SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. _)
Filed by the Registrant X
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| 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
ICHOR 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):
X No filing fee
|_| 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>
ICHOR Corporation
Suite 1250, 400 Burrard Street
Vancouver, British Columbia
Canada V6C 3A6
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of
ICHOR Corporation:
Notice is hereby given that the Annual Meeting of Shareholders of ICHOR
Corporation (the "Company") will be held at 6 Cours de Rive, Third Floor, CH1211
Geneva, Switzerland at 10:00 a.m., Central Europe Time, July 9, 1998, for the
following purposes:
1. To elect two (2) directors of the Company to hold office until the 2001
Annual Meeting of Shareholders.
2. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on May 21, 1998, as
the record date for the determination of Shareholders entitled to notice of and
to vote at the Annual Meeting.
By Order of the Board of Directors,
/s/ Michael J. Smith
Michael J. Smith
President
May 29, 1998
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE REQUESTED TO COMPLETE,
SIGN, DATE AND RETURN THE PROXY IN THE ENCLOSED ENVELOPE. INSTRUCTIONS FOR THE
PROPER EXECUTION OF PROXIES ARE SET FORTH IN THE PROXY STATEMENT.
<PAGE>
ICHOR Corporation
PROXY STATEMENT
This statement is furnished in connection with the solicitation by the
management of ICHOR Corporation (the "Company") of proxies for use at the Annual
Meeting of Shareholders to be held at 6 Cours de Rive, Third Floor, CH1211
Geneva, Switzerland on July 9, 1998, and any adjournments thereof. If the Proxy
is properly executed and received by the Company prior to the meeting or any
adjournment thereof, the shares of common stock of the Company, par value $.01
per share ("Common Shares"), represented by your Proxy will be voted in the
manner directed. In the absence of voting instructions, the Common Shares will
be voted for the nominees for director. The Proxy may be revoked at any time
prior to its use by filing a written notice of revocation of Proxy or a Proxy
bearing a date later than the date of the Proxy with the Secretary of the
Company, Mr. Roy Zanatta, Suite 1250, 400 Burrard Street, Vancouver, British
Columbia, Canada V6C 3A6, or by attendance at the meeting and voting your Common
Shares in person. If you attend the meeting and have submitted a Proxy, you need
not revoke your Proxy and vote in person unless you elect to do so. The Proxy
Statement and form of Proxy are being mailed to Shareholders commencing on or
about May 29, 1998.
The holders of a majority of the Common Shares outstanding and entitled
to vote at the Annual Meeting must be present in person or represented by Proxy
in order for a quorum to be present. Under applicable law, abstentions and
broker non-votes will be counted for purposes of establishing a quorum, but will
have no effect on the vote for election of directors.
Proxies will be solicited primarily by mail and may also be solicited
personally and by telephone by directors, officers and regular employees of the
Company without additional remuneration therefor. The Company may also reimburse
banks, brokers, custodians, nominees and fiduciaries for their reasonable
charges and expenses in forwarding Proxies and Proxy materials to the beneficial
owners of the Common Shares. All costs of solicitation of Proxies will be borne
by the Company. The Company does not presently intend to employ any other party
to assist in the solicitation process.
The close of business on May 21, 1998, has been fixed as the record
date (the "Record Date") for the determination of Shareholders entitled to
notice of and to vote at the Annual Meeting.
On the Record Date, there were 4,907,520 Common Shares of the Company
issued and outstanding. Each Common Share is entitled to one vote on each of the
matters properly presented at the Annual Meeting. Cumulative voting in the
election of directors is not permitted. Assuming a quorum is present, directors
will be elected by a plurality of votes cast at the meeting.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Shares as of May 8, 1998, by: (i)
all persons known by the Company to own more than five percent of the
outstanding Common Shares; (ii) each of the Company's executive officers and
directors that beneficially owns any Common Shares; and (iii) all executive
officers and directors as a group. The following is based solely on statements
filed with the Securities and Exchange Commission or other information the
Company believes to be reliable.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership(1) Percent of Class
<S> <C> <C>
MFC Bancorp Ltd. 6,951,802(2) 88.1%
6 Rue Charles-Bonnet
1206 Geneva, Switzerland
Michael J. Smith 10,000(3) *
6 Rue Charles-Bonnet
1206 Geneva, Switzerland
Roy Zanatta 10,000(3) *
2 Stratford Place
London, England
United Kingdom, W1N 9AE
John M. Musacchio 120,050(4) 2.4%
507 Lakewood Drive
Monroeville,PA 15146
Leonard Petersen 10,000(3) *
Suite 1270, Granville Street
Vancouver, B.C.
Canada V7Y 1G6
All executive officers and directors 150,050(5) 3.1%
as a group (6 persons)
- -----------------
* Less than 1%.
(1) To the extent set forth in the footnotes below, includes Common Shares
issuable in exchange for the Company's 5% Cumulative Redeemable
Convertible Preferred Shares, Series 1 ("Preferred Shares"). The
conversion price is 90% of the 20-day average closing trading price of
the Common Shares on the stock exchange or quotation system through
which the largest number of Common Shares traded during the period
immediately preceding the date that notice of conversion is delivered
to the Company. For the purposes of this table, the conversion price
and amount of Common Shares underlying the Preferred Shares has been
calculated as of May 8, 1998, based on a conversion price of $1.35 per
Common Share.
(2) Represents 3,970,320 outstanding Common Shares and the 2,981,482
Common Shares into which the 402,500 Preferred Shares beneficially
owned by MFC Bancorp Ltd. ("MFC") were convertible at May 8, 1998. MFC
shares voting and dispositive power over these Common Shares and
Preferred Shares with Logan International Corp. ("Logan"), Drummond
Financial Corporation ("Drummond"), Sutton Park International Ltd.
("Sutton Park") and Constable Investments Ltd. ("Constable") as set
forth below. MFC beneficially owns 71.1% of the voting securities of
Logan, including 60,000 shares of Logan's Series B Preferred Shares
over which MFC shares voting and dispositive control with Drummond.
MFC beneficially owns 47.9% of the outstanding voting securities of
Drummond, comprised of Common Shares of Drummond over which MFC shares
voting and dispositive power with its wholly-owned subsidiary,
Ballinger Corporation, and all of Drummond's Series 1, Preferred
Stock. Sutton Park and Constable are wholly-owned operating companies
of MFC.
Logan owns 2,500,000 Common Shares and 142,500 Preferred Shares, over
which it shares voting and dispositive power with MFC. At May 8, 1998,
the 142,500 Preferred Shares were convertible into 1,055,556 Common
Shares. Drummond owns 1,470,320 Common Shares over which Drummond
shares voting and dispositive power with MFC. Sutton Park owns 175,000
Preferred Shares over which it shares voting and dispositive power
with MFC. At May 8, 1998, the 175,000 Preferred Shares were
convertible into 1,296,296 Common Shares. Constable owns 85,000
Preferred Shares over which it shares voting and dispositive power
with MFC. At May 8, 1998, the 85,000 Preferred Shares were convertible
into 629,630 Common Shares.
(3) Represents Common Shares underlying options exercisable within 60 days.
(4) Includes 120,000 Common Shares underlying options exercisable within
60 days.
(5) Includes 150,000 Common Shares underlying options exercisable within
60 days.
</TABLE>
PROPOSAL 1
ELECTION OF DIRECTORS
The number of directors of the Company is established at six. The votes
of a plurality of the Common Shares present in person or by Proxy at the Annual
Meeting are required to elect the directors.
The Board of Directors is divided into three classes. Pursuant to the
Bylaws of the Company, two (2) directors will serve until the Annual Meeting in
1999, two (2) directors will serve until the Annual Meeting in 2000 and two (2)
directors are to be elected at this Annual Meeting to serve until the Annual
Meeting in 2001.
The nominees, Mr. Michael Smith and Mr. Roy Zanatta, presently serve as
directors and each of them has indicated that he is willing and able to serve as
a director following the Annual Meeting. If either Mr. Smith or Mr. Zanatta is
unable or unwilling to serve, the accompanying proxy may be voted for the
election of such other person as shall be designated by the Board of Directors.
Proxies received by the Company on which no designation is made will be voted
FOR the nominee.
Directors
The following table sets forth information regarding each nominee for
election as a Director and each Director whose term of office will continue
after the Annual Meeting.
<TABLE>
<CAPTION>
Expiration of
Name Current Position with the Company Age Term as a Director
<S> <C> <C> <C>
Michael J. Smith President, Chief Financial Officer,
Treasurer and Director 50 1998
Roy Zanatta Secretary and Director 33 1998
John Musacchio Chief Operating Officer
and Director 50 1999
Young-Soo Ko Director 41 1999
Leonard Petersen Director 44 2000
Jae-Sun Lee Director 71 2000
</TABLE>
Michael J. Smith became a director of the Company during 1996 and
President and Chief Financial Officer of the Company on January 10, 1997. Mr.
Smith is the President, Chief Executive Officer and a director of MFC. He was
Chief Financial Officer of Mercer International Inc. from May 1988 until 1996.
Mr. Smith is Chief Executive Officer, Chief Financial Officer and a director of
Logan and of Drummond.
Roy Zanatta is currently an employee and director of MFC and has been
associated with MFC in various capacities since 1993. Mr. Zanatta joined
Drummond as Secretary in March 1995 and became a Vice-President in May 1995.
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,
Mr. Zanatta was employed as a project manager with the Canadian Standards
Association. Mr. Zanatta earned a B.Sc. Degree in 1987 from the University of
British Columbia and an M.B.A. from McGill University in 1991.
Leonard Petersen has been a director of the Company since 1996. Since
1990, he has served as a director and a senior officer of Pemcorp Management,
Inc. He was a chartered accountant with Davidson & Company from 1987 to 1990.
Mr. Petersen is a director of Logan.
John Musacchio was President of the Company from July 1994 until
January 10, 1997. Mr. Musacchio served as Vice President - Technical Services of
PDG Environmental, Inc. ("PDGE") from November 1992 until July 1994. In this
position he was responsible for PDGE's remediation business. From 1984 until
November 1992, Mr. Musacchio was a partner at Paul C. Rizzo Associates, Inc., an
environmental consulting firm. During that period he served as Director, Senior
Vice President and Chief Operating Officer of that corporation.
Young-Soo Ko became a director of the Company in February 1998. Since
1991, he has been the Managing Director of Sung Sim Services Ltd., and from 1984
until 1991 he was the Manager of Kolon Trading Co., Ltd. of Seoul, Korea, and
Hong Kong. Mr. Ko earned a B.A. Degree in International Commerce in 1984 from
Dankook University in Seoul.
Jae-Sun Lee became a director of the Company in February 1998. Since
1990, he has been the Chairman of EE-Chin Industrial Co. Ltd., Seoul, Korea. He
earned a Masters Degree in Economics in 1962 from Sung Kyun-Kwan Graduate School
in Korea and he graduated in 1960 from the National Defense College in Korea.
During the fiscal year ended December 31, 1997, the Board of Directors
acted on six occasions by unanimous written consent.
Committees of the Board
The Company has established an Audit Committee. The function of the
Audit Committee is to meet with and review the results of the audit of the
Company's financial statements performed by the independent public accountants
and to recommend the selection of independent public accountants. The members of
the audit committee are Mr. Zanatta, Mr. Smith and Mr. Petersen. In 1997, the
Audit Committee acted on one occasion by unanimous written consent.
The Company also has established a Compensation Committee. The members
of the Compensation Committee are Mr. Zanatta and Mr. Smith. The primary duty of
the Compensation Committee is to grant stock options under the Company's Stock
Option Plan and to review the performance of management and make recommendations
with respect to management compensation and award bonuses to employees and
consultants under the Company's Incentive Bonus Plan. In 1997, the Compensation
Committee acted on two occasions by unanimous written consent.
The Company does not have a Nominating Committee.
EXECUTIVE COMPENSATION
The following table sets forth for the last three fiscal years
information on the annual compensation for the Company's chief executive officer
( the "CEO") and the Company's only executive officer other than the CEO that
received aggregate annual remuneration from the Company in excess of $100,000
during the fiscal year ended December 31, 1997 (collectively, with the CEO, the
"Named Executive Officers").
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
---------------------------------------------------------- -------------
Securities
Other Underlying
Name and Principal Annual Options/ All Other
Position Year Salary($) Bonus($) Compensation($) SARs(#) Compensation($)
-------- ---- --------- -------- --------------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Michael J. Smith, 1997 0 0 0 0 0
President and Chief 1996(1) 0 0 0 10,000 0
Financial Officer 1996(2) 0 0 0 0 0
John M. Musacchio, 1997 170,250 0 0 120,000 0
Chief Operating 1996(1) 114,960 0 0 0 0
Officer(3) 1996(2) 115,842 0 0 100,000 0
- -----------------------
(1) Represents the eleven-month period from February 1 through December 31,
1996. Effective February 1, 1996, the Company changed its fiscal year
to a calendar year. Prior to that, the Company's fiscal year ended
January 31.
(2) Represents the twelve-month period from February 1, 1995 through
January 31, 1996. See Note 1 above.
(3) Effective January 10, 1997, Mr. Musacchio ceased to be President
of the Company and became Chief Operating Officer.
</TABLE>
<PAGE>
Stock Options
The following table sets forth information concerning the award of
stock options to the Named Executive Officers during fiscal 1997:
Option/SAR Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Number of % of Total Potential Realizable Value
Securities Options/SARs at Assumed Annual Rates of
Underlying Granted to Exercise or Stock Price Appreciation
Options/SARs Employees in Base Price Expiration for Option Term
Granted (#) Fiscal Year ($/Sh) Date 5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C>
John M. Musacchio 120,000 82.8% 2.00 11/5/2007 150,934 382,498
</TABLE>
The options granted to Mr. Musacchio in 1997 were granted pursuant to
the Company's 1994 Amended Stock Option Plan (the "1994 Plan"). Half of those
options becomes exercisable on May 5, 1999, and the remaining half becomes
exercisable on May 5, 2000.
Option Exercises; Outstanding Options
The table below provides information on exercises of options during
1997 by the Named Executive Officers and information with respect to unexercised
options held by the Named Executive Officers at December 31, 1997.
Aggregated Option/SAR Exercises in Last Fiscal Year and
Fiscal Year-End Option/SAR Values
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying In-The-Money
Unexercised Options/SARs at
Options/SARs at Fiscal Year-End ($)
Common Shares Fiscal Year-End (#) Exercisable/
Acquired on Exercisable/ Unexercisable
Name Exercise (#) Value Realized ($) Unexercisable
<S> <C> <C> <C> <C>
Michael J. Smith 0 0 10,000/0 1,325/0
John M. Musacchio 0 0 120,000/120,000 0/0
</TABLE>
Employment Agreement
Under the terms of an employment agreement dated November 30, 1995, as
amended February 1, 1997, Mr. Musacchio's annual salary is $165,000 or such
greater amount as may be set from time to time by the President or the Board of
Directors. Mr. Musacchio's 1997 salary was $170,250. While he is employed by the
Company, Mr. Musacchio is entitled to participate in all Company employee
benefit plans generally available to the Company's executives and to participate
equitably in bonuses and/or additional incentive compensation as determined in
the discretion of the Compensation Committee of the Board of Directors. Mr.
Musacchio is employed "at will" by the Company and may be terminated at any time
without cause. If the Company terminates him without cause, Mr. Musacchio shall
be entitled to a severance benefit equivalent to one year's salary (the
"Severance Benefit"). Mr. Musacchio may terminate his employment agreement on
six months' written notice to the Company. Subject to certain exceptions, Mr.
Musacchio may not, during the term of his employment agreement, for two years
after he retires or at any time when he is receiving his annual salary or the
Severance Benefit, engage in any business that is substantially competitive with
any business then actively conducted by the Company or any of its subsidiaries.
Compensation of Directors
Employee directors are not compensated in their role as directors. The
outside directors of the Company receive $500 for each meeting they attend plus
reimbursement for their actual expenses incurred in attending such meetings. In
addition, the Company has established the 1994 Plan which provides for grants of
options to employee and non-employee directors.
Pursuant to the 1994 Plan, each non-employee director ordinarily is
automatically granted an option to purchase 10,000 shares upon becoming a
director. Each director who has served for at least 12 months ordinarily will
automatically be granted an additional option to purchase 1,250 shares on the
fifth business day following the Company's Annual Meeting of Shareholders.
Options granted to non-employee directors are exercisable immediately upon grant
and for a period of ten years thereafter. No non-employee director may be
awarded more than 15,000 options.
Options granted to non-employee directors have a per share exercise
price equal to at least the fair market value of a share of the Company's Common
Shares at the time the option is granted. Options granted to non-employee
directors terminate ten years from grant, unless the termination is due to the
director's death, in which event the exercise period is one year following
death, but not beyond the original maximum term of the option. During the fiscal
year ended December 31, 1997, no options were granted to non-employee directors.
The following Report of the Compensation Committee on Executive
Compensation and the Peformance Graph included in this Proxy Statement shall not
be deemed to be incorporated by reference by any general statement incorporating
for reference this Proxy Statement into any filing under the Securities Act of
1933 or the Securities Exchange Act of 1934, except to the extent the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under the Acts.
Report of the Compensation Committee on Executive Compensation
The Company's approach to executive compensation is designed to enable
it to recruit, retain and motivate executives to achieve the Company's
performance objectives and to increase shareholder value. The Company currently
determines executive compensation using a number of different criteria. Each
executive officer's individual performance and area of responsibility is
evaluated on an annual basis in relation to base salary, comparative
compensation surveys which include benefits and the Company's long-term
incentive compensation plans.
Performance management reviews are conducted periodically for all
employees of the Company and executive officers. Individual goals are
established at that time, incorporating the overall strategic plans and
objectives of the Company. The performance review focuses on an executive
officer's specific area of responsibility, accomplishments and contributions as
they relate to both personal performance and the Company's overall performance.
The basic benefits offered to executive officers, which include
participation in the Company's 401(k) Plan, group health insurance, group term
life insurance and disability insurance, are the same as those provided to other
employees of the Corporation. Additionally, certain executive officers are
provided with automobile allowances and club memberships which are used for both
business and personal purposes.
Executive officers of the Company are eligible to participate in the
Company's 1994 Plan and the Company's 1995 Qualified Incentive Stock Option Plan
(the "1995 Plan"). The Compensation Committee approves periodic grants of
options to executive officers under the 1994 Plan and the 1995 Plan as part of
the performance review process.
The 1997 compensation of the Company's President, Mr. Smith, was
maintained at the level specified in his employment agreement. No bonus or stock
options were awarded to Mr. Smith in 1997.
This report was approved by the Compensation Committee.
/s/ Roy Zanatta /s/ Michael Smith
Performance Graph
The information set forth in the table below and graphically on the
following page compares the value of the Common Shares to the Nasdaq Market
Index and an industry index representing peer issuers. Each of the total
cumulative total returns presented assumes a $100.00 investment on February 9,
1995, the date of the Company's initial public offering, and reinvestment of
dividends. The industry index of peer issuers is comprised of the following
securities: EA Engineering Science & Technology; EMCON; Fluor Daniel GTI Inc.
(formerly Groundwater Technology, Inc.); GZA Geoenvironmental Technologies,
Inc.; International Technology Corp.;New Horizons Worldwide (formerly Handex
Corp.); OHM Corp; Sevenson Environmental; and Roy F. Weston Inc. (Class A).
Omega Environmental, Inc., which previously was included in the group of peer
issuers, was omitted from this year's group, because it was delisted from the
Nasdaq Stock Market in September 1997.
<TABLE>
<CAPTION>
Company or Index February 9, 1995 Fiscal Year Ended December 31
- ---------------- ---------------- ----------------------------------------------------------------
1995 1996 1997
---- ---- ----
<S> <C> <C> <C> <C>
ICHOR Corporation 100.00 13.89 37.50 33.33
Peer Group Index 100.00 95.04 93.38 97.77
Nasdaq Market Index 100.00 128.69 159.91 195.61
</TABLE>
<PAGE>
Certain Relationships and Related Party Transactions
In February 1998, Conqueror Holdings Ltd. ("Conqueror") completed
the acquisition of 30,000 Preferred Shares for $300,000. Mr. Smith is
President and a director of Conqueror.
On March 6, 1998, Logan completed the acquisition of 142,500 Preferred
Shares in consideration of debt forgiveness in the amounts of $600,000 and
$825,000 effective, respectively, September 30 and December 31, 1997. The
indebtedness had been represented by the Company's 8% note due December 1999,
payable monthly to Logan and collateralized by certain assets of the Company's
subsidiaries. Logan waived interest of $114,000 due for 1997. Logan shares
voting and dispositive power with MFC over 59.6% of the Company's Common Shares
as of May 8, 1998, including 1,055,556 Common Shares issuable upon conversion of
the 142,500 Preferred Shares calculated as of May 8, 1998, based upon a
conversion price of $1.35 per Common Share. Michael J. Smith, President, Chief
Financial Officer, Treasurer and a director of the Company, is President, Chief
Financial Officer and a director of Logan and President, Chief Executive Officer
and a director of MFC. Roy Zanatta, Secretary and a director of the Company is
Secretary and a director of MFC.
On March 6, 1998, the Company issued 175,000 Preferred Shares to Sutton
Park in consideration of $1,000,000 cash and Sutton Park's release, effective
December 31, 1997, of the Company's guarantee of a $750,000 loan to Ortek Inc.
("Ortek") due January 1, 1999. Interest on the loan accrued at 11% per annum and
was secured by all of Ortek's personal property. Sutton Park is a wholly-owned
operating subsidiary of MFC and shared voting and dispositive power with MFC
over 20.9% of the Company's Common Shares as of May 8, 1998, including 1,296,296
Common Shares issuable upon conversion of the 175,000 Preferred Shares
calculated as of May 8, 1998, based upon a conversion price of $1.35 per Common
Share. Mr. Smith is a director of Sutton Park.
On March 6, 1998, Constable completed the acquisition of 85,000
Preferred Shares for $850,000. Constable is a wholly-owned operating subsidiary
of MFC and shared voting and dispositive power with MFC over 11.4% of the
Company's Common Shares as of May 8, 1998, including 629,630 Common Shares
issuable upon conversion of the 85,000 Preferred Shares calculated as of May 8,
1998, based upon a conversion price of $1.35 per Common Share. Mr. Smith is a
director of Constable.
Drummond established a $750,000 credit facility for the Company and its
wholly-owned subsidiary, ICHOR Services, Inc., pursuant to a loan agreement
effective January 15, 1997, as amended effective June 30, 1997. The demand loan
is secured by all of the personal property of the Company and ICHOR Services
Inc. and accrues interest at 10% per annum. After June 30, 1997, Drummond
increased the credit facility on the same terms to $780,000. That amount was the
principal balance outstanding at December 31, 1997 and the amount currently
outstanding. Drummond shares voting and dispositive power with MFC over 30.0% of
the Company's Common Shares as of May 8, 1998. Mr. Smith is President, Chief
Executive Officer, Chief Financial Officer and a director of Drummond. Mr.
Zanatta is Vice President and a director of Drummond.
At December 31, 1997, the Company had an intercompany receivable
from Logan in the amount of $270,000. See "Indebtedness of Management."
Indebtedness of Management
At December 31, 1997, the Company had an intercompany receivable from
Logan in the amount of $270,000, which is not yet paid. The receivable
represents an amount that Logan collected on the Company's behalf in connection
with the Company's sale of a subsidiary in 1997 to an unrelated third party.
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities and Exchange Act of 1934, as amended
(the "Exchange Act") requires that the Company's officers and directors, and
persons who own more than 10% of a registered class of the Company's equity
securities, file reports of ownership and changes of ownership with the
Securities and Exchange Commission (the "SEC"). Officers, directors and greater
than 10% shareholders are required by SEC regulation to furnish the Company with
copies of all such reports they file.
Based solely on the review of the copies of such reports received by
the Company, the Company believes that, with respect to its fiscal year ended
December 31, 1997, all of its executive officers, directors and 10% shareholders
filed all required reports under Section 16(a) in a timely manner.
INDEPENDENT ACCOUNTANTS AND AUDITORS
Peterson Sullivan P.L.L.C., Certified Public Accountants, has been selected
by the Board of Directors to examine the consolidated financial statements of
the Company and its subsidiaries for the fiscal year ending December 31, 1998.
Peterson Sullivan P.L.L.C. examined the consolidated financial statements of the
Company and its subsidiaries for the year ended December 31, 1997.
Representatives of Peterson Sullivan P.L.L.C. are not expected to be present at
the Annual Meeting.
FUTURE SHAREHOLDER PROPOSALS
Any proposal that a Shareholder intends to present at the next Annual
Meeting of Shareholders must be received by the Company on or before January 31,
1999.
OTHER MATTERS
The Board of Directors knows of no matter other than those mentioned in
the Proxy Statement to be brought before the meeting. If other matters properly
come before the meeting, it is the intention of the Proxy holders to vote the
Proxies in accordance with their judgment. If there are insufficient votes to
approve any of the proposals contained herein, the Board of Directors may
adjourn the meeting to a later date and solicit additional Proxies. If a vote is
required to approve such adjournment, the Proxies will be voted in favor of such
adjournment.
A copy of the Company's Annual Report on Form 10-K to the Securities
and Exchange Commission will be provided to Shareholders without charge upon
written request directed to Shareholders Information, ICHOR Corporation, Suite
1250, 400 Burrard Street, Vancouver, British Columbia, Canada V6C 3A6.
BY ORDER OF THE BOARD OF DIRECTORS.
DATE: May 29, 1998.
<PAGE>
PROXY
ICHOR CORPORATION
Suite 1250, 400 Burrard Street
Vancouver, British Columbia, Canada V6C 3A6
This Proxy is solicited on behalf of the Board of Directors of ICHOR
Corporation.
The undersigned hereby appoints Michael J. Smith and Rene Randall, and each
of them, as proxies, each with the power of substitution to represent and to
vote as designated below, all the shares of common stock of ICHOR Corporation
held of record by the undersigned on May 21, 1998, at the Annual Meeting of
Shareholders to be held on July 9, 1998, or any adjournment thereof.
1. ELECTION OF DIRECTORS
FOR the nominees listed WITHHOLD AUTHORITY
below (except as marked to vote for the nominees
to the contrary below) |_| listed below |_|
(Instruction: To withhold authority to vote for a nominee, strike a line
through the nominee's name in the list below.)
Michael J. Smith (Term will expire in 2001)
Roy Zanatta (Term will expire in 2001)
2. In their discretion, the Proxy holders are authorized to vote upon such other
business as may properly come before the meeting.
This Proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this Proxy will
be voted FOR Proposal 1.
Please sign exactly as name appears on your share certificates. When shares
are held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
DATED _________________, 1998
------------------------------
Signature
------------------------------
Print Name
------------------------------
Signature, if jointly held
------------------------------
Print Name
Please mark, sign, date and return this Proxy promptly using the enclosed
envelope.
