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
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.142-12
NORD RESOURCES CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
NORD RESOURCES CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:*
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4) Proposed maximum aggregate value of transaction:
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* Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / 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:
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4) Date Filed:
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[LOGO] NORD RESOURCES CORPORATION
8150 Washington Village Drive
Dayton, Ohio 45458
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 8, 1994
To the Stockholders of
NORD RESOURCES CORPORATION:
Notice is hereby given that the annual meeting of stockholders of Nord
Resources Corporation (the "Corporation") will be held at the Brown Palace
Hotel, 321 17th Street, Denver, Colorado, on June 8, 1994 at 2:30 p.m. (Mountain
Time) for the following purposes:
1. The election of six directors of the Corporation; and
2. To act upon such other matters as may properly come before the meeting
or any adjournment thereof.
The close of business on April 11, 1994 has been fixed as the record date
for the determination of stockholders entitled to notice of and to vote at the
annual meeting and at any adjournment thereof.
YOUR PROXY IS IMPORTANT TO ENSURE A QUORUM AT THE MEETING. THUS, WHETHER
OR NOT YOU EXPECT TO BE PRESENT, YOU ARE REQUESTED TO DATE, SIGN AND MAIL THE
ENCLOSED PROXY IN THE POSTAGE-PAID ENVELOPE WHICH HAS BEEN PROVIDED FOR THAT
PURPOSE. THE PROXY MAY BE REVOKED BY YOU AT ANY TIME BEFORE IT IS EXERCISED AND
THE GIVING OF YOUR PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU
ATTEND THE MEETING.
By Order of the
Board of Directors,
Karl A. Frydryk
Secretary
April 18, 1994
NORD RESOURCES CORPORATION
8150 Washington Village Drive, Dayton, Ohio 45458
PROXY STATEMENT
For the Annual Meeting of Stockholders
June 8, 1994
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation by
the Corporation's Board of Directors (the "Board") of proxies in the
accompanying form for the annual meeting of stockholders of Nord Resources
Corporation (the "Corporation").
Shares cannot be voted at the meeting unless the stockholder is present
in person or represented by proxy. All shares represented by properly executed
proxies received by the Board pursuant to this solicitation will be voted in
accordance with the stockholder's directions specified on the proxy. If no
directions have been specified by marking the appropriate squares on the
accompanying proxy card, the shares will be voted in accordance with the Board's
recommendations. A stockholder signing and returning the accompanying proxy has
the power to revoke it at any time prior to its exercise by delivering to the
Corporation a later dated proxy or by giving notice to the Corporation in
writing or in open meeting, but without affecting any vote previously taken. The
holders of a majority of the Corporation's outstanding shares, present in person
or represented by proxy and entitled to vote, constitute a quorum for the
transaction of all business at the meeting. Abstentions and broker non-votes are
included in determining if a quorum is present at the meeting.
Only stockholders of record at the close of business on April 11, 1994
are entitled to vote at the annual meeting. As of April 11, 1994, there were
issued and outstanding 15,139,974 shares of Common Stock of the Corporation.
Each share is entitled to one vote. Cumulative voting is not permitted. A list
of stockholders of record entitled to vote at the meeting will be available for
examination by any stockholder for any purpose germane to the annual meeting
during normal business hours, for a period of 10 days prior to the annual
meeting, at the offices of Berenbaum & Weinshienk, 370 17th Street, Suite 2600
Republic Plaza, Denver, Colorado and at the offices of the Corporation, 8150
Washington Village Drive, Dayton, Ohio. The list will also be available at the
annual meeting. An affirmative vote of a majority of the shares present and
voting at the meeting is required for approval of all items being submitted to
the stockholders for their consideration. Abstentions from voting will have the
same effect as voting against the election of a director or a proposal. However,
broker non-votes will not be included in the tabulations of shares entitled to
elect directors or vote on a proposal.
This Proxy Statement and the accompanying proxy were first mailed to
stockholders on or about April 18, 1994.
1
PRINCIPAL STOCKHOLDERS
The following table sets forth the only persons known by the Board to be
the beneficial owners of more than 5% of the outstanding shares of Common Stock
of the Corporation as of December 31, 1993, based on information contained in
Schedule 13G filed by such persons with the Securities and Exchange Commission,
reporting beneficial ownership as of December 31, 1993.
COMMON SHARES
BENEFICIALLY
OWNED AS OF DECEMBER 31,
1993
NAME AND ADDRESS OF -------------------------
BENEFICIAL OWNER NUMBER % OF CLASS
- ---------------------------------------- ------------ ----------
The Travelers Inc.
65 East 55th Street
New York, NY 10022 1,514,078(1) 10.0%
The Prudential Insurance
Company of America
Prudential Plaza
Newark, NJ 07102-3777 805,950(2) 5.3%
<FN>
(1) The Travelers Inc. does not have voting power over 1,106,157 of the shares
listed, has shared voting power over 400,000 of the shares listed and shared
dispositive power over 47,630 of the shares listed.
(2) The Prudential Insurance Company of America has shared voting and dispostive
power over 480,400 of the shares listed.
ELECTION OF DIRECTORS
Six directors are to be elected to hold office until the next annual
meeting of stockholders and until their successors are elected and qualified.
The Board has nominated for election as directors the six persons named below,
all of whom presently serve as members of the Board. The shares represented by
the accompanying proxy, unless the giver of the proxy dictates otherwise, will
be voted at the meeting in favor of the election of the nominees named below.
In connection with the Corporation's sale of 50% of its ownership in a
subsidiary, Sierra Rutile Limited, the Corporation accepted the resignations of
former directors J. Peter Davies, Christopher A. Neal and Richard L. Steinberger
in November 1993. On January 10, 1994, W. Pierce Carson was appointed by the
Board to fill a vacancy and is herein nominated for election as a director by
the stockholders for the first time. The appointment of Dr. Carson increased the
number of directors of the Corporation to the minimum number required by the
Corporation's By-Laws.
Each of the nominees named below is, at present, available for election.
If any nominee should for any reason become unavailable for election, proxies in
the accompanying form will be voted for a substitute nominee designated by the
Board. There are no family relationships among any nominees or directors or
among them and any officer of the Corporation or any of its subsidiaries.
2
Set forth below is certain information for each nominee for election as a
director and each executive officer named in the Summary Compensation Table.
COMMON SHARES
BENEFICIALLY
OWNED AS OF APRIL 11,
1994(1)
DIRECTOR -----------------------
NOMINEES FOR ELECTION OF DIRECTORS AGE SINCE NUMBER % OF CLASS
- ---------------------------------------- --- -------- ---------- ----------
Walter T. Belous 58 1974 37,023(3) (2)
W. Pierce Carson 52 1994 26,040 (2)
Edgar F. Cruft 61 1971 330,246(4) 2.2%
Terence H. Lang 57 1978 195,833(5) 1.3%
Leonard Lichter 66 1974 25,750(6) (2)
Donald L. Roettele 58 1971 42,538(7) (2)
OTHER NAMED EXECUTIVE OFFICERS
- ---------------------------------------------
James T. Booth 46,900(8) (2)
Karl A. Frydryk 63,474(9) (2)
William W. Wilcox 70,060(10) (2)
All nominees for election as
directors and executive officers
as a group (9 persons) 837,864(11) 5.9%
<FN>
(1) Ownership includes sole voting and investment power except as otherwise
noted. When applicable, the number of shares beneficially owned includes
the number of unissued shares which the listed person (or group) has a
right to acquire within 60 days after April 11, 1994. In determining the
number of shares outstanding for computing the percent of class owned by a
listed person (or group), the number of shares outstanding of the
Corporation has been increased by the number of unissued shares which the
listed person (or group) has a right to acquire from the Corporation within
60 days after April 11, 1994.
(2) Represents less than 1% of the shares outstanding.
(3) Includes options to purchase 26,750 shares. Mr. Belous' wife owns an
additional 1,500 shares as to which Mr. Belous disclaims beneficial
ownership.
(4) Includes options to purchase 221,725 shares. Dr. Cruft's wife and children
own an additional 15,697 shares as to which Dr. Cruft disclaims beneficial
ownership.
(5) Includes options to purchase 178,975 shares. Mr. Lang's wife owns an
additional 21,348 shares as to which Mr. Lang disclaims beneficial
ownership.
(6) Includes options to purchase 24,750 shares.
(7) Includes options to purchase 24,750 shares. Mr. Roettele's wife owns an
additional 17,729 shares as to which Mr. Roettele disclaims beneficial
ownership.
(8) Consists of options to purchase 46,900 shares.
(9) Includes options to purchase 61,091 shares.
(10) Consists of options to purchase 70,060 shares.
(11) Includes options to purchase 655,001 shares held by directors and executive
officers as a group.
Mr. Belous has, since 1981, been employed by and is executive vice
president of Chi Mei Corporation, a company engaged in international trade with
the Peoples Republic of China.
Dr. Carson, who holds a Ph.D. in Economic and Structural Geology, was
appointed as a director of the Corporation in January 1994. He has served as
president and a director of Nord Pacific Limited, a company which is 35% owned
by the Corporation, since its inception in 1990. Prior to then, he served as
senior vice president of pacific operations for the Corporation beginning in
1980.
Dr. Cruft, who holds a Ph.D. in Geochemistry, is a founder of the
Corporation and has served as its chairman and chief executive officer since its
inception. He was president of the Corporation from inception to 1985 and was
renamed president in 1988. From 1963 through 1973, he served on the faculty of
the University of New Mexico, becoming an Associate Professor of Geochemistry in
1967. From 1963 to 1967, Dr. Cruft also was a mining and geochemical
3
consultant to various mining companies. From 1956 to 1959, he was employed as a
field and mining geologist by the Ventures Ltd.-Falconbridge Nickel Mines Ltd.
group of companies in Canada and from 1954 to 1956 was a field and mining
geologist in South Africa and Malawi with major South African mining companies.
Dr. Cruft is also chairman and chief executive officer of Nord Pacific Limited.
Mr. Lang has served as senior vice president-finance and treasurer since
joining the Corporation in 1978. Prior to joining the Corporation, he had 15
years of experience in financial planning and management in the business
equipment industry, holding several financial management positions with NCR
Corporation. Mr. Lang is also treasurer and a director of Nord Pacific Limited.
Mr. Lichter, an attorney and a CPA, is a principal in the law firm of
Spitzer & Feldman P.C., New York, New York, which is counsel to the Corporation.
He is also a director of Laser Photonics, Inc., Radix Ventures, Inc. and Nord
Pacific Limited.
Mr. Roettele has, since 1970, been employed by and is currently the
president and a director of Fox Technology, Inc., a company engaged in
electronic product manufacturing and distribution.
OTHER EXECUTIVE OFFICERS
Mr. James T. Booth, 53, is president of Nord Kaolin Company, an 80% owned
subsidiary of the Corporation. Mr. Booth joined Nord Kaolin Company in 1978 as
plant manager, became general manager in 1989 and was named president in 1993.
Mr. Karl A. Frydryk, 39, CPA, has served as vice president-controller
since joining the Corporation in 1984 and as secretary of the Corporation since
1987.
Mr. William W. Wilcox, 45, is vice president of sales and marketing for
the Corporation. Mr. Wilcox joined the Corporation in 1977 and became vice
president of sales and marketing in 1984.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
The Board held five meetings during 1993. Each current director who was a
director in 1993 attended at least 75% of the meetings of the Board and the
Committees on which he served.
The Corporation does not have a standing nominating committee, but has an
Audit Committee, a Compensation Committee and a Technical Committee.
The members of the Audit Committee are Leonard Lichter and Donald L.
Roettele. The Audit Committee meets independently with representatives of the
Corporation's independent auditors and senior management. The Audit Committee
reviews the general scope of the Corporation's annual audit, the fee charged by
the independent auditors and other matters relating to internal control systems.
In addition, the Audit Committee is responsible for recommending the engagement
or discharge of the Corporation's independent auditors. The Committee held two
meetings in 1993. Christopher A. Neal was also a member of this committee until
his resignation from the Board in November 1993.
The members of the Compensation Committee are Walter T. Belous and
Leonard Lichter. The Compensation Committee is responsible for approving and
reporting to the Board on the annual compensation for all officers, including
salary and stock options. The Compensation Committee also is responsible for
granting stock options and other funding and awards to be made under the
Corporation's existing compensation plans. The Committee held one meeting in
1993. Christopher A. Neal was also a member of this committee until his
resignation from the Board in November 1993.
4
The members of the Technical Committee are Walter T. Belous and Edgar F.
Cruft. The function of the Technical Committee is to review and assist in
technical evaluation of ongoing and future projects. The Committee did not meet
in 1993.
Members of the Board who are not employed by the Corporation, except Mr.
Lichter, receive an annual fee of $10,000, plus $1,000 for attending each
meeting of the Board and $800 for attending each meeting of a Committee of the
Board. Mr. Lichter, counsel to the Corporation, charges his time and expenses to
the Corporation through Spitzer & Feldman P.C.
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Corporation's directors, executive officers and
holders of more than 10% of the Corporation's Common Stock to file with the
Commission initial reports of ownership and reports of changes in ownership of
Common Stock of the Corporation. Based solely on the Corporation's review of
copies of such forms it received from directors, executive officers and holders
of more than 10% of the Corporation's Common Stock and on written
representations from certain of such persons, the Corporation believes that,
during the year ended December 31, 1993, all filing requirements under Section
16(a) of the Exchange Act were made by such persons on a timely basis.
During 1993, the Corporation paid $1,890,000 for legal services to the
firm of Spitzer & Feldman, P.C. in which Leonard Lichter, a director, is a
principal.
During 1993, the Corporation advanced funds to Nord Pacific Limited
("Pacific"), which was 47% owned by the Corporation at December 31, 1993 (the
Corporation's ownership decreased to 35% in February 1994 as a result of a
public offering of newly issued shares by Pacific.) Beginning in 1990, the
Corporation had made funds available to Pacific under lines of credit
arrangements and funds were borrowed by Pacific to enable it to sustain its
operations through February 1994. During 1993, the largest amount owing to the
Corporation by Pacific was $5,052,000. The advances to Pacific bore interest at
prime plus 1/2%. During 1993, the Corporation converted $2,500,000 of its
advances to Pacific into shares of common stock of Pacific at market price. In
connection with the aforementioned February 1994 public offering by Pacific, the
Corporation converted an additional $2,900,000 of its advance to Pacific into
shares of common stock of Pacific at a price of $.83 per share, which was less
than market price. The Corporation presently does not have any outstanding
advances to Pacific and does not anticipate making any additional advances in
the foreseeable future. Dr. Cruft is Chairman, Chief Executive Officer and a
Director of Pacific; Mr. Lang is Vice President, Treasurer and a Director of
Pacific; Dr. Carson is President and a Director of Pacific and Mr. Lichter is a
Director of Pacific.
COMPENSATION OF EXECUTIVE OFFICERS
The following table discloses compensation received by the Corporation's
Chief Executive Officer, the four other most highly paid executive officers at
December 31, 1993 and two former executive officers who resigned during 1993 for
whom disclosure as an executive officer would have been required had they
remained in the employment of the Corporation at December 31, 1993
(collectively, "Named Executive Officers") for the fiscal years ended December
31, 1993, 1992 and 1991.
5
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPEN-
SATION
----------
AWARDS
ANNUAL ----------
COMPENSATION SECURITIES ALL OTHER
------------------ UNDERLYING COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(2) SATION(3)
- ---------------------------------------- ---- -------- -------- ---------- ---------
Edgar F. Cruft(1) 1993 $512,150 33,750(5) $ 5,258
Chairman, President & CEO 1992 $505,000 -- $ 1,596
1991 $505,000 25,000 --
Richard L. Steinberger 1993 $281,750 $150,000 -- $ 3,217
Vice-Chairman(4) 1992 $322,000 -- $ 1,283
1991 $298,000 25,000 --
Terence H. Lang 1993 $235,000 -- $ 4,842
Sr. Vice President-Finance & Treasurer 1992 $235,000 -- $ 1,169
1991 $235,000 25,000 --
J. Peter Davies(4) 1993 $175,000 -- $ 24,944
Sr. Vice President-Rutile Operations 1992 $200,000 -- $ 4,364
1991 $200,000 25,000 --
William W. Wilcox 1993 $159,228 13,000 $ 3,651
Vice President-Sales & Marketing 1992 $151,646 8,600 $ 783
1991 $145,000 14,000 --
Karl A. Frydryk 1993 $124,033 -- $ 3,991
Vice President-Controller & Secretary 1992 $112,950 -- $ 765
1991 $108,000 35,000 --
James T. Booth 1993 $107,511 6,000 $ 3,687
President-Nord Kaolin Company 1992 $ 93,288 5,500 $ 1,425
1991 $ 89,200 10,000 --
<FN>
Note - "All Other Compensation" is not presented for 1991 as permitted under
applicable transition provisions of the proxy statement rules.
(1) Includes salary earned for 1993 ($137,150) and both 1992 and 1991 ($130,000)
as Chairman and CEO of Nord Pacific Limited, a 35%-owned affiliate of the
Corporation.
(2) Number of shares subject to options granted under employee option plans for
the periods presented.
(3) Included in "All Other Compensation" for 1993 are (1) matching contributions
by the Corporation under its 401(k) Retirement and Savings Plan for Dr.
Cruft - $4,497, Mr. Steinberger - $2,818, Mr. Lang - $4,497, Mr. Davies -
$3,935, Mr. Wilcox - $2,778, Mr. Frydryk - $3,595 and Mr. Booth - $2,713,
(2) the dollar value of life insurance premiums paid by the Corporation with
respect to term life insurance benefits for Dr. Cruft - $761, Mr.
Steinberger - $399, Mr. Lang - $345, Mr. Wilcox - $873, Mr. Frydryk - $396
and Mr. Booth - $974, and (3) premiums of $21,009 on a life insurance policy
owned by Mr. Davies.
(4) Mr. Steinberger and Mr. Davies resigned from their respective positions with
the Corporation in November 1993 in connection with the Corporation's sale
of a 50% interest in Sierra Rutile Limited. They are currently employed by
50% owned affiliates of the Corporation in connection with the operations of
Sierra Rutile Limited. In connection with Mr. Steinberger's termination of
employment, the Corporation has agreed to pay him a bonus of $50,000 in each
of 1994, 1995 and 1996, which will be applied to retirement of a $150,000
loan previously made to him in connection with the payment of the exercise
price of options granted under the Corporation's employee plans.
(5) Consist of an option grant to replace an expiring option for the same number
of shares. Exercise price of grant is $4.88 per share while expiring option
was at an exercise price of $4.00 per share. See "Ten-Year Option
Repricings".
(6) Non-cash benefits of each of the Named Executive Officers were less than 10%
of their aggregate compensation.
6
The Corporation has established a loan program to fund the exercise of
stock options or for any other purpose associated with a benefit to the
Corporation, for Messrs. Cruft, and Lang, who are executive officers. Such loans
are limited to $150,000 for each executive, are callable on 90 day notice by the
Board and bear interest, payable quarterly, at 1/2% over the yield on funds
invested by the Corporation (average interest rate of 4.32% in 1993). The
largest amount of indebtedness outstanding during 1993 and the amount
outstanding on April 11, 1994 from Messrs. Cruft and Lang was $150,000 each. The
loans related to the executives' exercise of options to acquire shares of the
Corporation's Common Stock. The Corporation has also loaned $150,000 to a former
executive officer, Mr. Steinberger, under this loan program. Under an agreement
with Mr. Steinberger related to his termination of employment with the
Corporation in 1993, the above amount ceased to bear interest on November 18,
1993 and will be repaid in equal annual installments of $50,000 in 1994, 1995
and 1996 in conjunction with a bonus awarded Mr. Steinberger. See "Summary
Compensation Table".
OPTION GRANTS IN 1993
The following table presents information concerning options granted in
1993 to Named Executive Officers under the Corporation's employee option plans.
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE VALUE
---------------------------------------------- AT ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM(4)
OPTIONS EMPLOYEES EXERCISE EXPIRATION ------------------
NAME GRANTED IN 1993(3) PRICE DATE 5% 10%
- ---------------------------------------- ---------- ---------- -------- ---------- -------- --------
Edgar F. Cruft 33,750(1) 19.1% $4.88 10/24/96 $103,473 $262,220
William W. Wilcox 13,000(2) 7.3% $6.75 3/11/03 $ 55,186 $139,851
James T. Booth 6,000(2) 3.4% $6.75 3/11/03 $ 25,470 $ 64,547
<FN>
(1) Option is currently exercisable and was granted to replace an option which
was expiring in November 1993. See "Ten-Year Option Repricings".
(2) Option became exercisable on March 11, 1994.
(3) The Corporation granted employees options to purchase 176,950 shares in
1993.
(4) Dollar amounts under these columns are the result of calculations based on
assumed annualized rates of stock appreciation of 5% and 10% as prescribed
by the Securities and Exchange Commission. The assumed rates are not
intended by the Corporation to forecast possible future appreciation, if
any, of its stock price, which will be determined by future events and
unknown factors.
7
AGGREGATED OPTION EXERCISES IN 1993 AND YEAR-END OPTION VALUES
The following table presents information concerning options exercised
during 1993 by the Named Executive Officers and the value of their respective
unexercised options at December 31, 1993.
NUMBER OF
SECURITIES VALUE1 OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES DECEMBER 31, 1993 DECEMBER 31, 1993
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
- ---------------------------------------- ----------- -------- ----------------- -----------------
Edgar F. Cruft 6,750 $16,630 221,725 $ 19,845
-- N/A
Richard L. Steinberger None 60,000 --
-- N/A
Terence H. Lang None 178,975 --
-- N/A
J. Peter Davies None 52,000 --
-- N/A
William W. Wilcox None 57,060 --
13,000 --
Karl A. Frydryk None 61,091 --
-- N/A
James T. Booth None 40,900 --
6,000 --
<FN>
1 Based on the closing sale price of $4 7/8 for the Corporation's Common Stock
on December 31, 1993 on the New York Stock Exchange Composite Tape.
DEFINED BENEFIT RETIREMENT PLANS
The following table illustrates the estimated annual benefit payable upon
retirement to Messrs. Cruft, Steinberger and Lang at specified levels of
compensation and years of service to the Corporation.
YEARS OF SERVICE
-------------------------------
COMPENSATION 15 20 30
- ------------- --------- --------- ---------
$200,000 $ 107,500 $ 110,000 $ 110,000
250,000 134,375 137,500 137,500
300,000 161,250 165,000 165,000
350,000 188,125 192,500 192,500
400,000 215,000 220,000 220,000
450,000 241,875 247,500 247,500
500,000 268,750 275,000 275,000
The non-qualified retirement agreement with each of these executives
provides for annual payments equal to 50%, plus 1/4% for each year of service
with the Corporation to a maximum credit of 20 years, of their average annual
compensation for the three consecutive years in their last ten years of
employment with the Corporation during which they received their highest
compensation. The compensation covered by the plan is based on the named
executive's annual salary disclosed in the Summary Compensation Table. Under
these agreements, annual payments
8
begin at age 62, or termination of employment, whichever is later, and continue
for the life of the executive and his spouse. The executive may retire anytime
after age 55 and receive reduced annual payments. At December 31, 1993, Dr.
Cruft and Mr. Steinberger had over twenty years of service and Mr. Lang had
fifteen years of service. The Corporation has also provided for the payment of a
death benefit of $150,000 for Dr. Cruft and Mr. Lang and to Mr. Steinberger
until termination of employment.
The following table illustrates the estimated annual benefit payable upon
retirement to certain management personnel of the Corporation at specified
levels of compensation and years of service to the Corporation.
YEARS OF SERVICE
-----------------------------------------------
COMPENSATION 10 15 20 25 30
- -------------- ------- ------- ------- ------- -------
$100,000 $15,000 $22,500 $30,000 $37,500 $45,000
125,000 18,750 28,125 37,500 46,875 56,250
150,000 22,500 33,750 45,000 56,250 67,500
175,000 26,250 39,375 52,500 65,625 78,750
200,000 30,000 45,000 60,000 75,000 90,000
The non-qualified retirement agreements with certain management personnel
designated by the Board, including Messrs. Booth, Frydryk and Wilcox, provide
annual payments to participants for a period of 15 years beginning at age 62, or
on termination of employment, whichever is later (or anytime after age 55 in the
event the provisions of the agreement with respect to early retirement are
satisfied). The payments are equal to 1 1/2% for each year of service to a
maximum of 30 years times the participant's average annual compensation over his
final three years of employment. The compensation covered by the plan is based
on the named executive's annual salary disclosed in the Summary Compensation
Table. The portion of the percentage earned through years of service vests at
the rate of 20% per year, beginning at six years of service, and becomes fully
vested in the event of a change in control of the Corporation as defined in the
agreements. In addition to the above amount, Mr. Frydryk will receive an
additional 5% of his salary at retirement payable over the same 15 year period.
At December 31, 1993, Messrs. Booth, Frydryk and Wilcox had 15, 9 and 16 years
of service, respectively. The agreements also provide for payment of death
benefits for the participants equal to three times the compensation earned by
the participant during the year prior to his death.
CHANGE IN CONTROL ARRANGEMENTS
The Corporation has entered into agreements with certain Named Executive
Officers which provide for the payment of benefits in the event of termination
of their employment after a change in control of the Corporation, as defined in
the agreements. These agreements are intended to ensure the establishment and
maintenance of a sound and vital management essential to protecting and
enhancing the best interests of the Corporation and its stockholders. Under
agreements with Messrs. Cruft and Lang, if their employment is terminated by
either them or the Corporation (other than for cause, as defined in the
agreement, or death) at any time within two years of a change in control, the
Corporation shall pay them a lump sum amount equal to 300% of the greater of (1)
their base salary at date of termination or (2) their average annual
compensation for the five calendar years preceding the calendar year in which
the change in control occurred, plus an amount equal to the aggregate spread on
all unexercised options granted to them under the Corporation's stock option
plans. Under agreements with Messrs. Frydryk and Wilcox, if their employment is
terminated by the Corporation (other than for cause, disability, retirement or
death) or by the employee for good reason (i.e. change of duties, reduction in
compensation, failure to maintain benefits and other causes as set forth in the
9
agreement) at any time within two years of a change in control, the Corporation
shall pay them a lump sum amount equal to 200% of the greater of (1) their base
salary at date of termination or (2) their average annual compensation for the
five calendar years preceding the calendar year in which the change in control
occurred, plus an amount equal to the aggregate spread on all unexercised
options granted to them under the Corporation's stock option plans. The
Corporation has a similar arangement with Mr. J. Peter Davies, a former
executive officer, who is presently employed by a 50% owned subsidiary of the
Corporation. Mr. Davies' lump sum payment would be calculated identically to
those of Messrs. Frydryk and Wilcox. The requirement to pay Mr. Davies would
occur if his employment was terminated after a change in control of the 50%
owned subsidiary and he is not offered a position with the Corporation. The
agreements are valid until the later of December 31, 1995 or two years after the
occurrence of a change in control prior to December 31, 1995, subject to
extension by mutual consent.
To preserve the benefits available under the Corporation's severance
agreements with Messrs. Cruft and Lang, the Corporation has established a
benefit trust (the "Trust"). Upon the occurrence of any potential change in
control, as defined in the Trust, the Corporation will be obligated to
contribute an amount of cash and other property to the Trust which is intended
to be sufficient to pay, in accordance with the terms of the agreements, the
benefits authorized under such agreements. If the funds in the Trust are
insufficient for any reason to pay such amounts, the Corporation will remain
obligated to pay any such deficiency.
TEN-YEAR OPTION REPRICINGS
The following table discloses adjustments or amendments to the exercise
price of stock options awarded to named executive officers during the period
January 1, 1984 through December 31, 1993.
MARKET
NUMBER OF PRICE OF EXERCISE LENGTH OF
SECURITIES STOCK AT PRICE AT ORIGINAL OPTION
UNDERLYING TIME OF TIME OF TERM REMAINING
OPTIONS REPRICING REPRICING NEW AT DATE OF
REPRICED OR OR EXERCISE REPRICING OR
NAME DATE OR AMENDED AMENDMENT AMENDMENT PRICE AMENDMENT
---------------------------------------- -------- ---------- --------- --------- -------- ---------------
Edgar F. Cruft 10/21/93 33,750 $4.88 $ 4.00 $4.88 14 Days
Chairman, President & CEO 10/29/87 60,000 $7.38 $16.50 $7.38 9 Yrs., 3 mos.
Richard L. Steinberger 10/29/87 60,000 $7.38 $16.50 $7.38 9 Yrs., 3 mos.
Vice-Chairman
Terence H. Lang 10/29/87 60,000 $7.38 $16.50 $7.38 9 Yrs., 3 mos.
Sr. Vice President-Finance & Treasurer
William W. Wilcox 10/29/87 6,750 $7.38 $12.00 $7.38 8 Yrs., 11 mos.
Vice President-Sales & Marketing 10/29/87 3,300 $7.38 $15.83 $7.38 9 Yrs., 3 mos.
Karl A. Frydryk 10/29/87 4,200 $7.38 $12.00 $7.38 8 Yrs., 11 mos.
Vice President-Controller & Secretary 10/29/87 4,050 $7.38 $15.83 $7.38 9 Yrs., 3 mos.
James T. Booth 10/29/87 3,000 $7.38 $12.00 $7.38 8 Yrs., 11 mos.
President-Nord Kaolin Company 10/29/87 1,950 $7.38 $15.83 $7.38 9 Yrs., 3 mos.
REPORT OF BOARD OF DIRECTORS ON REPRICINGS
On October 21, 1993, the Board voted to issue an option to Dr. Cruft to
purchase 33,750 shares at the then current market price of $4.88 per share as
replacement for an option to purchase the same number of shares at $4.00 per
share which was scheduled to expire on
10
November 8, 1993. The Board determined that it was in the best interest of the
Corporation to extend the period in which the expiring option could be
exercised, but in consideration of such extension, the exercise price was
increased to current market at such time.
BOARD OF DIRECTORS
Walter T. Belous Leonard Lichter
Edgar F. Cruft Donald L. Roettele
J. Peter Davies Richard L. Steinberger
Terence H. Lang
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
PHILOSOPHY
The Corporation applies a consistent philosophy to compensation for all
employees, including senior management. This philosophy is based on the premise
that the achievements of the Corporation result from the coordinated efforts of
all individuals working toward common objectives. The Corporation strives to
achieve those objectives through teamwork that is focused on meeting the
periodic goals established by the Corporation, the expectations of customers and
stockholders. The compensation program goals are to enable the Corporation to
attract, retain and reward key personnel who contribute to the long-term success
of the Corporation and to align compensation with business objectives and
performance. The Corporation's compensation program for executive officers is
based on the same principles applicable to compensation decisions for all
employees of the Corporation.
COMPETITIVE COMPENSATION
The Corporation is committed to providing a compensation program that
helps attract and retain key personnel of outstanding ability. The Corporation
ensures that its compensation is competitive by comparing its compensation
practices with those of other similar companies and reflects this review in its
determination of compensation.
COMPENSATION OF CEO
The Compensation Committee has not given Dr. Cruft a raise since May
1989. Dr. Cruft's compensation for fiscal year 1993 was based on the
compensation historically paid him.
COMPENSATION AND PERFORMANCE
Executive officers are rewarded based upon corporate performance and
individual performance. Corporate performance is evaluated by reviewing the
extent to which strategic and business plan goals are met, including such
factors as operating profit or loss and performance relative to competitors.
Individual performance is evaluated by reviewing organizational and management
development progress against set objectives and the degree to which teamwork and
Corporation values are fostered.
The Corporation applies its compensation philosophy worldwide. The
Corporation strives to achieve a balance of the compensation paid to a
particular individual and the compensation paid to other executives both inside
the Corporation and at comparable companies. The Corporation believes that
employees should understand the performance evaluation and compensation
administration process. The process of assessing performance is as follows:
1. At the beginning of the performance cycle, the evaluating manager sets
objectives and key goals.
2. The evaluating manager gives the employee ongoing feedback on
performance.
11
3. At the end of the performance cycle, the manager evaluates the
accomplishments of objectives/key goals.
4. The manager compares the results with the results of peers within the
Corporation.
5. The evaluating manager communicates the comparative results to the
employee.
6. The comparative result affects decisions on salary and stock options.
COMPENSATION VEHICLES
The Corporation has a successful history of using a simple total
compensation program that consists of cash, equity based compensation and
retirement plans. Having a compensation program that allows the Corporation to
successfully attract and retain key employees permits it to mine and produce its
industrial minerals at competitive levels of production and costs, to provide
useful products and services to customers, enhance stockholder value, motivate
technological innovation, foster teamwork and adequately reward employees. The
vehicles are:
(a) Cash Based Compensation--The Corporation sets base salary for
employees by reviewing the aggregate of base salary and annual bonus for
competitive positions in the market, and by reviewing the employee's
historical compensation and the effect of inflation on such compensation.
(b) Stock Option Program--The purpose of this program is to provide
additional incentives to employees to work to maximize stockholder value.
The option program also utilizes vesting periods to encourage key
employees to continue in the employ of the Corporation. The Corporation
grants stock options annually to a broad-based population representing
approximately 50% of the total employee pool.
(c) Deferred Compensation for Senior Executives--The Corporation has
entered into separate retirement agreements with its senior executives.
The agreements provide benefits to the senior executives upon retirement
based on several factors, including the number of years of service to the
Corporation. The purpose of these retirement agreements is to provide
incentive to the senior executives to continue to provide their services
to the Corporation.
(d) 401-K Plan--The Corporation provides a retirement and savings plan
for its salaried U.S. employees pursuant to Section 401(k) of the Internal
Revenue Code. Each employee may contribute up to 15% of his or her salary
to this plan, to a maximum of $8,994 in 1993. Under the plan, the
Corporation makes a matching contribution on behalf of each participating
employee of 50% on the lower of the first 6% of each employee's salary or
the percentage actually contributed by the employee. This plan enables the
Corporation to attract and retain employees upon whom the Corporation
relies in operating its business.
(e) Other Plans--The Corporation is party to an agreement with the
union which represents workers at its kaolin facility, which agreement
provides for specified retirement and other benefits.
12
COMPENSATION COMMITTEE
Leonard Lichter, Chairman
Walter T. Belous
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee are Messrs. Belous and Lichter,
neither of whom are or have been officers or employees of the Corporation or any
of its subsidiaries. The Chairman of the Compensation Committee is Leonard
Lichter, who is a principal in the firm of Spitzer & Feldman P.C., which firm
provides legal services to the Corporation.
STOCKHOLDER RETURN ON COMMON STOCK
The following graph compares the total annual return on the Corporation's
Common Stock with the total annual return of the Dow Jones Equity Market Index
and the Dow Jones Mining Index. The presentation assumes $100 was invested on
December 31, 1988 in the Corporation's Common Stock and in each of the indices
and any dividends were reinvested.
A table of the graph is as follows:
DOW JONES
EQUITY DOW JONES NORD
VALUE AS OF MARKET MINING RESOURCES
DECEMBER 31 INDEX INDEX CORPORATION
- ----------- ---------- ---------- ----------
1988 $ 100.00 $ 100.00 $ 100.00
1989 $ 130.94 $ 138.67 $ 142.67
1990 $ 125.80 $ 141.47 $ 76.00
1991 $ 166.61 $ 176.97 $ 60.00
1992 $ 180.95 $ 170.71 $ 65.33
1993 $ 198.94 $ 201.51 $ 52.00
13
INDEPENDENT AUDITORS
Deloitte & Touche have acted as independent auditors for the Corporation
since its inception and have been selected by the Audit Committee to serve in
such capacity for the fiscal year ending December 31, 1994. A representative of
Deloitte & Touche is expected to be present at the annual meeting and will have
the opportunity to make a statement, if he so desires, and to respond to
appropriate questions.
OTHER MATTERS
The Board is not aware of any matter not referred to in the enclosed form
of proxy that will be presented for action at the meeting. If any such matter
properly comes before the meeting, the proxies in the accompanying form will be
voted with respect thereto in accordance with the judgment of the person or
persons voting such proxies.
The Corporation's transfer agent, American Stock Transfer & Trust
Company, is to perform certain services in connection with the solicitation,
including tabulation of proxies and personal or telephone inquiries to
stockholders or brokers, banks or others acting as custodians. For these
services, the transfer agent will receive a fee at its customary rate and
reimbursement of certain out-of-pocket expenses. Brokers, banks and other
persons acting as custodians may be reimbursed for certain expenses incurred by
them in obtaining instructions from beneficial owners of the Corporation's
Common Stock. In addition to use of the mails, directors and officers of the
Corporation may, without compensation other than their regular compensation,
solicit proxies from stockholders by telephone or in person. All costs of
solicitation will be borne by the Corporation.
THE CORPORATION WILL PROVIDE, WITHOUT CHARGE, TO EACH STOCKHOLDER WHOSE
PROXY IS BEING SOLICITED HEREBY, A COPY OF THE CORPORATION'S ANNUAL REPORT ON
FORM 10-K FOR 1993 (INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES THERETO),
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND/OR THE CORPORATION'S
1993 ANNUAL REPORT, UPON WRITTEN REQUEST DIRECTED TO THE ATTENTION OF KARL A.
FRYDRYK, SECRETARY, NORD RESOURCES CORPORATION, 8150 WASHINGTON VILLAGE DRIVE,
DAYTON, OHIO 45458.
STOCKHOLDER PROPOSALS
A proposal by a stockholder intended for inclusion in the Corporation's
proxy statement for the 1995 annual meeting of stockholders must be received by
the Corporation at the address noted immediately above, to the attention of Karl
A. Frydryk, Secretary, on or before December 19, 1994, in order to be eligible
for such inclusion.
PLEASE SIGN THE PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE TO
WHICH NO POSTAGE NEED BE AFFIXED IF MAILED WITHIN THE UNITED STATES.
April 18, 1994
NORD RESOURCES CORPORATION
8150 Washington Village Drive
Dayton, Ohio 45458
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NORD RESOURCES CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS JUNE 8,1994
The undersigned hereby appoints Edgar F. Cruft and Karl A. Fydryk, or
either of them, attorneys and proxies with full power of substitution in each of
them, in the name, place and stead of the undersigned to vote as proxy all the
stock of the undersigned in Nord Resources Corporation.
(TO BE SIGNED ON REVERSE SIDE)
- --------------------------------------------------------------------------------
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PLEASE MARK YOUR
/X/ VOTES AS IN THIS
EXAMPLE.
FOR WITHHELD NOMINEES: Walter T. Belous
1. Election of / / / / W. Pierce Carson
Nominees Edgar F. Cruft
Terence H. Lang
For, except vote withheld from following nominee(s): Leonard Lichter
Donald L. Roettele
- ----------------------------------------------------
2. The transaction of such other business as may properly come before the
meeting.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2 IF NO
INSTRUCTION TO THE CONTRARY IS INDICATED OR IF NO INSTRUCTION IS GIVEN.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.
SIGNATURE(S) DATE
---------------------------------- -------------------------
NOTE: Please sign exactly as your name appears hereon. Executors,
administrators, trustees, etc., should so indicate when signing, giving
full title as such. If signer is a corporation, execute in full corporate
name by authorized officer. If shares held in the name of two or more
persons all should sign.
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