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 Section 240.14a-11(c) or Section
240.14a-12
NORD RESOURCES CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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/X/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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[LOGO] NORD RESOURCES CORPORATION
8150 Washington Village Drive
Dayton, Ohio 45458
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 4, 1996
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 Sheraton Grande
Hotel, 333 South Figueroa Street, Los Angeles, California, on June 4, 1996 at
10:00 a.m. for the following purposes:
1. To elect seven directors of the Corporation,
2. To consider and act upon a proposal to amend the Corporation's
Certificate of Incorporation to increase the authorized Common Stock of
the Corporation from 25,000,000 shares to 40,000,000 shares,
3. To consider and act upon a proposal, as required under Rule 312.03(c)
of the New York Stock Exchange Listed Company Manual, to approve the
conversion of a $2,100,000 loan into 840,000 shares of Common Stock and
4. To act upon such other matters as may properly come before the meeting
or any adjournment thereof.
The close of business on April 22, 1996 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 30, 1996
NORD RESOURCES CORPORATION
8150 Washington Village Drive, Dayton, Ohio 45458
PROXY STATEMENT
For the Annual Meeting of Stockholders
June 4, 1996
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 enclosed proxy. If
no directions have been specified by marking the appropriate squares on the
proxy, the shares will be voted in accordance with the Board's recommendations.
A stockholder signing and returning a 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 22, 1996
are entitled to vote at the annual meeting. As of April 22, 1996, there were
issued and outstanding 18,998,408 shares of Common Stock of the Corporation.
Each share is entitled to one vote and 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, for a period of 10 days prior to the annual meeting, during normal
business hours at Coudert Brothers, 1055 W. Seventh St., 20th Floor, Los
Angeles, California 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 Items 1 and 4 of this Proxy Statement.
An affirmative vote of a majority of the issued and outstanding shares entitled
to vote on the proposal is required for approval of Item 2 of this Proxy
Statement. An affirmative vote of a majority of the shares present and voting at
the annual meeting is required for approval of Item 3 of this Proxy Statement,
provided that a majority of the issued and outstanding shares entitled to vote
on Item 3 cast their vote. Abstentions from voting will have the same effect as
voting against the election of a director and against each of the other items.
Broker non-votes will not be included in the tabulations of shares entitled to
elect directors and will have the same effect as voting against Item 2.
This Proxy Statement and the enclosed proxy were first mailed to
stockholders on or about April 30, 1996.
1
PRINCIPAL STOCKHOLDERS
The following table sets forth the only persons known by the Board to be
beneficial owners of more than 5% of the outstanding shares of Common Stock of
the Corporation:
SHARES BENEFICIALLY
OWNED AS OF
APRIL 16, 1996
NAME AND ADDRESS OF ------------------------
BENEFICIAL OWNER NUMBER % OF CLASS
--------------------------------------------- ------------ ----------
MIL (Investments) S.A.
Boulevard Royal 25B
L-2449
Luxembourg, Luxembourg 3,160,000(1) 16.6%
The Travelers Group Inc.
388 Greenwich Street
New York, NY 10013 1,933,831(2) 10.2%
(1) MIL (Investments) S.A. ("MIL") acquired the shares from the Corporation
pursuant to a Stock Purchase and Sale Agreement ("Stock Purchase Agreement")
between the Corporation and MIL dated April 15, 1996. The transaction was a
private placement in reliance upon the transaction "safe harbor" afforded by
Regulation S, as promulgated by the Securities and Exchange Commission ("SEC")
under the Securities Act of 1933, as amended ("1933 Act"). See discussion in
Item 3 of this Proxy Statement. On April 15, 1996, MIL also entered into an
agreement with the Corporation (the "Loan Agreement") whereby MIL loaned
$2,100,000 to the Corporation (the "Loan"). See discussion in Item 3 of this
Proxy Statement. Subject to the stockholders approving Item 3 of this Proxy
Statement and the New York Stock Exchange ("NYSE") listing the Conversion
Shares (as defined below), the Loan will convert automatically into 840,000
shares of Common Stock of the Corporation (the "Conversion Shares"). In such
event, MIL would own 4,000,000 shares of Common Stock of the Corporation or
approximately 20.2% of the issued and outstanding shares of Common Stock of
the Corporation.
(2) The Travelers Group Inc. has shared voting and dispositive power over the
shares listed.
ITEM 1 - ELECTION OF DIRECTORS
Seven directors are to be elected to hold office until the next annual
meeting and until their successors are elected and qualified. The Board has
nominated for election as directors the seven persons named below, all of whom
presently serve as members of the Board. The shares represented by proxy, unless
the giver of the proxy dictates otherwise, will be voted at the annual meeting
in favor of the election of the nominees named below.
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.
SHARES BENEFICIALLY OWNED
AS OF APRIL 16, 1996(1)
DIRECTOR --------------------------
NOMINEES FOR ELECTION OF DIRECTORS AGE SINCE NUMBER % OF CLASS
----------------------------------- --- -------- ----------- ----------
W. Pierce Carson 53 1994 41,040(3) (2)
Edgar F. Cruft 63 1971 307,296(4) 1.6%
Karl A. Frydryk 41 1995 103,274(5) (2)
Terence H. Lang 59 1978 179,633(6) (2)
Leonard Lichter 68 1974 25,750(7) (2)
Joseph Max Yvan Boulle ("Max
Boulle") 43 1996 -- (8) (8)
Marc Franklin 39 1996 -- (8) (8)
OTHER NAMED EXECUTIVE OFFICERS
-----------------------------------
James T. Booth 55 58,950(9) (2)
William W. Wilcox 48 77,310(9) (2)
All nominees for election of
directors and other named
executive officers as a group (9
persons) 793,253(10) 4.0%
(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 16, 1996. 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 16,
1996.
(2) Represents less than 1% of the shares outstanding.
(3) Includes options to purchase 15,000 shares.
(4) Includes options to purchase 196,525 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 101,091 shares.
(6) Includes options to purchase 162,775 shares. Mr. Lang's wife owns an
additional 21,348 shares as to which Mr. Lang disclaims beneficial ownership.
(7) Includes options to purchase 24,750 shares.
(8) Max Boulle and Marc Franklin are the nominees of MIL. MIL is indirectly
100% owned by Jean-Raymond Boulle. Max Boulle is the brother of Jean-Raymond
Boulle. There is no family relationship between Marc Franklin and Jean-Raymond
Boulle. MIL, as of April 16, 1996, beneficially owned 3,160,000 shares of
Common Stock of the Corporation, which amount represents approximately 16.6%
of the issued and outstanding shares of Common Stock.
(9) Consists of options to purchase shares.
(10) Includes options to purchase 636,401 shares held by directors and named
executive officers as a group.
NOMINEES FOR ELECTION OF DIRECTORS
Dr. Carson, who holds a Ph.D. in Economic and Structural Geology, 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 consultant
to various mining companies. From 1956 to 1959, he was employed as a field and
3
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. Karl A. Frydryk, CPA, has served as vice president-controller since
joining the Corporation in 1984 and as secretary of the Corporation since 1987.
Prior to then, he had 8 years experience in auditing and financial advisory
services while working for Touche Ross & Co. (now Deloitte & Touche LLP), an
international accounting firm.
Mr. Lang has served as senior vice president-finance and treasurer since
joining the Corporation in 1978. Prior to then, 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 Nord Pacific Limited.
Mr. Boulle has been employed since March 1989 by BNP Capital Markets,
London, England, as a senior institutional sales person in European equities.
Prior thereto, he worked for several international trading companies with
responsibilities ranging from trading commodities to negotiating and closing
trading contracts between American and Russian companies. Mr. Boulle graduated
from Oxford Brooks University, Oxford England in 1975. Mr. Boulle is one of the
designees appointed by MIL. See Item 3 of this Proxy Statement.
Mr. Franklin has been employed since 1975 by J&S Franklin Holdings and
Management Services Ltd., London, England, a manufacturer of military and civil
equipment, and has served as a director and has been a shareholder of such
corporation since 1977. Mr. Franklin is one of the designees appointed by MIL.
See Item 3 of this Proxy Statement.
OTHER NAMED EXECUTIVE OFFICERS
Mr. James T. Booth 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. William W. Wilcox 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 four meetings during 1995 and each current director
attended at least 75% of the meetings of the Board and the Committees on which
he served.
The Corporation has an Audit Committee and a Compensation Committee but
does not have a Standing Nominating Committee.
The members of the Audit Committee in 1995 were Leonard Lichter and
Donald L. Roettele (resigned as a director in November 1995). 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 one
meeting in 1995.
4
The members of the Compensation Committee in 1995 were Walter T. Belous
(resigned as a director in September 1995) and Leonard Lichter. Dr. Carson was
named to the Compensation Committee in February 1996. 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 1995.
Members of the Board who are not employed by the Corporation, its
subsidiaries or affiliates, except Mr. Lichter, receive an annual retainer 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.
In January 1995, the Corporation adopted a deferred compensation program
for directors other than directors who are employees of the Corporation, its
subsidiaries or affiliates or are affiliated with entities which provide
services to the Corporation. Under this program, qualifying directors who have
served as directors for 10 years will receive a lifetime payment beginning at
the later of age 62 or their resignation as a director in an amount equal to the
annual retainer paid to the director during his/her last year of service as a
director. No current directors are eligible for this program. Messrs. Belous and
Roettele, who resigned as directors in 1995, will each begin receiving an annual
benefit of $10,000 when they reach age 62.
On April 15, 1996, the Corporation entered into the Stock Purchase
Agreement with MIL. Concurrently with the closing under the Stock Purchase
Agreement, the size of the Board was increased to eight (8) members and MIL was
granted the right to designate three (3) directors to immediately fill the
vacancies and MIL was further granted the right to designate three (3) nominees
for the Board through the annual meeting in 2000. See discussion in Item 3 of
this Proxy Statement. MIL has designated Max Boulle and Marc Franklin and has
reserved its right to designate a third director to the Board.
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
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of the common stock of the Corporation. Based 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 or on written representations from certain of such persons, the
Corporation believes that, during the year ended December 31, 1995, all filing
requirements under Section 16(a) of the Exchange Act were made by such persons
on a timely basis.
The Corporation paid $996,700 for legal services to the firm of Spitzer &
Feldman, P.C. in which Leonard Lichter, a director, is a principal, during
Spitzer & Feldman's 1995 fiscal year.
5
COMPENSATION OF EXECUTIVE OFFICERS
The following table discloses compensation received by the Corporation's
Chief Executive Officer and the four other most highly paid executive officers
at December 31, 1995 (collectively, "Named Executive Officers") for the fiscal
years ended December 31, 1995, 1994 and 1993.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
-------------
AWARDS
ANNUAL ------------- ALL
COMPENSATION(6) SECURITIES OTHER
-------------------- UNDERLYING COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(2) SATION(3)
- ---------------------------------------- ---- -------- ---------- ------------- --------
Edgar F. Cruft(1) 1995 $576,214 17,775(5) $25,745
Chairman,President & CEO 1994 $547,932 $5,431
1993 $512,150 33,750(4) $5,258
Terence H. Lang 1995 $261,555 17,775(5) $4,952
Sr.Vice President-Finance Treasurer 1994 $249,100 $4,952
1993 $235,000 $4,842
William W. Wilcox 1995 $168,000 7,000 $5,713
Vice President-Sales & Marketing 1994 $159,862 7,000 $4,586
1993 $159,228 13,000 $3,651
Karl A. Frydryk 1995 $147,000 $ 5,000 30,000 $5,028
Vice President-Controller & Secretary 1994 $140,000 $ 8,000 25,000 $4,920
1993 $124,033 $3,991
James T. Booth 1995 $125,000 10,000 $5,096
President-Nord Kaolin Company 1994 $110,000 7,000 $4,539
1993 $107,511 6,500 $3,687
(1) Includes salary earned for 1995 ($158,840), 1994 ($150,432) and 1993
($137,150) as chairman and CEO of Nord Pacific Limited, a 35%-owned affiliate
of the Corporation.
(2) Number of shares subject to options granted under stock option plans for the
periods presented.
(3) Included in "All Other Compensation" for 1995 are (1) matching contributions
under a 401(k) Retirement and Savings Plan for Dr. Cruft - $24,934, (including
$20,760 matched by Nord Pacific Limited under its plan), Mr. Lang - $4,620,
Mr. Wilcox -$4,620, Mr. Frydryk - $4,436 and Mr. Booth - $3,750, and (2) the
dollar value of life insurance premiums paid by the Corporation with respect
to term life insurance benefits for Dr. Cruft - $811, Mr. Lang - $332, Mr.
Wilcox - $1,093, Mr. Frydryk - $592 and Mr. Booth - $1,346.
(4) Consists of an option grant to replace an expiring option for the same
number of shares. Exercise price is $4.88 per share while expiring option was
at an exercise price of $4.00 per share.
(5) Replaced expired option for identical number of shares and exercise price.
(6) Non-cash benefits for 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 6.72% in 1995). The
largest amount of indebtedness outstanding during 1995 and the amount currently
outstanding 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.
OPTION GRANTS IN 1995
The following table presents information concerning options granted in
1995 to Named Executive Officers under the Corporation's employee option plans.
INDIVIDUAL GRANTS
------------------------------------------
% OF
TOTAL
OPTIONS ANNUAL RATES OF
NUMBER OF GRANTED STOCK PRICE
SECURITIES TO APPRECIATION FOR
UNDERLYING EMPLOYEES OPTION TERM(6)
OPTIONS IN EXERCISE EXPIRATION -----------------
NAME GRANTED 1995(5) PRICE DATE 5% 10%
- ----------------------- ---------- --------- -------- ---------- ------- --------
Edgar F. Cruft 17,775(2) 9.6% $5.61 1/30/97 $10,221 $ 20,941
Terence H. Lang 17,775(2) 9.6% $5.61 1/30/97 $10,221 $ 20,941
William W. Wilcox 7,000(3) 3.8% $5.00 2/16/05 $22,011 $ 55,781
Karl A. Frydryk 15,000(4) 8.1% $2.25 11/6/05 $21,225 $ 53,789
15,000(3) 8.1% $5.00 2/16/05 $47,167 $119,531
James T. Booth 10,000(3) 5.4% $5.00 2/16/05 $31,445 $ 79,687
(1) All options are exercisable at April 16, 1996 unless otherwise noted.
(2) Replaced expired option for identical number of shares and exercise price.
(3) Option became exercisable on February 16, 1996.
(4) Consists of options granted in connection with appointment as a Director of
the Corporation. Options become exercisable in 7,500 share increments on each
of November 7, 1996 and 1997.
(5) The Corporation granted employees options to purchase 184,850 shares in
1995, including the above Directors' options.
(6) 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 1995 AND YEAR-END OPTION VALUES
The following table presents information concerning options exercised
during 1995 by the Named Executive Officers and the value of their respective
unexercised options at December 31, 1995.
NUMBER OF
SECURITIES VALUE(1) OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES DECEMBER 31, 1995 DECEMBER 31, 1995
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
- -------------------------- ----------- ----------- ------------------- -----------------
Edgar F. Cruft None N/A 196,525 $ 0
-- N/A
Terence H. Lang None N/A 162,775 $ 0
-- N/A
William W. Wilcox None N/A 70,310 $ 0
7,000 $ 0
Karl A. Frydryk None N/A 86,091 $ 0
30,000 $ 0
James T. Booth None N/A 48,950 $ 0
10,000 $ 0
(1) Based on closing sale price of $2 1/4 for the Corporation's Common Stock on
December 30, 1995 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 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 both 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 executive's
annual salary
8
paid by the Corporation as disclosed in the Summary Compensation Table. Annual
payments begin at age 62, or termination of employment, whichever is later, and
continue for the longer of 10 years or for the lives of the executive and his
spouse. The executive may retire anytime after age 55 and receive reduced annual
payments. At December 31, 1995, Dr. Cruft had over twenty years of service and
Mr. Lang had seventeen years of service. Under a 1995 amendment to the above
retirement agreements, Dr. Cruft and Mr. Lang are able to receive certain lump
sum distributions from the Corporation for the above annual payments. Either
executive may request a lump sum distribution of up to 88% of the present value
of the annual payments (calculated using specified actuarial assumptions as to
life expectance and discount rates), limited to the amount available in
non-qualified trust accounts established for each executive. At December 31,
1995, the present value of the annual payments for Dr. Cruft was $3,330,000 and
for Mr. Lang was $1,749,000 and the amount available for lump sum distribution
was $1,411,000 for Dr. Cruft and $259,000 for Mr. Lang. The Corporation has
agreed to fund $650,000 into the non-qualified trust account for Dr. Cruft on
each of July 31, 1996 and 1997 and $200,000 to the account for Mr. Lang
currently. To the extent that either executive receives a lump sum distribution,
the remaining obligation for annual payments shall be reduced by a percentage
equal to the portion of the present value of the annual payments which have been
paid out plus the 12% differential, divided by the present value of the annual
payments as of the date of the lump sum distribution. Neither executive has
requested a lump sum distribution as of April 16, 1996. The Corporation has also
provided for the payment of a death benefit of $150,000 to a beneficiary of each
of Dr. Cruft and Mr. Lang.
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 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, 1995, Messrs. Booth, Frydryk and Wilcox had seventeen, eleven
and eighteen years of service, respectively. If a participant dies prior to
reaching retirement, the agreements provide for payment of a death benefit to
the participant's beneficiary in an amount equal to three times the compensation
earned by the participant during the year prior to his death, in lieu of the
above payments after retirement.
9
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. The change in control provisions in these agreements were not
triggered by the transactions described in Item 3 of this Proxy Statement. 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. Booth, 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 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. Mr. Booth would also be eligible to receive
benefits under the agreement if a change in control of Nord Kaolin Company were
to occur. The agreements are valid until the later of December 31, 1997 or two
years after the occurrence of a change in control prior to December 31, 1997,
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.
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.
10
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 had not given Dr. Cruft a raise since May
1989. During 1994 and 1995, his annual salary was increased by 6% and 5%,
respectively to compensate somewhat for inflation since 1989.
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.
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
11
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 $9,240 in 1995. 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.
COMPENSATION COMMITTEE
Leonard Lichter, Chairman
W. Pierce Carson
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during 1995 were Mr. Belous
(resigned in 1995) and Lichter, neither of whom are or have been officers or
employees of the Corporation or any of its subsidiaries. In January 1996, Dr.
Carson was named to replace Mr. Belous on the Compensation Committee. Dr. Carson
served as officer of the Corporation from 1980 through March 1990, at which time
he was named President of Nord Pacific Limited, a company which is 35% owned by
the Corporation. 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. Dr. Cruft is a director, chairman and member
of the compensation committee of Nord Pacific Limited. Dr. Carson is a director
and president of Nord Pacific Limited and serves as a director of the
Corporation and a member of the Compensation Committee. Mr. Lang is a director,
vice-president and treasurer of Nord Pacific Limited and a director and senior
vice president of the Corporation.
12
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, 1990 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 DOW JONES NORD
VALUE AS OF MINING EQUITY MARKET RESOURCES
DECEMBER 31 INDEX INDEX CORPORATION
- --------------- ----------- -------------- -----------
1990 $ 100.00 $ 100.00 $ 100.00
1991 $ 125.09 $ 132.45 $ 78.96
1992 $ 120.67 $ 143.84 $ 85.96
1993 $ 142.44 $ 158.15 $ 68.43
1994 $ 140.50 $ 159.36 $ 89.47
1995 $ 173.37 $ 220.51 $ 31.58
ITEM 2 -- PROPOSAL TO AMEND CERTIFICATE OF INCORPORATION TO
INCREASE THE NUMBER OF SHARES OF AUTHORIZED COMMON STOCK
The Corporation is currently authorized to issue 25,000,000 shares of
Common Stock, $.01 par value. As of April 16, 1996, the Corporation had
18,998,408 shares of Common Stock outstanding, 1,915,113 shares of Common Stock
reserved for exercise of stock options and 840,000 shares of Common Stock
reserved for conversion of an existing promissory note. See Item 3 of this Proxy
Statement.
The Board has unanimously approved and recommends to the stockholders an
amendment to the Corporation's Certificate of Incorporation to increase the
authorized Common Stock, $.01 par value, from 25,000,000 shares to 40,000,000
shares. If this proposed amendment is approved by the stockholders, paragraph
"4" of the Certificate of Incorporation would be stricken and a new paragraph
"4" would be substituted in the lieu thereof as follows:
"4. The total number of shares of stock which the Corporation has
authority to issue is forty million (40,000,000) and the par value of
each of such shares is One Cent ($.01) amounting in the aggregate to
Four Hundred Thousand ($400,000) Dollars."
The additional shares of Common Stock will be available for issuance from
time to time without first offering such shares to the stockholders.
Stockholders do not have preemptive rights with respect to the shares of Common
Stock. Although the Corporation has no present intention of issuing additional
shares of Common Stock (other than upon conversion of an existing promissory
note discussed in Item 3 of this Proxy Statement), their subsequent issuance may
have the effect of diluting the voting power of existing stockholders and may
adversely affect the market price of the Common Stock. However, in the event
additional shares of Common Stock are issued in transactions whereby favorable
business opportunities are provided or that provide
13
working capital sufficient to adequately capitalize the Corporation and allow it
to pursue its business plans, the market price may increase. The issuance of
such additional shares of Common Stock might be disadvantageous to current
stockholders in that any additional issuances would reduce per share dividends,
if any.
The Board is recomending the adoption of the amendment to the
Corporation's Certificate of Incorporation in order to enhance the Corporation's
financial flexibility. The Corporation currently has 21,753,521 shares of Common
Stock issued and outstanding and reserved for issuance. The Board believes the
proposed increase in the Corporation's authorized Common Stock is prudent in
view of the complexity of modern business financing. The additional shares of
Common Stock to be authorized by the amendment would be available for issuance
from time to time for any proper corporate purpose without further action on the
part of the stockholders. Such purposes might include, without limitation,
issuance of Common Stock in public or private sales for cash as a means of
obtaining capital for use in the Corporation's business and operations, as part
or all of the consideration required to be paid by the Corporation for the
acquisition of other business properties or in connection with stock splits or
dividends and under the Corporation's compensation plans for it officers,
directors and employees. The Board does not intend to issue any Common Stock
except on terms which it deems to be in the best interest of the Corporation and
its stockholders.
The Corporation has no agreement or commitment concerning the issuance of
any additional shares of Common Stock, except as to excercise of outstanding
stock options and conversion of the promissory note discussed in Item 3 of this
Proxy Statement.
While the proposal set forth in this Item 2 does not result from any
knowledge by the Board or management of the Corporation of any third party
effort to accumulate Common Stock of the Corporation, additional shares of
Common Stock issued by the Board could be utilized, under certain circumstances,
to make a third party's attempt to gain control of the Corporation's more
difficult, time consuming and/or costly. For example, additional shares of
Common Stock could be issued which might have the effect of diluting the
percentage of Common Stock owned by a significant stockholder or issued to
purchasers who might support management in opposing a takeover bid which the
Board determines is not in the best interest of the Corporation and its
stockholders. Accordingly, this proposal may be viewed as having possible
anti-takeover effects. A takeover transaction frequently affords stockholders
the opportunity to sell their shares at a premium over current market prices.
While the Corporation is subject to certain Delaware corporate law statutes
which may have anti-takeover effects, neither the Corporation's Certificate of
Incorporation nor By-Laws presently contain any provisions which may be viewed
as having an anti-takeover effect. The Corporation has agreements with certain
executive officers and other personnel which provide for significant payments to
such persons in the event of a takeover of the Corporation. This proposal is not
a part of a plan by the Board to adopt a series of amendments which may have an
anti-takeover effect and the Board does not presently intend to propose any
amendments in future proxy solicitations which may have an anti-takeover effect.
Any provision which discourages the acquisition of the Corporation's
Common Stock by a person seeking control could be beneficial to the stockholders
generally to the extent that it (i) provides for greater stability and
continuity of management, (ii) protects stockholders against unfair or
inequitable mergers or tender offers and (iii) helps discourage or prevent a
takeover by an acquiror seeking to obtain control in order to break up and
auction off the Corporation's component parts or otherwise act in non-beneficial
ways with respect to the Corporation or its assets. However, such provisions
could also have the effect of discouraging, making costlier or more difficult,
or preventing a merger or a tender offer which would be beneficial to the
Corporation's stockholders. Moreover, the adoption of the proposed amendment to
the Certificate of Incorporation may have the effect of assisting the
Corporation's management in retaining its
14
position, even if removal would be beneficial to the stockholders generally.
Consequently, management would be in a better position to resist changes that
might benefit stockholders generally, but that might be disadvantageous to
management.
The affirmative vote of the holders of a majority of all outstanding
shares of Common Stock entitled to vote at the annual meeting is required for
the adoption of the amendment to the Certificate of Incorporation. Abstentions
and broker non-votes will have the same effect as voting against Item 2.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" ITEM 2.
ITEM 3 -- PROPOSAL, AS REQUIRED UNDER RULE 312.03(C) OF THE NEW YORK
STOCK EXCHANGE LISTED COMPANY MANUAL, TO APPROVE THE CONVERSION
OF A $2,100,000 LOAN INTO 840,000 SHARES OF COMMON STOCK
On April 15, 1996, the Corporation entered into the Loan Agreement with
MIL, whereby MIL loaned the sum of $2,100,000 to the Corporation ("Loan") and
the Corporation executed and delivered to MIL an unsecured promissory note
("Note") in favor of MIL evidencing the Loan. The Note bears interest at the
rate of 7% per annum. Interest accrues and is payable together with the
principal balance in full on April 15, 1997. The Note provides that, in the
event that the stockholders of the Corporation at the 1996 annual meeting
approve the conversion of the Loan into Common Stock (the "Loan Conversion"),
which approval is required under Rule 312.03(c) of the NYSE Listed Company
Manual ("NYSE Manual"), and the listing of the Conversion Shares (as defined
below) on the NYSE, the Loan will be converted into 840,000 shares of Common
Stock of the Corporation ("Conversion Shares") and the Loan, including all
accrued interest thereon, will be cancelled. Thus, the conversion price per
share of Common Stock is approximately $2.50 per share. The closing price of the
Corporation's Common Stock on the NYSE on April 12, 1996 (the last full trading
day prior to the closing of the Loan Agreement) was $2.25 per share. The closing
price of the Corporation's Common Stock on the NYSE on April 26, 1996 was $4.88
per share. The transaction was a private placement in reliance upon the
transaction "safe harbor" afforded by Regulation S, as promulgated by the SEC
under the 1933 Act. Stockholders do not have preemptive rights with respect to
the shares of Common Stock.
The Loan Agreement provides that the Corporation will use its best
efforts to obtain stockholder approval of the Loan Conversion. Pursuant to the
Agreement, the Corporation agreed that from April 15, 1996 through and including
the date of the annual meeting or any adjournments or postponements thereof, the
Corporation would not (i) offer, sell, contract to sell or otherwise issue or
dispose of any shares of Common Stock or any other securities convertible into
or exchangeable for or that represent the right to receive Common Stock or any
other securities of the Corporation (other than pursuant to existing warrants,
options and other convertible securities), or (ii) announce or affect any stock
split, stock dividend, stock combination, reverse stock split, stock
reclassification or reorganization with respect to the Common Stock or any other
security of the Corporation.
MIL has agreed, pursuant to the Loan Agreement, to vote the Purchase
Shares in favor of the Loan Conversion subject, however, to submitting a written
request to the NYSE to confirm that the Purchase Shares may be so voted and,
unless the NYSE objects to MIL voting the Purchase Shares, MIL shall vote the
Purchase Shares in favor of the Loan Conversion.
On April 15, 1996, the Corporation also entered into the Stock Purchase
Agreement with MIL whereby the Corporation sold to MIL and MIL purchased from
the Corporation 3,160,000 shares of Common Stock ("Purchase Shares") for the
purchase price of $7,900,000, or $2.50 per
15
share. The vote of the stockholders under this Item 3 is solely with respect to
the Loan Conversion and does not affect the Stock Purchase Agreement, the
Purchase Shares previously issued or the Loan Agreement. If the stockholders do
not approve the Loan Conversion, the Corporation will be required to pay the
Note, together with all accrued interest, on April 15, 1997.
The Board has unanimously approved and recommends to the stockholders
that they approve the Loan Conversion. If the Loan Conversion is approved,
existing stockholders would incur a dilution in their interest in the
Corporation of approximately 4.2% and MIL would own, in the aggregate, 4,000,000
shares of Common Stock, representing approximately 20.2% of the issued and
outstanding shares of Common Stock. MIL is not restricted in any way from
acquiring more shares of Common Stock or from disposing of shares of Common
Stock, except for compliance with relevant securities laws.
In connection with the Stock Purchase Agreement, the size of the Board
was expanded to eight (8) members and MIL was granted the right to designate
three (3) nominees to the Board (the "MIL Nominees") and the Board (excluding
the members designated by MIL) retained the right to designate the remaining
five (5) nominees. Pursuant to such right, MIL has designated Max Boulle and
Marc Franklin as the MIL Nominees (see Item 1 of this Proxy Statement). MIL has
retained the right to designate a third MIL Nominee. The Corporation has agreed
to nominate and use its best efforts to obtain the election of the MIL Nominees
(which may include Max Boulle and Marc Franklin or any other individuals
designated by MIL) at each annual or special meeting of stockholders called for
the purpose of filling positions on the Board of Directors through and including
the annual meeting to be held in 2000. Such actions shall include, without
limitation, soliciting persons for the election of directors (including the MIL
Nominees) and recommending the MIL Nominees for election to the Board in the
same manner as all other nominees of the Corporation for election as directors.
If any MIL Nominee shall resign or be removed or be unable to serve for any
reason prior to the expiration of such MIL Nominee's term as a director of the
Corporation, MIL is required to notify the Board of a replacement MIL Nominee
and the Board is required to take all action necessary to cause such replacement
MIL Nominee to be elected or appointed to fill the unexpired term of the
withdrawing MIL Nominee. The Stock Purchase Agreement provides that the size of
the Board shall not be increased or decreased without the approval of at least
two (2) of the MIL Nominees.
The Stock Purchase Agreement further provides that MIL will vote all of
the Common Stock of the Corporation it owns and may own in the future for the
five (5) nominees designated by the Board through and including the annual
meeting to be held in 2000. Notwithstanding the foregoing, if MIL and its
affiliates in the aggregate own in excess of 50% of the then issued and
outstanding shares of Common Stock of the Corporation, MIL will be entitled to
vote all of its shares of Common Stock without regard to any restrictions
contained in the Stock Purchase Agreement. Furthermore, if MIL and its
affiliates in the aggregate at any time own 10% or more, but less than 15%, of
the issued and outstanding shares of Common Stock, MIL shall only be entitled to
designate two (2) MIL Nominees; if MIL and its affiliates own 5% or more, but
less than 10%, of the issued and outstanding shares of Common Stock, MIL shall
only be entitled to designate one (1) MIL Nominee; and, if MIL and its
affiliates own less than 5% of the issued and outstanding shares of Common
Stock, MIL shall not be entitled to designate any MIL Nominees.
Section 203 of the Delaware General Corporation Law ("DGCL") provides
that ". . . a corporation shall not engage in any business combination with any
interested stockholders for a period of three (3) years following such
stockholder becoming an interested stockholder, unless: (i) prior to such time
the Board of Directors of the corporation approved either the business
combination or the transaction which resulted in the stockholder becoming an
interested stockholder, . . ." Section (c) (5) of Section 203 of the DGCL
defines an "interested stockholder"
16
to mean any person that owns 15% or more of the outstanding voting stock of a
corporation. The term "business combination" means any merger or consolidation
of a corporation or any subsidiary with an interested stockholder and other
enumerated transactions. Prior to the execution of the Stock Purchase Agreement,
the Board of Directors unanimously adopted a resolution approving the
transactions contemplated by the Stock Purchase Agreement and, in connection
therewith, waived the provisions of Section 203 of the DGCL with respect to MIL
and its affiliates in connection with such transactions and any future
transactions between the Corporation and MIL or its affiliates.
Under the Stock Purchase Agreement and Loan Agreement, the Corporation
granted MIL the right to demand registration under the 1933 Act of the Purchase
Shares and Conversion Shares, respectively. MIL was also granted "piggy-back"
registration rights. Neither the Stock Purchase Agreement, nor the Loan
Agreement, nor any of the rights, obligations and claims thereunder may be
assigned by MIL, except that upon prior notice to the Corporation, MIL may
assign the Stock Purchase Agreement and/or Loan Agreement and/or any rights,
obligations or claims thereunder to Jean-Raymond Boulle or to any entity
controlled by Jean-Raymond Boulle, provided that Jean-Raymond Boulle thereafter
continues to remain in control of such entity (the terms "controlled" and
"control" having the meanings ascribed to them in Rule 12b-2 promulgated by the
SEC under the Securities Exchange Act of 1934, as amended).
The Board believes that the investment by MIL, which is indirectly 100%
owned by Mr. Jean-Raymond Boulle, is of strategic importance to the Corporation
and its subsidiaries given Mr. Boulle's international experience in the mining
industry. Mr. Boulle is the founder, a major shareholder and co-chairman of
Diamond Fields Resources, which is the owner of a 75% interest in the newly
discovered nickel deposit in Voisey Bay in Labrador, Canada.
The Corporation entered into the Stock Purchase Agreement, issued the
Purchase Shares and entered into and borrowed funds under the Loan Agreement in
order to obtain working capital. The Board believes that adding to the
Corporation's working capital has strengthened the Corporation's financial
position, and will enable the Corporation to finance its obligations at its 80%
owned kaolin subsidiary and help in developing a plan regarding the reopening of
its 50% owned rutile mine in Sierra Leone. The proposed issuance of the
Conversion Shares (as well as the issuance of the Purchase Shares) was not done
as a result of any knowledge by the Board or management of the intention of any
third party to accumulate Common Stock of the Corporation or to make any third
party's attempt to gain control of the Corporation more difficult,
time-consuming and/or costly. However, the issuance of such shares could be
viewed as having possible anti-takeover effects. See Item 2 of this Proxy
Statement for a discussion regarding anti-takeover issues.
The Board believes that the agreements entered into with MIL, which is
indirectly 100% owned by Jean-Raymond Boulle, and his expressed interest in
being involved in the future development of the Corporation, will provide
opportunities to the Corporation and its subsidiaries and affiliates that might
otherwise be unavailable, including, without limitation, providing assistance in
the reopening of the Corporation's 50% owned rutile mine in Sierra Leone. The
Board believes that the Loan Conversion is in the best interests of the
Corporation and its stockholders because the Loan Conversion will give Mr.
Boulle a larger equity interest in the Corporation and will provide capital on
terms that compare favorably to the Corporation's other financing options. In
addition, if the Loan Conversion is approved, the Corporation will be able to
convert debt to equity on its balance sheet.
In reaching its decision to enter into the Stock Purchase Agreement and
the Loan Agreement, and unanimously to recommend approval of the Loan Conversion
to the stockholders, the Board considered a number of factors including, among
other things, the
17
Corporation's long-term strategic plan, its capital structure and resources,
operations, management and historical earnings and assessments of the earnings
potential, prospects and future values of the Corporation, both with and without
consummation of the agreements, and the Corporation's alternative financing
options.
An affirmative vote of a majority of the shares present and voting at the
annual meeting is required for approval of Item 3, provided that a majority of
the issued and outstanding shares entitled to vote on Item 3 cast their votes.
Abstentions will have the same effect as voting against Item 3.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" ITEM 3.
INDEPENDENT AUDITORS
Deloitte & Touche LLP 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, 1996. A
representative of Deloitte & Touche LLP 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 1995 (INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES THERETO),
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND/OR THE CORPORATION'S
1995 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 1997 annual meeting must be received by the Corporation
at the address noted immediately above, to the attention of Karl A. Frydryk,
Secretary, on or before December 31, 1996, in order to be eligible for such
inclusion.
18
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Corporation's 1995 Annual Report to Stockholders ("Annual Report"),
which is filed with the Securities and Exchange Commission and which is
delivered concurrently with this Proxy Statement, is incorporated herein by
reference. Stockholders are urged to review carefully the financial information
contained in the Annual Report.
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 30, 1996
19
[LOGO]
NORD RESOURCES CORPORATION
8150 Washington Village Drive
Dayton, Ohio 45458
20
PROXY CARD
NORD RESOURCES CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS ON JUNE 4, 1996
The undersigned hereby appoints Edgar F. Cruft and Karl A. Frydryk, 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)
------------------------------------------
/X/ Please mark your
votes as in this
example.
1. Election of Nominees For Against Withheld Nominees: Joseph Max Yvan Boulle
/ / / / / / W. Pierce Carson
Edgar F. Cruft
Marc Franklin
For, except vote withheld from the following nominee(s): Karl A. Frydryk
Terence H. Lang
Leonard Lichter
- -------------------------------------------
2. Proposal to amend the Corporation's Certificate of Incorporation to increase
the authorized Common Stock.
For Against Withheld
/ / / / / /
3. Proposal to approve conversion of a $2,100,000 loan
into 840,000 shares of Common Stock
For Against Withheld
/ / / / / /
4. The transaction of such other business as may come before the meeting.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2, 3 AND 4
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
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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 are held in the name of two or more persons all
should sign.