the internal audit function and reporting and by reviewing the external
auditors' annual letter of comments on these items and management's
responses thereto.
Occupational Health and Safety and Environmental. The Corporation's
business activities do not typically involve occupational health and
safety matters or environmental issues. Should a health and safety or
environmental issue arise, executive management implements corrective
and preventative measures and reports its activities in that regard to
the Board.
Human Resources Matters. In addition to the role of the Compensation
Committee, the Executive Committee reviews and monitors the
Corporation's policies and activities in human resources and related
employment matters to ensure excellent relations with employees of the
Corporation and compliance with applicable laws.
Information Systems. As part of the ongoing planning processes of the
Corporation, executive management regularly informs the Board of the
development and status of the Corporation's management information
systems.
<PAGE>
Majority of directors should be "unrelated" (independent of management and free
from conflicting interests).
The Board of Directors is composed of six members. The current
composition of the Board does not include a majority of
directors who are unrelated to the Corporation. However, the
Board believes that the number of directors who do not have
interests in or relationships with the Corporation provides for
fair representation of shareholders who have invested in the
Corporation.
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%. The number of such unrelated
directors fairly reflects the investment in the Corporation by
shareholders other than the significant shareholder and those
persons or entities directly or indirectly unrelated to the
significant shareholder. Therefore, the unrelated directors (and
the Board as a whole) are in a position to fairly represent
minority shareholders.
Disclosure for each director whether he or she is related, and how that
conclusion is reached.
Mr. Gordon Symons is the Chairman of the Board and a controlling
shareholder; therefore, he is related to the Corporation.
Messrs. Alan G. Symons and Douglas H. Symons are the Chief
Executive Officer and Chief Operating Officer, respectively and
are therefore related to the Corporation.
None of the remaining directors, being one half of the Board
members, is related by reason of having worked for the
Corporation, having material contracts with the Corporation or
having received remuneration from the Corporation in excess of
directors' fees. None of the directors has any interest or any
business or other relationship with G. Gordon Symons, Alan G.
Symons or Douglas H. Symons which could, or could reasonably be
perceived to, materially interfere with his ability to act with
a view to the best interests of the Corporation, and as such,
none of the directors is related to G. Gordon Symons, Alan G.
Symons or Douglas H. Symons.
Appoint a committee responsible for the appointment/assessment of directors
composed exclusively of outside directors, a majority of whom are unrelated.
The Board of Directors recommends candidates for the Board. The
Board reviews the qualifications of prospective members in
consideration of current Board compositions and the
Corporation's needs. The Board does not have in place assessment
procedures for Board and director performance.
Implement a process for assessing the effectiveness of the Board, its committees
and individual directors.
Although the Board does not have a formal process to address the
effectiveness of the Board, its committees and individual
directors as recommended by the Guidelines, the Board believes
it carries on its duties and responsibilities effectively and in
the best interests of the shareholders.
Provide orientation and educational programs for new directors.
The current members of the Board of Directors have had a
longstanding relationship with the Corporation and as such this
Guideline has not been pertinent. However, in the event of an
election to the Board of new directors, the Board would
undertake to summarize and document the Corporation's business,
affairs and governance and provide to new directors orientation
through meetings with officers and other Board members on an
informal basis.
Consider reducing the size of the Board, with a view to improving effectiveness.
The Board believes that the current number of directors promotes
effectiveness and efficiency and is appropriate in the
circumstances. The Board does not believe it should have fewer
than the current number of directors.
Review compensation of directors in light of risks and responsibilities.
The Compensation Committee reviews and recommends to the Board
of Directors for approval the remuneration of directors. The
Board considers the time commitment, comparative remuneration,
responsibilities and other factors in determining remuneration.
Committees should generally be composed of outside directors and a majority of
Committee members should be unrelated.
A majority of the members of the Audit Committee and
Compensation Committee are composed of outside directors. The
Executive Committee is composed of non-outside, related
directors.
Appoint a committee responsible for approach to corporate governance issues.
Although the Board of Directors has not established a separate
corporate governance committee, the Executive Committee, is,
among other things, responsible for making recommendations to
the Board of Directors regarding the Corporation's approach to
corporate governance and for the Corporation's disclosure of
such approach.
Define limits to management's responsibilities by developing mandates for the
Board and the Chief Executive Officer; the Board should approve the Chief
Executive Officer's corporate objectives.
The Board of Directors has the authority to manage or supervise
the management of the Corporation's business as more fully
described under the heading "Board of Directors" above. Certain
roles are delegated to management or a Board Committee subject
to review by the full Board. Although the Chief Executive
Officer's corporate objectives are not formally set out, the
Board of Directors oversees the performance of the Chief
Executive Officer with a view toward compliance with the overall
objectives of the Corporation.
Establish structures and procedures to enable the Board to function
independently of management.
The Board of Directors has the prerogative of meeting
independently of management. The Committees of the Board
function independently of management when appropriate. The
Chairman of the Board, who is not a member of management has
responsibility to ensure that the Board of Directors discharges
its responsibilities.
Establish an audit committee with a specifically defined mandate, all members of
which should be outside directors.
A majority of the Audit Committee is composed of outside
directors and has a specifically defined mandate as discussed
under the heading "Audit Committee" above, including among other
things to, monitor audit functions, review preparation of
financial statements, recommend presentation of the annual
financial statements and meet with external auditors
independently of management.
Implement a system to enable individual directors to engage outside advisors at
the Corporation's expense.
Consistent with past practice individual directors may engage
outside advisors at the Corporation's expense with the
authorization of the Board.
Directors' and Officers' Liability Insurance
The Corporation has purchased directors and officers liability insurance
from The Chubb Insurance Company of Canada. This coverage expires on October 27,
2000 and contains a limit of liability of (Cdn.) $20 million. A premium of
(Cdn.) $311,850 was paid in 1997 for three years' coverage. There is no
deductible for coverage other than executive indemnification for which the
deductible is (Cdn.) $100,000.
<PAGE>
Performance Graph
The following performance graph compares the cumulative total
shareholder return on the Corporation's common stock with the TSE 300 for the
years 1995 through 1999.
[graph omitted]
Notwithstanding anything to the contrary set forth in any of the
Corporation's previous filings under the Securities Act of 1993, as amended, or
the Securities Exchange Act of 1934, as amended, that may incorporate future
filings (including this Management Proxy Circular, in whole or in part), the
preceding Report on Executive Compensation and the Historical Performance Graph
shall not be incorporated by reference in any such filings.
Directors' Approval
The contents of this Management Proxy Circular and the sending thereof
have been approved by the Board of Directors of the Corporation.
April 26, 2000
/s/AGS
Alan G. Symons
Chief Executive Officer and President
<PAGE>
GORAN CAPITAL INC.
FORM OF PROXY
PROXY SOLICITED BY MANAGEMENT OF THE CORPORATION FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON TUESDAY, MAY 30, 2000
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 Meeting of the Shareholders of the Corporation (the "Meeting") to be held
at the City of Toronto, Ontario, Canada on Tuesday, May 30, 2000, 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 ORWITHHELD FROM VOTING in the election of directors.
-
2. VOTED FOR ORWITHHELD FROM VOTING in the appointment of the
- -
auditor.
DATED this ______ day of _____________________, 2000.
................................................
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, 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, Proxy Department, Unit 6, P.O. Box
12005 Station BRM B, Toronto, Ontario, Canada M7Y 2K5 or presented in
person at the meeting to be held May 30, 2000, at 2 Eva Road, Suite 200,
Toronto, Ontario, Canada at 10:00 a.m.
