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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:
[X] Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
HARISTON CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), or 14a-6(i)(1), or 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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(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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[ ] Fee paid previously with preliminary materials.
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paid previously. Identify the previous filing by registration statement
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HARISTON CORPORATION
SUITE 1555 - 1500 WEST GEORGIA STREET
VANCOUVER, BC V6G 2Z6
October 28, 1997
Dear Shareholder:
On behalf of Hariston Corporation, I cordially invite you to attend the
Annual Meeting of Shareholders on Friday, December 12, 1997 at Suite 1600, 925
West Georgia Street, Vancouver, British Columbia, Canada at 10:00 a.m.
At the meeting, shareholders will vote on (i) the election of five
persons to the board of directors; and (ii) approval of the appointment of
Arthur Andersen, Chartered Accountants as Hariston's auditors for 1997. Further
information concerning the meeting and the nominees for director can be found in
the accompanying Notice and Proxy Statement. In addition, there will be a report
on the status of Hariston's business and an opportunity for you to express your
views on subjects related to Hariston's business.
The directors and officers of Hariston hope that as many shareholders
as possible will be present at the meeting. Because the vote of each shareholder
is important, we ask that you sign and return the enclosed proxy card in the
envelope provided, whether or not you now plan to attend the meeting. If you
attend the meeting, you may vote in person even if you have previously mailed a
proxy card.
We appreciate your co-operation and interest in Hariston. To assist us
in preparation for the meeting, please return the proxy card at your earliest
convenience.
Sincerely yours,
/s/ NUNO BRANDOLINI
Chairman and Chief Executive Officer
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HARISTON CORPORATION
SUITE 1555 - 1500 WEST GEORGIA STREET
VANCOUVER, BC V6G 2Z6
To the Holders of Common Stock October 28, 1997
of Hariston Corporation
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN THAT the 1997 Annual Meeting (the "Meeting") of
Shareholders of Hariston Corporation (the "Company") will be held on Friday,
December 12, 1997 at Suite 1600, 925 West Georgia Street, Vancouver, British
Columbia, Canada, at 10:00 a.m. (Vancouver time), for the following purposes:
(a) to receive the Annual Report of the Directors and Consolidated
Financial Statements for the period ending December 31, 1996
together with the Auditors' Report thereon;
(b) to elect five directors for the ensuing year;
(c) to appoint Arthur Andersen, Chartered Accountants as the
Auditors for the ensuing year and to authorize the Directors
to fix the remuneration to be paid to the Auditors; and
(d) to transact such other business as may properly come before
the meeting or any adjournment thereof.
The Board of Directors has specified that proxies to be used at the
Meeting or any adjournment thereof must be deposited at Vancouver, British
Columbia, Canada, with Montreal Trust Company as transfer agent for the Company,
not later than 5:00 p.m. (Vancouver time), December 11, 1997. Shareholders of
record at the close of business on October 28, 1997, are entitled to vote at the
meeting and any adjournment thereof.
A copy of the Company's Annual Report to Shareholders for the year
ended December 31, 1996 is enclosed.
This notice and the accompanying proxy material are sent to you by
order of the Board of Directors.
/s/ L. JAMES PORTER
Secretary
YOU ARE REQUESTED TO FILL IN, SIGN, DATE AND RETURN THE PROXY SUBMITTED
HEREWITH IN THE RETURN ENVELOPE PROVIDED FOR YOUR USE. THE GIVING OF SUCH
PROXY WILL NOT AFFECT YOUR RIGHT TO REVOKE SUCH PROXY OR TO VOTE
IN PERSON SHOULD YOU LATER DECIDE TO ATTEND THE MEETING.
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HARISTON CORPORATION
SUITE 1555 - 1500 WEST GEORGIA STREET
VANCOUVER, BC V6G 2Z6
MANAGEMENT PROXY CIRCULAR
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 12, 1997
This Proxy Statement, dated October 28, 1997, is furnished in
connection with the solicitation by the Board of Directors of Hariston
Corporation ("Hariston" or the "Company") of proxies to be voted at the Annual
Meeting of Hariston shareholders on December 12, 1997, and any adjournment
thereof (the "Meeting"). It is currently anticipated that definitive copies of
this Proxy Statement and the accompanying Proxy and the Annual Report to
Shareholders will be mailed to shareholders on or about November 7, 1997. THIS
IS A MANAGEMENT PROXY CIRCULAR AND PROXIES ARE SOLICITED BY OR ON BEHALF OF THE
MANAGEMENT OF THE CORPORATION FOR USE AT THE MEETING.
Holders of record of the Company's Common Stock, without par
value ("Shareholders") at the close of business on October 28, 1997, are
entitled to receive notice of the meeting and to vote the shares held on that
date. The number of voting securities of Hariston outstanding on October 28,
1997 was 12,663,113 shares of Common Stock, without par value ("Common Stock").
Each share of Common Stock is entitled to one vote.
MARKET PRICES FOR THE COMPANY'S COMMON EQUITY
The Company's Common Stock trades on the OTC Bulletin Board in the
United States, an over-the-counter market regulated by the National Association
of Securities Dealers, Inc. The Company's trading symbol is "HRSNF." On the
Record Date, there were approximately 3,956 record holders of the Common Stock.
On October 27, 1997, the trading day immediately preceding the date of this
Proxy Statement, the last sale price of the Common Stock on the OTC Bulletin
Board was $0.07.
ELECTION OF DIRECTORS
Pursuant to the Canada Business Corporations Act (the "CBCA"), as
implemented by Hariston's Certificate of Incorporation and By-laws, all
corporate powers are exercised by and under the direction of the board of
directors, and the Company's business, property and affairs are managed by and
under the direction of the board of directors.
NOMINEES
Directors are elected at each annual meeting of shareholders and hold
office until the next annual meeting of shareholders or until their respective
successors are elected and qualified. The board of directors is of the opinion
that the election to the board of directors of the persons identified below, all
of whom are currently serving as directors of the Company and have consented to
continue to serve if elected, would be in the best interests of the Company. The
names of such nominees are as follows: James P. Angus, Nuno Brandolini, Neil S.
Mackenzie, Kevin R. McCarthy and L. James Porter. Information concerning these
nominees is submitted by management.
Set forth below is certain information with respect to each person
proposed to be nominated by management for election as a director of the
Corporation. Information with respect to ages of the directors
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is as of October 28, 1997 and information as to their ownership of shares of
Hariston Common Stock as of that date is provided under the caption "OWNERSHIP
OF COMMON STOCK"
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES LISTED BELOW.
NUNO BRANDOLINI, age 43, Chairman of the Board and Chief Executive
Officer, has held these offices since July 1996. He has been a Director since
July, 1995. He is also Chief Executive Officer of Scorpion Holdings, Inc., a
private financial advisory company. In addition, Mr. Brandolini is a director of
Arabella, S.A., a publicly traded Luxembourg company, and a Director of Sonex
Research, Inc., a U.S. publicly traded company. From 1993 to 1995, Mr.
Brandolini was a Managing Director of Rosecliff, Inc., a leveraged buy-out
company, and from 1991 to 1993, Mr. Brandolini was a Vice President of Solomon
Brothers, a diversified financial services, investment and securities brokerage
company. Mr. Brandolini's ordinary residence is New York, New York, U.S.A.
KEVIN R. MCCARTHY, age 37, was appointed the Company's President and to
the Board of Directors in July 1996. Mr. McCarthy is also President of Scorpion
Holdings, Inc., a private financial advisory company. From October 1993 to
November 1995, Mr. McCarthy was Chief Financial Officer of Rosecliff, Inc., a
leveraged buy-out company, and from 1982 to October 1993, Mr. McCarthy was a
partner in and held various other positions with Ernst & Young, Certified Public
Accountants. Mr. McCarthy is a Certified Public Accountant. Mr. McCarthy's
ordinary residence is Westport, Connecticut, U.S.A.
L. JAMES PORTER, age 33, was appointed the Company's Chief Financial
Officer and Corporate Secretary, and to the Board of Directors, in February
1995. From September 1987 to February 1995, Mr. Porter was employed as a Senior
Tax Manager and held various other positions with Arthur Andersen, Chartered
Accountants. Mr. Porter is a Chartered Accountant and a Chartered Financial
Analyst. Mr. Porter's ordinary residence is West Vancouver, British Columbia,
Canada.
JAMES P. ANGUS, age 51, was appointed to the Company's Board of
Directors in December 1994. Mr. Angus has been President of Angroup Holdings
Limited, a private investment holding company, since 1988. Mr. Angus is also a
director of Tribridge Enterprises Corp., a Canadian publicly traded company. Mr.
Angus' ordinary residence is West Vancouver, British Columbia, Canada.
NEIL S. MACKENZIE, age 53, was appointed to the Board of Directors in
December 1994. Mr. Mackenzie is also President of NS Mackenzie & Company
Limited, a management consulting firm, a position he has held since 1991, a
partner with the Chancellor Partners, a company engaged in management
consulting, Secretary/Treasurer of Canadian Fine Papers (B.C.) Corp., a private
merchant of fine papers, President of 509306 B.C. Limited, a private children's
software developer, President of Interlearn Holdings Ltd., a public holding
company, a Director of ATS Wheel Inc., a Canadian publicly traded company
engaged in the manufacture of advanced automobile tire and wheel systems, a
director of RTDS Technologies, Inc., a private manufacturer of software and
hardware for the electric utility industry, and a director of Advanced Process
Control Ltd., a private manufacturer of software for computer controlled
industrial processes. From 1976 to 1991, Mr. Mackenzie was a Partner and held
various other positions with Ernst & Young, Management Consultants. Mr.
Mackenzie's ordinary residence is Vancouver, British Columbia, Canada.
IF NO CHOICE IS SPECIFIED IN THE FORM OF PROXY AS TO THE MANNER IN
WHICH THE PERSON NAMED IN THE PROXY IS REQUIRED TO VOTE THE SHARES REPRESENTED
THEREBY, THE PERSON NAMED AS PROXY INTENDS TO VOTE ALL SHARES FOR WHICH HE
RECEIVES SUCH PROXIES FOR THE ELECTION OF THE NOMINEES IDENTIFIED HEREIN. If
authority is witheld by the Shareholder giving the proxy with respect to one or
more of such nominees, the
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shares will not be voted for the election of any directors as to whom such
authority is withheld. The person named as proxy is not permitted to vote for a
greater number of persons than the five persons named as nominees herein.
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors held seven meetings during the fiscal year ended
December 31, 1996. Among the incumbent nominees for membership on the Board of
Directors, no Director attended fewer than 75% of the aggregate of the meetings
of the Board and the Committees upon which he served.
COMMITTEES OF THE BOARD
The Board of Directors has standing Audit and Compensation Committees,
but does not have a Nominating Committee. In practice, the entire Board performs
the function of a Nominating Committee.
Audit Committee. The Audit Committee of the Board of Directors held
seven meetings during the fiscal year ended December 31, 1996. The Committee's
responsibility is to review and act or report to the Board of Directors with
respect to various audit and accounting matters, including the selection of
independent auditors, the determination of the scope of audit procedures, the
nature of the services to be performed by and the fees to be paid to the
Company's independent auditors, the establishment of the accounting practices of
the Company, and the monitoring of all financial aspects of the Company's
operations. The Audit Committee is composed of Mr. James P. Angus, Mr. Neil S.
Mackenzie and Mr. L. James Porter.
Compensation Committee. The Compensation Committee of the Board of
Directors held one meeting during the fiscal year ended December 31, 1996. The
Committee is responsible for making recommendations to the Board concerning such
executive compensation arrangements and plans as it deems appropriate. The
Compensation Committee is composed of Mr. Nuno Brandolini, Mr. James P. Angus
and Mr. Neil S. Mackenzie.
DIRECTOR COMPENSATION ARRANGEMENTS
Directors, other than Messrs. Brandolini, McCarthy and Porter, receive
a fee from the Company equal to CDN $1,000 per month plus CDN $500 per meeting
attended. The Corporation may also periodically award options or warrants to its
Directors. As described below, Messrs. Brandolini and McCarthy's services are
rendered to the Corporation through an arrangement between Hariston and Scorpion
Holdings, Inc. ("Scorpion").
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors hereby presents to
the shareholders of the Company this report concerning the compensation of the
Company's executive officers, including the Named Executive Officers. The
Compensation Committee is responsible for setting and administering the
compensation policies of the Company with respect to its executive officers and,
on an annual basis, determining the compensation of each executive officer.
The Company's executive compensation program is designed to align
executive compensation with the Company's business strategy and performance. The
goals of the executive compensation program are: (i) to attract and retain key
executives critical to the success of the Company; (ii) to provide levels of
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compensation which are competitive with those offered by the Company's
competitors and by other companies of similar size; and (iii) to motivate
executives to enhance long-term shareholder value by building appropriate
ownership in the Company.
The annual compensation for the executive officers, including James V.
McGoodwin, the Company's President and Chief Executive Officer for part of the
last fiscal year, includes base salaries, coupled with cash bonuses and stock
options. Base salaries are the fixed component of the executive officers'
compensation package. Salaries are set and adjusted based upon competitive
standards and individual performance. The compensation of Mr. Brandolini and Mr.
McCarthy, other than options, is rendered through an arrangement between
Hariston and Scorpion.
The award of cash bonuses is based upon the performance of the Company
during the prior year and the contribution of each individual executive officer
to the Company's performance. Among the factors (the "Performance Factors")
which the Committee has established to assess the Company's overall performance
are: the Company's performance against budget and targets for sales, expenses
and profits, and the successful implementation of both short and long-term
corporate strategies for enhancing shareholder value (e.g., strategic
acquisitions, divestitures, facilities expansion, productivity improvements,
etc.).
A substantial portion of the compensation of executive officers is
based upon the award of stock options which rely on increases in the value of
the Company's Common Shares. The award of options is intended to encourage such
employees to establish a meaningful, long-term ownership interest in the Company
consistent with the interests of the Company's shareholders. Under the Company's
stock option plans, options are granted from time to time to certain officers
and key employees of the Company and its subsidiaries at the fair market value
of the Company's Common Shares at the time of grant. Because the compensation
element of options is dependent on increases over time in the market value of
such shares, stock options represent compensation that is tied to the Company's
long-term performance. The award of stock options to executive officers is
determined based upon individual performance, level of compensation and position
with the Company.
The Committee has reviewed the 1997 base salaries of each of the
executive officers and is of the opinion that such salaries are not unreasonable
in view of those paid by the Company's competitors and by other companies of
similar size. The Committee also reviewed the stock options awarded to the
executive officers for their services in 1996 and is of the opinion that the
option awards are reasonable in view of the officers' individual performance and
positions with the Company.
The Committee has also reviewed Mr. Brandolini's compensation for 1997
and is of the opinion that his compensation was not unreasonable in view of
those paid to CEO's of the Company's competitors and by other companies of
similar size. Mr. Brandolini received options for the purchase of 440,000 shares
of the Company's common stock at prices equal to the Company's then current
trading price, subject to a three year vesting schedule, for his past and
anticipated services to the Company, which the Committee believes to be
reasonable and appropriate in light of his individual performance and that of
the Company during 1996 based upon the Performance Factors discussed above. Mr.
Brandolini was not paid a cash bonus for 1996.
COMPENSATION COMMITTEE:
Nuno Brandolini
James P. Angus
Neil S. Mackenzie
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SUMMARY OF EXECUTIVE COMPENSATION
The following table sets forth certain summary information concerning
compensation paid or accrued for services rendered to the Company in all
capacities during the years ended December 31, 1995 and 1996 to Messrs.
McGoodwin and Brandolini, who served as Chief Executive Officer of the Company
during 1996 and Messrs. Porter and Meyer, who were the Company's only executive
officers whose total salary and bonus for 1996 exceeded $100,000 (collectively,
the "Named Executive Officers") for services in all capacities during the years
ended December 31, 1996, 1995 and 1994.
SUMMARY COMPENSATION TABLE
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Long Term
Compensation
------------
Securities
Other Annual Underlying All Other
Name and Principal Salary Bonus Compensation Options Compensation
Position Year ($) ($) ($) (#) ($)
==========================================================================================================================
James V. McGoodwin 1996 $77,000 $Nil. $Nil. Nil $4,527
Chief Executive 1995 110,000 Nil. Nil. 1,000,000(2) 11,000
Officer(1)
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Nuno Brandolini 1996(3) (4) (4) Nil. 440,000 (4)
Chairman and Chief
Executive Officer
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L. James Porter 1996 95,833 7,000 Nil. 240,000 Nil.
Chief Financial 1995(5) 64,167 7,000 Nil. 250,000(2) Nil.
Officer and Corporate
Secretary
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James E. Meyer 1996(6) 104,167 Nil. Nil. Nil. Nil.
President of Direct
==========================================================================================================================
(1) Mr. McGoodwin resigned as Chief Executive Officer of the Company in
July 1996.
(2) All outstanding option grants under the 1995 Stock Option Plan were
cancelled on July 17, 1996.
(3) Mr. Brandolini was appointed Chief Executive Officer of the Company in
July 1996. Prior to such appointment, Mr. Brandolini received directors
fees from the Company of $4,777 in 1996 and $4,766 in 1995.
(4) Mr. Brandolini receives no salary or bonus payments from the Company.
As described below, Mr. Brandolini's services are rendered through an
arrangement between the Company and Scorpion Holdings, Inc. During
1996, the Company paid $107,741 to Scorpion Holdings, Inc. pursuant to
this arrangement.
(5) Mr. Porter was appointed Chief Financial Officer and Corporate
Secretary of the Company in February 1995.
(6) Mr. Meyer was appointed President of Educorp Direct Inc. ("Direct") in
March 1996.
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OPTION GRANTS AND EXERCISES
The following table sets forth certain information with respect to options
granted to the Named Executive Officers during the fiscal year ended December
31, 1996. No Named Executive Officers, other than those shown in the following
table, were granted any options during such year.
OPTION GRANTS IN LAST FISCAL YEAR
=============================================================================================================================
Individual Grants
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Number of Percentage of Potential Realizable Value at
Securities Total Options Exercise Assumed Annual Rate of Stock Price
Underlying Granted to or Base Appreciation for Option Term (4)
Options Employees in Price Expiration -----------------------------------------
Name Granted Fiscal Year(3) ($/sh) Date 0% 5% 10%
=============================================================================================================================
Nuno Brandolini 40,000 N/A (5) $1.25 7/17/2003 $0 $20,355 $47,436
400,000(1) 28% $1.25 8/16/2003 $0 $203,550 $474,358
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L. James Porter 50,000 3% $1.25 7/17/2003 $0 $25,444 $59,295
190,000(2) 11% $1.25 8/16/2003 $0 $96,686 $225,320
=============================================================================================================================
(1) Options to purchase 133,333 shares are exercisable immediately upon
grant, and the remaining options become exercisable at the rate of
133,333 at August 16, 1997 and 133,334 at August 16, 1998. The term of
the options is seven years.
(2) Options to purchase 63,333 shares are exercisable immediately upon
grant, and the remaining options become exercisable at the rate of
63,333 at August 16, 1997 and 63,334 at August 16, 1998. The term of
the options is seven years.
(3) Based on 1,405,000 options granted to employees during fiscal 1996. An
additional 360,000 options were granted to non-employee directors
during such fiscal year.
(4) The potential realizable value is based on assumed rates of
appreciation of the fair market value of the underlying shares from the
date of grant. It is calculated assuming that the stock price on the
date of grant appreciates at the indicated rate compounded annually for
the entire term of the option and the option is exercised and sold on
the last day of its term for the appreciated stock price. The 5% and
10% assumed rates are mandated by the rules of the Securities and
Exchange Commission and do not represent the Company's projection of
the future price of the Company's Common Stock. There can be no
assurance that any of the values reflected in this table will be
achieved.
(5) Options granted to Mr. Brandolini as a director, prior to his
appointment as Chief Executive Officer of the Company.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION VALUES
The following table sets forth information with respect to exercises of stock
options by the Named Executive Officers during the fiscal year ended December
31, 1996 and the number and value of securities
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underlying unexercised options held by the Named Executive Officers as of
December 31, 1996. No Named Executive Officer other than those listed in the
following table held any options as of December 31, 1996.
==========================================================================================================================
Number of Securities Value of Unexercised In-
Underlying Unexercised the-Money Options at
Shares Options at December 31, December 31, 1996
Acquired on Value Realized 1996 (#) ($)(1)
Name Exercise (#) ($) Exercisable / Unexercisable Exercisable / Unexercisable
==========================================================================================================================
Nuno Brandolini 0 0 173,333 / 266,667 $0 / $0
- --------------------------------------------------------------------------------------------------------------------------
L. James Porter 0 0 113,333 / 126,667 $0 / $0
==========================================================================================================================
- -------------
(1) Based on the closing price of the Common Stock of $0.47 on December 31,
1996.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As noted above, the current members of the Compensation Committee are
Messrs. Brandolini, Angus and Mackenzie. Mr. Brandolini serves as the Chief
Executive Officer of the Company.
STOCK OPTIONS
1995 Stock Option Plan. In July 1995, the Company adopted the 1995 Stock
Option Plan (the "1995 Plan") covering an aggregate of 3,000,000 shares of the
Company's Common Stock. This plan was cancelled on July 17, 1996, as were all
outstanding option grants under the plan.
1996 Stock Option Plan. In July 1996, the Company adopted the 1996 Stock
Option Plan (the "1996 Plan") covering an aggregate of 260,000 shares of the
Company's Common Stock. The purpose of the 1996 Plan is to attract and retain
qualified personnel, to provide additional incentives to employees, officers,
directors and consultants of the Company and to promote the success of the
Company's business. Pursuant to the 1996 Plan, the Company may grant incentive
and nonstatutory (non-qualified) stock options to key employees, officers,
directors or consultants of the Company.
The 1996 Plan is administered by the Board of Directors, which has sole
discretion and authority, consistent with the provisions of the 1996 Plan, to
determine which eligible participants will receive options, the time when
options will be granted, the terms of options granted and the number of shares
which will be subject to options granted under the 1996 Plan. The Board may also
appoint a committee to administer the 1996 Plan and, subject to applicable law,
to exercise all of the powers of the Board under the 1996 Plan. As of December
31, 1996, 260,000 options were outstanding under the 1996 Plan at a weighted
average exercise price equal to $1.25 per share.
The maximum term of a stock option under the 1996 Plan is seven years. If an
optionee terminates his or her service to the Company, the optionee may exercise
only those option shares vested as of the date of termination. The exercise
price of incentive stock options granted under the 1996 Plan must be at least
equal to the fair market value of the Common Stock subject to the option on the
date of grant. The exercise price of incentive stock options granted to an
optionee who owns stock possessing more than 10% of the voting power of the
Company's outstanding capital stock must equal to at least 110% of the fair
market value of the Common Stock subject to the option on the date of grant. The
exercise price of nonstatutory stock options granted under the 1996 Plan shall
be determined by the Board. Payment of the exercise price
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under an option may be made in cash, previously acquired shares of the Company's
Common Stock or such other consideration as may be determined by the Board of
Directors.
The 1996 Plan may be amended at any time by the Board of Directors,
although certain amendments would require Shareholder approval. The 1996 Plan
will terminate in July 2006 unless earlier terminated by the Board.
1996 Stock Option Plan No. 2. In August 1996, the Company adopted the
1996 Stock Option Plan No. 2 (the "1996 Plan No.2") covering an aggregate of
2,000,000 shares of the Company's Common Stock. The purpose of the 1996 Plan
No.2 is to attract and retain qualified personnel, to provide additional
incentives to employees, officers, directors and consultants of the Company and
to promote the success of the Company's business. Pursuant to the 1996 Plan
No.2, the Company may grant incentive and nonstatutory (non-qualified) stock
options to key employees, officers, directors or consultants of the Company.
The 1996 Plan No.2 is administered by the Board of Directors, which has
sole discretion and authority, consistent with the provisions of the 1996 Plan
No.2, to determine which eligible participants will receive options, the time
when options will be granted, the terms of options granted and the number of
shares which will be subject to options granted under the 1996 Plan No.2. The
Board may also appoint a committee to administer the 1996 Plan No.2 and, subject
to applicable law, to exercise all of the powers of the Board under the 1996
Plan No.2. As of December 31, 1996, 1,130,000 options were outstanding under the
1996 Plan No.2 at a weighted average exercise price equal to $1.25 per share.
The maximum term of a stock option under the 1996 Plan No.2 is seven
years. If an optionee terminates his or her service to the Company, the optionee
may exercise only those option shares vested as of the date of termination and
must effect such exercise within three months, although the Board may set longer
periods for exercise of supplemental stock options. The exercise price of
incentive stock options granted under the 1996 Plan No.2 must be at least equal
to the fair market value of the Common Stock subject to the option on the date
of grant. The exercise price of incentive stock options granted to an optionee
who owns stock possessing more than 10% of the voting power of the Company's
outstanding capital stock must equal to at least 110% of the fair market value
of the Common Stock subject to the option on the date of grant. The exercise
price of nonstatutory stock options granted under the 1996 Plan No.2 shall be
determined by the Board. Payment of the exercise price under an option may be
made in cash, previously acquired shares of the Company's Common Stock or such
other consideration as may be determined by the Board of Directors.
The 1996 Plan No.2 may be amended at any time by the Board of
Directors, although certain amendments would require Shareholder approval. The
1996 Plan No.2 will terminate in August 2006 unless earlier terminated by the
Board.
OWNERSHIP OF COMMON STOCK
Except as provided herein, based on review of the registered
shareholders listing, SEC filings, and limited inquiry, the Company is not aware
of any person (individual or corporate), or group of persons who have
pre-arranged to vote in unison, owning beneficially more than 5% of the
outstanding shares of the Company's voting securities.
The following table sets forth the beneficial ownership, as of October
28, 1997, of the Company's Common Stock (i) by each person who is a director of
the Company (none of whom, except the individuals listed, beneficially owns any
Common Stock of the Company), (ii) by each of the Named Executive
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Officers (none of whom, except the individuals listed, beneficially owns any
Common Stock of the Company), (iii) by each person who is known to be a
beneficial owner of more than 5% of any class of the Company's equity securities
and (iv) by all directors and executive officers of the Company as a group. A
list of current executive officers of the Company is attached as Exhibit A
hereto. Unless otherwise indicated, the persons named in the table possess sole
voting and investment power with respect to the shares listed (except to the
extent such authority is shared with spouses under applicable law).
Beneficial Ownership
----------------------------------------------------
5% Shareholders, Directors, Named Executive Officers
and all Directors and Executive Officers as a Group Shares Percent
- ---------------------------------------------------------------------------------------------------------------------
Nuno Brandolini..................................................... 407,666 (2) 3.2%
Kevin R. McCarthy................................................... 300,000 (3) 2.3%
L. James Porter..................................................... 226,666 (4) 1.8%
James P. Angus...................................................... 120,000 (5) *
Neil S. Mackenzie................................................... 120,000 (5) *
Pierre Anthamatten.................................................. 900,000 (6) 7.1%
All Directors and Officers as a Group (6 Persons) .................. 1,040,999 (7) 7.7%
- -----------------
* Represents less than 1% of the outstanding shares.
(1) Based on 12,663,113 shares of Common Stock, outstanding as of October
28, 1997.
(2) Includes 306,666 shares issuable upon exercise of options which are
exercisable within 60 days.
(3) Includes 200,000 shares issuable upon exercise of options which are
exercisable within 60 days.
(4) Includes 176,666 shares issuable upon exercise of options which are
exercisable within 60 days.
(5) Consists solely of shares issuable upon exercise of options which are
exercisable within 60 days.
(6) As reported on Schedule 13D filed by Mr. Anthamatten dated January 15,
1993, which Schedule 13D has not been amended. According to such
Schedule 13D, such shares are owned directly by Olinka, S.A., a
Luxembourg corporation, all of the outstanding shares of which are
owned by Mr. Anthamatten. According to such Schedule 13D, Olinka,
S.A.'s business address is 3, Rue Adames, L-1114 Luxembourg.
(7) Includes 923,332 shares issuable upon exercise of options which are
exercisable within 60 days.
Based on review of the registered shareholders listing, JB Oxford &
Company is the registered holder of 934,508 shares of the Company's Common
Stock, representing a 7.4% interest in the Company. JB Oxford & Company was
previously a market maker in the Company's stock.
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To the knowledge of the Directors and senior officers of the Company, only the
following own, directly or indirectly, or exercise control or discretion over,
shares carrying more than 10% of the voting rights attached to all outstanding
shares of the Company as of the date hereof:
Percentage of Issued and
Name of Shareholder Number of Shares Outstanding Shares
- -----------------------------------------------------------------------------------------------------
CEDE & Co. 7,661,535* 60.5%
Kray & Co 1,186,502* 9.4%
* Management of the Company is not aware of the beneficial owners of
the shares.
The above information was supplied by the Registrar and Transfer Agent
and Management of the Company.
OTHER TRANSACTIONS AND CERTAIN RELATIONSHIPS
In June 1996 under the terms of two $125,000 short-term notes the
Company borrowed $250,000 from McGoodwin James & Co., a company controlled by
Hariston's then President and Chief Executive Officer, James V. McGoodwin. The
proceeds were used to fund the working capital needs of the Company's multimedia
software operations. The notes bore simple interest at a rate of 10%. In January
1997, payment on the two $125,000 notes was extended by way of conversion into a
new $250,000 note, also bearing interest at 10%. Under the terms of the new
note, payments of principal and interest are being made by Hariston monthly with
the note to be fully repaid by December 15, 1997. As of October 28, 1997,
$41,667 of the principal balance on the note remains to be paid.
In July 1996 James V. McGoodwin resigned as an officer and Director of
the Company. Under the terms of his resignation, the Company agreed to pay Mr.
McGoodwin, through his private company McGoodwin James and Co., an aggregate of
$69,000 in monthly payments of $11,500 for the period July through December,
1996. Such payments were made in full. Additionally, the Company agreed to sell
to McGoodwin James & Co. certain furniture and equipment in the Company's former
Costa Mesa, California office at the Company's net book value. Under this sale
arrangement, the Company has received proceeds of $54,886 in partial payment of
the aggregate $59,873 purchase price for such furniture and equipment.
Upon the resignation in July 1996 of James V. McGoodwin, Nuno
Brandolini replaced Mr. McGoodwin as Chairman and Chief Executive Officer and
Kevin R. McCarthy replaced Mr. McGoodwin as President of the Company. The
services of Messrs. Brandolini and McCarthy are being rendered to the Company
through an arrangement between Hariston and Scorpion Holdings, Inc.
("Scorpion"). Under the terms of this arrangement, Scorpion is paid a monthly
fee of $20,000. During 1996, the Company paid $107,741 to Scorpion pursuant to
this arrangement. As of October 28, 1997, the Company has paid $180,000, and
owes $20,000, to Scorpion pursuant to this arrangement in respect of the 1997
fiscal year.
Mr. Meyer and the Company are parties to an employment letter agreement
(the "Meyer Agreement") dated March 5, 1996, pursuant to which Mr. Meyer serves
as President of Direct. The Meyer Agreement provided that Mr. Meyer's base
salary will initially be $125,000 and that he will participate in a bonus plan
whereby he can earn up to 50% of his base salary on an annual basis, based on
achievement of Direct's operating budget and certain non-financial goals. The
Meyer Agreement also provided for certain relocation benefits, travel
reimbursement, health benefits, expense reimbursement and four weeks paid
vacation per year. The Meyer Agreement provides for the grant to Mr. Meyer of
certain options in Educorp upon the occurrence of certain events and on the same
basis as other executives of Educorp, which events
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have not yet occurred and which options have not been granted as of October 28,
1997. Pursuant to the Meyer Agreement, Mr. Meyer would be entitled to three
months base salary upon the termination of his employment by the Company without
cause.
COMPARISON OF CUMULATIVE TOTAL SHAREHOLDER RETURN
The following graph shows a comparison of five year cumulative total
returns to shareholders of the Company's Common Stock, the NASDAQ Stock Market
(U.S. and foreign companies) Index and the NASDAQ Stock Market Index for
"Non-financial" companies over the same periods (assuming an initial investment
of $100 in the Company's Common Stock, the NASDAQ Stock Market Index and the
NASDAQ Stock Market Index for "Non-financial" companies as of December 31, 1991
and reinvestment of all dividends). This graph takes into account the Company's
one-for-five reverse stock split in September, 1992. This graph shall not be
deemed incorporated by reference by any general statement incorporating by
reference this Proxy Circular into any filing under the Securities Act of 1933
(U.S.) or the Exchange Act of 1934 (U.S.), except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.
[GRAPHIC OMITTED]
- -------------------------------------------------------------------------------------------------------------------------------
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
- -------------------------------------------------------------------------------------------------------------------------------
Hariston Common Stock $100.00 $480.00 $1,344.00 $512.00 $416.00 $60.00
NASDAQ Stock Market $100.00 $116.03 $132.11 $129.92 $180.12 $221.02
Index
NASDAQ "Non-Financial" $100.00 $109.30 $123.95 $120.95 $166.30 $237.04
Companies Index
- -------------------------------------------------------------------------------------------------------------------------------
15
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APPOINTMENT AND REMUNERATION OF AUDITORS
Management of the Company proposes that Arthur Andersen & Co.,
Chartered Accountants, ("Arthur Andersen") be appointed to act as the Company's
auditors for the next fiscal year. Arthur Andersen are currently the Company's
auditors. Arthur Andersen were first appointed as the Company's auditors on June
30, 1995. Representatives of Arthur Andersen are expected to be present at the
annual meeting with an opportunity to make a statement if they so desire and are
expected to be available to respond to appropriate questions.
Management of the Company recommends to its shareholders the
appointment of Arthur Andersen as the Company's auditors. UNLESS AUTHORITY IS
WITHHELD, THE PERSON NAMED IN THE ENCLOSED FORM OF PROXY WILL VOTE FOR THE
APPOINTMENT OF ARTHUR ANDERSEN AS AUDITORS OF THE COMPANY, TO HOLD OFFICE UNTIL
THE NEXT ANNUAL MEETING OF SHAREHOLDERS, AT A REMUNERATION TO BE FIXED BY THE
BOARD OF DIRECTORS.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
For the Company's fiscal year ended December 31, 1993, the Company's
financial statements were audited by the Montreal, Quebec firm of Raymond,
Chabot, Martin, Pare. Following that fiscal year, the Company ceased to have
substantive connections with Montreal, and dismissed Raymond, Chabot, Martin,
Pare, engaging instead that firm's affiliate, Doane Raymond of Vancouver,
British Columbia, to audit its consolidated financial statements for the fiscal
year ended December 31, 1994.
Following the completion of the audit for the Company's fiscal year
ended December 31, 1994, and because of the increasingly international nature of
the Company's operations, including its acquisition of the "Educorp" group of
businesses, the Company dismissed Doane Raymond, effective June 30, 1995, as its
independent auditors. The Company engaged Arthur Andersen to audit its
consolidated financial statements for the fiscal years ended December 31, 1995
and 1996.
The Company's independent auditors' reports on its financial statements for
the fiscal years ended December 31, 1994 and 1993 did not contain an adverse
opinion or disclaimer of opinion, or qualification or modification as to
uncertainty, audit scope or accounting principles, and during such period there
was no disagreement between the Company and its former accountants on any matter
of accounting principles or practices, financial statement disclosure, or
auditing scope of procedure which, if not resolved to the satisfaction of such
former accountant, would have caused it to make reference to the subject matter
of the disagreement in connection with its report. However, the report on the
financial statements for the year ended December 31, 1994 did refer the reader
to two footnotes to the financial statements which described uncertainties. The
report stated that no additional explanatory paragraph was contained because the
report was expressed in accordance with Canadian reporting standards which do
not permit a reference to such uncertainties when the uncertainties are
adequately disclosed in the financial statements.
The decision to change the Company's auditors was recommended and
approved by the Company's Board of Directors.
SHAREHOLDER PROPOSALS
Shareholders are advised that any shareholder proposal, including
nominations to the Board of Directors, intended for consideration at the 1998
Annual Meeting of shareholders of the Company must be received by the Company no
later than September 11, 1998 to be included in the proxy material for the 1998
Annual Meeting. It is recommended that shareholders submitting proposals direct
them to the
16
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Secretary of the Company and utilize certified mail, return receipt requested,
in order to ensure timely delivery.
OTHER BUSINESS AND GENERAL PROXY INSTRUCTIONS
The enclosed form of Proxy confers discretionary authority upon the
person named therein with respect to amendments to matters mentioned in the
Notice of Meeting, or other matters which may properly come before the meeting.
The Board of Directors of the Company is not aware of any business or matter
other than those indicated above which may properly be presented at the meeting.
If any other matters come before the meeting or any adjournments thereof, the
person named in the accompanying form of proxy will vote in accordance with
their best judgment with respect to such matters.
TO BE EFFECTIVE, THE FORM OF PROXY MUST BE DELIVERED TO THE COMPANY AT THE
ADDRESS SET FORTH BELOW, OR TO THE COMPANY, C/O MONTREAL TRUST COMPANY OF
CANADA, AT 510 BURRARD STREET, VANCOUVER, BRITISH COLUMBIA V6C 3BP, IN EITHER
CASE PRIOR TO 5:00 P.M. ON DECEMBER 11, 1997. A SELF ADDRESSED ENVELOPE IS
ENCLOSED.
The expense of the Board's proxy solicitation will be borne by the
Company. In addition to the use of the mails, proxies may be solicited by
personal interview or by telephone. Banks, brokerage houses and other
institutions will be requested to forward the soliciting material to beneficial
owners and to obtain authorization for the execution of proxies; and, if they in
turn so request, the Company will reimburse such banks, brokerage houses and
other institutions, nominees or fiduciaries for their expenses in forwarding
such material. Directors, officers and regular employees of the Company may also
solicit proxies without additional remuneration therefor.
Shareholders are urged to read carefully the material in this Proxy
Statement, specify their choice on each matter by marking the appropriate box on
the enclosed Proxy and sign, date and return the Proxy in the envelope provided
for that purpose. If the enclosed Proxy is properly executed and timely
deposited with Montreal Trust Company as transfer agent for the Company, the
shares represented thereby will be voted in accordance with the instructions of
the shareholder giving the Proxy. IF NO CHOICE IS SPECIFIED IN THE FORM OF PROXY
AS TO THE MANNER IN WHICH THE PERSON NAMED IN THE PROXY IS REQUIRED TO VOTE THE
SHARES REPRESENTED THEREBY, THE PERSON NAMED AS PROXY INTENDS TO VOTE ALL SHARES
FOR WHICH HE RECEIVES SUCH PROXIES FOR THE ELECTION OF THE NOMINEES IDENTIFIED
HEREIN AS DIRECTORS AND FOR THE APPOINTMENT OF ARTHUR ANDERSEN AS INDEPENDENT
AUDITORS FOR 1997. The persons named as proxy is not permitted to vote for a
greater number of persons than the five persons named as nominees herein.
A shareholder giving a proxy may revoke it at any time prior to its
exercise by (a) by signing a proxy instrument bearing a later date and
depositing it with the Secretary of the Company; or (b) as to any matter on
which a vote shall not have already been cast pursuant to the authority
conferred by such proxy instrument, by signing a written notice or verification
and delivering it to the Secretary of the Meeting, or the Chair of the Meeting;
or (c) by attending the Meeting in person and personally voting the shares
represented by the proxy instrument; or (d) in addition to revocation in any
other manner permitted by law, a proxy may be revoked under Subsection 148(4) of
the CBCA by an instrument in writing executed by the shareholder or by his or
her attorney in writing (or if the shareholder is a Company, under its corporate
seal or by an officer or attorney thereof authorized in writing), deposited
either at the registered office of the Company at Suite 1600, 925 West Georgia
Street, Vancouver, British Columbia, Canada, V6C 3L2, at any time up to and
including the last business day preceding the day of the Meeting or any
adjournment thereof, or with the Chair of the Meeting on the day of the Meeting
or any adjournment thereof, and upon either of such deposits the proxy is
revoked.
17
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The person designated in the accompanying form of Proxy is a Director and
Officer of the Company. A SHAREHOLDER HAS THE RIGHT TO APPOINT A PROXY TO
REPRESENT HIM OR HER AT THE MEETING, OTHER THAN THE PERSON WHOSE NAME IS PRINTED
AS PROXY IN THE ACCOMPANYING FORM OF PROXY, BY STRIKING OUT THE SAID PRINTED
NAME AND BY INSERTING THE NAME OF HIS OR HER CHOSEN PROXY IN THE BLANK SPACE
PROVIDED FOR THAT PURPOSE IN THE FORM OF PROXY. THE PERSON SO NAMED AS THE PROXY
NEED NOT BE A SHAREHOLDER OF THE COMPANY.
Proxies, ballots and voting tabulations identifying Shareholders are
kept private and will not be available to anyone except as actually necessary to
meet legal requirements. Access to proxies and other individual Shareholder
voting records is limited to the inspectors of election appointed by the Company
and certain of the Company's employees who must acknowledge in writing their
responsibility to comply with this policy of confidentiality.
The mailing address of the Company is: Hariston Corporation, Suite
1555-1500 West Georgia Street, Vancouver, British Columbia, Canada V6G 2Z6.
FILINGS UNDER SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended
("Section 16(a)") requires the Company's directors, officers and beneficial
owners of more than 10% of its common stock to file reports of holdings and
transactions of the Company's Common Stock with the Securities and Exchange
Commission. Based upon Company records and other information, the Company
believes that with respect to the fiscal year ended December 31, 1996, each of
the Company's directors, officers and beneficial owners of more than 10% of its
Common Stock were in compliance with the filing requirements of Section 16(a).
QUORUM AND REQUISITE VOTE
The holders of a majority of the outstanding shares of Common Stock
must be represented in person or by proxy at the Annual Meeting for the meeting
to be held. Pursuant to applicable law, only votes cast "for" a matter
constitute affirmative votes. Votes "withheld" or abstaining from voting are
counted for quorum purposes, but since they are not cast "for" a particular
matter, they will have the same effect as negative votes or votes "against" a
particular matter. Shares voted by a broker on a routine matter or matters (such
as election of directors or approval of auditors) but as to which the broker
indicates it lacks authority to vote on non-routine matters will be counted as
present for purposes of determining the presence or absence of a quorum and as
entitled to vote, and will be voted, with respect to the routine matter(s), but
not entitled to vote, and will not be voted, with respect to the non-routine
matter(s). Shares as to which a broker indicates it lacks authority to vote, or
shares which the broker does not vote, will not be counted as present for
purposes of determining the presence or absence of a quorum.
The five nominees for director receiving a plurality of the votes cast
at the Annual Meeting in person or by proxy shall be elected. The appointment of
Arthur Andersen requires for approval the affirmative vote of a majority of the
shares of Common Stock represented and voting at the meeting, in person or by
proxy.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Except as noted below, this Proxy Statement incorporates by reference
documents which are not presented herein and some of which are not delivered
herewith. Such documents relating to the Company are available without charge,
upon written request to the Company. If making such a request, please send it
18
15
to: Hariston Corporation, Suite 1555 - 1500 West Georgia Street, Vancouver, BC,
Canada V6G 2Z6, Attn: Secretary.
The following documents previously filed by the Company with the
Securities and Exchange Commission (the "Commission") (Commission File No.
0-13966) pursuant to the Exchange Act are hereby incorporated by reference into
this Proxy Statement.
1. The Company's Annual Report on Form 10-K for the Fiscal Year Ended December
31, 1996;
2. The Company's Quarterly Report on Form 10-Q for the Quarter Ended March 31,
1997;
3. The Company's Quarterly Report on Form 10-Q for the Quarter Ended June 30,
1997.
4. The Company's Form 10-K/A amending its Form 10-K for the Fiscal Year Ended
December 31, 1996.
A copy of the Company's 1996 Annual Report to Shareholders accompanies
this Proxy Statement. The Annual Report to Shareholders is not a part of this
Proxy Statement. Copies of the documents incorporated by reference are available
without charge upon written request to the Company. If making such a request,
please send it to: Hariston Corporation, Suite 1555, 1500 West Georgia Street,
Vancouver, BC, Canada V6G 2Z6, Attention: Secretary.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Proxy Statement to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Proxy Statement.
APPROVAL OF CIRCULAR
The undersigned hereby certifies that the contents and the sending of
this Management Proxy Circular have been approved by the Directors of the
Company.
DATED at Vancouver, British Columbia this 28th day of October, 1997.
BY ORDER OF THE BOARD
HARISTON CORPORATION
/s/ NUNO BRANDOLINI
Chairman and Chief Executive Officer
19
ANNEX A
EXECUTIVE OFFICERS OF HARISTON
The following individuals are the current executive officers of the
Company. The executive officers of the Company are elected annually by the Board
to serve until the next annual election of officers and until their respective
successors have been elected and have qualified unless removed by the Board.
NUNO BRANDOLINI, age 43, has been Chairman and Chief Executive Officer
of the Company since July 1996. See the biography of Mr. Brandolini included in
this Proxy Statement.
KEVIN R. MCCARTHY, age 37, has been President of the Company since July
1996. See the biography of Mr. McCarthy included in this Proxy Statement.
L. JAMES PORTER, age 33, has been Chief Financial Officer and Corporate
Secretary of the Company since February 1995. See the biography of Mr. Porter
included in this Proxy Statement.
JAMES E. MEYER, age 51, was appointed President of Educorp Direct,
Inc., an indirect, wholly-owned subsidiary of the Company in March 1996 and was
appointed Secretary of Educorp Multimedia, Inc. and Chief Executive officer of
HighText Interactive, Inc. in July 1996. Prior to his joining the Company, Mr.
Meyer was President of Sunwear Direct, a private marketer of swimwear, from 1994
through 1996, a partner of Minwok Associates, an international catalog marketing
and management consulting firm, during 1993 and Vice President of Inmac Corp., a
public company engaged in the worldwide distribution of computer hardware and
software products, from 1992 through 1993.
20
HARISTON CORPORATION
PROXY
1997 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 12, 1997
THIS PROXY IS SOLICITED BY MANAGEMENT IN CONJUNCTION WITH THE 1997 ANNUAL
MEETING OF SHAREHOLDERS OF HARISTON CORPORATION TO BE HELD IN VANCOUVER, BRITISH
COLUMBIA, CANADA, ON DECEMBER 12, 1997 AT THE TIME AND LOCATION SET FORTH IN THE
NOTICE OF ANNUAL GENERAL MEETING DATED OCTOBER 28, 1997.
The undersigned shareholder of HARISTON CORPORATION (the "Corporation") hereby
appoints L. JAMES PORTER, Secretary, or instead of him,
_____________________________________________ of _____________________________,
with full power of substitution, as nominee of the undersigned to attend and act
for the undersigned and on behalf of the undersigned at the 1997 Annual Meeting
(the "Meeting") of the shareholders of the Corporation to be held on December
12, 1997 and at any adjournment or adjournments thereof in the same manner, to
the same extent and with the same power as if the undersigned were present at
the said meeting or any adjournment or adjournments thereof with respect to the
matters set out below, any amendments or variations to such matters and any
other matters properly to come before the meeting. WITH RESPECT TO ANY
AMENDMENTS OR VARIATIONS TO ANY MATTER DESCRIBED BELOW AND ANY OTHER MATTERS
WHICH MAY PROPERLY COME BEFORE THE MEETING, I HEREBY CONFER DISCRETIONARY
AUTHORITY ON THE PERSON WHO VOTES AND ACTS ON MY BEHALF HEREUNDER TO WITH
RESPECT TO THE PARTICULAR MATTER AS HE OR SHE THINKS FIT.
I direct that my registered common shares of the Corporation shall be voted or
withheld from voting as specified below:
1. In respect of the election of Directors as follows:
JAMES P. ANGUS FOR ____________ WITHHELD ___________
NUNO BRANDOLINI FOR ____________ WITHHELD ___________
NEIL S. MacKENZIE FOR ____________ WITHHELD ___________
KEVIN R. McCARTHY FOR ____________ WITHHELD ___________
L. JAMES PORTER FOR ____________ WITHHELD ___________
2. In respect of the appointment of Arthur Andersen, Chartered
Accountants, as the Auditors of the Corporation and authorizing the
Directors to fix the remuneration to be paid to the Auditors, as
follows:
FOR ___________ WITHHELD ______________
THE UNDERSIGNED HEREBY REVOKES ANY PROXY PREVIOUSLY GIVEN.
DATED this ______ day of __________________, 1997.
(x)
_______________________________________ ____________________________________
NAME OF SHAREHOLDER (PLEASE PRINT) SIGNATURE OF SHAREHOLDER
Address:_______________________________
_______________________________________
21
INSTRUCTIONS FOR PROXY
1. The shares represented by this Proxy will be voted on Items 1 and 2 as
the undersigned may have specified by marking an "x" in the spaces
provided for that purpose. IF NO CHOICE IS SPECIFIED, THE SHARES WILL
BE VOTED AS IF THE SHAREHOLDER HAD SPECIFIED AN AFFIRMATIVE VOTE.
2. A SHAREHOLDER HAS THE RIGHT TO APPOINT A PROXY HOLDER (WHO NEED NOT BE
A SHAREHOLDER) TO ATTEND AND ACT FOR THE SHAREHOLDER ON HIS OR HER
BEHALF AT THE MEETING OTHER THAN THE PERSON DESIGNATED ABOVE. SUCH
RIGHT MAY BE EXERCISED BY STRIKING OUT THE NAMES OF THE SPECIFIED
PERSON AND BY INSERTING IN THE SPACE PROVIDED THE NAME OF THE PERSON
THE SHAREHOLDER WISHES TO APPOINT INSTEAD.
3. This form of Proxy should be dated and must be executed by the
shareholder or his or her attorney duly authorized in writing or, if
the shareholder is a corporation, under its corporate seal or by an
officer or attorney thereof duly authorized. If this form of Proxy is
not dated, it will be deemed to bear the date on which it is mailed to
the shareholder.
4. The signature should agree with the name on this form of Proxy.
Executors, administrators, trustees, etc., should so indicate when
signing. Where shares are held jointly, each owner must sign.
5. To be effective, this form of Proxy must be deposited with the
Registrar and Transfer Agent of the Corporation, Montreal Trust
Company, 510 Burrard Street, Vancouver, British Columbia, Canada, V6C
3B9, not later than 5:00 p.m. (Vancouver time), December 11, 1997.
6. IN THE CASE OF REVOCATION OF A PROXY PREVIOUSLY GIVEN, THIS FORM OF
PROXY MUST BE DEPOSITED WITH THE REGISTERED OFFICE OF THE CORPORATION
AT SUITE 1600, 925 WEST GEORGIA STREET, VANCOUVER, BRITISH COLUMBIA,
CANADA, V6C 3L2, AT ANY TIME UP TO AND INCLUDING THE LAST BUSINESS DAY
PRECEDING THE MEETING OR ANY ADJOURNMENT THEREOF, OR WITH THE CHAIR OF
THE MEETING ON THE DAY OF THE MEETING OR ANY ADJOURNMENT THEREOF. The
accompanying Management Proxy Circular sets out the rights of the
shareholder to revoke a proxy previously given in greater detail.